and vacate an arbitration war or that arbitration award shows on the face of the award that the arbitrator exceeded his authority respectfully we submit this is one of the relatively few arbitration cases that this court should reverse let me begin with the statute of statute if i may section ten a for the federal arbitration act states that this court should vacate an arbitration award when among other things the arbitrator has exceeded his authority equally clear is that an arbitrator exceeds his or her authority when an arbitrator ignores the parties contractual choice of law governing the arbitration i'll get to that in a minute but in this case the face of the arbitration award shows that the texas based arbitrator violated the party's contractual choice of law that he apply missouri law and that instead he applied more familiar texas law to the end other states law to decide the attorney fish it was before the court i proposed to step analysis for this court to approach this case in reviewing this appeal however i would ask that the court focus on what the arbitrator actually sa not on what my opponent claims the arbitrator said because the arbitrator's decision is what should guide this court we respectfully submit that the focus of this score should be on specifically paragraph seven of the arbitrator's award which can be found in the adenoma page fifteen that contains the language that we challenge and where we believe the arbitrator went off the rails so to address these issues first i suggest we take a look at the district court decision which we submit should be reversed i don't feel there's any issue here about the standard of review that the court should apply we recognize the district court's factual findings are entitled to  happy to your honor it's it's indisputed in this case that there was a missouri choice of law governing this the district court observe that it page two of the district court ruling the contract provide that section twenty of the contract which can be find in the appendix of page thirty six it's uncontroverted that missouri law should have been applied by the arbitrator to this case whole st virtually every arbitration decision of this court and the least eight significant decisions in the last two decades they all say that the court should look first to the contract to deferment determine the scope of the arbitrator's authority the district court agreed that he did in fact do that the basis the linchpin if you will of the arbitrator's of war in the two sentences of paragraph seven he says the limitation of liability covers liability for loss ind y damage or delay but does not cover attorney's fees this is where he went off the rails in the limitation of liability context courts routinely classify attorneys fees and legal expenses not as damages as costs that are subject to the limitation of liability what is the texas arbitrator site as far as authority for that ruling eight circuit applying illinois law i understand applying illinois law texas law which very clearly in this case says these things are treated differently and the law of arizona and florida why isn't this just a routine he got the long wrong case for a very good reason or because there's a choice of law issue and then got it wrong and the exceeding authorities very important because missouri would have reached a different result and he didn't apply missouri authority here we cited four decisions from the seventh circuit to by judge posner to by  easterbrook if you look at those four decisions i think it illustrates exactly the points that the court is raising which i think is a critical point in those four cases in one of my can't remember the name of which one it was the court if if if the arbitrator was supposed to apply missouri law or illinois law in that case and did it wrong then we've got the case but if he was supposed to apply illinois law and applied the law  already why isn't that just a different legal there i mean because of the statute he's exceeded his authority all of the cases of this core and the two recent cases of the supreme court all say that the arbitrator must draw his or her authority from the contract this contract says use missouri law if the arbitrator would have used missouri law badly we would not be here we would have paid the award below we disagree with the award below that we paid but we recognize the standard of review in this particular case he exceeded his authority because he didn't he didn't apply missouri badly missouri law badly he applied the wrong one he applied texas  law and the law these other states well you see you see my texas law he cited four different states correct none of which were missouri maybe there is no missouri case right now you say you have cases but they're not not on point with respect around to receive it they are on point missouri long b he thought they're not on point so i'm just going to say general understanding of multiple states and figure that missouri would apply the same law i think judge posner said in his cases we can't speculate about what he did when he tells us what he did and he did it wrong the error here is apparent on the face of the award because we can read it we can see where he went  stray there's there's actually a circuit case that we didn't cite but as i was preparing for the argument i was reading all the circuit cases it's the minnesota nurses association case it's a twenty two f third for fourteen and in that particular case the court did exactly what we're asking the court to do here and the way the court approached it is exactly the way i'm suggesting this panel appro it which is to look at the arbitrator's of war and see that he exceeded his authority and reverse well but we have to assume that he did not understand that he had to apply missouri law that's your whole argument right my argument is he should have and he didn't paragraph fifteen he specifically says i'm applying missouri law so why is he applying missouri law  applying it badly we would lose if he is applying the correct call badly i acknowledge that but in paragraph seventy doesn't say he's applying missouri wasn't paragraph fifteen so he understands of the agreement requires the application of missouri law i think we have to take the arbitrator's award as we find that that's what the court did in minnesota nurses and that's what the supreme court says we should do in this on this key ruling which is really the entire issue before the court he did not rely upon we i would refer the court now to the edstrom decision which i think is on all fours it's a posner decision for the seventh circuit but it explains in great detail how the arbitrator in that case was supposed to apply the l different standards of review apart from section ten that's