Weirton Medical Center, Inc. v. Quorum Health Resources, LLC

Filing

UNPUBLISHED PER CURIAM OPINION filed. Originating case number: 5:15-cv-00132-FPS. Copies to all parties and the district court/agency. [1000348141]. [18-1058]

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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 18-1058

WEIRTON MEDICAL CENTER, INCORPORATED,
Plaintiff - Appellant,
v.
QUORUM HEALTH RESOURCES, LLC; STEPHEN MILLER; MICHAEL
ROLPH; ROBERT LOVELL; ROBERT VENTO; DANIEL HAMMAN; JOHN
WALTKO,
Defendants - Appellees,
and
COMMUNITY HEALTH SYSTEMS, INCORPORATED,
Defendant.

Appeal from the United States District Court for the Northern District of West Virginia,
at Wheeling. Frederick P. Stamp, Jr., Senior District Judge. (5:15-cv-00132-FPS)

Submitted: July 31, 2018

Decided: August 14, 2018

Before MOTZ and KEENAN, Circuit Judges, and SHEDD, Senior Circuit Judge.

Affirmed by unpublished per curiam opinion.

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Patrick S. Casey, CASEY & CHAPMAN, PLLC, Wheeling, West Virginia; Anthony
Cillo, COHEN & GRIGSBY, PC, Pittsburgh, Pennsylvania, for Appellant. Ellis R.
Lesemann, Michelle A. Matthews, LESEMANN & ASSOCIATES LLC, Charleston,
South Carolina; William J. Ihlenfeld, II, BAILEY & GLASSER LLP, Wheeling, West
Virginia, for Appellees.

Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:
Weirton Medical Center, Inc. (“Weirton”), appeals the district court’s order
confirming an arbitration award entered in favor of Quorum Health Resources, LLC
(“Quorum”), and several individuals.

Weirton argues that the arbitrator manifestly

disregarded the law in applying res judicata and collateral estoppel to bar most of its
claims. For the reasons that follow, we affirm.
“This court reviews de novo the district court’s denial of a motion to vacate an
arbitration award.” Brown & Pipkins, LLC v. Serv. Emps. Int’l Union, 846 F.3d 716, 723
(4th Cir. 2017) (brackets and internal quotation marks omitted). Generally, “judicial
review of an arbitration award in federal court is severely circumscribed and among the
narrowest known at law.” Jones v. Dancel, 792 F.3d 395, 401 (4th Cir. 2015) (internal
quotation marks omitted). However, a court may vacate an arbitration award upon a
showing that the arbitrator manifestly disregarded the law. Wachovia Sec., LLC v. Brand,
671 F.3d 472, 483 (4th Cir. 2012). To prevail under this standard, a plaintiff must
demonstrate “that: (1) the disputed legal principle is clearly defined and is not subject to
reasonable debate; and (2) the arbitrator refused to apply that legal principle.” Jones, 792
F.3d at 402. Misapplication or misconstruction of the law does not constitute manifest
disregard. Id. Rather, the plaintiff must show that the arbitrator was “aware of the law,
understood it correctly, found it applicable to the case before [him], and yet chose to
ignore it in propounding [his] decision.” Remmey v. PaineWebber, Inc., 32 F.3d 143, 149
(4th Cir. 1994).

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In 2015, QHR Intensive Resources, LLC (“QIR”), a subsidiary of Quorum,
prevailed in an arbitration proceeding against Weirton. The arbitration concerned a
dispute over QIR’s agreement to provide Weirton with various hospital management
services, including appointment of three interim executive officers.

While Weirton

unsuccessfully pursued vacatur of this first arbitration award, see Weirton Med. Ctr., Inc.
v. QHR Intensive Res., LLC, 682 F. App’x 227 (4th Cir. 2017) (No. 16-1647), it
commenced the instant action against Quorum, the three interim officers, and others. The
district court eventually ordered the case to arbitration, where the arbitrator determined
that most of Weirton’s claims had already been adjudicated in the first arbitration and
entered an award in Appellees’ favor. The district court denied Weirton’s motion to
vacate the arbitration award and granted Appellees’ motion to confirm.
On appeal, Weirton contends that the second arbitrator ignored the first arbitrator’s
determination that the three interim officers were employees only of Weirton, such that
they could not be in privity with QIR for claim preclusion purposes. See Fruth v.
Powers, 806 S.E.2d 465, 474 (W. Va. 2017) (providing West Virginia requirements for
res judicata and collateral estoppel). Weirton maintains that the second arbitrator was
bound by the first arbitrator’s decision, and that the second arbitrator’s contradictory
finding reflected a manifest disregard for the law of the case. Weirton is mistaken,
however, as the first arbitrator did not address whether the interim officers severed their
relationship with QIR or enjoyed an exclusive relationship with Weirton. Rather, the first
arbitrator merely stated that the interim officers served as Weirton’s borrowed
employees.

As a result, the second arbitrator’s finding—that the interim officers
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remained in privity with QIR while working for Weirton—is not inconsistent with the
first arbitrator’s findings. Thus, we conclude that Weirton has failed to establish that the
second arbitrator manifestly disregarded the law in reaching his decision.
Accordingly, we affirm the judgment of the district court. We dispense with oral
argument because the facts and legal contentions are adequately presented in the
materials before this court and argument would not aid the decisional process.
AFFIRMED

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