STATE OF MICHIGAN COURT OF APPEALS

STATE OF MICHIGAN COURT OF APPEALS

March 3, 2016

STATE OF MICHIGAN COURT OF APPEALS

LAUREN BIENENSTOCK & ASSOCIATES, INC, LAUREN BIENENSTOCK, and SAMUEL BIENENSTOCK

FOR PUBLICATION March 3, 2016
9:00 a.m. No. 323986
Oakland Circuit Court LC No. 2013-137660-CZ

Plaintiffs-Appellants, v SUSAN LOWRY, CAROLYN GRITTINI, JACQUELYN FLECK, BARBARA ESSIAN, PAULA RASKIN, ROBERT GRITTINI, MARY JO POWER, PAMELA GOLETZ, a/k/a PAMELA LANEY, TAMMY NANNINI, CHRISTINE GONZALEZ, a/k/a CHRISTINE DIFRANCESCO, MAUREEN COLLIER, SARA MANN, SHERRIE MANIER, DEBORAH CULVER, MELISSA RIELI, VINCENT QUAGLIA, MARLANA WILLICK, KATHLEEN REISING, DIANNE SARKISIAN, AMY LENGA, MEIGHAN LINEBARUGH, BONNIE MURPHY, MARIE PUCHEL, PAMELA SMITH, LORETTA STUMP, LISA LAMPRIDES, a/k/a LISA GRAMBO, JOANNE KIPPERT, a/k/a JOANNE BUGG, APRIL KURTZ, LAURA KERR, CINDY BATTISTON, PATTI PILARSKI, MARY REED, MONICA STORM, and PAMELA WORTHINGTON, a/k/a PAMELA JACKSON

Defendants-Appellees.

Before: STEPHENS, P.J., and CAVANAGH and MURRAY, JJ. MURRAY, J. In this action for declaratory and injunctive relief, plaintiffs Lauren Bienenstock & Associates, Inc. (LBA), Lauren Bienenstock, and Samuel Bienenstock appeal as of right the order of the Oakland Circuit Court granting in part and denying in part their motion for summary disposition. The question presented is whether a trial court or arbitrator has the authority under the Federal Arbitration Act (FAA), 9 USC § 1 et seq., to determine whether multiple arbitration cases should be consolidated when the arbitration agreement is silent on that issue. We hold that the arbitrator is the one to decide that issue, and so we affirm the trial court’s order denying plaintiffs’ motion for summary disposition on that issue. I. FACTS AND PROCEDURAL HISTORY The factual backdrop to this proceeding arose from a dispute about compensation. All of the defendants worked as independent contractors for LBA at some point in the past. All but two of the defendants, Monica Storm and Pamela Worthington a/k/a Pamela Jackson (“Jackson”), signed independent contractor agreements (ICA) with LBA for performing their work as licensed court reporters. Each of the ICAs signed by the 22 defendants contained the following clause:

Any dispute relating to this Agreement, or breach thereof, shall be settled pursuant to the rules and regulations of the American Arbitration Association (“AAA”).  Either Party requesting arbitration under this Agreement shall make a demand on the other party by registered or certified mail, with a copy to the AAA’s Southfield, Michigan office, which shall be the location of any arbitration hearing.  The arbitration shall then take place as noticed by the AAA, and the outcome thereof shall be binding regardless of whether one of the parties fails or refuses to participate.

Initially defendants filed a lawsuit in Macomb circuit court against plaintiffs seeking what they believed was overdue compensation. However, as a result of the arbitration clause quoted above, plaintiffs moved for—and were granted—summary disposition with regard to the 22 defendants in this case—all of whom had signed an ICA with an arbitration agreement—and were denied summary disposition with regard to the four other court reporters for whom no ICA could be found.1 These 22 defendants appealed that decision to this Court, arguing that because the ICAs were not valid or enforceable, they were not required to resolve their disputes in arbitration. We concluded otherwise. Lowry v Lauren Bienenstock & Assoc, Inc, unpublished opinion per curiam of the Court of Appeals, issued December 23, 2014 (Docket No. 317516). In any event, while those two cases were pending, defendants (including the 22 with a pending appeal) filed a demand for arbitration against plaintiffs with the American Arbitration Association (AAA). Because their ICAs provided that arbitration would be handled pursuant to AAA rules and regulations, and AAA rules permitted class arbitration under certain circumstances, defendants filed their arbitration as a class arbitration, defining the class as “[a]ll court reporters who currently provide, or formerly provided, court reporting services as independent contractors for [LBA] pursuant to a written [ICA] that included an arbitration provision.” Defendants asserted that the class numbered in the hundreds, they all shared a common transaction arising out of the same facts and applicable law, joinder of all the claimants would be impracticable, and class arbitration was the most convenient and cost-effective way of disposing of the dispute.

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