Opinion ID: 672322
Heading Depth: 3
Heading Rank: 1

Heading: Was the Matter Submitted to the Arbitrator?

Text: 40 In Executone's view, the arbitrator's award of damages to the former Isoetec shareholders must be modified and corrected because it was awarded upon a matter not submitted to the arbitrator. Title 9 of the United States Code authorizes the district courts to modify or correct an arbitration award [w]here the arbitrators have awarded upon a matter not submitted to them, 9 U.S.C. Sec. 11(b); see also Totem Marine Tug & Barge, Inc. v. North Am. Towing, Inc., 607 F.2d 649, 651 (5th Cir.1979) (Although arbitrators enjoy a broad grant of authority to fashion remedies ..., arbitrators are restricted to those issues submitted.). The former Isoetec shareholders contend that we should defer to the arbitrator's interpretation of the issue submitted to it for decision just as we defer to the arbitrator's interpretation of the contract. 41 We begin by noting that the question of whether a party can be compelled to arbitrate, as well as the question of what issues a party can be compelled to arbitrate, is an issue for the court rather than the arbitrator to decide. Litton Fin. Printing Div. v. NLRB, 501 U.S. 190, 207-09, 111 S.Ct. 2215, 2226, 115 L.Ed.2d 177 (1991); AT & T Technologies, Inc. v. Communications Workers, 475 U.S. 643, 649, 106 S.Ct. 1415, 1418, 89 L.Ed.2d 648 (1986); see also Neal v. Hardee's Food Sys., Inc., 918 F.2d 34, 37 (5th Cir.1990) (reviewing the arbitrability question de novo); District 37 of Int'l Ass'n of Machinist & Aerospace Workers v. Lockheed Eng'g & Mgmt. Servs. Co., 897 F.2d 768, 770 (5th Cir.1990) ([T]he arbitrability of a grievance is an issue for judicial determination.). Doubts are to be resolved in favor of arbitrability. AT & T, 475 U.S. at 650, 106 S.Ct. at 1419. 42 Executone focuses on the letters sent to the arbitrator by the parties, contending the three matters related to the Stewart Title transaction were submitted to the arbitrator as follows: (1) should the final Isoetec purchase price reflect a $295,000 profit in 1989 from the Stewart Title transaction, (2) were the former shareholders of Isoetec entitled to a $110,000 credit for additional labor and material costs incurred by Isoetec in connection with the Stewart Title transaction, and (3) were the former shareholders of Isoetec entitled to a $38,000 credit for profits lost when Stewart Title canceled its Dallas and Fort Worth contracts with Isoetec. Executone also contends that the arbitrator answered all three issues no, in favor of Executone's position. However, the arbitrator allocated the fault for the $295,000 lost profit to Executone, and it awarded the former Isoetec shareholders in damages the amount that they lost in terms of the final purchase price based on a breach of warranty theory. In Executone's view, the arbitrator effectively awarded the former Isoetec shareholders some eight times the $148,000 they had requested. 43 After a careful review of the record, we conclude that the issue decided by the arbitrator in favor of the former Isoetec shareholders with respect to the Stewart Title transaction was sufficiently submitted by the parties. 1 The arbitrator itself plainly believed that the Stewart Title issue submitted for resolution was sufficiently broad in scope to justify the award. Soon after the arbitrator released its report regarding the other issues to the parties, counsel for Executone wrote a letter to the arbitrator strongly objecting to the Stewart Title damage award, asserting that Executone never had an opportunity to respond to [the Stewart Title] claim because the former shareholders of Isoetec never requested the relief you awarded. The arbitrator responded in a letter, defending its conclusion that the parties had submitted the issue decided. That letter read, in pertinent part: 44 As previously stated, we disagree with your statement that EXECUTONE never had an opportunity to respond to the Stewart Title--Houston issue. My August 14, 1991, letter to EXECUTONE and Isoetec, which outlined the anticipated agenda for the evidentiary hearing, clearly listed Alleged loss of contracts due to equipment shortages and deficiencies as a non-accounting dispute. Further, Isoetec in the last paragraph of page four of its response to matters submitted by EXECUTONE states because EXECUTONE delayed in delivering the additional hardware and software, Stewart [Title] removed the system. This allegation was further discussed at considerable length at the evidentiary hearing held in our Dallas office on September 13, 1991, and we believe EXECUTONE had every opportunity to address this issue. 45 We note that the August 14, 1991, letter from the arbitrator to the parties effectively served as a submission agreement when it was accepted by the parties without objection. 