Court Opinion

ID: 9554200
Source: CourtListenerOpinion
Date Created: 2023-08-08 00:00:35.725241+00
Date Added: 2024-06-11T15:23:18.735622
License: Public Domain

Case: 22-50850        Document: 00516848606             Page: 1      Date Filed: 08/07/2023

             United States Court of Appeals
                  for the Fifth Circuit
                                                                               United States Court of Appeals
                                                                                        Fifth Circuit

                                            FILED
                                     ____________
                                                                                 August 7, 2023
                                      No. 22-50850                               Lyle W. Cayce
                                     ____________                                     Clerk

   Concierge Auctions, L.L.C.,

                                                                     Plaintiff—Appellee,

                                            versus

   ICB Properties of Miami, L.L.C.,

                                              Defendant—Appellant.
                     ______________________________

                     Appeal from the United States District Court
                          for the Western District of Texas
                               USDC No. 1:21-CV-894
                     ______________________________

   Before Wiener, Graves, and Douglas, Circuit Judges.
   Per Curiam: *
         ICB Properties of Miami, L.L.C. (“ICB”) appeals the district court’s
   grant of Concierge Auctions, L.L.C.’s (“Concierge”) petition to confirm a
   final arbitration award. Guided by the “extraordinarily narrow” standard of
   review that applies to our consideration of arbitration awards, see Rain CII
   Carbon, LLC v. ConocoPhillips Co., 674 F.3d 469, 471–72 (5th Cir. 2012)
   (citation omitted), we AFFIRM.

         _____________________
         *
             This opinion is not designated for publication. See 5th Cir. R. 47.5.
Case: 22-50850        Document: 00516848606              Page: 2       Date Filed: 08/07/2023

                                         No. 22-50850

                                                I.
           ICB, a holding company, entered into an agreement (the “Auction
   Agreement”) with Concierge, a real estate auction marketing firm, to auction
   a luxury property owned by ICB in Florida. The Auction Agreement
   contained an arbitration provision (the “Arbitration Provision” or
   “Provision”), which required the parties to “submit any and all
   controversies, disputes, claims, and matters of difference arising out of or
   relating to this Agreement, . . . exclusively to arbitration in Austin, Texas in
   accordance with the Commercial Arbitration Rules and Mediation
   Procedures of the American Arbitration Association.”
           The auction commenced in March 2019, and the property sold for
   significantly less than ICB expected. 1 After a disagreement on who was to
   pay the buyer’s broker commission, the broker sued ICB in Florida state
   court. ICB then asserted third-party claims against Concierge, alleging,
   among other things, that Concierge breached the Auction Agreement by
   failing to properly conduct the auction.
           In September 2019, Concierge invoked the Arbitration Provision in
   the Auction Agreement and filed a Demand for Arbitration against ICB with
   the American Arbitration Association (“AAA”) in Austin, Texas, alleging
   that ICB breached the Arbitration Provision by filing claims against it in
   Florida state court.
           In July 2021, an arbitrator found in favor of Concierge on its breach of
   contract claim and held that Concierge was entitled to recover attorneys’ fees

           _____________________
           1
             ICB originally entered into a listing agreement with Engel & Völkers, an
   international real estate agency, to list the property for $68 million. The property sold at
   auction for $25.5 million.

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Case: 22-50850        Document: 00516848606             Page: 3      Date Filed: 08/07/2023

                                         No. 22-50850

   and expenses incurred in the arbitration. 2 Concierge filed a petition to
   confirm the arbitration award in the United States District Court for the
   Western District of Texas, and ICB subsequently filed a motion to vacate the
   award. Finding that ICB failed to demonstrate that the final arbitration award
   should be vacated, modified, or corrected, the magistrate judge
   recommended that the district court grant Concierge’s petition. The district
   court adopted the recommendation.
                                             ***
           ICB asserts two issues on appeal: (1) the arbitrator lacked jurisdiction
   under the first-to-file rule, and (2) the arbitrator lacked jurisdiction to rule on
   the arbitrability of the claims.
           As to the first-to-file issue, ICB asserts that the arbitrator lacked
   jurisdiction because the Florida state case was filed first, thus, the arbitrator
   was required to decline arbitrating the dispute. “Under the first-to-file rule,
   when related cases are pending before two federal courts, the court in which
   the case was last filed may refuse to hear it if the issues raised by the cases
   substantially overlap.” Cadle Co. v. Whataburger of Alice, Inc., 174 F.3d 599,
   603 (5th Cir. 1999) (citations omitted). “The federal courts long have
   recognized that the principle of comity requires federal district courts—
   courts of coordinate jurisdiction and equal rank—to exercise care to avoid
   interference with each other’s affairs.” Save Power Ltd. v. Syntek Fin. Corp.,
   121 F.3d 947, 950 (5th Cir. 1997) (citation omitted).                  “The concern
   manifestly is to avoid . . . rulings which may trench upon the authority of

           _____________________
           2
             The Arbitrator ordered ICB to pay Concierge (1) $20,000 in attorneys’ fees,
   costs, and expenses incurred in the Florida state court action; (2) $145,000 in attorneys’
   fees and $122.70 in expenses incurred in the Arbitration proceeding; (3) $40,000 in
   conditional attorneys’ fees if ICB unsuccessfully opposed confirmation of the final
   arbitration award; and (4) $27,295 for arbitration fees and expenses.

