Federal Court Equitably Estops Lawsuit, Sending Case to Arbitration

 Posted on September 28, 2013 in Complex Civil Litigation

Silverman Thompson lawyers Bill Sinclair and Anna Skelton recently convinced a New Jersey federal judge that he should compel arbitration of their suit, effectively dismissing a federal complaint. The plaintiff, Precision Funding Group, sued its competitor, National Fidelity Mortgage, for alleged interference with contracts and business opportunities (among other business torts). PFG based its complaint in large part on the actions of two former employees who left PFG to work for NFM. In addition to its suit against NFM, PFG initiated arbitrations against its former employees pursuant to a clause in their employment agreement, drafted by PFG, that required mandatory arbitration.

On behalf of NFM, Sinclair and Skelton argued that the federal suit against NFM was essentially the same suit that PFG brought in arbitration against its former employees and the Court should therefore "equitably estop" PFG from proceeding with its Federal claims. After extensive briefing and a lengthy hearing, the Court agreed, finding that even though NFM wasn’t a party to the employment agreements that provided for the mandatory arbitration, it had standing to compel arbitration because its claims were "inextricably intertwined" with those in arbitration.

STSW is widely-recognized as a premier litigation firm in the Mid-Atlantic region. Sinclair, who can be reached at bsinclair@silvermanthompson.com, and Skelton were recently honored as Maryland Super Lawyers for 2013 in the areas of business and civil litigation and their practices cover a wide range of business and commercial matters, including construction, employment, real estate, and business disputes.

A reported opinion can be found at Precision Funding Group v. National Fidelity Mortgage, 2013 U.S. Dist. LEXIS 76609 (D. N.J. May 31, 2013).