PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

MCI CONSTRUCTORS, LLC, 

Plaintiff-Appellant,

v.

CITY OF GREENSBORO, a

municipality, organized under the

laws of the State of North

Carolina,

Defendant-Appellee,

and  No. 09-1600

HAZEN AND SAWYER, P.C., a New

York Corporation,

Defendant,

v.

NATIONAL UNION FIRE INSURANCE

COMPANY OF PITTSBURGH, PA, a

Pennsylvania Corporation,

Third Party Defendant. 
MCI CONSTRUCTORS, LLC, 

Plaintiff,

v.

CITY OF GREENSBORO, a

municipality, organized under the

laws of the State of North

Carolina,

Defendant-Appellee,

and  No. 09-1606

HAZEN AND SAWYER, P.C., a New

York Corporation,

Defendant,

v.

NATIONAL UNION FIRE INSURANCE

COMPANY OF PITTSBURGH, PA, a

Pennsylvania Corporation,

Third Party Defendant-Appellant. 

Appeals from the United States District Court

for the Middle District of North Carolina, at Greensboro.

William L. Osteen, Jr., District Judge.

(1:99-cv-00002-WO-WWD)

Argued: April 8, 2010

Decided: July 1, 2010

Before TRAXLER, Chief Judge, and DUNCAN and

DAVIS, Circuit Judges.

2 MCI CONSTRUCTORS v. CITY OF GREENSBORO
Affirmed by published opinion. Judge Duncan wrote the opinion, in which Chief Judge Traxler and Judge Davis joined.

COUNSEL

ARGUED: C. Allen Foster, GREENBERG TRAURIG, LLP,

Washington, D.C., for MCI Constructors, LLC. William P. H.

Cary, George W. House, BROOKS, PIERCE, MCLENDON,

HUMPHREY & LEONARD, Greensboro, North Carolina,

for City of Greensboro. ON BRIEF: Eric C. Rowe, David

Samuel Panzer, GREENBERG TRAURIG, LLP, Washington, D.C., for MCI Constructors, LLC; John M. Gillum,

MANIER & HEROD, Nashville, Tennessee, for National

Union Fire Insurance Company of Pittsburgh, PA. Michael D.

Meeker, Joseph A. Ponzi, BROOKS, PIERCE, MCLENDON,

HUMPHREY & LEONARD, Greensboro, North Carolina,

for City of Greensboro.

OPINION

DUNCAN, Circuit Judge:

This appeal arises from a contract dispute concerning the

construction of a wastewater treatment plant. This dispute has

been before us once before. See MCI Constructors, Inc. v.

City of Greensboro, 125 F. App’x 471 (4th Cir. 2005). Following that decision, all concerned parties agreed to submit

the outstanding issues to arbitration. Arbitration yielded an

award to Appellee City of Greensboro (the "City") of

$14,939,004. The district court then granted the City’s motion

to confirm that award. This appeal followed. For the reasons

that follow, we affirm.

MCI CONSTRUCTORS v. CITY OF GREENSBORO 3
I.

A.

On January 16, 1996, the City entered into a contract with

Appellant MCI Constructors, LLC ("MCI") for the expansion

and upgrade of a wastewater treatment plant in Greensboro,

North Carolina, for a cost of roughly $29 million. The contract explains that "[t]o prevent disputes and litigations, the

City Manager shall . . . decide every question which may arise

relative to the fulfillment of the Contract on the part of the

Contractor." J.A. 227. As required by North Carolina law,

after signing the contract, MCI obtained a performance bond

from National Union Fire Insurance Company ("National

Union") of Pittsburgh, Pennsylvania, which incorporated the

terms of the contract between the City and MCI and guaranteed that MCI would perform the contract. 

When construction of the wastewater plant became substantially delayed, the City terminated the contract. MCI then

commenced this diversity action in the Middle District of

North Carolina against the City and Hazen and Sawyer, P.C.

("Hazen and Sawyer"), the engineering firm that designed the

project. The complaint alleged, inter alia, claims for breach of

contract, negligent misrepresentation, and wrongful termination. In response, the City filed a counterclaim for breach of

contract, and a third-party complaint against National Union

on its bond. The district court declined to entertain most of

these claims, concluding that the contract required that all disputes regarding the fulfillment of the contract be resolved by

the City Manager. Accordingly, the parties submitted their

claims to the City Manager. 

After a two-day hearing, on April 16, 2002, the City Manager issued an order. In that order, the City Manager held that

the City had properly terminated MCI for cause, and denied

MCI’s wrongful termination claim. Thereafter, a hearing was

held to determine the City’s damages. After that proceeding,

4 MCI CONSTRUCTORS v. CITY OF GREENSBORO
on February 5, 2003, the City Manager issued an order finding that MCI owed the City $13,377,842.73. 

The City then filed a motion for summary judgment, seeking to enforce the City Manager’s decision. National Union

filed a cross-motion for summary judgment seeking to avoid

liability as the surety for payment of the $13,377,842.73. On

March 10, 2004, after finding that the City Manager’s decision was not "influenced by fraud, bad faith, or gross mistake," the district court issued an order granting summary

judgment in favor of the City on all of MCI’s claims. J.A.

2510. The district court determined that "the City Manager’s

award [was] a complete defense to [MCI’s] claims."1Id. Further, having found the City Manager’s award binding and

enforceable, the district court awarded judgment to the City

on its counterclaim. Thus, the district court held that the City

was to recover from MCI the sum of $13,377,842.73. In a

separate order, the district court held that the City Manager’s

award was enforceable against National Union. 