46 Admittedly, an issue concerning Alleged loss of contracts due to equipment shortages and deficiencies is somewhat broad, but this does not weaken our conclusion that the issue decided was submitted to the arbitrator. The Valentine Sugars case is instructive. The parties in that case had entered a joint venture whereby one party would provide a formula for a resin to be used to manufacture waferboard and the other would buy an industrial spray dryer to spray dry the liquid resin. Valentine Sugars, 981 F.2d at 211-12. The resin turned out to be faulty, so the joint venture was unsuccessful. Id. at 212. In the aftermath, one party sued the other and the dispute went to arbitration. Id. The demand for arbitration simply requested the panel to arbitrate  'a dispute concerning a commercial matter involving several contracts signed on the 29th day of June, 1984....'  Id. at 213. The arbitrators decided in their award which party owned the spray dryer, the district court confirmed the award, and on appeal Valentine Sugars claimed that the issue of ownership of the spray dryer had not been submitted. Id. We affirmed the confirmation of the award, expressing our sympathy with Valentine but concluding that the broad language of the arbitration demand gave the arbitrators the power to do whatever was necessary to resolve any disputed matter arising out of the joint venture. Id. As we observed, federal law does not impose any requirements as to how specific a notice of arbitration must be, and we declined to develop a code of pleading for arbitration ourselves. Id. 47 We distinguish Totem, a case relied upon heavily by Executone, in which we reversed an arbitrator's award because the arbitrator both improperly expanded the subject matter of the arbitration and improperly engaged in ex parte communications with one of the parties. Totem, 607 F.2d at 653. In the arbitration at issue in Totem, the party that ultimately prevailed claimed several items of damages totalling some $87,000, with the largest single item claimed being $45,000. Id. at 651. The arbitration panel, however, awarded the prevailing party some $158,000, including a $117,000 item of damages that the prevailing party had not even requested. Id. We vacated the award, noting that it is anomalous for the arbitration panel to award an unrequested item of damages three times larger than any item claimed, id., and concluding that the arbitrators had ignored the dispute actually submitted to them and dispensed their 'own brand of industrial justice,'  id. at 652 (citation omitted). 48 For the reasons outlined above we do not agree with Executone's contention that the arbitrator in the instant case, like the arbitration panel in Totem, decided an unsubmitted issue. Executone's focus on the two other issues related to the Stewart Title transaction as described by the former Isoetec shareholders' letter to the arbitrator, rather than on the arbitrator's summary of the issues to be decided, is misplaced. Additionally, we disagree with a key assumption underlying Executone's argument based on Totem, which is that the instant case also involves an arbitration award far in excess of the amount actually sought by the aggrieved party. Executone's assertion that the shareholders received some eight times the $148,000 in damages they requested with respect to the Stewart Title transaction is disingenuous. The shareholders sought a $148,000 adjustment in the calculation of Isoetec's 1989 pre-tax profits, not $148,000 in damages; application of the multiplier called for in the purchase agreement would have had a substantial inflationary effect on the actual award had the shareholders prevailed. Thus, Executone's argument that the $1,187,000 award to the shareholders was eight times the amount sought by them is fallacious. Additionally, Executone ignores the financial stakes represented by the Stewart Title accounting issue, which was whether Isoetec was entitled to record $295,000 in 1989 profits from the Stewart Title transaction. Had the arbitrator resolved this issue against Executone, the arbitration award in favor of the former Isoetec shareholders would closely resemble the actual award. It is clear to us that the arbitrator's award was, in terms of size, well within the parameters envisioned by the parties. 