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                                      No. 22-50850

   sister courts.” Id. (citations omitted). “This concern applies where related
   cases are pending before two judges in the same district . . . as well as where
   related cases have been filed in different districts.” Id. (citations omitted).
   As stated above, the rule applies to federal district courts, thus, the rule is
   inapplicable here, where the dispute concerns a Florida state case and an
   arbitration.
          Thus, the crux of this appeal concerns whether the arbitrator lacked
   jurisdiction to rule on the arbitrability of the claims.
                                           II.
          “We review the district court’s confirmation of an arbitrator’s
   award de novo, but our review of the arbitrator’s award itself…is very
   deferential.” Commc’ns Workers of Am., AFL-CIO v. Sw. Bell Tel. Co., 953
   F.3d 822, 826 (5th Cir. 2020) (citation omitted). This standard of review has
   been described as “extraordinarily narrow,” “severely limited,” and “one
   of the most deferential standards ‘known to the law.’” Id. (citations omitted)
   Our court “must affirm an arbitral award ‘as long as the arbitrator is even
   arguably construing or applying the contract and acting within the scope of
   his authority.’” Id. (citation omitted). “Even if an arbitrator committed
   serious error, we may not reverse the arbitrator’s judgment if the decision
   ‘draw[s] its essence from the contract.’” Id. (citations omitted).
                                          III.
          ICB asserts that the arbitrator lacked jurisdiction to rule on the
   arbitrability of the claims and thus exceeded his authority when he
   determined that ICB breached the Arbitration Provision.
          Under AAA Rule 7(a), “[t]he arbitrator shall have the power to rule
   on his or her own jurisdiction, including any objections with respect to the
   existence, scope, or validity of the arbitration agreement or to the arbitrability

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Case: 22-50850          Document: 00516848606             Page: 5       Date Filed: 08/07/2023

                                           No. 22-50850

   of any claim or counterclaim.” Archer and White Sales, Inc. v. Henry Schein,
   Inc., 935 F.3d 274, 279–80 (5th Cir. 2019) (citation omitted). A contract
   “need not contain an express delegation clause.” Id. (citations omitted).
   Rather, “an arbitration agreement that incorporates the AAA Rules
   ‘presents clear and unmistakable evidence that the parties agreed to arbitrate
   arbitrability.’” Id. (citations omitted).
          Here, the Arbitration Provision incorporates the AAA rules—it
   provides that any arbitration shall be “in accordance with the Commercial
   Arbitration Rules and Mediation Procedures of the American Arbitration
   Association then in effect (the ‘Rules’).”                In addition, the Provision
   “grant[s] all powers to the arbitrator to the fullest extent of the Rules.”
   Thus, the Provision presents clear and unmistakable evidence that the parties
   agreed to arbitrate arbitrability. Archer, 935 F.3d at 279.
          ICB points to a specific clause in the Arbitration Provision, 3 asserting
   that the clause “vested ‘exclusive jurisdiction’ over the matter to Travis
   County courts.” ICB contends that, while “this appeal appears to merely
   ask whether to confirm or vacate an arbitrator’s award,” “a closer inspection

          _____________________
          3
              The specific clause at issue reads:
          Judgment upon the award may be entered in any court of competent
          jurisdiction or application may be made to such court for a judicial
          acceptance of the award and an order of enforcement. Each of the Parties
          consents to the exclusive jurisdiction of the state and federal courts located
          in the County of Travis, State of Texas (and of the appropriate appellate
          courts therefrom) in any such action or proceeding (including an action to
          compel arbitration or to stay any proceeding inconsistent with this
          provision) and in any other action or proceeding arising out of or relating
          to this Agreement, including but not limited to its performance,
          enforcement, scope and/or interpretation, and waives any objection to
          venue or to the jurisdiction of such courts.

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                                    No. 22-50850

   reveals this case is really about contract interpretation.” The district court
   found that ICB took the clause out of context.
          Regardless of whether we agree or not, we “must sustain an
   arbitration award even if we disagree with the arbitrator’s interpretation of
   the underlying contract as long as the arbitrator’s decision ‘draws its
   essence’ from the contract.” Timegate Studios, Inc., v. Southpeak Interactive,
   L.L.C., 713 F.3d 797, 802 (5th Cir. 2013) (citations omitted) (alteration in the
   original). Further, “we resolve all doubts in favor of arbitration.” Id.
          As stated above, the Provision required the parties to “submit any and
   all controversies, disputes, claims, and matters of difference arising out of or
   relating to this Agreement, . . . exclusively to arbitration in Austin, Texas in
   accordance with the Commercial Arbitration Rules and Mediation
   Procedures of the American Arbitration Association.” Accordingly, the
   arbitrator had the authority to determine jurisdiction and arbitrability issues.
   AFFIRMED.

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