N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT
W ETZEL’ S PR ETZELS, LLC , a C a l ifornia lim ite d lia

bility c om pa ny , Pla intiff, C ounte r-De fe nda nt, Appe lle e , v. TITO JOHNSON, a

n individua l; a

n d TAR IQ JOHNSON, a

n individua l, De fe nda

nts, C ounte r-C la im a nts, Appe lla nts. No. 12-56716 D.C . No. 2:11-c v-04459-AHM -SP
M EM O R ANDUM *

Appe a l from

the Unite d

Sta t e s Distric t C ourt for the C e ntra l Distric t of C a lifornia A . Howa rd M a tz , Distric t Judge , Pre siding Argue d a nd Subm itte d Fe brua

ry 12, 2014 Pa sa de n a , C a l ifornia B e fore : PAEZ a

nd NGUYEN, C irc uit Judge s, a nd M O TZ, Se nior Distric t Judge
. **



# FIL E D
APR 03 2014 M OLLY C. DW Y ER, CLERK U. S. CO URT O F APPEALS

* This disposition is not a ppropria te for public a t ion a

nd is not pre c e de nt e xc e pt a s provide d

by 9th C ir. R . 36-3. ** The Honora

ble J. Fre de ric k

M otz , Se nior Distric t

Judge for the U.S. Distric t C ourt for the Distric t of M a ry l a n d, sitting by de signa t ion.Tito Johnson a nd Ta riq Johnson (“ t

he Johnsons” ) a

ppe a l the distric t c ourt’ s orde r de ny ing the ir m otion to va c a te an a rbitration a

ward in fa

vor of W e tz e l’ s Pre tz e ls, LLC . On a

p pe a l, the Johnsons urge

us to va c a te the arbitration a ward be c a use the arbitra

tor e xc e e de d his powe rs by e n forc ing c e rta in provisions in the fra nc hise a gre e m e nt tha

t re quire d the Johnsons to a ssign the i r le a se and prope rty inte re s ts to W e tz e l’ s Pre t z e ls a fte r the fra nc hise a gre e m e nt wa s te rm inate d (“ the post-te rm inat ion provisions” ). Se e 9 U.S.C
. § 10(a )(4).

“ The Fe de ra l Arbitra

tion Ac t e num e ra te s lim ite d grounds on whic h a fe de ra l
c ourt m a y va c a te , m odify , or c orre c t a n a rbitra l a ward.” K y oc e ra C orp. v . Prude ntial-Bac he Trade Se rv s., Inc
. , 341 F.3d 987, 994 (9th C ir. 2003) (c iting 9 U.S.C . §§ 1–16). In orde r for us to va c a te the aw a rd on the ground tha

t the
a rbitrator e xc e e de d his powe rs unde r § 10(a )(4), the Johnsons would ha ve to show that the award wa s “ c om

ple te l y irra tiona l, or e xhibit[e d] a m a nife st disre ga rd of la w,” se e Bille r v . Toy o ta Motor C orp. , 668 F.3d 655, 665 (9th C ir. 2012) (inte rna l quota t ion m a rks a

n d c ita tions om itte d), but the y

hav e m a de no suc h showing. An a ward is c o m

ple te ly irra tiona l only

if it is not “ de rive d

from the
a gre e m e nt, vie we d

in light of the

a gre e m e nt’ s la

ngua ge a nd c o nte xt, a s we ll a s othe r indic a tions of thepa rtie s’ inte ntions.” Id. (inte rna l quota tion m a rks a

nd
c ita tions om itte d). The fra nc hise a gre e m e nt in this c a se e xpre ssly provide d for the 2a ssignm e nt of the Johnsons’ le a se and prope rty inte re sts to W e tz e l ’ s Pre tz e ls onc e the a gre e m e nt wa s te rm inat e d, a nd it a lso m a de “ [a ] ny dispute arising out of or in
c onne c tion with this [a

] gre e m e nt” subje c t to a

rbitra tion. The a ward the re fore is pla i nly de rive d from

the pa rtie s’ a gre e m e n t. M ore ove r, unde r the fra nc hise
a gre e m e nt, a ll dispute s re la te d to the a gre e m e nt e xc e pt c la im s for “ p rov isional injunc tive re lie f” we re re quire d to go to a rbitra tion, a nd be c a u se the Johnsons
ne ve r sought a

pre lim ina

ry injunc tion from

the distric t c ourt re ga

rding the postte rm ination provisions, the y we re not de prive d of the ir rights unde r the a gre e m e nt whe n the arbitrator e nforc e d t he post-te rm ination provisions. Thus, the arbitrator did not e xc e e d his powe rs on this ground. Nor ha ve the Johnsons c onvinc e d us tha t the award e xhibite d a

m a n i fe st disre ga rd of la w . “ To va c a t e an a

rbitration a

ward on this ground, it m ust be c le a r from the re c o rd tha

t the arbitrators re c ogniz e d the a pplic a ble la w a nd the n ignore d it.” Bille r , 668 F.3d a

t 665 (inte rna l a lte ra tion, quota tion m a rks, a

nd c ita t ions
om i tte d). Nothing in the

re c ord pre se nte d to us e sta blishe s tha

t the arbitrator, by
e nforc ing the post-te rm ination provisions of the a gre e m e nt, re c ogniz e d

a pplic a ble la w tha t would m a ke those provisions unenforc e a ble but ignore d it.

3Ac c ordingly , the arbitrator did not e xc e e d his powe rs, a nd be c a use the re is no othe r re a son to va c a te the award, the award wa s a ppropria te ly c onfirm e d on the
m otion by

W e tz e l’ s Pre tz e ls. 1 AFFIRM E D
.

1 In light of our re solution of the c a se on this ba sis, we ne e d not re a c h the re la te d issue s of whe the r a pa rty opposing the

c onfirm a tion of a

n a rbitration a

ward m ust do so by

obje c ting to a

m o tion to c onfirm

the award tha

t pre da te s a

m otion to va c a te the award ra the r tha n a llowing the

award to be c o nfirm e d without opposition a

nd only the n m oving to va c a te the award and whe the r a n a ward c a n be va c a te d a fte r a

fina l judgm e nt only

if the judgm e nt c a n be unde r Fe d. R
. C iv. P. 60(b). S e e The Hartbridge , 57 F.2d 672, 673 (2d C ir. 1932) (pe r c uriam ). 4