IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 13-20644

WHY NADA CRUZ, L.L.C., also known as Why Not Cruise; GREG 

ANDERSON,

Plaintiffs – Appellants

v.

ACE AMERICAN INSURANCE COMPANY,

Defendant – Appellee

Appeal from the United States District Court

for the Southern District of Texas

USDC No. 4:11-CV-3353

Before KING, HAYNES, and GRAVES, Circuit Judges.

PER CURIAM:*

Plaintiffs-Appellants Why Nada Cruz, L.L.C. and Greg Anderson appeal

the judgment of the district court confirming an arbitration award. They 

contend that the arbitrator violated the Federal Arbitration Act, 9 U.S.C. 

§ 10(a)(3), (4), in dismissing the arbitration as untimely and in declining to 

consider their request for reconsideration. For the following reasons, we 

AFFIRM.

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not 

be published and is not precedent except under the limited circumstances set forth in 5TH 

CIR. R. 47.5.4.

United States Court of Appeals

Fifth Circuit

FILED

June 3, 2014

Lyle W. Cayce

Clerk

 

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I. Factual and Procedural History

On August 15, 2010, the vessel “Sweet Dreams” sunk. PlaintiffsAppellants Greg Anderson and Why Nada Cruz, L.L.C., also known as Why 

Not Cruise (collectively “Anderson”), sought recovery for the loss under a 

yachtsman policy of insurance (“Policy”) issued by Defendant-Appellee ACE

American Insurance Company (“ACE”). The Policy included a provision 

requiring disputes to be settled by binding arbitration. The Policy further 

provided that the “request for arbitration must be filed within one (1) year of 

the date of loss or damage.” 

ACE advised Anderson on September 20, 2010 that it had denied his

claim. On July 7, 2011, Anderson’s counsel sent ACE a letter stating: 

If you need any other information for your evaluation of the claim 

then let me know and I will do what I can to get you the 

information as quickly as possible. Afterwards, if ACE still denies

the claim then please contact me to make arrangements for 

requesting arbitration under the policy. Otherwise, we have been 

instructed to file a lawsuit on August 8, 2011 to preserve our 

client(s) [sic] claims.

It appears that ACE did not respond to the letter.

On August 11, 2011, instead of filing for arbitration, Anderson sued ACE 

in Texas state court to recover under the Policy for the sinking of the vessel 

“Sweet Dreams.” ACE removed the case to federal court and filed an 

unopposed motion to compel arbitration and abate the court proceedings, 

which the district court granted on February 14, 2012.

More than eight months later, in October 2012, Anderson filed an 

arbitration demand with the American Arbitration Association (“AAA”). Once

the parties selected an arbitrator, ACE sought dismissal of the arbitration 

proceeding on the ground that Anderson had failed to comply with the Policy’s 

requirement that a request for arbitration be filed within one year of the loss. 

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After receiving briefing and evidence from the parties, the arbitrator 

entered an award dismissing the arbitration on the ground that “the 

arbitration was not filed in a timely manner [and] did not meet the specific 

requirements, as detailed within the Insurance Policy.” Specifically, the 

arbitrator found that “the filing for arbitration dated 25th October 2012, was 

over two (2) years two (2) months after the date of loss.” The arbitrator rejected 

Anderson’s contention that ACE’s apparent failure to respond to his July 7, 

2011 letter waived or tolled the one-year deadline for requesting arbitration. 

The arbitrator noted that Anderson’s communications made it clear that 

Anderson was aware, before the deadline, of the Policy’s arbitration 

requirement. The arbitrator explained that given 

the knowledge of the terms of the Policy requiring arbitration to 

be filed within twelve (12) months of the date of the loss, and that 

the Court had ordered arbitration, the undersigned arbitrator 

finds it questionable why Claimants delayed their actual filing of 

the arbitration over eight (8) months after being ordered by the 

Court and considers this action a critical factor and unreasonable 

response.

After the arbitral award was issued, Anderson asked “if the arbitrator 

would allow for a Motion to reconsider.” The arbitrator declined, explaining 

that “both the claimants and respondents had every opportunity to forward to 

me all documentation concerning the timeliness issues in this case in initial 

discovery.”

