McShane v. PilePro Steel, LP et al
REPORT AND RECOMMENDATIONS that the District Judge GRANT IN PART and DENY IN PART McShanes 1 Petition to Confirm Arbitration Award and DENY PilePros 12 Counter-Petition for Partial Vacatur or Modification of Arbitration Award. Signed by Judge Andrew W. Austin. (klw)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
PILEPRO STEEL, LP, et al.
REPORT AND RECOMMENDATION
OF THE UNITED STATES MAGISTRATE JUDGE
THE HONORABLE LEE YEAKEL
UNITED STATES DISTRICT JUDGE
Before the Court are Plaintiff’s Petition to Confirm Arbitration Award (Dkt. No. 1);
Respondent PilePro Steel, LLC’s Answer and Counter-Petition for Partial Vacatur or Modification
of Arbitration Award (Dkt. No. 12); Plaintiffs’ Memorandum in Support of Petition to Confirm
Arbitration Award (Dkt. No. 23); Defendants’ Response to Plaintiff’s Brief (Dkt. No. 24); and
Plaintiffs’ Reply (Dkt. No. 25). The District Court referred the above motion to the undersigned
Magistrate Judge for report and recommendation pursuant to 28 U.S.C. §636(b)(1)(A), FED. R. CIV.
P. 72, and Rule 1(c) of Appendix C of the Local Rules.
I. GENERAL BACKGROUND
This case arises from an arbitration between Plaintiff Gerry McShane and Defendant PilePro
Steel, LP.1 The arbitration centered on a contract between McShane and PilePro, which each party
alleges the other breached. The arbitrator, Philip Durst, held a hearing on the matter on April 4-5,
2016, and issued his interim opinion on the merits of the parties’ claims on May 18, 2016. The
McShane also brings this suit against F. Sempe, LLC. However, F. Sempe was not a party
to the arbitration, and the Court cannot confirm the arbitration award against it. As such, the
undersigned RECOMMENDS that the District Court DENY McShane’s Petition with regard to
claims against F. Sempe.
arbitrator found that McShane was due $118,000.00 under the contract between PilePro and
McShane. He further issued a final award on June 14, 2016, awarding McShane an additional
$110,852.14 for attorney’s fees and costs for the arbitration, bringing the total due to $228,852.14.
The arbitrator additionally stated that the awards “shall bear pre-award and post-award interest at 5%
per annum.” Dkt. No. 1 at 3. McShane brings this petition to confirm the arbitration award and
enter judgment against PilePro and F. Sempe. PilePro counter-petitions to partially vacate or modify
the award under the Texas Arbitration Act and the Federal Arbitration Act.
II. LEGAL STANDARD
The Federal Arbitration Act (FAA) was enacted to codify “the national policy favoring
arbitration and place arbitration agreements on equal footing with all other contracts.” Buckeye
Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443 (2006). Thus, a court’s review of an arbitration
award is limited. First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 943 (1995). The FAA
provides that a court may vacate an award:
where the award was procured by corruption, fraud, or undue means;
where there was evident partiality or corruption in the arbitrators, or either of
where the arbitrators were guilty of misconduct in refusing to postpone the
hearing, upon sufficient cause shown, or in refusing to hear evidence
pertinent and material to the controversy; or of any other misbehavior by
which the rights of any party have been prejudiced; or
where the arbitrators exceeded their powers, or so imperfectly executed them
that a mutual, final, and definite award upon the subject matter submitted was
9 U.S.C. § 10(a); see also Hall St. Assocs., LLC v. Mattel, Inc., 552 U.S. 576, 586 (2008) (holding
that Sections 10 and 11 of the FAA are the exclusive methods to review an arbitration award). On
the other hand, “[j]udicial deference to arbitration . . . does not grant carte blanche approval to any
decision an arbitrator might make.” Piggly Wiggly Operators’ Warehouse, Inc. v. Piggly Wiggly
Operators’ Warehouse Indep. Truck Drivers Union, Local No. 1, 611 F.2d 580, 583 (5th Cir. 1980).
“Arbitration is ‘simply a matter of contract between the parties.’” ConocoPhillips, Inc. v. Local 130555 United Steelworkers Int’l Union, 741 F.3d 627, 630 (5th Cir. 2014) (quoting First Options, 514
U.S. at 943). “[A] party can be forced to arbitrate only those issues it specifically has agreed to
submit to arbitration.” First Options, 514 U.S. at 945. The arbitrator “can bind the parties only on
issues that they have agreed to submit to him.” Piggly Wiggly, 611 F.2d at 583. Thus, “[i]f an
arbitral panel exceeds its authority, it provides grounds for a court to vacate that aspect of its
decision.” Smith v. Transp. Workers Union of Am., AFL-CIO Air Transp. Local 556, 374 F.3d 372,
375 (5th Cir. 2004).
