Court Opinion

ID: 3064360
Source: CourtListenerOpinion
Date Created: 2015-10-14 22:22:53.841426+00
Date Added: 2024-06-11T12:26:46.994730
License: Public Domain

FILED
                           NOT FOR PUBLICATION                              AUG 16 2012

                                                                        MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS

                            FOR THE NINTH CIRCUIT

ALLIED PROFESSIONALS                             No. 10-56968
INSURANCE COMPANY, an Arizona
corporation,                                     D.C. No. 8:10-cv-00414-AG-MLG

              Plaintiff - Appellee,
                                                 MEMORANDUM *
  v.

JOANNE KONG, an individual,

              Defendant - Appellant.

                   Appeal from the United States District Court
                      for the Central District of California
                   Andrew J. Guilford, District Judge, Presiding

                        Argued and Submitted May 11, 2012
                               Pasadena, California

Before: NOONAN and FISHER, Circuit Judges, and GRITZNER, Chief District
Judge.**

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
       **
             The Honorable James E. Gritzner, Chief United States District Judge
for the Southern District of Iowa, sitting by designation.
       Joanne Kong appeals the district court’s order affirming an arbitration award

in favor of Allied Professionals Insurance Company. We have jurisdiction under

28 U.S.C. § 1291, and we affirm.

I. Middle District of Florida Ruling

       As an initial matter, because “appeals from reviewable decisions of the

district . . . court[] shall be taken to . . . the court of appeals for the circuit

embracing the district,” 28 U.S.C. § 1294 (emphasis added), we do not reach

Kong’s assertion that the District Court for the Middle District of Florida erred by

denying Kong’s motion to remand and by granting Allied’s motion to compel

arbitration. Accordingly, this disposition has no preclusive effect on Kong’s

arguments that this case should be remanded to Florida state court because the

District Court for the Middle District of Florida lacked subject matter jurisdiction

under 28 U.S.C. § 1332(c); and that under the McCarran-Ferguson Act, 15 U.S.C.

§ 1012(b), Florida’s insurance law reverse preempts the Federal Arbitration Act

(“FAA”), 9 U.S.C. §§ 1-16, and prohibited the District Court for the Middle

District of Florida from compelling arbitration in Orange County, California.

II. Central District of California Ruling

       The appeal from the order of the District Court for the Central District of

California enforcing the arbitration award is properly before this court and is

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reviewed de novo. See New Regency Prods., Inc. v. Nippon Herald Films, Inc.,

501 F.3d 1101, 1105 (9th Cir. 2007). “A federal court may vacate an award if the

arbitrator engages in misbehavior that prejudices a party, or if the arbitrator

exceeds his powers in rendering such an award.” Schoenduve Corp. v. Lucent

Techs., Inc., 442 F.3d 727, 731 (9th Cir. 2006) (citing 9 U.S.C. § 10(a)(3)-(4)).

Under § 10 of the FAA, “[a]rbitrators exceed their powers in this regard not when

they merely interpret or apply the governing law incorrectly, but when the award is

completely irrational, or exhibits a manifest disregard of law.” Id. (quoting

Kyocera Corp. v. Prudential-Bache Trade Servs., Inc., 341 F.3d 987, 997 (9th Cir.

2003) (en banc)). To vacate an arbitration award for manifest disregard of the law,

“[i]t must be clear from the record that the arbitrators recognized the applicable

law and then ignored it.” Lagstein v. Certain Underwriters at Lloyd’s, London,

607 F.3d 634, 641 (9th Cir. 2010) (alteration in original) (citation and internal

quotation marks omitted).

      We reject Kong’s allegation that the District Court for the Central District of

California lacked subject matter jurisdiction. Diversity of citizenship provides an

independent basis of subject matter jurisdiction. See Moses H. Cone Mem’l Hosp.

v. Mercury Const. Corp., 460 U.S. 1, 25 n.32 (1983). Complete diversity exists

here because Kong is a Florida resident and Allied is an Arizona corporation. See

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28 U.S.C. § 1332(a). The amount in controversy requirement is also satisfied

because the subject of the arbitration was whether the Allied policy at issue

covered an injury Kong suffered and the enforceability of an agreement between

Kong and Allied’s insured purportedly awarding Kong $1,115,000 compensatory

damages and assigning Kong the right to enforce the award against Allied. See id.

      Kong’s personal jurisdiction challenge is similarly deficient because the

policy’s forum selection clause provided the district court with personal

jurisdiction, see United States v. Park Place Assocs., Ltd., 563 F.3d 907, 929 n.14

(9th Cir. 2009), and venue was proper because Orange County, California, is

within the Central District of California, see 9 U.S.C. § 9 (stating that an

application for the enforcement of an arbitration award “may be made to the

United States court in and for the district within which such award was made”).

      Kong’s final argument that the arbitrator demonstrated manifest disregard of

the law by allowing the report of Allied’s expert witness in violation of Federal

Rule of Evidence 26 is unavailing. Even if such a violation occurred, it would not

constitute a basis upon which to vacate the arbitration award. See U.S. Life Ins.

Co. v. Superior Nat’l Ins. Co., 591 F.3d 1167, 1173 (9th Cir. 2010) (“[W]hen

interpreting and applying the FAA, we are mindful not to impose the federal

courts’ procedural and evidentiary requirements on the arbitration proceeding;

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rather, our responsibility is to ensure that the FAA’s due process protections were

afforded.”).

      Kong has failed to demonstrate that the arbitration award constitutes

manifest disregard of the law.

III. Motion for Sanctions

      Following oral argument, Allied filed a motion under Federal Rule of

Appellate Procedure 38 and 28 U.S.C. §1927 requesting that we impose sanctions

on Kong’s attorney for filing a frivolous appeal. We note that Kong has not taken

the most prudent course in prosecuting her case, has been sanctioned at other

stages of this litigation, and has caused undue delay in other forums. In addressing

Kong’s appeal from the enforcement of the arbitration award that is before this

court, however, we cannot say that Kong’s “arguments of error are wholly without

merit.” Winterrowd v. Am. Gen. Annuity Ins. Co., 556 F.3d 815, 828 (9th Cir.

2009) (citation and internal quotation marks omitted).

      Allied’s Motion for Sanctions is denied.

      AFFIRMED.

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