A. Miner Contracting Incorporated v. Dana Kepner Company Incorporated et al

Filing 36

ORDER that Plaintiff's Petition to Vacate Arbitration Award and Award of Fees and Costs (Doc. 1 ) is denied. The Clerk shall terminate this case. See order for complete details. Signed by Judge Neil V. Wake on 1/15/16. (NKS)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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A. Miner Contracting, Inc.,

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Plaintiff,

No. CV-15-01904-PHX-NVW
ORDER

v.
Dana Kepner Company, Inc., a Delaware
corporation; Does 1-50; Black & White
Companies; Limited Liability Companies or
Partnerships I-X,

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Defendants.

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Before the Court is Plaintiff’s Petition to Vacate Arbitration Award and Award of

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Fees and Costs (Doc. 1) and the parties’ accompanying briefs. For the reasons that

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follow, the Petition will be denied.

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I.

BACKGROUND

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In 2010, A. Miner Contracting, Inc. (“Miner”) sued Dana Kepner Company, Inc.

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(“Kepner”) on various tort and contract claims. The parties agreed to arbitration and

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selected as their arbitrator a partner at a local law firm. After a three-day hearing, the

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arbitrator rejected Miner’s claims, found in favor of Kepner’s counterclaims, and

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awarded fees and costs to Kepner. The arbitrator’s final decision, issued in June 2012,

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awarded Kepner a total of $626,892.36. Miner paid the award immediately.

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Later that year, Miner petitioned the Court to vacate the award on the grounds that
the arbitrator exceeded his authority and his decision lacked legal support. See A. Miner
Contracting, Inc. v. Dana Kepner Co., No. CV-12-08198-PHX-GMS, 2012 WL
6674430, at *1 (D. Ariz. Dec. 20, 2012). The Court denied the petition. Id.

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Now, Miner again petitions the Court to vacate the award, this time on the ground
that the arbitrator was biased.
allegations:

During the arbitration, other partners at the arbitrator’s law firm were

representing a man in a high-profile divorce.

That man, himself an attorney, was

representing a party adverse to Miner in substantial, unrelated litigation. In other words,
during the arbitration the arbitrator’s firm’s client’s client opposed Miner in a separate
proceeding. Because the arbitrator did not disclose this relationship, Miner contends the
award should be vacated.

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Miner’s bias theory rests on the following factual

Kepner contends Miner’s petition is untimely and does not allege bias sufficient to
justify vacating the award.

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II.

ANALYSIS
A.

Timeliness

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Under the Federal Arbitration Act, a petition to vacate an arbitration award must

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be brought within three months after the award is filed or delivered. 9 U.S.C. § 12; see

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also United States v. Park Place Assocs., Ltd., 563 F.3d 907, 919 n.8 (9th Cir. 2009).

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Here, the arbitrator issued his final decision in June 2012, and Miner filed its current

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petition in September 2015. Thus, the petition is three years too late. See Lafarge

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Conseils Et Etudes, S.A. v. Kaiser Cement & Gypsum Corp., 791 F.2d 1334, 1339 (9th

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Cir. 1986) (finding attempt to vacate award after one year untimely).

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Although the statute contains no explicit exception to the limitations period, Miner

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urges the Court to apply the doctrine of equitable tolling. Miner requests leniency

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because, unlike the arbitrator and Kepner, Miner only recently discovered evidence of the
arbitrator’s bias.
There are two problems with this argument. First, the Ninth Circuit rejected a
similar argument in Lafarge. There, a party attempted to vacate an arbitration award “by
way of a Rule 60(b) motion with a claim of newly discovered evidence.” 791 F.2d at
1338. The court denied the motion and noted that “[n]ewly discovered evidence does not
justify vacation of an award.” Id. at 1339 (citing Shearson Hayden Stone, Inc. v. Liang,
653 F.2d 310, 313 (7th Cir. 1981)). Indeed, Miner cites no instance of a court making
any exception to the Federal Arbitration Act’s limitations period, much less an exception
based on new evidence.
Second, even if new evidence could justify vacating an award in some cases,
Miner does not adequately explain why vacation is justified in this case. The evidence on
which Miner relies appears to be public information about the identities of attorneys in
conspicuous lawsuits. It is unclear why Miner could not have discovered or presented
this information sooner. To entertain Miner’s petition now, three years later, would
unwisely “create a rule that encourages losing parties to challenge arbitration awards on
the basis of pre-existing, publicly available background information . . . .” Lagstein v.
Certain Underwriters at Lloyd’s, London, 607 F.3d 634, 646 (9th Cir. 2010).
Therefore the limitations period will not be tolled, and Miner’s petition is timebarred.
B.

Sufficiency of Allegations

In addition to timing limitations, the Federal Arbitration Act limits the grounds on
which a federal court may vacate an arbitration award. The statute permits vacation only
if (1) corruption or fraud was involved, (2) the arbitrator was evidently partial or corrupt,
(3) the arbitrator was guilty of misbehavior, or (4) the arbitrator exceeded his or her
powers. 9 U.S.C. § 10. “These grounds afford an extremely limited review authority, a
limitation that is designed to preserve due process but not to permit unnecessary public

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intrusion into private arbitration procedures.” Kyocera Corp. v. Prudential-Bache Trade
Servs., Inc., 341 F.3d 987, 998 (9th Cir. 2003).
Miner invokes the second statutory ground for vacation, alleging the arbitrator was
“evidently partial.” Evident partiality can arise from either actual bias or nondisclosure
on the arbitrator’s part. Woods v. Saturn Distribution Corp., 78 F.3d 424, 427 (9th Cir.
1996). Miner alleges nondisclosure. Accordingly, Miner must show that the arbitrator
failed to disclose information that creates a “reasonable impression of bias.” Id.; see also
Lagstein, 607 F.3d at 645-46.
Miner’s petition does not identify any such information. Instead, the petition
describes a complex relationship between the arbitrator and one of Miner’s litigation
adversaries. This relationship is too tenuous to create a “reasonable impression of bias.”
This is not a case where the arbitrator had previously represented one of the parties
or their adversaries. This is not even a case where a member of the arbitrator’s firm had
previously represented one of the parties or their adversaries. This is a case where the
arbitrator’s firm’s client represented one of the parties’ adversaries in litigation unrelated
to, but concurrent with, the arbitration. To a reasonable observer, this tangled web of
connections creates disorientation, not an impression of bias.
A contrary ruling would defy common sense. To infer bias here would impose on
prospective arbitrators an obligation to investigate the activities of each of their firm’s
clients. This obligation would be unworkable, especially for arbitrators with day jobs in
very large firms.
Miner cites no instance of a court inferring partiality in a comparable situation.
Miner’s reliance on Commonwealth Coatings Corp. v. Continental Casualty Co. is
misplaced. There, one of the parties to the arbitration was a “regular customer[]” of the
arbitrator’s business, and the arbitrator failed to disclose the “close financial relations that
had existed between them for a period of years.” 393 U.S. 145, 146-48 (1968). That is
not this case.

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Therefore, even if Miner’s petition were timely, it fails to sufficiently allege
partiality.

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IT IS THEREFORE ORDERED that Plaintiff’s Petition to Vacate Arbitration
Award and Award of Fees and Costs (Doc. 1) is denied. The Clerk shall terminate this
case.
Dated this 15th day of January, 2016.

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Neil V. Wake
United States District Judge

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