McShane moves to confirm the arbitration award. PilePro counter-petitions to partially
vacate or modify the arbitration award on three bases. First, PilePro argues that the arbitrator
exceeded his powers in awarding attorney’s fees. Second, it argues that the arbitrator manifestly
disregarded the law on PilePro’s breach of contract claims and the arbitrator’s award of attorney’s
fees. Lastly, PilePro moves to modify the award of attorney’s fees under both the FAA and the
Texas Arbitration Act (TAA).
Scope of the Arbitration Agreement
To decide whether an issue is arbitrable, there are “two considerations: (1) whether there is
a valid agreement to arbitrate between the parties; and (2) whether the dispute in question falls
within the scope of that arbitration agreement.” Webb v. Investacorp, Inc., 89 F.3d 252, 58 (5th Cir.
1996). Here, neither party disputes that a valid arbitration clause exists. However, PilePro argues
that the arbitrator acted outside of that scope in his award of certain attorney’s fees.
Where there is a valid arbitration clause, “there is a presumption of arbitrability.” AT&T
Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 650 (1986). The court must resolve all
doubts concerning whether the parties agreed to arbitrate an issue in favor of arbitration. Carter v.
Countrywide Credit Indus., Inc., 362 F.3d 294, 297 (5th Cir. 2004); Mitsubishi Motors Corp. v.
Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985). Thus, “unless it may be said with positive
assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted
dispute,” the court should find in favor of arbitration. AT&T Techs., 475 U.S. at 650. Moreover,
when reviewing a decision under Section 10(a)(4) of the FAA, the decision must be upheld so long
as the arbitrator “draw[s] its essence from the contract.” E. Associated Coal Corp. v. United Mine
Workers of Am., Dist. 17, 531 U.S. 57, 62 (2000). As long as an arbitrator “is even arguably
construing or applying the contract and acting within the scope of his authority,” the decision should
be upheld. Id.
The parties agree that Section 19 of the Employment Agreement governs the arbitration. This
section provides that:
Any dispute that may arise between the Company [PilePro] and Executive
[McShane] in reference to this Agreement or any Related Agreement, or the
interpretation, application or construction thereof, and any matter, without limitation,
arising out of Executive’s employment with the Company, shall be . . . settled
exclusively by arbitration . . . provided, however, that the Company shall be entitled
to seek a restraining order or injunction in any court of competent jurisdiction to
prevent any continuation of any violation of the provisions of Sections 5 through 8
of this Agreement [the non-compete, non-disparagement, intellectual property, and
confidentiality clauses]. . . . In the event action is brought to enforce the provisions
of this Agreement pursuant to this Section 19, the non-prevailing parties shall be
required to pay the reasonable attorney’s fees and expenses of the prevailing parties
to the extent determined to be appropriate by the arbitrator or the mediator, acting in
its sole discretion.
See Dkt. No. 12-1 at 11-12. PilePro does not object to the arbitrator’s power to decide the merits of
the dispute; nor does it dispute that the arbitrator was permitted to award attorney’s fees. Instead,
PilePro maintains that the arbitrator was not permitted to award fees (1) not personally “incurred”
by the party; (2) earned as part of state litigation; and (3) entangled with other matters not before the
PilePro first challenges the arbitrator’s award of fees not personally incurred by McShane.
PilePro asserts that the fees were not within the scope of the arbitration clause because McShane’s
current employer, rather than McShane personally, paid the attorney’s fees and thus the fees do not
qualify as those “of the prevailing part[y].” This claim ignores the broad discretion granted the
arbitrator to determine the appropriate attorney’s fees. In reaching his conclusion on this issue, the
arbitrator was at least “arguably construing” the text of Section 19. The text of the provision itself
does not require that the “prevailing part[y]” be responsible for paying the fees, but rather that the
fees be “of” that party. Here, the fees were earned defending McShane’s interest in the employment
agreement, and therefore could be interpreted as being “of” McShane—regardless of who ultimately
paid the bill. Thus, the clause is at least “susceptible of [the] interpretation” tendered by the
arbitrator, and is well within the scope of the arbitrator’s power. AT&T Techs., 475 U.S. at 650.