MCI and National Union appealed the district court’s rulings. On appeal, we "affirm[ed] all the rulings of the district

court except its application of the ‘fraud, bad faith, or gross

mistake’ standard, which [the district court] applied to review

the decision of the City Manager." MCI Constructors, 125 F.

App’x at 474. Specifically, we held that 

since the City Manager signed the contract for the

City and in essence was adjudicating his own performance, rights, and liabilities under the contract,

North Carolina law requires that the City Manager’s

performance be measured by a standard of objective

1The court recognized that in a previous opinion it had not required

MCI to submit its claims for breach of warranty and negligent misrepresentation to the City Manager, but nevertheless granted judgment because

those "claims were within the ambit of the City Manager’s contractual

decision-making authority." J.A. 2511. 

MCI CONSTRUCTORS v. CITY OF GREENSBORO 5
reasonableness "based upon good faith and fair play"

—a standard that must be read into the contract so as

to prevent the contract from being rendered illusory.

Id. Thus, we reversed and vacated the judgment insofar as the

judgment depended on application of this standard.

B.

Trial was then set for February 6, 2006. On January 26,

2006, however, the City, MCI, and National Union advised

the district court that they had "entered into a binding Arbitration Agreement to resolve all issues between them" arising

from the contract and that "[u]pon conclusion of the arbitration, all matters currently set for trial w[ould] be moot." J.A.

2621. In that agreement, the parties stipulated that an arbitration panel would be selected by the parties, that the "rules

would be standard AAA Complex Commercial or JAMS

rules," J.A. 2634, and that the "[p]roceedings [would] be

bifurcated between liability and damages," J.A. 2635. Further,

the parties agreed that "[a]t the conclusion of the arbitration,

the award [would] be confirmed and a judgment [would be]

entered," and that "[u]pon confirmation, MCI [would] take a

voluntary dismissal with prejudice of all claims and proceedings against the City . . . and the City [would] take a voluntary

dismissal with prejudice of all claims against MCI." J.A.

2637. Accordingly, as requested by the parties, the district

court stayed the case pending arbitration.

On September 26, 2006, the parties presented their liability

arguments to a panel of three arbitrators. On June 20, 2007,

the arbitration panel issued an award finding that "[t]he City’s

termination of MCI’s performance under [the] contract . . . for

expansion of a waste water treatment plant . . . was for cause."

J.A. 4113. In response, on September 17, 2007, MCI filed a

motion with the district court seeking to vacate the award.

Specifically, MCI argued, inter alia, that "the Panel refused to

hear material evidence[,] . . . repeatedly . . . refus[ed] to con6 MCI CONSTRUCTORS v. CITY OF GREENSBORO
sider [its] submissions and [did] not allow[ ] [it] to respond to

the City’s Closing Arguments in the Liability Phase of the

Arbitration." J.A. 4120. Further, MCI argued that "the City

obtained the ‘Award’ by undue means by misrepresenting

facts outside the record during Closing Arguments and acting

to prevent MCI from being able to respond." Id. At MCI’s

request, however, the district court issued an order explaining

that it would not entertain MCI’s motion until thirty days after

the arbitration was complete.

The parties then presented their damages arguments to the

arbitration panel. On April 17, 2008, the arbitration panel

found that "the City [was] entitled to recover from MCI"

$14,939,004. J.A. 7403. Contending that the award was

unclear, on April 24, 2008, MCI sent an email to the arbitration panel, requesting the panel to modify it. Specifically,

MCI argued that the arbitration panel failed to deduct the contract balance from the award, and that the arbitration panel

was required to provide a reasoned award that addressed the

disposition of all the claims submitted. On May 8, 2008, the

panel issued an order denying MCI’s request. The panel

explained that because none of the parties requested a reasoned award prior to the panel’s appointment, it was not obligated to provide one. Further, the panel noted that "[t]he

Damages Award did not contain any errors." J.A. 7416. 

Thereafter, the City moved to have the liability and damages awards confirmed by the district court. MCI and

National Union moved to vacate the arbitration awards. In the

alternative, MCI also moved to remand the damages award.

On the substantive motions, the district court received a total

of twenty-two briefs and held oral arguments. After reviewing

all these materials, on March 9, 2009, the district court issued

two opinions denying MCI’s and National Union’s motions.

Thereafter, on April 28, 2009, the district court entered an

order confirming the arbitration awards. The court also

entered final judgment pursuant to Federal Rule of Civil Procedure 54(b). MCI and National Union then appealed.

MCI CONSTRUCTORS v. CITY OF GREENSBORO 7
II.

On appeal, MCI and National Union present three main

arguments. First, they argue that the district court erred in certifying the judgment as final under Rule 54(b). Second, they

maintain the district court should have vacated the awards

because the liability award was obtained through undue

means, the arbitration panel exceeded the scope of its powers

to issue the damages award, and the damages award does not

draw its essence from the parties’ contract. Finally, they contend that the district court should have remanded the damages

award because the award fails to specify whether it includes

the contract balance, and because the arbitrators were required

to issue a reasoned award. We consider each argument in turn.2

A.

We turn first to MCI and National Union’s argument that

the district court erred in certifying the judgment as final

under Federal Rule of Civil Procedure 54(b). We review the

district court’s Rule 54(b) certification for abuse of discretion.

Fox v. Baltimore City Police Dep’t, 201 F.3d 526, 531 (4th

Cir. 2000); Braswell Shipyards, Inc. v. Beazer E., Inc., 2 F.3d

1331, 1336 (4th Cir. 1993). In doing so, we recognize that our

role is "not to reweigh the equities or reassess the facts but to

make sure that the conclusions derived from those weighings

and assessments are juridically sound and supported by the

record." Curtiss-Wright Corp. v. Gen. Elec. Co., 446 U.S. 1,

10 (1980). 

