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Bernstein Shur Monthly – March 2018


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Bernstein Shur Monthly – March 2018

Welcome Shareholder Chad Higgins to Our Portland Office

With 15 years of experience in a broad range of industries, including energy, pharmaceuticals, food and beverage, consumer products, and higher education, Chad has handled all areas of litigation and trial in both state and federal courts. View Chad’s bio here.

Welcome Shareholder Kristin Mendoza to Our Manchester Office

With almost 20 years in practice, Kristin has always had a passion for working with tech startups and business owners. With her familiarity with the industry, Kristin has the insight to break down transactions and legal issues into smaller modules, steps and action plans more easily understood by non-lawyers. View Kristin’s bio here.

Welcome Shareholder Christopher Dargie to Our Portland Office

Having served as lead counsel to multi-national organizations on major M&A transactions, fledgling startups looking to raise capital, and countless other companies on virtually every matter in between, Chris has the experience and insight that runs the gamut of business law. View Christopher’s bio here.

Bernstein Shur is a Proud Supporter of Maine Outdoor Brands.

By: Isabel Mullin

The new outdoor business alliance formally launched in fall of 2017 and now has over 40 business members and non-profit partners. In January 2018, MOB had a booth at Outdoor Retailer in Denver, Colorado where its members were able to display and promote their products and services. This summer they will head to the Outdoor Show in Friedrichshafen, Germany. The organization is also working to quantify and better understand the impact of the outdoor recreation economy in Maine. This information will help businesses and the State better plan for the future and attract new people to Maine. Bernstein Shur strongly believes in this work and is grateful for the opportunity to provide support to the organization and its members.

Act Quickly if You Want to Object to Arbitration

By: Meredith Eilers

A recent Vermont case reminds us of the importance of raising any objection to arbitration early in the process. In Adams v. Barr, 2017 VT 12, — A.3d — (2018), the Vermont Supreme Court ruled that a construction company that had participated in the arbitration process for nearly six months—filing a counterclaim, choosing the arbitrator, engaging in reciprocal discovery, and participating in prehearing conferences and motion practice—had waived its right to object to arbitration, regardless of the merits of that objection.

Claiming Adams Construction had failed to pay Barr Law Group more than $40,000 in legal fees, Barr filed a demand for arbitration against Adams with the American Arbitration Association. Adams filed an answer and counterclaim, and actively participated in the various stages of preparation for the three-day hearing scheduled. However, one week before the hearing, Adams filed an objection to the arbitration and a motion to dismiss the arbitration proceeding, arguing—for the first time—that the arbitration provision in the fee agreement was unenforceable. Citing Vermont law and other legal authority, Adams argued that Barr had failed to take the required steps to ensure that Adams was aware of the implications of agreeing to binding arbitration, and thus the agreement was not enforceable. Adams had no counsel of record through the arbitration proceeding, and indicated that it had only learned of this legal basis for objecting to the arbitration shortly before it made its objection.

The arbitrator denied Adams’s objection and proceeded with the hearing, which resulted in an award to Barr of the full measure of fees it sought, plus interest, and the dismissal of all of Adams’s counterclaims. Adams filed an application to vacate the arbitration award in the superior court, arguing again that the arbitration provision was not enforceable. Barr argued that Adams had waived its objection by actively participating in the arbitration for months before bringing the objection. The superior court agreed with the arbitrator, and with Barr, concluding that such active participation and last-minute objection amounted to a waiver of any challenge to the validity of the agreement. On appeal, the Vermont Supreme Court, citing relevant Vermont and national case law, agreed that “at some point prior to the actual arbitration hearing a party who participates in an arbitration proceeding without objecting to the validity of the arbitration may waive the ability to make that objection.” Declining to indicate exactly where that line is, the Vermont Supreme Court nonetheless concluded that Adams had crossed it.

Maine’s Law Court has not addressed this question squarely—yet—but it could reach the same conclusion. Better to avoid the question entirely and raise any objection to the enforcement of an arbitration provision as soon as possible. Even if you lose before the arbitrator and are forced to proceed with the arbitration hearing, you will have preserved your objection and your ability to pursue that argument on appeal. Waiting increases the risk.