49 The same facts that support our conclusion that the Stewart Title issue decided by the arbitrator was actually submitted also support the conclusion that the issue was arbitrable. It is well-settled that the arbitrator's jurisdiction is defined by both the contract containing the arbitration clause and the submission agreement. Piggly Wiggly Operators' Warehouse, Inc. v. Piggly Wiggly Operators' Warehouse Indep. Truck Drivers Union, Local No. 1, 611 F.2d 580, 583-84 (5th Cir.1980). If the parties go beyond their promise to arbitrate and actually submit an issue to the arbitrator, we look both to the contract and to the scope of the submissions to the arbitrator to determine the arbitrator's authority. Id. at 584; see also United Food and Commercial Workers, Local Union No. 7R v. Safeway Stores, Inc., 889 F.2d 940, 946 (10th Cir.1989); Sun Ship, Inc. v. Matson Navig. Co., 785 F.2d 59, 62 (3d Cir.1986). Thus, the parties may agree to arbitration of disputes that they were not contractually compelled to submit to arbitration. Dorado Beach Hotel Corp. v. Union de Trabajadores de la Industria Gastronomica de Puerto Rico Local 610, 959 F.2d 2, 4 (1st Cir.1992); Piggly Wiggly, 611 F.2d at 584. As we have already concluded, the parties agreed to allow the arbitrator to decide the issue of Alleged loss of contracts due to equipment shortages and deficiencies. Because the parties agreed to submission of this broad issue to the arbitrator, it is irrelevant to our decision whether Executone might have properly objected to submission of the issue on the grounds of non-arbitrability. Piggly Wiggly, 611 F.2d at 584-85. 50 In summary, the district court ordered the parties to submit all issues to the arbitrator for final resolution. Before the arbitration commenced, the arbitrator sent the parties a summary of the issues it would decide and advised the parties that one of the issues to be arbitrated was Isoetec's alleged loss of contracts due to deficiencies in Executone's equipment. Executone has cited nothing in the record to show that it responded to the summary in any way to disabuse the arbitrator of its view of the issues to be decided. The arbitrator's notice was broad enough to include the issue of the loss of the Stewart Title--Houston contract due to faulty equipment and software. Although we are not free from doubt regarding the arbitrator's interpretation of the scope of its mandate, we resolve all doubts in favor of arbitration. Valentine Sugars, 981 F.2d at 213. We conclude that the issue decided by the arbitrator was sufficiently submitted by the parties and therefore decline to reverse the arbitrator's interpretation of the scope of the Stewart Title issue.2. Did the Award Draw Its Essence From the Parties' 51 Contract? 52 The other strand of Executone's argument that we should reverse the arbitrator's award is the contention that the award does not draw its essence from the contracts between the parties. Before analyzing this claim it is worth quoting in full the rationale given by the arbitrator for the award of $1,187,000 in damages to the former Isoetec shareholders: 53 Issue 3 Alleged loss of contracts due to equipment deficiencies 54 Dispute Resolver's decision--Damages are awarded to the former shareholders of Isoetec in the amount of $1,187,000. 55 Rationale--The claim is a breach of warranty claim related to the functionality of the hardware and software provided by EXECUTONE. Section 7(A) of the Distributor Agreement addresses the warranties of EXECUTONE. Section 7(A) states EXECUTONE's obligation under this warranty shall be limited to repair or replace any part(s) or Software which may prove defective under normal and proper use and service for the Warranty Period. [ ]EXECUTONE shall not be responsible for any labor costs incurred by Distributor during the Warranty Period. Section 7(A) further states IN NO EVENT SHALL EXECUTONE BE LIABLE FOR SPECIAL OR CONSEQUENTIAL DAMAGES ... The testimony and supporting documents produced at the September 13, 1991 evidentiary hearing support[ ] a finding that the hardware and/or software did not function properly and that EXECUTONE approved the design of the system prior to installation; therefore, Isoetec has a valid breach of warranty claim. The testimony further supports a finding that the equipment would still be in use but for the functionality problems. The damage amount therefore is equivalent to the impact on the purchase price of not having this sale completed under its terms. Additional lost profits and labor costs are not recoverable under this claim. 56 In its letter to Executone's counsel after the award had been made, the arbitrator offered the following additional explanation: 57 [T]he damage amount of $1,187,000 in our report is the calculated result under the Purchase Agreement of the $295,000 reduction in income related to the Stewart Title--Houston contract, and represents the economic damage to Isoetec of EXECUTONE's actions; it does not represent lost profits or damages under the Distributor Agreement. The calculation of this amount is based upon the provisions of the Purchase Agreement. We believe this damage calculation is appropriate for the following reasons: 1) the Purchase Agreement was the agreement under which this dispute resolution process arose, and 2) the special nature of the environment which the Purchase Agreement created causes certain actions taken by the parties to the Agreement to have an economic impact beyond that which would have existed outside this environment. 58 Executone contends that the award does not draw its essence from the parties' contracts and that we must therefore vacate the arbitrator's award of damages. 59