Second, PilePro argues that because an injunction was specifically barred from consideration
by the arbitrator, awarding fees earned during that state court litigation is beyond the scope of the
arbitration clause. But Section 19 places no such limit on the arbitrator’s attorney’s fees
determination, leaving it to his “sole discretion.” Additionally, the text provides for fees “[i]n the
event action is brought to enforce the provisions of this Agreement pursuant to Section 19,” which
does not clearly limit an award to those solely earned during the arbitration. Rather, Section 19
delineates the parties’ recourse to an “action” including both arbitration and an injunction. Thus,
the arbitrator’s determination that the state court litigation was part of the “action” in which
McShane prevailed is not clearly outside the scope of the text of Section 19. Further, the arbitrator
reasoned that the legal fees were used to litigate “similar and related issues,” and that “McShane’s
legal positions and participati[on] in that litigation was necessary to advance or protect his claims
[in the arbitration].” Dkt. No. 23-2 at 3-4. The arbitrator found that the fees earned as part of the
state court litigation were necessary to McShane’s interest in the arbitration and were therefore part
of the “action . . . brought to enforce the provisions of this Agreement” in which fees could be
awarded. This interpretation is within the scope of the text of the Agreement.
Lastly, PilePro argues that the arbitrator’s reduction of the fees awarded to 66% of the fees
claimed was arbitrary. Instead, PilePro argues, the arbitrator was required to request that McShane
resubmit the logs with more specific information as to the matters worked on. The arbitrator had
noted that McShane provided no evidence “to suggest that all of such time was germane or necessary
to advance [his] arbitral claims,” but in his discretion, chose to eliminate a percentage of the fees
rather than go through a line-by-line analysis of the logs. Dkt. No. 23-2 at 4. Once again, this
decision was within the arbitrator’s discretion, and not outside the scope of the agreement.
Moreover, the reduction the arbitrator determined “appropriate” in this case was a fact determination
inappropriate for judicial review. McKool Smith, P.C. v. Curtis Int’l, Ltd., 650 F. App’x 208, 213
(5th Cir. 2016).
PilePro additionally argues that the arbitrator exceeded the scope of his powers in manifestly
disregarding the law.2 First, it is not entirely clear that manifest disregard of the law is still a basis
on which a party may seek vacatur of an arbitration award. Following the Supreme Court’s decision
in Hall Street Associates, LLC v. Mattel, Inc., 552 U.S. 576 (2008), the Fifth Circuit concluded that
the FAA’s “statutory grounds are the exclusive means for vacatur under the FAA.” Citigroup Glob.
Mkts., Inc. v. Bacon, 562 F.3d 349, 355 (5th Cir. 2009). After Citigroup the Fifth Circuit has not
resolved if the argument remains available as a statutory ground, under the theory that manifestly
disregarding the law amounts to an arbitrator “exceeding his powers” in violation of 9 U.S.C.
§ 10(a)(4). See McKool Smith, 650 F. App’x at 212. As the court did in McKool Smith, the
undersigned assumes here that the argument remains viable, and does not address whether that
assumption is supportable under current law.
Both parties agree that the agreement is covered by both the TAA and FAA. Under the
TAA, the statute “provides the exclusive basis for vacatur of an arbitration award.” Hoskins v.
Hoskins, 497 S.W.3d 490, 497 (Tex. 2016). Because “manifest disregard” is not included in the list
of grounds for vacatur, it is not a basis on which an award governed by the TAA may be set aside.
Id.; see also id. at 498-500, (Willett, J., concurring) (“Participants in arbitrations governed by the
TAA now know that an award can be vacated only under the TAA’s enumerated grounds. No
glosses on those statutory bases, no smuggling common law in through the back door—and no
judicial intermeddling with the Legislature’s carefully circumscribed bases for judicial review of an
arbitration award. Exclusive means exclusive.”). PilePro’s argument that the award may be set aside
on this ground therefore fails to the extent it is based on Texas law. As the case law regarding this
argument under the FAA is less clear, however, the Court addresses the claim as one made pursuant
to the FAA.
Regardless, demonstrating that an arbitrator manifestly disregarded the law such that an
award should be vacated is extremely difficult, and is something rarely found by a court. It requires
“more than error or misunderstanding with respect to the law”—it necessitates showing that “the
arbitrator appreciate[d] the existence of a clearly governing principle but decide[d] to ignore or pay
no attention to it.” Prestige Ford v. Ford Dealer Comput. Servs., Inc., 324 F.3d 391, 395 (5th Cir.
