Court Opinion

ID: 801954
Source: CourtListenerOpinion
Date Created: 2012-06-08 20:28:08+00
Date Added: 2024-06-11T18:00:02.202321
License: Public Domain

NOT FOR PUBLICATION

                     UNITED STATES COURT OF APPEALS                           FILED
                            FOR THE NINTH CIRCUIT                              JUN 08 2012

                                                                          MOLLY C. DWYER, CLERK
                                                                            U.S. COURT OF APPEALS

AZ HOLDING, LLC, a North Dakota                  No. 11-15271
limited liability company,
                                                 D.C. No. 2:08-cv-00276-LOA
               Plaintiff-counter-defendant -
Appellant,
                                                 MEMORANDUM*
  v.

THOMAS C. FREDERICK, husband; et
al.,

               Defendants-counter-claimants
- Appellees.

                   Appeal from the United States District Court
                            for the District of Arizona
                Lawrence O. Anderson, Magistrate Judge, Presiding

                        Argued and Submitted May 14, 2012
                             San Francisco, California

Before: THOMAS, McKEOWN, and W. FLETCHER, Circuit Judges.

       AZ Holding, LLC (“AZ Holding”) appeals the district court’s order

confirming the Final Arbitration Award in AZ Holding’s diversity action against

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Thomas Frederick, Christine Cobb, RBW Consultants, Inc. and Bumaro, LLC

(collectively, “Frederick”). We have jurisdiction pursuant to 28 U.S.C. § 1291,

and we affirm. Because the parties are familiar with the factual and procedural

history of this case, we repeat only those facts necessary to resolve the issues

raised on appeal.

      As a preliminary matter, we clarify that the settlement agreement between

AZ Holding and Frederick does not impact our jurisdiction because the agreement

was fairly circumscribed and limited to the calculation of payments owed under the

district court’s judgment and the offset of payments owed under a consulting

agreement.

      We review de novo a district court’s confirmation of an arbitral award.

Bosack v. Soward, 586 F.3d 1096, 1102 (9th Cir. 2009). “With respect to the

underlying arbitration decision, however, our review is both limited and highly

deferential.” Coutee v. Barington Capital Grp., L.P., 336 F.3d 1128, 1132 (9th

Cir. 2003) (internal quotation marks and citation omitted). We may vacate an

arbitration award only if the conduct of the arbitrator violated the Federal

Arbitration Act (“FAA”) or if the award itself is “completely irrational” or

“constitutes manifest disregard of the law.” Id. (internal quotation marks and

citation omitted). We have no authority to reweigh the evidence. See id. at 1133.

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      Contrary to AZ Holding’s assertion, there is no indication that the Arbitrator

construed § 9.12(d) of the Asset Purchase Agreement (“APA”) as a permissive,

rather than mandatory, provision. The Arbitrator acknowledged that § 9.12(d)

governed, but ultimately concluded that neither AZ Holding nor Frederick was a

“prevailing party” under the section and, as such, were not entitled to attorney’s

fees. “Prevailing party” is not a defined term in the APA and that determination

was within the Arbitrator’s authority. The Arbitrator’s conclusion that AZ Holding

prevailed with respect to some claims, but not others, did not foreclose the

possibility that AZ Holding was not a “prevailing party” within the meaning of

§ 9.12(d). See Lagstein v. Certain Underwriters of Lloyd’s, London, 607 F.3d 634,

643 (9th Cir. 2010) (noting that a reviewing court need only determine whether the

arbitrator’s interpretation was plausible).

      AZ Holding’s claim that it is entitled to attorney’s fees under § 9.11 of the

APA is equally unpersuasive. To the extent this argument relies on the meaning of

“prevailing party” in the APA, it fails for the reasons stated above. In addition, the

decision not to award fees under § 9.11 falls within the scope of the Final

Arbitration Award’s statement that “[a]ll claims for relief, costs, expenses or

damages not specifically addressed in this Award are denied.” The Arbitrator’s

                                              3
decision drew its essence from the parties’ agreement and was not completely

irrational. See Bosack, 586 F.3d at 1106.

      Finally, the district court was not required to award attorney’s fees under

Arizona Revised Statute § 12-341.01. The language of the APA permitted the

Arbitrator to make all determinations relating to court costs, arbitration expenses

and reasonable attorney’s fees, including those incurred in the two years of

litigation that preceded the arbitration. No separate determination by the district

court was required. An award of attorney’s fees under § 12-341.01 is

discretionary. It was within the district court’s discretion to determine that the case

amounted to “a draw” and that AZ Holding was not entitled to attorney’s fees. See

Assoc. Indem. Corp. v. Warner, 694 P.2d 1181, 1184 (Ariz. 1984) (holding that the

phrase “may award” in § 12-341.01 “vest[s] discretion in the trial court to

determine the circumstances appropriate for the award of fees”).

      AFFIRMED.

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