Court Opinion

ID: 4665950
Source: CourtListenerOpinion
Date Created: 2021-03-09 16:00:39.614125+00
Date Added: 2024-06-11T08:02:46.132455
License: Public Domain

19-868-cv
Oldcastle Precast, Inc. v. Liberty Mutual Insurance Co.

                                UNITED STATES COURT OF APPEALS
                                    FOR THE SECOND CIRCUIT

                                            SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED
BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY
OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

        At a stated Term of the United States Court of Appeals for the Second Circuit, held at the
Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York on the
9th day of March, two thousand twenty-one.

Present:    ROSEMARY S. POOLER,
            RICHARD C. WESLEY,
            SUSAN L. CARNEY,
                        Circuit Judges.
_____________________________________________________

OLDCASTLE PRECAST, INC.,

                                    Plaintiff-Appellee,

                           v.                                                  19-868-cv

LIBERTY MUTUAL INSURANCE COMPANY,
METRA INDUSTRIES, INC.,

                        Defendants-Appellants.
_____________________________________________________

Appearing for Appellants:           Charles W. Groscup, Watt, Tieder, Hoffar & Fitzgerald, LLP
                                    (Adam M. Tuckman, on the brief), McLean, VA.

                                    Joanna Sandolo, Belowich & Walsh, LLP, White Plains, N.Y. (on
                                    the brief).

Appearing for Appellee:             Patricia E. Habas, Rogers, Habas & Eisen, P.C., Orangeburg, N.Y.

      Appeal from the United States District Court for the Southern District of New York
(Román, J.).
        ON CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the judgment of said District Court be and it hereby is AFFIRMED in
part and VACATED in part, and the matter REMANDED for further proceedings consistent
with this order.

        Liberty Mutual Insurance Company and Metra Industries, Inc. (collectively, “Metra”)
appeal from the November 13, 2019 amended judgment of the United States District Court for
the Southern District of New York (Román, J.) granting Oldcastle Precast, Inc.’s motion to
confirm an arbitration award, denying Metra’s cross-motion for partial vacatur of the arbitration
award, and granting Oldcastle damages in the amount of $311,518.96, pre-judgment interest at
the rate of 9 percent per annum from May 1, 2017 through March 13, 2019 (the entry of the
original judgment), plus post-judgment interest at the federal statutory rate set by 28 U.S.C. §
1961(a). We assume the parties’ familiarity with the underlying facts, procedural history, and
specification of issues for review.

        “When a party challenges the district court's review of an arbitral award under the
manifest disregard standard, we review the district court’s application of the standard de novo.”
Porzig v. Dresdner, Kleinwort, Benson, N. Am. LLC, 497 F.3d 133, 138 (2d Cir. 2007) (italics
omitted) (quoting Wallace v. Buttar, 378 F.3d 182, 189 (2d Cir. 2004)). “A litigant seeking to
vacate an arbitration award based on alleged manifest disregard of the law bears a heavy burden,
as awards are vacated on grounds of manifest disregard only in those exceedingly rare instances
where some egregious impropriety on the part of the arbitrator is apparent.” T.Co Metals, LLC v.
Dempsey Pipe & Supply, Inc., 592 F.3d 329, 339 (2d Cir. 2010) (internal quotation marks,
citation, and brackets omitted). “That impropriety has been interpreted clearly to mean more than
error or misunderstanding with respect to the law.” Id. (internal quotation marks, citation, and
brackets omitted). “Rather, the award should be enforced, despite a court’s disagreement with it
on the merits, if there is a barely colorable justification for the outcome reached.” Id. (citation
and emphasis omitted).

       With regard to the damages associated with Metra’s counterclaim the arbitrator found:

               Below is a list of each component of Metra’s counterclaim/offset
               with a dollar amount awarded for each. Although the principal
               defense asserted by Oldcastle to these charges was based upon
               entitlement rather than costs, where entitlement was found to exist,
               certain adjustment were made to the amounts sought by Metra. For
               instance, unless supplied by third parties, I did not award sums for
               equipment or equipment operation as requested by Metra. I find that
               there was insufficient proof to establish actual damages sustained or
               the amounts requested for these items, and in any event, I find the
               damage calculations proffered by Metra’s employee for use,
               operation and/or downtime of Metra’s own equipment which, for
               the most part, was on the site anyway, to be unreliable.

App’x at 71-72.