On ACE’s motion, the district court entered an order confirming the 

arbitration award and dismissing the suit with prejudice. On July 5, 2013, 

Anderson moved for a new trial and to vacate the arbitration award. Along 

with the motion, Anderson’s counsel submitted an affidavit providing several 

justifications for the eight-month delay between the district court’s order 

compelling arbitration and Anderson’s arbitration request, including that 

during this period: (1) “[i]n addition to handling this case and other numerous 

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legal matters . . . [, Anderson’s counsel] had to prepare and did go to trial on 

three separate cases”; (2) ACE’s original counsel switched firms; (3) Anderson’s 

counsel took a summer vacation; and (4) counsel for both parties had several 

discussions about the logistics of filing for arbitration. The motion for a new 

trial was denied on September 30, 2013. Anderson filed a timely notice of 

appeal.

II. Standard of Review

“In light of the strong federal policy favoring arbitration, judicial review 

of an arbitration award is extraordinarily narrow.” Rain CII Carbon, LLC v. 

ConocoPhillips Co., 674 F.3d 469, 471–72 (5th Cir. 2012) (internal quotation 

marks and citation omitted). We review “a district court’s confirmation of an 

award de novo, but the review of the underlying award is exceedingly 

deferential.” Petrofac, Inc. v. DynMcDermott Petroleum Operations Co., 687 

F.3d 671, 674 (5th Cir. 2012) (internal quotation marks and citation omitted). 

“An award may not be set aside for a mere mistake of fact or law.” Apache 

Bohai Corp. LDC v. Texaco China BV, 480 F.3d 397, 401 (5th Cir. 2007).

III. Discussion

Anderson contends that the arbitrator erred both by: (1) failing to 

interpret properly the Policy language in concluding that Anderson failed to 

timely request arbitration, and (2) declining to entertain a motion for 

reconsideration. Anderson seeks to vacate the arbitration award and to 

resubmit the case to arbitration in accordance with the Policy terms.

Sections 10 and 11 of the Federal Arbitration Act, 9 U.S.C. §§ 1–16 

(“FAA”), provide “the exclusive means for setting aside or changing an 

arbitration award challenged under the FAA.” Citigroup Global Mkts., Inc. v. 

Bacon, 562 F.3d 349, 352 (5th Cir. 2009); see also Brook v. Peak Int’l, Ltd., 294 

F.3d 668, 672 (5th Cir. 2002). Section 10 permits vacatur only when, among 

other things, “the arbitrators were guilty of misconduct . . . in refusing to hear 

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evidence pertinent and material to the controversy” or “the arbitrators 

exceeded their powers.” 9 U.S.C. § 10(a)(3), (4).

We first address Anderson’s contention that the arbitrator exceeded his 

powers, in violation of § 10(a)(4) of the FAA, by concluding that Anderson’s 

request for arbitration was dilatory under the Policy. Arbitral authority

derives from contract. 21st Fin. Servs., L.L.C. v. Manchester Fin. Bank, 13-

50389, 2014 WL 12827, at *2, — F.3d —, — (5th Cir. Mar. 31, 2014). “Where 

arbitrators act contrary to express contractual provisions, they have exceeded 

their powers.” Id. at *3 (internal quotation marks and citation omitted). “If 

the contract creates a plain limitation on the authority of an arbitrator, we will 

vacate an award that ignores the limitation.” Id. (internal quotation marks and 

citation omitted). Nevertheless, “[a] reviewing court examining whether 

arbitrators exceeded their powers must resolve all doubts in favor of 

arbitration.” Brook, 294 F.3d at 672.

Anderson has not shown that the arbitrator exceeded his powers in 

dismissing the arbitration due to Anderson’s failure to timely request 

arbitration under the Policy terms. Anderson argues that the arbitrator should 

have found that Anderson timely requested arbitration in his July 7, 2011 

letter to ACE, which was sent less than one year after he submitted his claim. 