Federal Rule of Civil Procedure 54(b) provides that

"[w]hen an action presents more than one claim for relief—

whether as a claim, counterclaim, crossclaim, or third-party

claim—or when multiple parties are involved, the court may

2MCI and National Union raised several other arguments in their briefs.

Any arguments not discussed in this opinion were found to be without

merit. 

8 MCI CONSTRUCTORS v. CITY OF GREENSBORO
direct entry of a final judgment as to one or more, but fewer

than all, claims or parties only if the court expressly determines that there is no just reason for delay." Fed. R. Civ. P.

54(b). "The task which the district court must follow to effectuate a Rule 54(b) certification involves two steps." Braswell,

2 F.3d at 1335. "First, the district court must determine

whether the judgment is final." Id. A judgment "must be

‘final’ in the sense that it is ‘an ultimate disposition of an individual claim entered in the course of a multiple claims

action.’" Curtiss-Wright, 446 U.S. at 7 (quoting Sears, Roebuck & Co. v. Mackey, 351 U.S. 427, 436 (1956)). "Second,

the district court must determine whether there is no just reason for the delay in the entry of judgment." Braswell, 2 F.3d

at 1335. In determining whether there is no just reason for

delay in the entry of judgment, factors the district court

should consider, if applicable, include:

(1) the relationship between the adjudicated and

unadjudicated claims; (2) the possibility that the

need for review might or might not be mooted by

future developments in the district court; (3) the possibility that the reviewing court might be obliged to

consider the same issue a second time; (4) the presence or absence of a claim or counterclaim which

could result in a set-off against the judgment sought

to be made final;3 (5) miscellaneous factors such as

delay, economic and solvency considerations, shortening the time of trial, frivolity of competing claims,

expense, and the like.

3On this factor, the Supreme Court has explained "that counterclaims,

whether compulsory or permissive, present no special problems for Rule

54(b) determinations; counterclaims are not to be evaluated differently

from other claims." Curtiss-Wright Corp., 446 U.S. at 9. Like other

claims, the Court has explained, "their significance for Rule 54(b) purposes turns on their interrelationship with the claims on which certification

is sought." Id.

MCI CONSTRUCTORS v. CITY OF GREENSBORO 9
Braswell, 2 F.3d at 1335-36 (footnote call number added)

(quoting Allis-Chalmers Corp. v. Phila. Elec. Co., 521 F.2d

360, 364 (3d Cir. 1975)).

MCI and National Union argue that because "[t]he record

. . . is replete with examples of [Hazen and Sawyer]’s failure

to monitor and control the completion costs, resulting in costs

that the City never should have incurred and that MCI should

not be called upon to pay," the district court erred in entering

a Rule 54(b) certification. Appellants’ Br. at 58. Instead, they

contend, the district court should have held in abeyance the

motion to certify the judgment as final pending the resolution

of MCI’s claims against Hazen and Sawyer, particularly since

"both MCI and the City agree that the responsibility for

improperly certified charges of the completion contractors

must fall upon [Hazen and Sawyer]." Appellants’ Br. at 59. In

essence, they argue that there was a just reason for delaying

the entry of judgment here.4

Our review of the record supports the conclusion that there

was no just reason for delaying the entry of judgment here.

First, "[a]lthough the present matter and the Hazen [and] Sawyer litigation arise out of a common set of facts, i.e., the circumstances surrounding City’s termination of MCI’s

performance under the Contract," J.A. 7947-48, the relationship between the adjudicated and unadjudicated claims was

severed by virtue of the parties’ own admissions, such that the

4MCI and National Union do not seem to dispute that the judgment here

was final. Nevertheless, we note that the parties, in their Joint Motion to

Stay, stipulated as much to the district court. They submitted that the arbitration panel would resolve "all outstanding issues between them," J.A.

2621, that "[u]pon conclusion of the arbitration, all matters . . . set for trial

w[ould] be moot," id., that "[a]rbitration w[ould] be final and binding,"

J.A. 2634, and that "[a]t the conclusion of the arbitration, the award . . .

[would] be confirmed and a judgment [would be] entered," J.A. 2637. In

accordance with this agreement, the arbitration panel stated in its damages

award, "This AWARD is in full and final settlement of all issues submitted in the Damages Phase of this Arbitration." J.A. 7403. 

10 MCI CONSTRUCTORS v. CITY OF GREENSBORO
results of the arbitration have no binding or preclusive effect

on the litigation of the remaining claims against Hazen and

Sawyer. The parties represented to the district court that

"[u]pon conclusion of the arbitration, all matters . . . set for

trial w[ould] be moot," and that "[f]urther proceedings involving Hazen [and] Sawyer c[ould] take place at that time." J.A.

2621; see also J.A. 2628 ("Defendant Hazen [and] Sawyer . . .

has already consented to bifurcation of issues involving it

until after the resolution of certain claims between MCI and

the City, which will now be resolved through arbitration

instead of litigation in this Court."). Second, MCI and

National Union point to nothing in the record, nor are we able

to find anything, to suggest that review of the issues here

might be mooted by future developments in the district court.

On the contrary, "the possibility that [we] might be obliged to

consider the same issue[s] [explored here] a second time,"

Braswell, 2 F.3d at 1335, is unlikely because all that remains

to be resolved is whether the arbitration awards are valid, and

Hazen and Sawyer was not a party to the arbitration agreement and did not participate in the arbitration proceedings.

Third, MCI and National Union have not identified the presence or absence of a pending claim or counterclaim which

could result in a set-off against the judgment made final by

the district court. Finally, we do not believe any "miscellaneous factors such as delay, economic and solvency considerations, . . . frivolity of competing claims, expense, and the

like" change the analysis here. Braswell, 2 F.3d at 1336.

