The court holds that hitting the “Buy It Now” button on eBay forms a binding contract. That must have fascinated someone at the court enough to publish the opinion, which is otherwise fact-based and legally elementary. But near the end it says something which, though not new, is evidently noteworthy since it trapped one of these litigants.

Defendant sold an expensive diamond ring on eBay. Then somebody offered her more money so she did a deal with that guy instead. The original buyer sued and, after a bench trial, won. Defendant appealed.

The Court of Appeals spends several pages analyzing the facts in minute, witness-by-witness detail. It affirms, since there was an offer and acceptance and since Plaintiff adequately claimed and proved benefit of the bargain.

Then, in the 27th of 29 paragraphs, the court briefly mentions something legally interesting. Plaintiff had sued husband and wife; husband got himself dismissed, arguing that the ring was wife’s separate property and he had nothing to do with the eBay listing. Plaintiff tried to appeal that ruling by filing a cross-appeal. The court points out — citing the 1981 case (Maxwell) that says so — that a cross-appeal is effective only against the appellants.  Wife had filed the appeal; husband obviously wasn’t a party to it. So the court dismisses the cross-appeal.

The court doesn’t discuss this any further. Its well to keep in mind, though, that a cross-appeal is like a counterclaim or crossclaim in that it can only reach the parties to the adverse pleading. If you want others you have to file your own appeal within (this was one of the points of Maxwell) the regular appeal time.

(Opinion: Armiros v. Rohr)

This case discusses the power of an industry-wide arbitrator to change the terms of the agreement by which its members handle claims.

In this consolidated appeal two insurance companies had paid claims under homeowners’ policies for damage caused to their insureds’ homes by Defendant’s plumbing products. They filed subrogation cases against it. The parties were all signatories to the property subrogation agreement of Arbitration Forums, an outfit that arbitrates property claims. But after they signed it AF changed the agreement to exclude products-liability claims. Defendant moved to compel arbitration in both cases, lost both motions, and appeals.

The Court of Appeals reverses. The insurers relied on language in the agreement allowing AF to make rules and regulations covering arbitrations. But the court inteprets that, based on its reading of the structure of the agreement, as procedural. Exclusions of products actions was “a significant, substantive change,” not a mere procedural change. AF didn’t have the power to make a substantive change. The court rejects an Indiana case (also involving this defendant, which has been fighting this battle around the country for a few years now) that read the agreement differently.

The court also relies on 12-3006, making agreements to arbitrate future claims “enforceable and irrevocable,” which it says happens “upon the arising of the controversy, unless the parties agree otherwise.”

AF is an insurance-industry entity with insurance-industry attitudes, which explains why it figured to change a contract unilaterally by sending out a notice.  But these plaintiffs have that same attitude and as far as we know never objected to the change; they continue to be among the most frequent users of the agreement’s arbitration procedures. It would be interesting to know what discussions, if any, they had with AF about the change at the time.

(Opinion: Allstate v. Watts)

This was an attempt to use equity to enforce an unwritten agreement to split a contingent fee.

Plaintiff, a lawyer, was asked by another lawyer to work on a personal-injury case. They agreed to split the fee but put nothing in writing. Eventually the clients fired Plaintiff. They later fired the other attorney and hired Defendant, who settled their claim. Plaintiff demanded part of the fee; Defendant refused. Plaintiff sued in quantum meruit. (The opinion includes a footnote defining quantum meruit. We wonder what other obscure legal terms the court will from now on think it necessary to define — “statute” perhaps.) The trial court dismissed the Complaint.

The Court of Appeals affirms. The ERs require both contingent fees and fee splits to be in writing. The court explains why this is a good thing. Equity won’t enforce a contract that is against public policy. Plaintiff had a California case but “[n]either the interpretation and application of the Arizona Rules of Professional Conduct, nor this state’s public policy is subject to meaningful analysis by applying the law of other jurisdictions.” (This is of course throw-away rhetoric that our courts will ignore when foreign precedent supports their policy views.) Plaintiff also argued that prior Arizona cases had involved violation of statutes, not just ethical rules. But public policy has “the same force and effect” as a statute.

Plaintiff and the lawyer who brought him into the case were buddies who would have split the fee without a writing. Instead of being embarrassed by that Plaintiff insists on it. The moral is that friends don’t let friends act unethically.

(Opinion: Levine v. Haralson, Miller, Pitt et al.)