But the Policy required the arbitration “request” to be “filed,” which may 

require something more formal than a letter to ACE. And Anderson’s July 7, 

2011 letter may not have been a “request” for arbitration because it made any

request contingent on ACE’s further rejection of Anderson’s claim. Moreover, 

Anderson acknowledges that the term “request,” as used in the Policy, is 

ambiguous, and that the Policy does not specify the form that a request should 

take or to whom it should be made. Given the “exceedingly deferential” 

standard of review, Petrofac, 687 F.3d at 674, we cannot fault the arbitrator 

for his resolution of those ambiguities. See United Paperworkers Int’l Union v. 

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Misco, Inc., 484 U.S. 29, 38 (1987) (“Courts . . . do not sit to hear claims of 

factual or legal error by an arbitrator as an appellate court does in reviewing 

decisions of lower courts.”). Accordingly, the arbitrator did not exceed his 

powers by declining to find that Anderson’s reference to arbitration in his July 

7, 2011 letter was a “request for arbitration.”

Anderson further contends that, in determining that Anderson’s 

arbitration request was untimely, the arbitrator impermissibly relied on 

events that occurred after the Policy’s one-year deadline for requesting 

arbitration. In particular, Anderson asserts that the arbitrator’s consideration 

of the eight-month delay between the district court’s order compelling 

arbitration and Anderson’s arbitration demand has no basis in the Policy 

language. 

The arbitrator’s discussion of that delay can be fairly read as relating not 

to the issue of whether Anderson failed to file an arbitration request within 

one year of the loss, but to Anderson’s equitable argument that ACE waived or 

tolled the one-year deadline by not responding to the July 7, 2011 letter. In 

rejecting Anderson’s waiver argument, the arbitrator noted that: (1) ACE’s 

September 20, 2010 letter denying Anderson’s claim specifically referenced the 

Policy’s arbitration clause and the one-year contractual limitations period; (2) 

Anderson’s December 9, 2010 and July 7, 2011 letters to ACE acknowledged 

the Policy’s arbitration requirement; (3) Anderson did not file an arbitration 

demand until more than 26 months after the loss and 8 months after the 

district court compelled arbitration; and (4) when Anderson did eventually 

demand arbitration, he made the demand without assistance from ACE. In 

light of these findings, and their purpose, the arbitrator did not exceed his 

powers in considering Anderson’s actions after the one-year deadline for filing 

an arbitration request had run, or in rejecting Anderson’s argument that this 

deadline was waived or tolled.

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We next turn to Anderson’s second issue on appeal: that the arbitrator 

improperly denied him an opportunity to present evidence showing the reasons

for the eight-month delay between the district court’s order compelling 

arbitration and Anderson’s arbitration demand. Anderson states that, during 

that period, his counsel had three trials and went on summer vacation; ACE 

changed counsel; the parties discussed alternatives to submitting the 

arbitration to the AAA; and the parties had several discussions regarding the 

wording of the arbitration demand and the payment of filing fees. Anderson 

contends that the arbitrator’s refusal to permit a motion for reconsideration,

with which he could present this evidence, violated FAA § 10(a)(3)’s prohibition 

on arbitrators “refusing to hear evidence pertinent and material to the 

controversy,” and rendered the arbitration proceeding fundamentally unfair.

We cannot fault the arbitrator for declining to consider evidence that was 

not timely presented to him. ACE raised, in its application to dismiss the 

arbitration proceeding, the issue of the delay between the district court’s order 

compelling arbitration and Anderson’s arbitration demand to the AAA. 

Anderson had ample opportunity to present, in his response brief, evidence 

explaining and mitigating the impact of that delay, and supporting his waiver 

defense. We have held that “arbitrators enjoy inherent authority to police the 

arbitration process and fashion appropriate remedies to effectuate this 

authority.” Hamstein Cumberland Music Grp. v. Williams, 532 F. App’x 538, 

543 (5th Cir. 2013). Thus, the arbitrator did not commit misconduct, in 

violation of § 10(a)(3), by declining to give Anderson a second opportunity, after 

the arbitration award already had issued, to present evidence supporting his 

opposition to dismissal of the arbitration.

IV. Conclusion

For the foregoing reasons, the judgment of the district court is 

AFFIRMED.

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