what hall says and on that there's there's no dispute we don't dispute that we are squarely within section ten but on the issue of what is beyond the authority in the context of a choice of wong clause that issue wasn't in the hall that issue wasn't in medicine shop it was squarely in the holding of at strom i would just commend the reading of that por opinion with respect or honor if i could i'd like to reserve the balance my time you may thank you if you can aren't we hear from you you and while this may be a nice professional experience for me it's really unfortunate that we're here it's unfortunate that we're burdening the court wasting the court's resources and causing my client  the reason i did so is because i felt that it was appropriate and frankly necessary for three reasons the first is that this case this appeal was frivolous as file because for me based on many of your questions you're picking up on the standard of review the differential standard that's required here their arguments are contrary to controlling precedent and they're not object to believe reasonable but even though we shouldn't get into the merits of the case their argument is fundamentally flawed in patently frivolous their argument is the contract required application in missouri law they argue that under missouri law which is not true but they argue that under missouri law attorneys fees constitute damages there recover therefore because the limitation of liability provision in this case mentions damages the attorney's fees are not recoverable the problem with that argument is attorneys fees are indeed damages they will be recoverable in every case in missouri unless there was a limitation of liability provision that precluded that is not the law of missouri that's not the law anywhere as second and if i have time i'll get into this later on but as we mentioned in our in our papers our motion in our reply brief this appeal is frivolous as argued as well also they cited seven circuit cases which have been overruled by abbe max there contrary to medicine shop just column was a member of the panel that issued the opinion in medicine shop they never once addressed that in the principle never mentioned it even though that was the focus of our papers at the district court level even though it was mentioned specifically in the district court order they never once mentioned the case that's key in controlling and the reason i say that case is the controlling case is it's all for the party in that case vote was a franchise or franchisee dispute the issue was was the franchise or entitled to lost profits under missouri lost profits this court held specifically that wasn't a valid basis to contest an arbitrator's award and in fact the language in the opinion is that that theory is not  the but the third reason that we believe this case is appropriate for sanctions dargon it's based on the language from a sister circuit that the d m a international case issued by the tenth circuit in two thousand and nine and i just want to read the quote if we permit parties who lose in arbitration to freely litigate their cases in core arbitration will do nothing to reduce congestion in the judicial system dispute resolution will be slower instead of faster and reaching a final decision will cost more instead of less consequently unjustified and protracted attempts to vacate arbitration awards destroy the promise of arbitration and should not be tolerated it's exactly what happened here my clients were deprived what they bargained for i e the promise of arbitration despite having no colorable no legal or even korbel basis to do so pro energy has refused to honor of them say honor the award actually they refuse to honor a portion of the war just a portion they don't like and press the appeal for one point five years over a year and a half again that is deprived of what it expected what it bargained for and what it deserved but irrespective of whether the court is inclined to award sanctions we believe this court should in fact m well i guess in the back up this was a construction dispute my client was a general contractor prodigy was a sub contractor so contracts clearly says disputes will be submitted to arbitration pro energy initiated the arbitration it was the claimant in the arbitration pro energy sought damages of roughly five hundred thousand dollars my client sought damages on its counter claim of roughly two point three million dollars there are many contested issues in the arbitration but there are three of them that are pertinent to to this appeal the first was was the limitation of liability provision the mr motion has spoken to you about whether it was in forcible why was that important obviously the limitation of liabilit provision caps the exposure cap the exposure of pro energy to the contract some so for energy argued yes it's in forcible my client said no it was not the second issue there were two contracts that were entered into by the parties the issue as was the second contract that constitute a no vacation of the first contract thereby extinguishing the terms of the first that was important because it determined what was the contracts so was it the value of the second contract only which is what pro energy argued which ended up being about six hundred ninety nine thousand dollars or was it the combined some of the two contracts which is what my client argued which was roughly one point seven million dollars or thereabouts finally the third issue was was boomer entitled to recover attorney's fees and expenses incurred in connection with the arbitration the contract specifically allows the arbitrator to award fees it says section twenty one point two quote the arbitrator may include in the award payment to either party which reasonable attorneys fees and other expenses incurred in connection with the arbitration  specifically allowed it and so everyone for nine hundred sixteen thousand dollars in fees and expenses is that right that's what the arbitrator awarded the actual fees incurred substantially exceeded that but during the course of evaluating what was hosty a million dollars to litigate the arbitration i'm not talking about the peel i'm talking about the arbitration he said arbitration supposed to be an inexpensive form well if pro industry had offered what it felt that it owed the six ninety nine up front perhaps this would have short there's an issue that's correct you counter claim for three times as much and recovered on the counter claim but not to the extent that they had had requests so there was a final word in it was less expensive than if you'd gone to federal court in hindsight no i don't think so but we are in federal court and we shouldn't be in federal everything that occurred since the final word was