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        Metra primarily focuses on the arbitrator’s statement that there was insufficient proof of
“actual damages.” Appellant’s Br. at 34. Metra argues that the arbitrator manifestly disregarded
the law in requiring it prove actual damages, rather than prove its damages to a “reasonable
certainty.” See Indu Craft, Inc. v. Bank of Baroda, 47 F.3d 490, 496 (2d Cir. 1995). Metra argues
that the arbitrator was required to accept Metra’s damages calculation in full. However, what the
arbitrator required was either a showing of actual damages or other sufficient proof of the
damages incurred by Metra. In connection with this finding, the arbitrator noted that he found the
evidence of damages provided in testimony from Metra’s witnesses to provide an unreliable
basis for an award. The arbitrator was entitled to weigh the evidence in making his factual
findings, and it is well-settled that “[a] federal court may not conduct a reassessment of the
evidentiary record.” Wallace, 378 F.3d at 193.

        Metra also argues that the arbitrator so egregiously weighed the evidence that it rose to
the level of “misconduct” or “any other misbehavior,” 9 U.S.C. § 10(a)(3). “Courts have
interpreted section 10(a)(3) to mean that except where fundamental fairness is violated,
arbitration determinations will not be opened up to evidentiary review.” Tempo Shain Corp. v.
Bertek, Inc., 120 F.3d 16, 20 (2d Cir. 1997). Metra argues that it placed “uncontroverted”
evidence before the arbitrator, which the arbitrator “ignored and replaced with the arbitrator’s
extra-evidentiary musings about the undisputed equipment costs that he never allowed Metra to
address before closing the record,” rendering the proceedings fundamentally unfair under
9 U.S.C. § 10(a)(3). Appellant’s Br. at 46. Metra argues that it was unfair for the arbitrator not to
award all of the damages it sought for each work order the arbitrator found justified given that
Oldcastle did not challenge Metra’s damages calculations. This ignores that the arbitrator found
that Metra’s evidence on the question of damages provided an unreliable basis for the requested
damages award. Even assuming the testimony and evidence in question were unrebutted, that
does not obligate the arbitrator to find them an adequate and reliable basis for an award. If a
statement is unrebutted it may be more likely to be accepted as true and as providing a sound
basis for a finding, but the law does not deem unrebutted statements true or conclusive on a
matter of fact. There is simply no basis to overturn the arbitrator’s decision.

         Metra also challenges the district court’s grant of prejudgment interest. We review a
grant of prejudgment interest, and the rate of that interest, for abuse of discretion. See Com.
Union Assurance Co. v. Milken, 17 F.3d 608, 614 (2d Cir. 1994). Metra argues the district court
erred in awarding prejudgment interest at the statutory rate of 9 percent because the agreement
between the parties provided for a lower rate of interest. We agree that the rate the parties agreed
to in their contract is the correct rate of prejudgment interest. “It is well established that when a
contract provides for interest to be paid at a specified rate until the principal is paid, the contract
rate of interest, rather than the statutory rate set forth in C.P.L.R. 5004, governs until the
payment of the principal or until the contract is merged into a judgment.” Eur. Am. Bank v.
Peddlers Pond Holding Corp., 586 N.Y.S.2d 637 (2d Dep’t 1992). Until the arbitration award
was converted into a judgment, then, the contract controls the post-award, prejudgment interest
rate.

        In its post-hearing brief to the arbitrator, Oldcastle submitted that “Section 4 of the T&C
provides that Metra would pay interest of 0.5% per month, compounded monthly, on any unpaid
balances under the Contract.” App’x at 664. This constitutes a judicial admission, as it is a

                                                   3
statement of fact made with “sufficient formality or conclusiveness.” In re Motors Liquidation
Co., 957 F.3d 357, 360 (2d Cir. 2020) (citation omitted). In addition, the parties explicitly altered
Oldcastle’s standard terms and conditions to change the interest rate from 1.5 percent to 0.5
percent. Taken together, we conclude that the parties intended for a 0.5 percent prejudgment
monthly interest rate to apply. The explicit amendment of the terms to set a 0.5 percent interest
rate, coupled with Oldcastle’s admission before the arbitrator about the interest rate in the
contract, support the conclusion that the parties intended for a 0.5 percent monthly interest rate to
apply.

         Finally, Oldcastle seeks attorneys’ fees and costs for defending this appeal, arguing such
fees and costs are due under the terms of the payment bond. “An appellate panel is simply not
equipped to give proper consideration to the many-faceted factual disputes that may affect a
claim for attorney’s fees.” Dague v. City of Burlington, 976 F.2d 801, 804 (2d Cir. 1991).
Oldcastle’s application for fees and costs associated with this appeal may be pursued in the
district court upon remand.

       We have considered the remainder of Metra’s arguments and find them to be without
merit. Accordingly, the order of the district court confirming the arbitration award hereby is
AFFIRMED in part and VACATED in part, and the matter REMANDED for further
proceedings consistent with this order.

                                                      FOR THE COURT:
                                                      Catherine O’Hagan Wolfe, Clerk

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