Last month, a Maryland woman named Deborah Williams testified at a hearing in the House about her dispute over a Coffee Beanery franchise. Despite the fact that Maryland's attorney general determined that the Coffee Beanery had defrauded her, she was forced into arbitration in Michigan, where the company is headquartered. The Coffee Beanery's attorney actually worked as an arbitrator for AAA, the same firm handling her case, and her arbitrator shared an accounting firm with the company, a clear conflict of interest. Despite the decision from Maryland's attorney general, the arbitrator ruled against Williams, assessed her $100,000 for the cost of the arbitration, a $150,000 judgment to be paid to Coffee Beanery, and ordered her to pay the company's legal fees as well. Williams is now bankrupt and nearly homeless as a result and can't appeal the decision. She will be paying off the award for the rest of her life.
Minn. Stat. §572.19 - Vacating an award.
"Subdivision 1. Upon application of a party, the court shall vacate an award where:
(1) The award was procured by corruption, fraud or other undue means;
(2) There was evident partiality by an arbitrator...or corruption...or misconduct prejudicing...any party;
(3) The arbitrators exceeded their powers;
In the event of any dispute between the parties arising under this agreement, such dispute shall be resolved by arbitration in accordance with [identify applicable rules/laws/arbitral bodies]. The arbitrator[s] shall be selected by [describe process]. The hearing shall be conducted in [location], unless both parties consent to a different location. The decision of the arbitrator shall be final and binding upon all parties.
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