Court Opinion

ID: 803535
Source: CourtListenerOpinion
Date Created: 2012-07-02 20:29:14+00
Date Added: 2024-06-11T18:00:08.588499
License: Public Domain

FILED
                           NOT FOR PUBLICATION                              JUL 02 2012

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

                            FOR THE NINTH CIRCUIT

JPMORGAN CHASE BANK,                             No. 10-17562

              Plaintiff,                         D.C. No. 2:08-cv-01711-PMP-RJJ

       and
                                                 MEMORANDUM *
FOCUS SOUTH GROUP, LLC; SOUTH
EDGE, LLC,

              Petitioners - Appellees,

       v.

KB HOME NEVADA INC.; COLEMAN-
TOLL LIMITED PARTNERSHIP, LLC;
PARDEE HOMES OF NEVADA;
BEAZER HOMES HOLDINGS CORP.;
MERITAGE HOMES OF NEVADA,
FKA MTH Homes Nevada, Inc.,

              Defendants - Appellants.

                    Appeal from the United States District Court
                             for the District of Nevada
                      Philip M. Pro, District Judge, Presiding

                      Argued and Submitted February 15, 2012
                             San Francisco, California

        *
         This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Before: THOMAS, FISHER and IKUTA, Circuit Judges.

      Defendant-Appellant Meritage Homes of Nevada appeals the district court’s

order denying its motion to partially vacate a final arbitration award in favor of

Plaintiff-Appellee Focus South Group, LLC. We have jurisdiction pursuant to 28

U.S.C. § 1291, and we affirm.

      The arbitration panel’s denial of Meritage’s counterclaim against South

Edge, LLC was not in manifest disregard of the law. See Kyocera Corp. v.

Prudential-Bache Trade Servs., Inc., 341 F.3d 987, 994 (9th Cir. 2003) (en banc)

(“Neither erroneous legal conclusions nor unsubstantiated factual findings justify

federal court review of an arbitral award under the [Federal Arbitration Act].”);

Health Plan of Nev., Inc. v. Rainbow Med., LLC, 100 P.3d 172, 179 (Nev. 2004)

(“Manifest disregard of the law goes beyond whether the law was correctly

interpreted, it encompasses a conscious disregard of applicable law.”). It is not

clear that the legal principle Meritage contends the arbitrators ignored exists. See

Graber v. Comstock Bank, 905 P.2d 1112, 1115 (Nev. 1995) (“[T]he term

‘disregard’ implies that the arbitrator appreciates the existence of a clearly

governing legal principle but decides to ignore or pay no attention to it.” (emphasis

added)). Even assuming that it does, however, Meritage has not shown that the

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arbitrators recognized but chose to ignore it. See Comedy Club, Inc. v. Improv

West Assocs., 553 F.3d 1277, 1290 (9th Cir. 2009) (“[F]or an arbitrator’s award to

be in manifest disregard of the law, it must be clear from the record that the

arbitrator recognized the applicable law and then ignored it.” (internal quotation

marks and alterations omitted)); Graber, 905 P.2d at 1115. Because the arbitrators

reasonably found that Focus notified Meritage of its defaults on March 28, 2008,

the arbitrators did not manifestly disregard the law in determining that Meritage

committed an event of default under the Operating Agreement, and thereupon

rejecting Meritage’s counterclaim.

      The mandate shall issue in due course.

      AFFIRMED.

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