Court Opinion

ID: 3191409
Source: CourtListenerOpinion
Date Created: 2016-04-05 16:00:59.347067+00
Date Added: 2024-06-11T14:35:33.358339
License: Public Domain

Case: 15-11529     Date Filed: 04/05/2016    Page: 1 of 11

                                                              [DO NOT PUBLISH]

               IN THE UNITED STATES COURT OF APPEALS

                        FOR THE ELEVENTH CIRCUIT
                          ________________________

                                 No. 15-11529
                             Non-Argument Calendar
                           ________________________

                      D.C. Docket No. 1:12-cv-02170-WSD

UZOAMAKA O. AKPELE,
                                                    Plaintiff -
                                                    Counter Defendant -
                                                    Cross Defendant - Appellant,

versus

PACIFIC LIFE INSURANCE COMPANY,
                                                    Defendant -
                                                    Counter Claimant - Appellee,

OPPENHEIMER & CO., INC.,
JEREME G. TINTLE,
FREDERICK S. BROWN,
ANN HERRERA,
in her capacity as Temporary Administrator of the Estate of Ignatius Akpele, et al.,

                                                    Defendants – Appellees.

                           ________________________

                   Appeal from the United States District Court
                      for the Northern District of Georgia
                         ________________________

                                  (April 5, 2016)
               Case: 15-11529        Date Filed: 04/05/2016      Page: 2 of 11

Before WILLIAM PRYOR, JORDAN, and JILL PRYOR, Circuit Judges.

PER CURIAM:

       After her husband died, Ms. Uzoamaka Akpele learned that she was not the

designated beneficiary in three of her husband’s retirement accounts. Ms. Akpele

brought negligence and intentional tort claims against Pacific Life Insurance

Company, Oppenheimer & Co., Inc., two of Oppenheimer’s agents—Jeremy Tintle

and Frederick Brown—and Ann Herrera, the temporary administrator of her

husband’s estate.      She alleged that the defendants had improperly changed the

beneficiary in the accounts.

       When Ms. Akpele’s husband opened the first two accounts, he signed a

client agreement containing a pre-dispute arbitration clause that was binding on

successors. The district court therefore required Ms. Akpele to arbitrate her dispute

before a FINRA panel. The panel ruled in favor of Oppenheimer and Mr. Brown,

and the district court confirmed its award.1

       Ms. Akpele raises three arguments on appeal. She first contends that the

district court erred in granting the defendants’ motion to stay proceedings and

compel arbitration. Second, she asserts that the district court erred in granting the

defendants’ motion to reopen the case and confirm the arbitration award. Finally,

       1
          Ms. Akpele settled her dispute with Pacific Life over the third account. Mr. Tintle did
not litigate below and Ms. Akpele’s claims against Ms. Herrera were closely related to Ms.
Akpele’s claims against Oppenheimer and Mr. Brown that were submitted to arbitration. Thus,
Oppenheimer and Mr. Brown are the only parties participating in this appeal.
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Ms. Akpele challenges the district court’s denial (without prejudice) of her motion

for default judgment against Mr. Tintle. Upon review of the record and the parties’

briefs, we affirm.

                                          I

      Because we write for the parties, we assume their familiarity with the

underlying facts, and recite only what is necessary to resolve this appeal.

      This case concerns three retirement accounts that Dr. Ignatius Akpele

opened with Mr. Tintle, a financial advisor. Mr. Tintle assisted Dr. Akpele with

estate planning, but he also worked as a securities broker for Oppenheimer, a

broker-dealer. In the fall of 2008, Mr. Tintle and Mr. Brown, another broker,

helped Dr. Akpele open two accounts at Oppenheimer—a 401(k) account and an

individual retirement account (IRA). Dr. Akpele signed Oppenheimer’s standard

agreement, which contained the following pre-dispute arbitration clause:

     Agreement to Arbitrate All Controversies. The client agrees, and by
     carrying an account for the client, Oppenheimer agrees, that all
     controversies which may arise between the client and Oppenheimer and
     any of its officers, directors, employees, agents or affiliates relating to,
     but not limited to, those involving any transaction or the construction,
     performance, or breach of this or any other agreement between the client
     and Oppenheimer pertaining to securities and other property, whether
     entered into prior, on or subsequent to the date hereof, shall be
     determined by arbitration. Any arbitration under this agreement shall be
     conducted pursuant to the federal arbitration act and the laws of the state
     of New York, before FINRA and in accordance with its rules then in
     force. The award of the arbitrators, or of the majority of them, shall be
     final, and judgment upon the award rendered may be entered in any
     court, state or federal, having jurisdiction.
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The client agreement also stated in relevant part that “[c]lient hereby agrees that

this Agreement and all the terms thereof shall be binding upon Client’s heirs,

executors, administrators, successors, personal representatives, conservators and

assigns (“Successors”).”

      In October of 2010, Dr. Akpele purchased a third investment—a variable

annuity—from Pacific Life Insurance Company. He passed away a few months

later. Ms. Herrera, the temporary administrator of Dr. Akpele’s estate, requested

that Oppenheimer close the 401(k) plan and combine it into one estate account.