60 We first turn to the case law to flesh out our standard of review, the rather metaphysical essence test. The test dates back to the Supreme Court's decision in United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597, 80 S.Ct. 1358, 1361, 4 L.Ed.2d 1424 (1960), in which the Court stated that an arbitrator's award is legitimate only so long as it draws its essence from the collective bargaining agreement. See also United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 38, 108 S.Ct. 364, 370-71, 98 L.Ed.2d 286 (1987) ([A]s 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.). As might be expected, the cases applying Enterprise Wheel have arisen largely in the labor relations context, in which arbitration is prevalent, but we have also applied the essence test in other cases involving the review of arbitration awards. E.g., Anderman/Smith, 918 F.2d at 1216-17; Totem, 607 F.2d at 650. 61 A leading case from this circuit applying the essence test is Brotherhood of R.R. Trainmen v. Central of Ga. Ry., 415 F.2d 403, 412 (5th Cir.1969), cert. denied, 396 U.S. 1008, 90 S.Ct. 564, 24 L.Ed.2d 500 (1970), in which we stated that an arbitration award must have a basis that is at least rationally inferable, if not obviously drawn, from the letter or purpose of the collective bargaining agreement.... [T]he award must, in some logical way, be derived from the wording or purpose of the contract. Phrased another way, the question is whether the arbitrator's award was so unfounded in reason and fact, so unconnected with the wording and purpose of the collective bargaining agreement as to 'manifest an infidelity to the obligation of an arbitrator.'  Id. at 415 (quoting Enterprise Wheel, 363 U.S. at 597, 80 S.Ct. at 1361). We also indicated that the arbitrator's selection of a particular remedy is given even more deference than his reading of the underlying contract, stating that the remedy lies beyond the arbitrator's jurisdiction only if there is no rational way to explain the remedy handed down by the arbitrator as a logical means of furthering the aims of the contract. Id. at 412. In making our essence inquiry, we are not limited to the arbitrator's explanations for his award; as we stated in Anderman/Smith, 62 this Court does not review the language used by, or the reasoning of, the arbitrators in determining whether their award draws its essence from the contract. This Court looks only to the result reached. The single question is whether the award, however arrived at, is rationally inferable from the contract. 63 918 F.2d at 1219 n. 3. 64 Given our expansive reading of the essence test, it is not surprising that we have frequently upheld arbitration awards against challenges on this ground. For instance, we have upheld an arbitrator's award of back pay despite the fact that the underlying collective bargaining agreement neither permitted nor precluded such a remedy. Minute Maid Co. v. Citrus Workers, Local 444, 331 F.2d 280, 281 (5th Cir.1964). In Amalgamated Meat Cutters of N. Am., Dist. Local No. 540 v. Neuhoff Bros. Packers, Inc., 481 F.2d 817, 819 (5th Cir.1973), we enforced an arbitrator's award reinstating employees accused of theft and held that it was permissible for the arbitrator to require the employer to prove the employees guilty beyond a reasonable doubt. In United Steelworkers of Am. v. United States Gypsum Co., 492 F.2d 713, 728-32 (5th Cir.), cert. denied, 419 U.S. 998, 95 S.Ct. 312, 42 L.Ed.2d 271 (1974), we enforced an arbitrator's award, agreeing that it was within the arbitrator's power to find that an employer had breached a promise to negotiate a wage increase and to award the employees what the arbitrator believed would have been gained through negotiations. 65 These cases may be contrasted with those in which we have vacated arbitration awards. We have held that an arbitrator may not invalidate the very agreement from which he derives his power. International Ladies' Garment Workers' Union v. Ashland Indus., Inc., 488 F.2d 641, 643-44 (5th Cir.), cert. denied, 419 U.S. 840, 95 S.Ct. 71, 42 L.Ed.2d 68 (1974). We have also held that arbitral action contrary to express contractual provisions will not be respected on judicial review. Delta Queen Steamboat Co. v. District 2 Marine Eng'rs Beneficial Ass'n, 889 F.2d 599, 604 (5th Cir.1989), cert. denied, 498 U.S. 853, 111 S.Ct. 148, 112 L.Ed.2d 114 (1990); see also Misco, 484 U.S. at 38, 108 S.Ct. at 370-71 (The arbitrator may not ignore the plain language of the contract....). Thus, if a collective bargaining agreement permits an employer to discharge an employee for proper cause, and the arbitrator expressly or implicitly finds that proper cause existed, we will vacate the arbitrator's inconsistent reinstatement award. Delta Queen, 889 F.2d at 604; Container Prods., Inc. v. United Steelworkers of Am., Local 5651, 873 F.2d 818, 819-20 (5th Cir.1989). 66