Accordingly, we hold that the district court did not abuse

its discretion in certifying its judgment as final under Rule

54(b).

B.

We next consider MCI and National Union’s argument that

the district court should have vacated the arbitration awards.

In order for a reviewing court to vacate an arbitration award,

the moving party must sustain the heavy burden of showing

MCI CONSTRUCTORS v. CITY OF GREENSBORO 11
one of the grounds specified in the Federal Arbitration Act

(the "FAA") or one of certain limited common law grounds.5

Patten v. Signator Ins. Agency, Inc., 441 F.3d 230, 234 (4th

Cir. 2006). The FAA provides that a court may only vacate

an arbitration award on one of the following grounds:

(1) where the award was procured by corruption,

fraud, or undue means;

(2) where there was evident partiality or corruption

in the arbitrators, or either of them;

(3) where the arbitrators were guilty of misconduct

in refusing to postpone the hearing, upon sufficient

cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other

misbehavior by which the rights of any party have

been prejudiced; or

(4) where the arbitrators exceeded their powers, or

so imperfectly executed them that a mutual, final,

and definite award upon the subject matter submitted

was not made.

9 U.S.C. § 10(a). The permissible common law grounds for

vacating such an award "include those circumstances where

an award fails to draw its essence from the contract, or the

award evidences a manifest disregard of the law." Patten, 441

F.3d at 234.

5The district court noted that the common-law grounds may or may not

be available to MCI after Hall Street Associates, L.L.C. v. Mattel, Inc., 552

U.S. 576 (2008). In Hall Street, the Supreme Court held that "the statutory

grounds are exclusive," id. at 578, and that "the FAA confines its expedited judicial review to the grounds listed in 9 U.S.C. §§ 10 and 11," id.

at 592. Because we find that MCI and National Union’s common-law

arguments do not entitle them to relief, we need not decide whether courts

may still vacate an arbitration award if the award fails to draw its essence

from the controlling agreement, or if it flows from a manifest disregard of

the applicable law. 

12 MCI CONSTRUCTORS v. CITY OF GREENSBORO
MCI and National Union contend in this appeal that the district court should have vacated the arbitration awards under

several of the permissible statutory and common law bases.

Specifically, they contend that the liability award was procured by undue means in violation of § 10(a)(1) of the FAA.

They also argue that to issue the damages award, the arbitration panel exceeded the scope of its powers. Finally, they

assert that the damages award does not draw its essence from

the contract. We consider each argument in turn. 

In doing so, we review for clear error the district court’s

findings of fact and review de novo its conclusions of law,

including its decision not to vacate the arbitration awards.

Choice Hotels Int’l, Inc. v. SM Prop. Mgmt., LLC, 519 F.3d

200, 207 (4th Cir. 2008). We are mindful that "[o]ur authority

to review the arbitration award[s] at issue, like the authority

of the district court to do the same, is ‘substantially circumscribed.’" Id. (quoting Patten, 441 F.3d at 234). As we have

said previously, "the scope of judicial review for an arbitrator’s decision is among the narrowest known at law because

to allow full scrutiny of such awards would frustrate the purpose of having arbitration at all—the quick resolution of disputes and the avoidance of the expense and delay associated

with litigation." Three S Delaware, Inc. v. DataQuick Info.

Sys., Inc., 492 F.3d 520, 527 (4th Cir. 2007) (citation and

internal quotations omitted).

1.

We first consider whether the liability award was "procured

by . . . undue means" in violation of § 10(a)(1). 9 U.S.C.

§ 10(a)(1). "The term ‘undue means’ has generally been interpreted to mean something like fraud or corruption." Three S

Delaware, 492 F.3d at 529; see also Nat’l Cas. Co. v. First

State Ins. Group, 430 F.3d 492, 499 (1st Cir. 2005) ("The best

reading of the term ‘undue means’ under the maxim noscitur

a sociis ["it is known from fellows or allies"] is that it

describes underhanded or conniving ways of procuring an

MCI CONSTRUCTORS v. CITY OF GREENSBORO 13
award that are similar to corruption or fraud, but do not precisely constitute either."). Typically, to prove that an award

was procured by undue means, the party seeking vacatur

must show that the fraud [or corruption] was (1) not

discoverable upon the exercise of due diligence prior

to the arbitration, (2) materially related to an issue in

the arbitration, and (3) established by clear and convincing evidence.

A.G. Edwards & Sons, Inc. v. McCollough, 967 F.2d 1401,

1404 (9th Cir. 1992); see also Bonar v. Dean Witter Reynolds,

Inc., 835 F.2d 1378, 1383 (11th Cir. 1988) (collecting cases).

MCI and National Union contend that the arbitration

awards here were procured through undue means because the

City engaged in unfair and fraudulent actions. They explain

that the City (1) actively sought to prevent MCI from presenting the facts of the case de novo; (2) misrepresented facts to

the arbitration panel; and (3) elected to present its principal

arguments on rebuttal, thereby robbing MCI of its opportunity

to present a meaningful response at closing. Thus, they maintain, the arbitration awards should be vacated under

§ 10(a)(1).

MCI and National Union’s difficulty, however, is that no

court has ever suggested that the term "undue means" should

be interpreted to apply to actions of counsel that are merely

legally objectionable. See A.G. Edwards, 967 F.2d at 1403-04

(defining "undue means" as conduct "that is immoral if not

illegal"; holding that the term does not apply to defendant’s

raising of frivolous defenses during arbitration, or "sloppy or

overzealous lawyering"). 

