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ADR Appraisal isn’t arbitration under federal standard Federal, not state, law supplies the standard for interpreting the word “arbitration” in the Federal Arbitration Act, the 10th U.S. Circuit Court of Appeals held on Nov. 30, on an issue of first impression. Salt Lake Tribune Publishing Co. v. Management Planning Inc., No. 03-4256. Shareholders of Kearns-Tribune Corp. sold their company to the predecessor of MediaNews; formed a new company, Salt Lake Tribune Publishing Co.; and acquired an option to purchase the Salt Lake Tribune from MediaNews. When the parties did not agree on a purchase price, each side appointed an appraiser to assess the newspaper’s fair market value, pursuant to a procedure set forth in their agreement. But when the appraisals differed by more than 10%, the parties resorted to the agreement’s procedure whereby they jointly selected a third appraiser, Management Planning Inc. The agreement required that they then average the two closest values of the three appraisals. But Salt Lake was unhappy with the result, and sued MediaNews and Management Planning. A Utah federal court found that the appraisal was an “arbitration,” and granted the considerable deference owed to arbitrators’ decisions, dismissing Salt Lake’s claims. The 10th Circuit reversed and remanded, noting that neither the language nor the legislative history of the Federal Arbitration Act shows that Congress intended state law to define the term “arbitration.” The court rejected the district court’s reliance on Delaware law for a definition, stating that the question was whether “the process at issue sufficiently resembles classic arbitration to fall within the purview of the FAA.” Here it did not because the parties did not empower a third party to render a decision settling their dispute. Full text of the decision BANKRUPTCY Tenancy by the entireties is exempt from creditors Property owned by a Chapter 13 bankruptcy debtor as tenancy by the entireties with a nondebtor under Florida law is not part of the bankruptcy estate and therefore cannot be reached by creditors, the 11th U.S. Circuit Court of Appeals held on Nov. 30, in a case of first impression. Musolino v. Sinnreich, No. 04-10309. A Chapter 13 debtor claimed that certain property he held with his nondebtor wife as tenants by the entireties was exempt from his creditors. A bankruptcy court denied one of the creditor’s objection to this exemption. A Florida federal court affirmed. The 11th Circuit affirmed, holding that 11 U.S.C. 522 exempts from the bankruptcy estate “any interest in property in which the debtor had, immediately before the commencement of the case, an interest as a tenant by the entirety or joint tenant to the extent that such interest as a tenant by the entirety or joint tenant is exempt from process under applicable nonbankruptcy law.” Florida law holds that only the creditors of both the husband and the wife may attach property held as tenancy by the entireties. Full text of the decision CIVIL PRACTICE Good cause is required to extend service time A trial court did not err in denying a motion to extend the 120-day limit for service of process in an Arkansas civil action because there was no good cause shown for the delay in service, the Arkansas Supreme Court held on Dec. 2. Henyan v. Peek, No. 03-1155. Louise and Robert Henyan sued physicians Richard Peek and Mark Gibbs, alleging medical malpractice. The Henyans obtained two extensions of time to serve the doctors. They were able to serve Peek before the end of the second extension, but did not obtain service on Gibbs until after the expiration of the second extension. The Henyans moved for a third extension for service on Gibbs, but before ruling on the motion, the trial court granted the doctors’ motion to set aside the second extension, holding that the Henyans had failed to show good cause for the delay in service. The Henyans appealed, and Arkansas’ intermediate appellate court certified the appeal to the Arkansas Supreme Court. Affirming, the state’s high court rejected the Henyans’ argument that the only requirement to obtain an extension was a timely-filed motion requesting the extension. Holding that the plain language of the applicable statute, Ark. R. Civ. P. 4(i), required a showing of good cause, the court said, “Here, neither of Appellants’ motions offered any cause, let alone good cause, for the extensions. Moreover, there is nothing in the trial court’s orders indicating that the time for service was being extended upon a showing of good cause. Without a contemporaneous showing of good cause to grant the extensions, Appellants have failed to strictly comply with the service requirements of Rule 4(i). It therefore is of no consequence whether the reason later offered by Appellants, that they were unable to secure a file-marked copy of the complaint from the circuit clerk, amounts to good cause.”

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