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### No. 03-1300

COASTAL GE

NERAL CONS TRUCTIO N SERVIC ES CORPORATION, Appellant

v. VIRGIN ISLAND S HOUSIN G AUTHORITY

Appeal f rom the Di strict Cou

rt of the V

irgin I slands Division of St. Thomas and St. John (D.C. Civil Action No. 99-cv-00134) District Judge: Honorable Thomas K. Moore Submitted Under Third Circuit LAR 34.1(a)

May 6, 2004 Before: BARRY, AMBRO, and SMI TH, Circuit Judges (Opinion filed May 18, 2004)

OPINION

AMBRO, Circu it J udge : Coastal General Construction Services Corporation (“Coastal”) cha llenges the decision of the Appellate Division of the District C ourt of the Virgin Isl ands, whi ch affi rmed the Virgin Islands Territorial Court’s vaca tion of an arbitration award in favor of Coastal. For the reasons1 There is s ome confusion as to whether Coasta l’s of fici al name is Coastal Gener al Co ns t r uc t i on Se r vi ce s C orpo r ati on or Co as t alGe ne r alCo ns t r uc t i on Se r vi ce s, I nc . We underst and that

Coastal’ s offici al name is the former , and wil l tr eat i t as suc h. 2 set forth below, we

affirm. I. Fact

ual and Procedural Ba

ckground The facts of this case date back to 1988 and ha ve been reviewed numerous times by several courts. See United Sta tes v. Koe

nig , 281 F.3d 225 (3d Cir. 2001) ( Koeni g I ); V.I. Hous. Auth. v. Coastal Gen. Constr. Servs. Corp. , 27 F.3d 911 (3d Cir. 1994) ( Coastal I ); United States ex rel. V.I. Hous. Auth. v. Coastal Gen. Constr. Servs. Corp. , 299 F. Supp. 2d 483 (D.V.I. 2004); Coastal Gen. Constr. Servs., Inc. v. V.I . Hous. Auth. , 238 F. Supp. 2d 707 (D.V.I. App. Div. 2002) ( Co ast al II ) 1 ; United Sta tes v. Koe

nig , 53 F. Supp. 2d 803 (D.V.I. 1999) . Accordingly , we recite only those de

tails essential to the resolution of this case. In September 1988, Coastal and the Virg in Islands Housing Authority (VIHA) executed a contract for the renovation and modernization of a housing pr oject. The total value of the contract was $2,209,587. Due to the parties’ inability to perform, VIHA ter

minated the agreement in June 1999, prior to Coastal beginning wor k on the project. In Fe

bruary 1992, Coastal filed a claim against VI HA in the amount of $1,114,799 for start-up expenses, but supplied no documentation to support its claim. VIHA rejected Coastal’s claim, and Coastal requested arbitration. The day before the arbitration hearing w as to begin, however, Coastal presented VIHA a

n amended claim in the amount of $2,242,933 and provided VI HA numerous volumes of supporting documentation. VIHA objected to the ame nded claim and requested a continuance. The arbitrator2 As discusse d in Koenig I , supra , thi s discove ry ulti matelyled to t he conviction of W illiam Ko enig , one of C oas tal’s p rinc ipals

. 3 reserved ruling and proceeded with the arbitration. VIHA r enewed its objection and request for continuance at the close of the arbitration. Neve rtheless, the arbitrator awarded Coastal $1,262,04 9 and allo wed Coast al to reta in certa in tools and equipme

nt. VIHA’s subsequent investig ation of Coastal’s amended claim revealed it to be fraudulent. 2 VIHA then filed an a ction to vacate the arbitration award in the Virg in Islands Territorial Court. After an improvidently granted removal, the District Court for the District of the Virgin Islands vac ated the arbitration award. On appeal, we vacated the judgment of the District Court, instructing it to remand the matter to the Territorial Court for resolution. Coastal I , 27 F.3d at 917. Upo n re man d, t he T err it ori al C our t v aca ted th e ar bi tra ti on a war d i n Fe bru ary 1 999 . It found tha t the arb itrator c ommitted mis conduct in violation of 9 U.S.C. § 10(c)( 3) by refusing to postpone the hearing to allow for investigation of Coastal’s a mended claim. The Territorial Court also

