Court Opinion

ID: 4501732
Source: CourtListenerOpinion
Date Created: 2020-01-27 17:00:27.577904+00
Date Added: 2024-06-11T13:36:58.356768
License: Public Domain

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                             File Name: 20a0056n.06

                                           No. 19-3760

                          UNITED STATES COURT OF APPEALS
                               FOR THE SIXTH CIRCUIT
                                                                                       FILED
 RICK E. CAPONE,                                         )                       Jan 27, 2020
                                                         )                   DEBORAH S. HUNT, Clerk
        Plaintiff-Appellant,                             )
                                                         )
                                                                 ON APPEAL FROM THE
 v.                                                      )
                                                                 UNITED STATES DISTRICT
                                                         )
                                                                 COURT     FOR      THE
 ATLANTIC SPECIALTY INSURANCE                            )
                                                                 NORTHERN DISTRICT OF
 COMPANY,                                                )
                                                                 OHIO
                                                         )
        Defendant-Appellee.                              )
                                                         )

       Before: GILMAN, McKEAGUE, and KETHLEDGE, Circuit Judges.

       KETHLEDGE, Circuit Judge. The district court dismissed Rick Capone’s claims against

his insurance company because an arbitrator had already resolved them. We affirm.

       In 2011, Capone took his 60-foot Sunseeker yacht, named “Another Eriesponsible

Perchase,” to a mechanic for service. On the service invoice, the mechanic wrote that he had

changed the oil filters because the engine had been leaking oil. The invoice also included a “To

Do” list with the item “Oil cooler gasket seeping—[manufacturer] updated gaskets.” Yet Capone

did not have the gasket checked or replaced.

       The next year, Capone purchased from Atlantic Specialty Insurance an insurance policy

for his yacht. The policy provided: “If you make a claim under this policy and we disagree about

whether the claim is payable . . . , the disagreement must be resolved by binding arbitration[.]” In

a section titled “Legal Action Against Us,” the policy also said, “You may not bring a suit against

us unless you have complied with all terms of this policy, including arbitration.”
No. 19-3760, Capone v. Atlantic Specialty Ins. Co.

       In July 2013, Capone was piloting his yacht on Lake Erie when a leaking oil gasket caused

the engine to fail. He eventually paid more than $100,000 for repairs, which he asked Atlantic to

cover. Atlantic investigated and found that Capone had failed to maintain the engine properly after

the mechanic’s warning about the oil gasket. Atlantic therefore denied his claim.

       Capone disagreed with Atlantic’s decision. In 2017, the parties submitted the dispute to

an arbitrator, who likewise found that the damage to the engine “was directly and proximately

caused by a lack of required maintenance[.]” The arbitrator thus entered an award in favor of

Atlantic.

       Capone thereafter brought this suit, asserting two claims: first, that Atlantic breached the

policy when it denied him coverage; and second, that the policy entitled him to a declaratory

judgment that Atlantic owed him the cost of repairs. Atlantic moved to dismiss, arguing that the

arbitration award precluded Capone’s suit. The district court granted the motion. We review that

decision de novo. Buck v. Thomas M. Cooley Law Sch., 597 F.3d 812, 816 (6th Cir. 2010).

       Capone asked the district court, in substance, to vacate the arbitrator’s award. The Federal

Arbitration Act authorizes federal courts to vacate arbitration awards only on four specific

grounds. See 9 U.S.C. § 10(a); accord Ohio Rev. Code § 2711.10. Capone alleged none of those

grounds, so the district court properly dismissed his suit.

       Capone argues that the policy’s “Legal Action” section allowed him to reassert his claims

anew in this lawsuit, notwithstanding the prior “binding arbitration.” He is largely mistaken: we

can review only the arbitrator’s award, and our review of the award is necessarily limited to the

grounds set forth in the Act. Moreover, the arbitration provision says that the “arbitrator shall have

the same powers as arbitrators under the Federal Arbitration Act”; and those powers include the

power to enter awards that are final and enforceable except in extremely limited circumstances.

                                                 -2-
No. 19-3760, Capone v. Atlantic Specialty Ins. Co.

See 9 U.S.C. § 9; Samaan v. Gen. Dynamics Land Sys., Inc., 835 F.3d 593, 600 (6th Cir. 2016).

The arbitrator did that here, and—as the district court correctly observed—Capone has given us

no basis to vacate that award.

       The district court’s judgment is affirmed.

                                               -3-