67 Having determined that we must uphold the arbitrator's award if the arbitrator's award was drawn from the letter or the purpose of the underlying contract, Brotherhood of R.R. Trainmen, 415 F.2d at 412, we turn to the particulars of the ExecutoneIsoetec purchase agreement. As we have already seen, the parties agreed in mid-1989 that Executone would buy either all of Isoetec's stock or all of Isoetec's assets at the beginning of 1990. The parties further agreed that the purchase price to be paid by Executone would be based on Isoetec's adjusted pre-tax profits for 1989. To ensure that Isoetec's 1989 records accurately reflected its profits for the year, the parties agreed that Isoetec would procure an audit from BDO Seidman and Executone would provide for a subsequent review from Arthur Andersen. From this, it is clear that a predominate purpose of the parties in drafting the purchase agreement was to make sure that the Isoetec purchase price fairly reflected Isoetec's 1989 profits. Indeed, Isoetec specifically agreed to operate normally during 1989 and not manage the business simply to artificially increase 1989 earnings. In sum, the parties agreed to accept a purchase price for Isoetec based on a snapshot view of Isoetec's 1989 earnings, and specifically of Isoetec's 1989 adjusted pre-tax profits, as of December 31, 1989. 2 68 Although the parties contemplated that the audit and review process would extend into 1990, they also contemplated that the change of ownership of Isoetec would occur no later than January 1, 1990. The purchase agreement states, The Isoetec Purchase shall be effective, at Executone's option, as of either September 30, 1989 or January 1, 1990. In transactions of this kind, it is typical for the buyer to take over the operations of the purchased company immediately or shortly after the closing balance sheet date, even though the preparation of the year-end financial statements and the audit are still in progress and the calculation of the final purchase price cannot yet be done. Under generally accepted accounting principles, however, events occurring subsequent to the end of the relevant year can have a substantial impact on a company's profitability for that year; the failure subsequent to year end of a sale apparently completed during the year is just one example of this kind of event. Frequently, if not inevitably, the buyer is presented with opportunities to depress the purchase price by conducting the business of the acquired company in such a way as to diminish the company's profitability for the previous year. 69 This situation may well have occurred in the instant case. We know from the arbitrator that the Stewart Title--Houston transaction, scheduled for completion, and considered by the Isoetec shareholders and their auditor to have been completed, during 1989, was rescinded by Stewart Title after the end of 1989. Indeed, the arbitrator's resolution of the accounting issues reflects that the return of the equipment by Stewart Title after year end was the cause of the accounting adjustment to Isoetec's pre-tax profits for 1989 that eliminated the $295,000 in profits from the Stewart Title transaction that had been recorded by Isoetec and approved by Isoetec's auditor. 3 We do not know (because the testimony before the arbitrator was not transcribed) what actions, if any, Executone, as the manager of the business after 1989, took to resist that rescission or to remedy the problems perceived by Stewart Title. We do know that the dynamics of the purchase agreement could well have provided Executone with an incentive not to resist the rescission and thereby to reduce Isoetec's profitability in 1989 in order to reduce the final Isoetec purchase price. The purchase agreement contains no provision that would allow Executone to operate Isoetec after 1989 in such a way as to manipulate the purchase price adversely to the interests of the former Isoetec shareholders (nor would we expect the former Isoetec shareholders to agree to such a provision), nor does the purchase agreement contain any provision precluding those shareholders from recovering in the event that any such manipulation took place. 