found tha

t the arb itrator’ s award

was proc ured by fraud in violation of 9 U.S.C. § 10(c)(1). Coastal appealed the Territorial Court’s decision to the Appellate Division of the District Court of the Virgin Islands. See 4 V.I.C. § 33 (conferr ing jurisdiction on the Appellate Division to review final judgmentsand orde rs of the Territo rial Cour t in civil c ases). T

he Appellate Division affirmed the Territorial Court’s decision to vacate the ar bitration award. Co ast al II , 238 F. Supp. 2d at 711. Before us, Coastal argues tha t: (1) the arbitrator did not commit misconduct in violation4

of 9 U.S.C. § 10(c)(3); (2) the arbitrator’s awa rd was not procured by

fraudulent evidence; and (3) th e Terri toria l Cou rt erre d by admit ting t rial t ranscr ipts from r elate d crim inal p roceed ings instead o f requir

ing VI HA to prod

uce live witnesse s at trial

. II. Jurisdiction and Standard of Review We have jurisdiction to review the Appellate Division’s decision under 28 U.S.C. § 1291 and § 23A(c) of the United States Virgin I slands Revised Organic Act of 1954, as amended (48 U.S.C. § 1613a(c)). We exercise the same standard of revie w applied by the Appe

llate Division. B.A . P rop ert ies , Inc . v. Gov ’t o f Un it ed S tat es V .I. , 299 F.3d 207, 211 ( 3d Cir. 200 2); Semper v. Santos , 845 F.2d 1233, 1236 (3d Cir. 1988). The Appellate Division properly exercised plenary review over the legal conclusions of the Territorial Court and applied the clearly erroneous standard to the Territorial Court’s factual findings. Co ast al II , 238 F. Supp. 2d at 709. III. Analysis Courts may vacate

an arbitration award “where the arbitrators were guilty

of misconduct in refusing to p ostpone the hea ring , upon

suff icient ca use s hown .” 9 U .S.C. § 10( a)(3 ). We define “misconduct” under 9 U.S.C. § 10 (a)(3)as conduct “which so affects the ri ghts of a party that it may be said that he was deprived of a fair hearing .” Newark Stereoty pers’ Union v. Newark Morning L

edger Co. , 397 F.2d

594, 599 ( 3d Cir. 196 8), 393 U. S. 954 (196 8). Similar to the Appellate Division, we perceive no error in the Territorial Court’s finding that the arbitrator commi tted m iscon duct b y refusin g to po stpo ne the Novem ber 19 93 arb itrat ion h earing. We also agree that this misconduct warranted va cation of the arbitration award. On appeal, Coastal essentially argues that VI

HA was at fault for failing to prepar e for the arbitration. Coastal also states that the record fails to establish VI HA’s due diligence.3 Ac cord ingly, we need not rea ch C oastal’s argu men ts that the Territo rial Co urt erred in

finding t hat the arbit

rati on award was procured byfraud and i n admitting tr anscri pts fr om related cri minal proceedings. 5 Unfortunately, this ar

gument misses the mark. The Territorial Court found that Coastal refused to supply supporting documentation for its original claim and, less than twenty -four hours before the arbitration hearing was set to begin, presented hundreds of pages of doc uments in support of an amended claim for almost double the amount of the original claim. Coastal fails to cite any evidence to dispute this version of events. In fact, Coastal fails to discuss or explain its eleventhhour tactics at all. Further, we ag ree with the Appellate Division that VIHA did not waive any right to object to the failure to postpone the arbitration because the American Arbitration Association (“AAA”) rules, even if controlling , do not require that requests for postponements be in writing. See Co ast al II , 238 F. Supp. 2d at 710 (stating that an arbitrator may postpone any hearing “upon request of a pa rty for g ood cause shown” (quoting AAA Rule 30)). As such, we agree with the Territorial Court’s conclusions in regard to misconduct and vacation of the arbitration award. 3 * * * * * In this context, we affirm the Appellate Division’s decision affirming the Territorial Court’s vacation of the arbitration award.