issued should have been dispensed with and should not have been incurred so final word was issued november two thousand sixty one was awarded six hundred ninety nine thousand seven hundred two dollars plus interest which by the time that was paid was about two hundred ten thousand dollars the word actually suggests they would have been entitled to more but for the limitation a liability provision and one was awarded nine hundred seventy one hundred sixteen thousand dollars in attorney fees going back to the two if the three issues that i mentioned earlier though prinergy prevailed in the first one the limitation of liability provision was found to be enforceable or energy prevailed on the second when the arbitrator determined that there was indeed innovation in the second contract extinguished the first my client warmer prevailed on the third issue but it was entitle to two attorneys fees now here with pro energy wants to have its cake and eat it too but like the first portion of the award the principle damage award of six hundred ninety nine thousand dollars because of its liability w the limitation of liability provision and avoided about one point five million dollars in potential exposure was great after we moved to confirm the arbitration award they've finally been terribly paid that but now whether want to do is do piecemeal litigation or as they mention in their one of their briefs surgically appeal just the portion of the award the deals with attorneys fees and frankly with respect to that latter point we think that the cases say the arbitrator the court takes the arbitration award as it winds of section ten deals with a cater of arbitration awards section eleven deals with modification of words they chose to proceed under section ten but only focused on the portion of the award that they don't why that's inappropriate that's not allowed and frankly that shouldn't be the wall and shouldn't be put down because all that's going to do is encourage even more appeals of arbitration awards to the extent they can cherry pick certain portions that they don't want so we think the court office summarily dismissed the appeal for that basis on but let's focus specifically i have three minutes left i'll focus specifically on the issues that they've raised in their br with the award of pre judgement post judgment entries so for him to say that the arbitrator simply ignored this provision and acted like it didn't exist is simply nonsense let me ask you something there is an initial  then i must be candid with you your honor i didn't handle the arbitration i've been told that issue was raised what did missouri law apply with many of the same arguments being raised here being raised in the arbitration but i don't know that's not part of the record second issue pro energy makes much ado the fact that the arbitrator cited several cases from other jurisdictions with all due respect to pro energy so what this court does it every court does it when there's no missouri case on point that's what the court can and in fact should do look look at other jurisdictions for guidance and that's precisely what he did the question was raised earlier are there any missouri cases on point specifically that analyze whether attorneys  by and barred by a limitation of liability provision the answer is no there's not a case and why is that going back to what i said earlier because that's not the wall of missouri can't be the law missouri otherwise every litigant would get attorney's fees as a matter of course there was some criticism of the arbitrator not being more specific or maybe maybe pointing out that there was no missouri case on point of distinguishing the cases cited by pro energy with all due respect arbitration is meant to be less formal you're proud of wasn't required arbitration or he reviewed the contracts he interpreted the contracts he issued an award and that of word should be a firm so unless the court has any additional questions you  very well thank you for your argument mr moeller will hear from you and rebuttal if you wish really your honor if i may you may i think the argument about the references to missouri law on the award proves too much the point is being made that every time the arbitrator applied missouri law he called it out and he cited it and i acknowledge the award does refer to missouri law several times but in the key part that before us the only part that's before us he didn't do that he didn't call out missouri law he called out these other states law he didn't say he couldn't find any he didn't do what judges would do and turning to missouri law and trying to divine  missouri court might do that's in the ward and that's unfortunately the record that's before the court judge will oyo you asked the question about whether this had been brought to the attention of the arbitrator during the course of the arbitration before counsel was it's being handled by different counsel it was brought to the arbitrator's attention and why it wasn't addressed in the final award i don't know i can only assume that he was satisfied with the law that he applied the statement was made that we have peeled just the part we don't like that that's not accurate we didn't like any part of the arbitrator's final award we didn't think they should recover anything under the law but we recognize what the law provided recognized that's what the law obliged pro energy to do all that's left of the award is the attorney fees award and the case law says that the courts take these words as they find and that's how we find it today only the attorneys  are at issue we respectfully submit should be thumbs up or thumbs down and obviously in this case comes down that award counsel relies a lot and medicine and calls that adverse to us makes much of it i don't understand for the world why i like the medicine shop decision it supports foursquare exactly what we're doing here today it says if an arbitrator meets one of the four standards or scuse me if an award meets one of the four standards  section ten a then that's what has to be asserted on appeal that's precisely what we've done the other part of medicine shop says that manifest disregard is no longer part of the circuit law well it's never been part of this case so i don't know why medicine shop is so important it certainly is not onil forces council said because it does not deal with the authority issue that's before the courts today medicine shop says that the award must be within the authority of the arbitrator it acknowledges that but it didn't deal with the choice of law provision like this or look at the issue in the context of a properly raised choice of large human as we have done here today we did cite some cases that did deal with that from judge posner and judge easterbr