70 Further, under the peculiar circumstances of this case, Executone in its capacity as the purchaser of Isoetec's business also had the opportunity before the close of 1989 to manipulate the purchase price of the Isoetec business adversely to the interests of the Isoetec shareholders. Through 1989 Executone continued to perform as Isoetec's supplier of equipment. We know from the arbitrator's report on the accounting issues, see supra note 3, that in September 1989 (which was four months after the date originally scheduled for completion of Isoetec's contract with Stewart Title), Isoetec and Stewart Title agreed upon a timetable for correction of the deficiencies that Stewart Title perceived in the Executone equipment delivered by Isoetec under that contract. We also know that the Isoetec shareholders' response to Executone's submitted issues alleged that Stewart Title ultimately removed the system because EXECUTONE delayed in delivering[ ] additional hardware and software. From these two pieces of information in the record, it is clearly possible that the arbitrator concluded that Executone in its capacity as purchaser of the Isoetec business delayed during late 1989 in delivering the hardware and software necessary for Isoetec successfully to complete the Stewart Title contract, thereby reducing the amount that Executone would be required to pay for Isoetec's business. Again, the purchase agreement contained no provision that would allow Executone to delay supplying Isoetec with the necessary hardware and software to complete the Stewart Title contract so as to manipulate the purchase price adversely to the interests of the Isoetec shareholders, nor does that agreement preclude the shareholders from recovering in the event that any such manipulation took place. 71
72 We now turn to the arbitrator's award of damages to the former Isoetec shareholders to see if its essence is rationally inferable from the letter or purpose of the agreement described in the preceding section. The arbitrator first explained that the damages award was based on a breach of warranty by Executone, a rationale that Executone attacks as contrary to the disclaimers and limited warranties made by Executone in the distributor agreement. In its subsequent letter to Executone, the arbitrator explained that the award of damages had been made under the purchase agreement, not under the distributor agreement, and that the special nature of the environment created by the purchase agreement contributed to the arbitrator's decision. Taking the arbitrator's awards and explanations as a whole, it appears that the arbitrator believed (1) that as a matter of generally accepted accounting principles, the Isoetec shareholders were not entitled to record the sale to Stewart Title as 1989 earnings in view of the fact that the sale effectively washed out after the end of 1989 while the audit was in progress, but (2) that furthering the intent of the parties as expressed in the purchase agreement required Executone to bear the post-December 31, 1989 loss of the Stewart Title sale because Executone, in its capacity as the purchaser of Isoetec's business, was responsible for that loss. 73 We conclude that the arbitrator's award did draw its essence from the purchase agreement executed by Executone, Isoetec, and the Isoetec shareholders because it is rationally inferable from the parties' central purpose in drafting the agreement--which was to reach a purchase price based on a fair calculation of Isoetec's adjusted pre-tax profits for the year ended on December 31, 1989--and because the award is not contrary to express terms of the parties' agreement. Executone contends that the award is contrary to releases executed by the parties and to its disclaimers and limited warranties made in the distributor agreement. We find each of these contentions insufficient to justify overturning the arbitrator's award. 74 First, Executone relies on a release agreement executed by the parties and attached to the purchase agreement as Exhibit A. In this document, Isoetec and its shareholders executed a broad release of Executone from liability by reason of any matter, cause, information, or thing whatsoever from the beginning of the world to the Effective Date of this Release [June 5, 1989]. Executone argues that this release shields Executone from any liability for damages arising out of the Stewart Title transaction because the contract of sale between Stewart Title and Isoetec had already been executed (in March 1989) when the release was executed. The former Isoetec shareholders respond that this release was executed long before the critical events leading to the Stewart Title dispute occurred and so could not have encompassed damages arising out of those events. They also contend that Executone unsuccessfully presented this argument to the arbitrator, although we of course cannot verify this because we have no transcription of the arbitration proceedings. Executone also relies on similar releases executed by Isoetec's shareholders individually in early 1990 as barring the arbitrator's award. 