Further, while there is some evidence in the record to support MCI and National Union’s assertions that the City presented its main arguments on rebuttal and that—on at least one

occasion—it referred to evidence outside the record, Appel14 MCI CONSTRUCTORS v. CITY OF GREENSBORO
lants fail to establish that these actions led to the procurement

of the award. See PaineWebber Group, Inc. v. Zinsmeyer

Trusts P’ship, 187 F.3d 988, 994 (8th Cir. 1999) ("[T]here

must be some causal relation between the undue means and

the arbitration award."); Bonar, 835 F.2d at 1385 (finding an

arbitration award was procured through undue means where

"[t]he arbitrators’ written award, although brief, reflects the

influence of [the fraudulent] testimony"); see also Black’s

Law Dictionary 1327 (9th ed. 2009) (defining "procurement"

as "the act of getting or obtaining something or of bringing

something about"). As § 10(a)(1) "does not provide for vacatur in the event of any fraudulent conduct, but only where the

award was procured by corruption, fraud, or undue means,"

Forsythe Int’l, S.A. v. Gibbs Oil Co. of Tex., 915 F.2d 1017,

1022 (5th Cir. 1990) (internal quotations omitted) (emphasis

in original), and MCI and National Union have not proffered

any evidence that the undue means in dispute actually factored into the arbitration panel’s liability determination,6

 we

find the district court did not err in denying MCI and National

Union’s motion to remand on this basis.7

6MCI and National Union argue that requiring the showing of a causal

connection would impose an impossible burden because the arbitration

panel did not state the reasons for its decision in this case. We disagree.

Arbitration panels are not required to explain their decisions. See Wilko v.

Swan, 346 U.S. 427, 436 (1953), overruled on other grounds, Rodriguez

de Quijas v. Shearson/Am. Express, Inc., 490 U.S. 477, 484 (1989). Thus,

eliminating the need to prove a causal connection whenever an award is

unexplained would effectively read the "procured by" requirement out of

the statute, and would be inconsistent with the limited nature of judicial

review of arbitration awards. See A.G. Edwards, 967 F.2d at 1403. Such

a result could lead to parties attempting to circumvent the narrow scope

of our review by purposefully declining to request reasoned awards and

thereby avoiding the burden of showing the "procured by" requirement if

they later chose to challenge the award. 

7MCI and National Union also argue that the district court erred in confirming the award, because by breaching the arbitration agreement, the

City lost the ability to proceed under that agreement, and consequently,

any award arising out of that agreement cannot be enforced. Specifically,

MCI and National Union maintain that the City breached the arbitration

MCI CONSTRUCTORS v. CITY OF GREENSBORO 15
2.

We next determine whether the arbitration panel exceeded

the scope of its powers in issuing the damages award. MCI

and National Union argue that the arbitration panel exceeded

its powers in awarding any money to the City, because there

is no reasonable interpretation of the contract that excused the

City’s failure to comply with Articles 9.11 and 11 of the contract. They assert that the City’s failure to comply with these

articles bars the City from recovering any money from MCI

and National Union. 

MCI and National Union’s argument flows from their interpretation of specific provisions of the contract. Article 15,

entitled, "Suspension of Work and Termination," provides

that 

if CONTRACTOR persistently fails to perform the

Work in accordance with the Contract Documents

agreement by actively seeking to prevent MCI from fully and fairly presenting its case to the arbitrators, and by preventing MCI from arguing the

facts of the case de novo. Thus, they maintain the district court should not

have confirmed the award because there no longer was a valid agreement

between the parties to arbitrate. In support of this argument, MCI and

National Union rely on Hooters of America, Inc. v. Phillips, 173 F.3d 933,

938 (4th Cir. 1999), in which we held that a party "materially breached the

arbitration agreement by promulgating rules so egregiously unfair as to

constitute a complete default of its contractual obligation to draft arbitration rules and to do so in good faith." 

Hooters is distinguishable. In Hooters, this court emphasized that it

"only reach[ed] the content of the arbitration rules because their promulgation was the duty of one party," id. at 941, and the case involved the

unique situation where the procedural rules were "so one-sided that their

only possible purpose [was] to undermine the neutrality of the proceeding," id. at 938. By contrast, here MCI received a fundamentally fair hearing and the arbitrators applied the procedural rules governing the

arbitration in an impartial manner. Further, there is nothing to indicate that

one party, namely, the City, was solely responsible for selecting the arbitral rules. Thus, we find Hooters inapposite and MCI and National

Union’s argument without merit. 

16 MCI CONSTRUCTORS v. CITY OF GREENSBORO
. . . OWNER may, after giving CONTRACTOR . . .

seven days’ written notice . . . terminate the services

of CONTRACTOR . . . and finish the Work as

OWNER may deem expedient. In such case CONTRACTOR shall not be entitled to receive any further payment until the Work is finished. . . . If [all]

claims, costs, losses and damages [arising out of or

resulting from completing the Work] exceed [the]

unpaid balance [of the Contract Price], CONTRACTOR shall pay the difference to OWNER. Such

claims, costs, losses and damages incurred by

OWNER will be reviewed by ENGINEER as to their

reasonableness and when so approved by ENGINEER incorporated in a Change Order, provided

that when exercising any rights or remedies under

this paragraph OWNER shall not be required to

obtain the lowest price for the Work performed.