Meanwhile, the Oppenheimer IRA was re-titled in the name of Dr. Akpele’s sister,

the designated beneficiary as of March of 2010.2

      Ms. Akpele then sued Pacific Life, Oppenheimer, Mr. Tintle, Mr. Brown,

and Ms. Herrera, alleging the improper change of the designated beneficiary in all

three of her husband’s accounts. Oppenheimer and Mr. Brown moved to stay the

proceedings and compel arbitration. The district court concluded that Ms. Akpele

was bound by the Oppenheimer client agreement and granted the defendants’

motion to compel arbitration.

      In February of 2013, Ms. Akpele filed a motion for default judgment against

Mr. Tintle for failing to defend the action, but the district court denied it without

prejudice because the claims against him were closely related to the claims against

      2
          The record indicates that Dr. and Ms. Akpele were involved in divorce proceedings.
                                                4
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Oppenheimer and Mr. Brown (concerning the 401(k) and IRA accounts) that had

been submitted to arbitration. Ms. Akpele subsequently settled her dispute with

Pacific Life over the variable annuity. Because there were no remaining claims in

the action, the district court administratively closed the case in August of 2013—it

noted that any party with cause could move to reopen the case after arbitration.

      In June of 2014, the FINRA panel held a hearing and issued an award in

favor of Oppenheimer and Mr. Brown regarding Ms. Akpele’s challenges to her

husband’s 401(k) and IRA accounts. The district court confirmed the panel’s

arbitration award in February of 2015, and Ms. Akpele now appeals.

                                         II

      We review de novo a district court’s interpretation of an agreement to

arbitrate, but we review the district court’s findings of fact for clear error. See

Multi-Fin. Sec. Corp. v. King, 386 F.3d 1364, 1366 (11th Cir. 2004). “We review

confirmations of arbitration awards and denials of motions to vacate arbitration

awards under the same standard, reviewing the district court’s findings of fact for

clear error and its legal conclusions de novo.” Frazier v. CitiFinancial Corp.,

LLC, 604 F.3d 1313, 1321 (11th Cir. 2010). We review a district court’s denial of

a motion for default judgment for abuse of discretion. See Surtain v. Hamlin

Terrace Found., 789 F.3d 1239, 1244 (11th Cir. 2015).

                                         5
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                                         III

      We address Ms. Akpele’s challenges—to the district court’s decision to

compel arbitration, the district court’s confirmation of the arbitration award, and

the district court’s denial of the motion for default judgment—in turn.

                                         A

      Ms. Akpele’s first argument is that the district court erred in granting the

motion of Oppenheimer and Mr. Brown to stay proceedings and compel

arbitration.   The Federal Arbitration Act, 9 U.S.C. § 2 et seq., reflects a federal

policy in favor of arbitration, and our review of arbitral decisions is limited. See

Frazier, 604 F.3d at 1322. Nevertheless, “arbitration is a matter of contract and a

party cannot be required to submit to arbitration any dispute which he has not

agreed so to submit.” AT&T Techs., Inc. v. Communications Workers of Am., 475

U.S. 643, 648 (1986). In order to determine whether to compel arbitration, “a

court must analyze whether (1) there is a valid written agreement to arbitrate; (2)

the issue is . . . arbitrable under the agreement; and (3) the party asserting the

claims has failed or refused to arbitrate the claims.”        Caley v. Gulfstream

Aerospace Corp., 333 F. Supp. 2d 1367, 1373 (N.D. Ga. 2004), aff’d, 428 F.3d

1359 (11th Cir. 2005).

      The district court first determined that the arbitration agreement existed. It

rejected Ms. Akpele’s claim that defendants’ failure to produce a signed copy of

                                          6
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the Oppenheimer client agreement rendered the arbitration clause unenforceable.

The district court also found that Ms. Akpele had not established an “unequivocal

denial that the agreement had been made” because she did not produce any

evidence challenging her husband’s assent to the agreement. See Chastain v.

Robinson-Humphrey Co., 957 F.2d 851, 854–56 (11th Cir. 1992) (finding a triable

issue of whether a non-signatory to an agreement had agreed to arbitrate).

      Under the FAA, state contract law informs whether arbitration agreements

are binding on third-party beneficiaries. See Arthur Anderson LLP v. Carlisle, 556

U.S. 624, 630–31 (2009). The district court concluded that Ms. Akpele’s claims

were arbitrable because she was bound by the agreement as a “successor” (i.e., a

third-party beneficiary) under both federal and state law.         The district court

reasoned that, under Georgia law, third-party beneficiaries are bound by arbitration

clauses because they “are bound by any valid and enforceable provisions of the

contract in seeking to enforce their claims.” Lankford v. Orkin Exterminating Co.,

597 S.E.2d 470, 473 (Ga. Ct. App. 2004). Finally, the district court rejected Ms.

Akpele’s argument that the defendants waived the arbitral forum because removal

of an action to federal court is not a failure or refusal to arbitrate. See Morewitz v.