75 The argument based on the individual releases executed by the Isoetec shareholders can be easily disposed of; those releases do not release claims arising out of the purchase agreement, and the arbitrator could certainly have rationally concluded that this claim arose out of that agreement. Nor do we believe that the release incorporated into the purchase agreement itself was so crystalline as to bar the damages award made by the arbitrator. The arbitrator may well have interpreted the release agreement not to apply to disputes (such as the Stewart Title dispute) arising out of events occurring predominately after the execution of the release. Even if this is a case in which the arbitrator may have read the contract differently than we would have read it--a conclusion we could not reach in the absence of a clear picture of the facts presented to the arbitrator--we cannot say that the arbitrator ignored plain contractual language en route to its final decision. See Misco, 484 U.S. at 38, 108 S.Ct. at 370-71 (The arbitrator may not ignore the plain language of the contract; but the parties having authorized the arbitrator to give meaning to the language of the agreement, a court should not reject an award on the ground that the arbitrator misread the contract.). The cases cited by Executone concerning an arbitrator's lack of authority to contravene a settlement reached by an employer and an aggrieved employee after a dispute has arisen but prior to arbitration, Ohio Edison Co. v. Ohio Edison Joint Council, 947 F.2d 786 (6th Cir.1991), and Northwest Airlines, Inc. v. International Ass'n of Machinists, Air Transp. Dist. Lodge # 143, 894 F.2d 998 (8th Cir.1990), are not on point. 76 Executone also contends that the arbitrator ran afoul of the express disclaimers of liability and limitations of warranty included by Executone in the distributor agreement. In that agreement, Executone made certain warranties with respect to the products, spare parts, and software that it was to supply to Isoetec under the distributor agreement and limited its obligation under the warranties to repair or replace defective parts or software. Executone also excluded all other warranties, express or implied. 77 Based on the limited record before us, we must conclude that the arbitrator was arguably construing or applying the contract[s], Misco, 484 U.S. at 38, 108 S.Ct. at 370-71, when it made its award, despite the limited warranties made by Executone. In the first place, as the arbitrator observed, the limited warranties were made by Executone in the distributor agreement rather than in the purchase agreement. We have already seen that the purchase agreement could have changed the dynamics of the Executone-Isoetec relationship and ended their coinciding interests in seeing Isoetec perform profitably in 1989. The arbitrator may have reasonably concluded that the limitations of liability dictated by Executone should not be given the same strict interpretation in the new environment created by the purchase agreement as it would in a normal supplier-distributor situation. Although the purchase agreement admittedly did not include a covenant by Executone not to take actions solely for the purpose of deflating the Isoetec purchase price--the contract is silent on that point--the arbitrator could reasonably have interpreted the contract not to allow overreaching by Executone in the absence of a clause whereby the owners of Isoetec expressly agreed to run such a risk. That the arbitrator refused to read a standard repair and replace limited warranty in a distributor agreement as such an extreme cession of rights by the Isoetec shareholders under the purchase agreement is hardly surprising. Additionally, factual bases may have emerged during the course of the arbitration for overriding the limited warranties. See TEX.BUS. & COM.CODE ANN. Sec. 2.719(b) (Tex.UCC) (Vernon 1968) (Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in this title.). 78 We conclude that the arbitrator's award did not contradict express contractual terms. Our inability to hold that the arbitrator undoubtedly exceeded its authority requires us to resolve our doubt in favor of the arbitration. Valentine Sugars, 981 F.2d at 213. Indeed, it appears to us that the arbitrator was faithful to the central purpose of the purchase agreement, which was to provide to the Isoetec shareholders a fair purchase price for the Isoetec business. Certainly, at a minimum, the award was rationally inferable from the parties' agreements. 79 We AFFIRM the district court's confirmation of the arbitration award. 80