J.A. 207 (emphasis added). There is evidence in the record

showing that the City detailed its claims, costs, losses and

damages, submitted them to Hazen and Sawyer, and that

Hazen and Sawyer approved those claims, costs, losses and

damages in a Change Order, which ultimately changed the

Contract Price. MCI and National Union note, however, that

pursuant to Article 11, entitled "Change of Contract Price,"

the Contract Price could only be changed if "[the] claim for

an adjustment in the Contract Price [was] based on written

notice delivered by the party making the claim to the other

party and the ENGINEER," or if the parties could not agree

on the amount involved, the "claim[ ] for adjustment in the

Contract Price [was] determined by ENGINEER in accordance with [Article] 9.11."8

 J.A. 198-99. Article 9.11 states:

8As further evidence of this requirement, MCI and National Union point

to Article 1.9 of the contract. That article defines a "Change Order" as "[a]

document recommended by ENGINEER, which is signed by CONTRACTOR and OWNER and authorizes . . . an adjustment in the Contract

Price." J.A. 179. MCI and National Union explain that MCI would have

signed this Change Order only if it had been submitted to Hazen and Sawyer pursuant to the requirements of Articles 9 and 11. 

MCI CONSTRUCTORS v. CITY OF GREENSBORO 17
"Claims, disputes and other matters relating to . . . the interpretation of the requirements of the Contract Documents pertaining to the performance and furnishing of the Work and

Claims under Articles 11 and 12 in respect of changes in the

Contract Price . . . will be referred initially to ENGINEER in

writing with a request for a formal decision." J.A. 197. 

Because MCI and the City did not agree on the amount of

the Contract Price, MCI and National Union maintain that the

City was required to submit this issue to Hazen and Sawyer

pursuant to Article 9.11. The City, however, never did so, and

thus, MCI and National Union insist that, pursuant to Article

11.2, the City was barred from adjusting the Contract Price,

especially since Article 11 specifies that "[n]o claim for an

adjustment in the Contract Price will be valid if not submitted

in accordance with . . . paragraph 11.2." J.A. 198-99 (emphasis added). MCI and National Union maintain that, without an

adjustment to the Contract Price, the City cannot be entitled

to any monetary award. 

Contrary to MCI and National Union’s assertions, however,

the contract can be reasonably interpreted not to require the

City to submit its claim for an adjustment in the Contract

Price to Hazen and Sawyer, as otherwise required by Articles

9.11 and 11 of the contract. See Walton v. City of Raleigh, 467

S.E.2d 410, 412 (N.C. 1996) ("Parties can differ as to the

interpretation of [contract] language without its being ambiguous."). Article 15 is divided into two parts: when the City

may suspend the work, and when the City may terminate

MCI’s services. Under Article 15.1, entitled "OWNER May

Suspend Work," there is a direct reference to Article 11:

"CONTRACTOR shall be allowed an adjustment in the Contract Price . . . directly attributable to any . . . suspension if

CONTRACTOR makes an approved claim therefor as provided in Articles 11 and 12." J.A. 206. By contrast, Article

15.2, entitled "OWNER May Terminate"—the article implicated here—makes no mention of Article 11, thereby suggesting that the contract did not require the City to submit Change

18 MCI CONSTRUCTORS v. CITY OF GREENSBORO
Order disputes to Hazen and Sawyer when termination was

involved. See Marcoin, Inc. v. McDaniel, 320 S.E.2d 892, 897

(N.C. App. 1984) ("[A] contract must be construed as a

whole, considering each clause and word with reference to all

other provisions and giving effect to each whenever possible."). Thus, the City’s failure to comply with Articles 9.11

and 11 of the contract, under this interpretation of the contract, would not bar recovery.

Even if Articles 9.11 and 11 were controlling here, we find

that MCI and National Union would not be entitled to relief.

We have held as a matter of law that "neither misinterpretation of a contract nor an error of law constitutes a ground on

which an award can be vacated." Apex Plumbing Supply, Inc.

v. U.S. Supply Co., Inc., 142 F.3d 188, 193-94 (4th Cir. 1998)

(internal quotations omitted). As the City notes, MCI and

National Union’s argument that the arbitration panel exceeded

its authority is essentially a disagreement with the arbitration

panel’s construction of the contract. MCI and National Union

present no facts to support their allegation that the arbitration

panel exceeded its authority, and the evidence reveals that the

parties’ claims were referred to the arbitration panel pursuant

to an arbitration agreement, signed by the parties independently of the contract, which authorized the panel to resolve

"all outstanding issues between them," J.A. 2621, and to issue

a decision that "w[ould] be final and binding," J.A. 2634. In

fact, this exact question—that is, the validity of the Change

Order and whether, under Articles 9.11 and 11, the City was

required to submit the issue of the Contract Price to Hazen

and Sawyer first—was decided by the arbitration panel and

factored into the damages award. "As long as the arbitrator[s]

[are] even arguably construing or applying the contract," as

they were here, their awards will not be disturbed. Norfolk &

W. Ry. Co. v. Transp. Commc’ns Int’l Union, 17 F.3d 696,

700 (4th Cir. 1994). We thus find the arbitration panel did not

exceed the scope of its powers in issuing the damages award.

MCI CONSTRUCTORS v. CITY OF GREENSBORO 19
3.

MCI and National Union maintain that the damages award

must be vacated because that award irrationally disregards

unambiguous provisions of the contract. They contend that

the arbitration panel’s award does not "draw its essence" from

the parties’ contract because it does not discuss whether arguments offered by MCI regarding Articles 9.11 and 11 of the

contract defeated the City’s damages claim. In support of this

argument, MCI and National Union cite Clinchfield Coal Co.

v. District 28, United Mine Workers of America, 720 F.2d

1365, 1369 (4th Cir. 1983), in which we held that "[w]here

. . . the arbitrator fails to discuss critical contract terminology,

which terminology might reasonably require an opposite

result, the award cannot be considered to draw its essence

from the contract."

