Court Opinion

ID: 5134616
Source: CourtListenerOpinion
Date Created: 2021-12-14 15:00:41.895579+00
Date Added: 2024-06-11T08:23:44.998227
License: Public Domain

USCA11 Case: 20-14365      Date Filed: 12/14/2021   Page: 1 of 6

                                           [DO NOT PUBLISH]
                            In the
         United States Court of Appeals
                 For the Eleventh Circuit

                   ____________________

                         No. 20-14365
                   ____________________

JOHN PEEBLES,
ALLISON PEEBLES,
                                            Plaintiffs-Appellants,
versus
THE TERMINIX INTERNATIONAL COMPANY, LP,

                                            Defendant-Appellee.

                   ____________________

          Appeal from the United States District Court
             for the Southern District of Alabama
             D.C. Docket No. 1:19-cv-01089-JB-N
                   ____________________
USCA11 Case: 20-14365        Date Filed: 12/14/2021     Page: 2 of 6

2                      Opinion of the Court                20-14365

Before WILSON, LAGOA, and ED CARNES, Circuit Judges.
LAGOA, Circuit Judge:
        John and Allison Peebles (collectively, “Peebles”) appeal the
district court’s order vacating an arbitrator’s award of attorneys’
fees and litigation expenses. After careful review, and with the ben-
efit of oral argument, we reverse the district court’s decision.
       I.     FACTUAL AND PROCEDURAL HISTORY
      On December 30, 2016, Peebles initiated arbitration against
The Terminix International Company, Inc. (“Terminix”) by filing
a demand for arbitration. Peebles alleged various causes of action
in connection with Terminix’s failure to protect their home from
termite damage. The arbitration agreement attached to the de-
mand for arbitration was a 2014 arbitration agreement.
       Pursuant to the 2014 arbitration provision, “[a]ny claim, dis-
pute or controversy, regarding any contract, tort, statute, or other-
wise (‘Claim’), arising out of or relating to this agreement or the
relationships among the parties” was subject to binding arbitration.
The 2014 arbitration provision did not prohibit an award of attor-
neys’ fees or litigation expenses.
        On December 11, 2019, after a two-week arbitration hear-
ing, the arbitrator found that Terminix failed to perform its obliga-
tions, and that Terminix’s conduct warranted an award of punitive
damages. Based on these findings, the arbitrator awarded Peebles
$883,281 in compensatory damages, including $45,000 for litigation
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20-14365                  Opinion of the Court                             3

expenses, and $883,281 in punitive damages—i.e., a one-to-one ra-
tio of compensatory damages to punitive damages. The arbitrator
also awarded Peebles $397,476 in attorneys’ fees.
       Peebles immediately sought to confirm the arbitration
award in the U.S. District Court for the Southern District of Ala-
bama. Peebles attached the arbitration award and their demand
for arbitration, including the 2014 arbitration agreement, to their
petition to confirm the arbitration award. In response, Terminix
moved to vacate the arbitrator’s award of attorneys’ fees and litiga-
tion expenses. In support of its motion to vacate, Terminix filed a
2010 arbitration agreement between the parties, which provided
that “[e]ach party shall be responsible for paying its own attorneys’
fees, costs and expenses.” There was no evidence, however, in the
record suggesting that the 2010 arbitration provision was ever pre-
sented to the arbitrator during the arbitration proceedings.
        On September 14, 2020, the district court vacated the arbi-
trator’s award of attorneys’ fees and litigation expenses. Specifi-
cally, the district court found that the arbitrator lacked authority to
award attorneys’ fees and litigation expenses pursuant to the 2010
arbitration agreement.1

1 The district court also deducted $45,000 from the punitive damages award—
an amount equivalent to the $45,000 deduction to the compensatory damages
award for litigation expenses—to maintain the arbitrator’s one-to-one ratio
between compensatory and punitive damages. Because we reverse the district
court’s decision vacating the arbitrator’s award, we do not need to determine
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4                        Opinion of the Court                    20-14365

       Peebles moved to vacate the district court’s order under
Fed. R. Civ. P. 59(e) and 60(b) and argued that the district court
erred in relying on the 2010 arbitration provision as opposed to the
2014 arbitration provision, which was the only arbitration provi-
sion included in their demand for arbitration. The district court
denied that motion, and Peebles timely appealed.
                  II.    STANDARD OF REVIEW
       When reviewing a district court’s order vacating an arbitra-
tion award, we review the district court’s findings of fact for clear
error and its legal conclusions de novo. Johnson v. Directory As-
sistants Inc., 797 F.3d 1294, 1298-99 (11th Cir. 2015). A district
court’s determination that an arbitrator exceeded his authority is
“a legal determination that we review de novo.” Gherardi v.
Citigroup Glob. Mkts. Inc., 975 F.3d 1232, 1236 (11th Cir. 2020).
                           III.     ANALYSIS
       Under the Federal Arbitration Act (“FAA”), “federal courts
have limited authority to vacate or modify an arbitration award.”
Id. Federal courts can only vacate an arbitration award in the “very
unusual circumstances” described in the statute. Id. (quoting First
Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 942 (1995)).
“There is a presumption under the FAA that arbitration awards will
be confirmed, and ‘federal courts should defer to an arbitrator’s

whether the district court erred by reducing the punitive damages award sua
sponte.
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20-14365                Opinion of the Court                          5

decision whenever possible.’” Frazier v. CitiFinancial Corp., LLC,
604 F.3d 1313, 1321 (11th Cir. 2010) (quoting B.L. Harbert Int’l,
LLC v. Hercules Steel Co., 441 F.3d 905, 909 (11th Cir. 2006)).
        Here, the district court vacated the arbitration award under
9 U.S.C. § 10(a)(4) after finding that the arbitrator’s award of attor-
neys’ fees and litigation expenses was not authorized by the terms
of the arbitration provision submitted to the district court by Ter-
minix in its motion to vacate. “Following Supreme Court prece-
dent, we have interpreted § 10(a)(4)’s language . . . very narrowly.”
Gherardi, 975 F.3d at 1237. Vacatur under § 10(a)(4) “is permitted
only when an arbitrator ‘strays from interpretation and application
of the agreement and effectively dispenses his own brand of indus-
trial justice.’” Id. (quoting Major League Baseball Players Ass’n v.
Garvey, 532 U.S. 504, 509 (2001)).
       The 2014 arbitration provision—the only arbitration provi-
sion before the arbitrator—granted the arbitrator broad authority
to resolve all disputes between Peebles and Terminix and did not
prohibit the arbitrator from awarding attorneys’ fees and litigation
expenses. Moreover, Peebles sought an award of attorneys’ fees
and litigation costs within their demand for arbitration, and the
availability of such an award was extensively litigated throughout
arbitration. Therefore, “the arbitrator did not exceed his authority
or award upon a matter not submitted to him.” Frazier, 604 F.3d
at 1321. Indeed, “the legal merits of the dispute were the arbitra-
tors’ concern, not the district court’s or ours,” this is “[b]ecause the
arbitrators’ decision was an interpretation of the contract, rather
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6                      Opinion of the Court                 20-14365

than an expansion of the arbitrable issues, it stands on appeal.” See
Gherardi, 975 F.3d at 1239.
       Because the district court clearly erred in relying on the 2010
arbitration provision—a provision not before the arbitrator or at
issue in the arbitration—we reverse the district court’s order vacat-
ing parts of the arbitrator’s award, and on remand, the arbitrator’s
award in favor of the Peebles shall be reinstated in full.
       REVERSED AND REMANDED.