W. of England Ship Owners Mut. Prot. & Indem. Ass’n, 62 F.3d 1356, 1366 (11th

Cir. 1995).

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       On appeal, Ms. Akpele claims that she was not bound by the arbitration

clause because she did not benefit from, consent to, or ratify an action of her

husband that would bind her under the client agreement. Ms. Akpele is correct that

non-signatories to an agreement are bound by arbitration clauses in only limited

circumstances. See MS Dealer Service Corp. v. Franklin, 177 F.3d 942, 947 (11th

Cir. 1999). Third-party beneficiary status is one exception to the non-signatory

rule under Georgia law. See Lankford, 597 S.E.2d at 473 (discussing the third-

party beneficiary exception for a contract containing an arbitration clause). Ms.

Akpele admitted that she was a third-party beneficiary, but does not explain why

this recognized exception under Georgia law should not have applied to her. See

Am. Compl. ¶¶ 43, 114(G).

       Instead, Ms. Akpele makes a series of unpersuasive arguments to establish

that she should not have been required to arbitrate. 3 For example, Ms. Akpele

directs us to the Third Circuit’s decision in Griswold v. Coventry First LLC, 762

F.3d 264, 275 (3d Cir. 2014) (rejecting an equitable estoppel theory to compel a

non-signatory to an agreement to arbitrate). This case is not helpful here. The

Griswold court considered an equitable estoppel argument, see id. at 271–74, and it

did not address a third-party beneficiary claim under Georgia contract law. We

       3
          Ms. Akpele also challenges the scope of the arbitration clause and raises a defense to
arbitration under O.C.G.A § 9-9-2(c)(3). These claims were not raised below, and we decline to
address them now. See Access Now, Inc. v. Sw. Airlines Co., 385 F.3d 1324, 1332 (11th Cir.
2004) (describing five narrow exceptions for addressing a new argument on appeal).
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agree with the district court’s interpretation of the arbitration clause and its

successor provision, and we therefore affirm its decision to compel arbitration.

                                            B

      Ms. Akpele also argues that the arbitration decision should be vacated

because the arbitral panel excluded two important documents.              An arbitration

decision may be vacated in only four circumstances, but only one circumstance is

relevant here—“where the arbitrators were guilty of misconduct in refusing to . . .

hear evidence pertinent and material to the controversy.” 9 U.S.C. § 10(a)(3). A

federal court’s review of arbitral evidentiary rulings is limited, but acting in bad

faith, for example, may amount to misconduct under the FAA.                  See United

Paperworkers Int’l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 40 (1987)

(reviewing an arbitrator’s evidentiary ruling for bad faith).

      Ms. Akpele does not tell us why she wanted to introduce the “defined

benefit plan” and its related trust document that were sponsored by her husband’s

medical practice. It appears that Ms. Akpele wanted to use the documents to show

that her spousal consent was required to change the Pacific Life variable annuity’s

beneficiary. But, Ms. Akpele failed to comply with FINRA’s Code of Arbitration

Procedure Rule 12514(a) because she did not produce the documents on time. 4

      4
        Ms. Akpele produced the documents 7 days (rather than 20 days) before the hearing.
We note that Ms. Akpele’s motion to vacate the arbitration award was also untimely.
                                            9
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      The district court concluded that exclusion of the documents was reasonable

because of Ms. Akpele’s discovery violation. The district court also found that the

arbitral panel’s decision was not made in bad faith and it did not deprive Ms.

Akpele of a fair hearing. We agree.

      On appeal, Ms. Akpele claims that excluding the documents was a “manifest

injustice,” yet she does not provide any persuasive reason for how her right to a

fair hearing was impacted. Ms. Akpele not only downplays her own procedural

error (that rendered the evidence inadmissible in the first place), but she ignores

the district court’s reasons for finding that the documents’ inadmissibility was not

prejudicial. The district court noted that evidence from the excluded documents

was elicited through witness testimony and that the panel’s decision was consistent

with their terms. In other words, the panel agreed with Ms. Akpele that she

remained the designated beneficiary of the variable annuity. Ms. Akpele has not

established that the panel was guilty of misconduct as described in § 10(a)(3).

                                         C

      Ms. Akpele’s final argument is that the district court abused its discretion in

denying without prejudice her motion for default judgment against Mr. Tintle. Ms.

Akpele argues that, because Mr. Tintle failed to defend the original action and she

satisfied the requirements for obtaining a default judgment, see Fed. R. Civ. P.

55(a), the district court should have granted her motion.        The district court,

                                         10
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however, denied Ms. Akpele’s motion against Mr. Tintle without prejudice after it

determined that the only remaining claims against him were closely related to the

claims against Oppenheimer and Mr. Brown that were submitted to arbitration.

Ms. Akpele does not address her failure to re-file the motion at the close of

arbitration, and she fails to explain how the district court abused its discretion here.

                                          IV

      We affirm the district court’s decisions to compel arbitration, to confirm the

arbitration award, and to deny Ms. Akpele’s motion for default judgment.

      AFFIRMED.

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