Clinchfield is distinguishable. In that case, we found the

arbitration award did not draw its essence from the contract

because the arbitrator’s decision seemed impossible to square

with certain provisions of the contract. See id. ("[A] reasonable interpretation of [the operative] clause . . . require[s] a

contrary result."). Here, as explained above, Articles 9.11 and

11 of the contract do not require an opposite result from that

reached by the arbitration panel, and thus, the panel was not

required to discuss these articles in its awards. See Upshur

Coals Corp. v. United Mine Workers of Am., Dist. 31, 933

F.2d 225, 230 (4th Cir. 1991) ("We do not and need not

decide whether any of these analyses constitute the best or

most accurate reading of the contract. We hold only that they

are plausible readings of the agreement. . . . Consequently, . . .

we cannot say that the arbitration award failed to draw its

essence from the agreement."). 

Further, it bears noting that an arbitration award "does not

fail to draw its essence from the agreement merely because a

court conclude[s] that an arbitrator has misread the contract."

Patten, 441 F.3d at 235 (internal quotation marks omitted). As

20 MCI CONSTRUCTORS v. CITY OF GREENSBORO
explained above, "as long as the arbitrator is even arguably

construing or applying the contract and acting within the

scope of his authority, that a court is convinced he committed

serious error does not suffice to overturn his decision." U.S.

Postal Serv. v. Am. Postal Workers Union, AFL-CIO, 204

F.3d 523, 527 (4th Cir. 2000) (internal quotations omitted).

We thus find that the district court did not err in denying

MCI and National Union’s motion to vacate the arbitration

awards. The record does not support MCI and National

Union’s arguments that the liability award was procured by

undue means. Nor have MCI and National Union sufficiently

shown that to issue the damages award, the arbitration panel

had to exceed the scope of its powers, or that this award does

not draw its essence from the contract.

C.

Finally, we consider MCI and National Union’s argument

that the district court should have remanded the case to the

arbitrators. MCI and National Union present two arguments

on this issue. First, they maintain that the damages award is

ambiguous and thus remand was required. Second, they contend that the arbitration agreement required the arbitration

panel to issue a reasoned award, and as such, the district court

erred in denying MCI’s motion to remand. We consider each

argument in turn. We review the district court’s decision not

to remand the award to the arbitration panel for an abuse of

discretion. Raymond James Fin. Servs., Inc. v. Bishop, 596

F.3d 183, 190 (4th Cir. 2010). 

1.

We first consider MCI and National Union’s argument that

because the arbitration panel did not specify the basis for its

damages award, that award is ambiguous, thus requiring

remand to the arbitrators. MCI and National maintain that

"[r]emand is required because the [damages award] fails to

MCI CONSTRUCTORS v. CITY OF GREENSBORO 21
answer how much must be paid to satisfy the award." Appellants’ Br. at 44. MCI and National Union explain that the

award provides that the City "is entitled to recover from MCI

the sum of $14,939,004," id., but does not explain whether

MCI must pay that full amount to the City, or whether that

amount must be processed under Article 15.2 of the contract,

which provides that "[i]f . . . claims, costs, losses and damages exceed [the] unpaid balance, CONTRACTOR shall pay

the difference to the OWNER." J.A. 207 (emphasis added).

Because the arbitration panel did not explain whether it subtracted the unpaid balance of the Contract Price from the

Award ($9,667,357), MCI and National Union insist that the

award must be remanded for further explanation—that is, to

explain whether MCI owes $14,939,004 or $5,271,647. We

disagree.

It is well settled that arbitrators are not required to disclose

the basis upon which their awards are made and courts will

not look behind a lump-sum award in an attempt to analyze

their reasoning process. See United Steelworkers of Am. v.

Enter. Wheel & Car Corp., 363 U.S. 593, 598 (1960); see

also Remmey v. PaineWebber, Inc., 32 F.3d 143, 151 (4th Cir.

1994) ("[A]rbitrators need not state reasons for reaching a

particular result"); In re Arbitration No. AAA13-161-0511-85

Under Grain Arbitration Rules, 867 F.2d 130, 135 (2d Cir.

1989) ("[A]rbitrators may render a lump sum award without

disclosing their rationale for it, and . . . when they do, courts

will not inquire into the basis of the award unless they believe

that the arbitrators rendered it in ‘manifest disregard’ of the

law or unless the facts of the case fail to support it.") (internal

quotations omitted); Sargent v. Paine Webber Jackson & Curtis, Inc., 882 F.2d 529, 532 (D.C. Cir. 1989) ("We reject the

idea that a lump-sum award can be rejected for want of explanation (or, what is in effect almost the same thing, remanded

for an explanation) in the absence of facts making it appear

probable that the arbitrators committed an error justifying

vacation of the award."). 

22 MCI CONSTRUCTORS v. CITY OF GREENSBORO
Further, this exact issue was presented to the arbitration

panel in MCI’s email to the panel on April 24, 2008. See J.A.

7409 ("[I]t appears that th[e] Panel failed to deduct MCI’s

$9,667,357 Contract Balance from the $14,939,004 amount

that the Panel determined was owed to the City. MCI formally

requests that the Award be modified . . . to reflect that, after

taking into account MCI’s Contract Balance, MCI must pay

the City $5,271.647 plus interest."). In response, the arbitration panel explained that "[t]he Damages Award did not contain any errors and the arbiters have already decided all claims

submitted to them. MCI’s request to modify the Damage

Award is [therefore] DENIED." J.A. 7416. In light of the

arbitration panel’s response, we find there is no ambiguity

here that would require a remand.9

2.

MCI and National Union also insist that remand was necessary because the arbitration panel failed to issue a reasoned

award as was required by the arbitration agreement. MCI and

National Union maintain that the arbitration agreement is governed by the Judicial Arbitration Mediation Services

("JAMS") Rule 24(h), which requires arbitration awards to

contain, "[u]nless all Parties agree otherwise, . . . a concise

written statement of the reasons for the Award[s]." JAMS,

Comprehensive Arbitration Rules & Procedures 23 (July 15,

2009), http://www.jamsadr.com/files/Uploads/Documents/

JAMS-Rules/JAMS_comprehensive_arbitration_rules-2009.

9Further, the record reflects that MCI and the City submitted separate

estimates detailing how much the City is entitled to recover, and their

arguments as to these amounts are clearly set forth in the record of the

arbitration proceedings. In fact, we note that the City requested an award

of over $17 million, after subtracting the Contract Balance. Thus, as the

district court found, the panel’s award seems reasonable under the circumstances. See Apex Plumbing, 142 F.3d at 194 ("Where no mathematical

error appears on the face of the award . . . an arbitration award will not

be altered.") (internal quotations omitted) (alteration in original). 

MCI CONSTRUCTORS v. CITY OF GREENSBORO 23
pdf. Thus, they argue, a reasoned award was mandated here.

We disagree.

MCI and National Union misinterpret the nature of the

arbitration agreement. As explained by the district court, the

arbitration agreement provides that "[e]xcept as provided

herein or otherwise agreed," the arbitration "would be [conducted pursuant to] standard AAA Complex Commercial or

JAMS rules." J.A. 2634 (emphasis added). The only exception specified in the arbitration agreement is that "[i]f MCI

prevail[ed] at the [Liability] Phase," the arbitration panel was

required to apply the AAA Rules and Procedures for Large,

Complex Construction Disputes. J.A. 2636. Because MCI did

not prevail at the liability phase, the arbitration panel was free

to apply either the AAA Complex Commercial Arbitration

Rules or the JAMS Comprehensive Arbitration Rules and

Procedures. The arbitration panel elected to proceed under the

AAA Complex Commercial Arbitration Rules. Under Rule

42(b) of these rules, an arbitration panel "need not render a

reasoned award unless the parties request such an award in

writing prior to appointment of the arbitrator or unless the

arbitrator determines that a reasoned award is appropriate."

American Arbitration Association, Commercial Arbitration

Rules and Mediation, http://www.adr.org/sp.asp?id=

22440#R42 (last visited June 7, 2010). In the instant case,

none of the parties requested a reasoned damages award

before the appointment of the arbitrators, and thus, the arbitration panel was not required to issue such an award.

Nevertheless, MCI and National Union argue that "[t]he

District Court committed clear error in concluding that ‘none

of the parties requested a reasoned Damages Award before

the Panel rendered its damages decision.’" Appellants’ Br. at

46 (citing J.A. 7917). They note that MCI requested a reasoned damages award during the hearing, before the panel

rendered its damages decision. See, e.g., J.A. 7381 ("I agree

with Mr. Meeker that the rules are contradictory. We think the

proper resolution of that contradiction is for the requirement

24 MCI CONSTRUCTORS v. CITY OF GREENSBORO
of the more fulsome award should govern, and we would like

a reasoned award."). Even so, we find the district court did

not abuse its discretion in denying MCI’s motion to remand.

The AAA Complex Commercial Arbitration Rules require the

party seeking a reasoned award to submit its request "prior to

the appointment of the arbitrator[s]," not prior to the issuance

of the arbitration award. American Arbitration Association,

Commercial Arbitration Rules and Mediation, http://

www.adr.org/sp.asp?id=22440#R42 (last visited June 7,

2010). Here, the request was not made prior to the appointment of the arbitrators, and thus, the panel was not required

to provide a reasoned award. Therefore, the factual error

made by the district court does not affect the resolution of this

issue. 

Accordingly, we find the district court did not abuse its discretion in denying MCI’s motion to remand.

III.

In conclusion, we hold that the district court did not abuse

its discretion in certifying the judgment as final under Rule

54(b), primarily because the relationship between the adjudicated and unadjudicated claims was severed by virtue of the

parties’ own admissions. We also hold that the district court

did not err in denying MCI and National Union’s motion to

vacate the arbitration awards. The record does not support

MCI and National Union’s contentions that the liability award

was obtained through undue means, that the arbitration panel

exceeded the scope of its powers to issue the damages award,

or that the damages award does not draw its essence from the

contract. Finally, we hold that the district court did not abuse

its discretion in denying MCI’s motion to remand. The damages award is not ambiguous, and the arbitration agreement

did not require the arbitration panel to issue a reasoned award.

MCI CONSTRUCTORS v. CITY OF GREENSBORO 25
For the foregoing reasons, we affirm the judgment of the

district court.10

AFFIRMED

10The City asks that we impose sanctions against MCI and National

Union pursuant to B.L. Harbert International, LLC v. Hercules Steel Co.,

441 F.3d 905 (11th Cir. 2006), overruled on other grounds, Hall Street,

552 U.S. 576, as recognized by, Frazier v. CitiFinancial Corp., LLC, Nos.

08-15188, 08-15709, 2010 WL 1727446 (11th Cir. Apr. 30, 2010). In that

case, the Eleventh Circuit explained that "it may be that we can and should

insist that if a party on the short end of an arbitration award attacks that

award in court without any real legal basis for doing so, that party should

pay sanctions." Id. at 913. Because we find that MCI and National Union

did have a real legal basis for pursuing this appeal, we decline to grant the

City’s request. 

26 MCI CONSTRUCTORS v. CITY OF GREENSBORO