2003). Further, the party seeking vacatur must show that the allegedly ignored law was “well
defined, explicit, and clearly applicable.” Id. (quoting Merrill Lynch, Pierce, Fenner & Smith, Inc.
v. Bobker, 808 F.2d 930, 934 (2d Cir. 1986)). And even if manifest disregard is established, relief
is only allowed if enforcement of the award would result in “significant injustice.” American Laser
Vision PA v. Laser Vision Inst., LLC, 487 F.3d 255, 259 (5th Cir. 2007).
PilePro asserts two groups of arguments to support its manifest disregard claim. First, it
assails the arbitrator’s conclusion that PilePro’s breach was not partially or fully excused by
McShane’s actions. In contends that the arbitrator manifestly disregarded the law to find that:
(1) PilePro could not unilaterally modify McShane’s salary; (2) McShane did not acquiesce in the
modification of his salary by continuing to work; (3) McShane’s failure to give thirty days notice
before quitting did not bar his claim; and (4) McShane did not breach the non-compete clause.
Second, PilePro argues that the arbitrator manifestly disregarded the law in awarding McShane
attorney’s fees that (1) were paid by his employer; (2) were part of the state litigation; and (3) were
entangled with other matters. As is seen below, none of these arguments meet the very high standard
for vacatur of the award.
Breach of Contract
PilePro alleges four errors by the arbitrator on the breach of contract finding. However, the
majority of these objections “are essentially challenges to the factual findings of the arbitrator.”
PilePro overlooks the fact that in reviewing an arbitration award a court must “refrain from
commenting on the correctness or incorrectness of the arbitrator’s factual findings.” McKool Smith,
P.C., 650 F. App’x at 213 (quoting Local Union 59, Int’l Bhd. of Elec. Workers, AFL-CIO v. Green
Corp., 725 F.2d 264, 268 (5th Cir. 1984)).
PilePro contends that the employment agreement permitted it to unilaterally alter McShane’s
salary, and the arbitrator’s conclusion to the contrary manifestly disregarded the law. But the
conclusion by the arbitrator was not based on any particular legal doctrine, and PilePro cites no law
it alleges the arbitrator disregarded in making this interpretation. Instead, it points solely to the terms
of the contract. While the construction of a contract is a question of law, an arbitrator’s discretion
in interpreting a contract is extremely broad. Even “serious error” is not a basis for overturning an
arbitrator’s decision. E. Associated Coal Corp., 531 U.S. at 62. PilePro has utterly failed to show
that the arbitrator’s contract interpretation was so erroneous that it qualifies as being in manifest
disregard of the law.
The case is similar with regard to the arbitrator’s finding that McShane did not waive his
objection to the modification of his salary. Specifically, the arbitrator found that McShane had not
“agreed or acquiesced” to the modification, and therefore that he did not waive his right to object
to it. Dkt. No. 23-1 at 4. This is plainly a finding of fact. To the extent that PilePro argues that the
arbitrator manifestly disregarded controlling law in making this conclusion, its argument falls far
short. The Texas Supreme Court has held that modification of a contract “is a question of fact” and
that the “employer asserting a modification must prove that he unequivocally notified the employee
of definite changes in employment terms.” Hathaway v. General Mills, Inc., 711 S.W.2d 227, 229
(Tex. 1986). Here, the arbitrator found that PilePro did not “unequivocally” notify McShane of
permanently changing the salary, finding instead that PilePro merely meant to “delay paying
McShane his monthly salary.” Dkt. No. 23-1 at 4 (emphasis in original). This is plainly a finding
of fact reserved to the arbitrator, and under black letter law must remain undisturbed by a court.
PilePro next complains of the arbitrator’s decision that McShane’s breach of the agreement
by not providing thirty days notice before leaving PilePro did not bar McShane’s breach of contract
claim. PilePro contends that clearly governing law provides that a party in breach cannot maintain
a suit for breach. Dobbins v. Redden, 785 S.W.2d 377, 378 (Tex. 1990). This is not a full statement
of the law, however. The Fifth Circuit (relying on Texas contract law) has permitted a party in
breach to recover damages when the other party “had breached [the contract] first.” Info. Commc’n
Corp. v. Unisys Corp., 181 F.3d 629, 632-33 (5th Cir. 1999) (citing Mead v. Johnson Grp., Inc., 615
S.W.2d 685 (Tex. 1981)). The arbitrator found that PilePro breached the contract by failing to pay
McShane his salary, and McShane’s subsequent “breach” in failing to give thirty days’ notice did
not bar his recovery under the contract. Even if the Court were to accept PilePro’s argument that the
arbitrator misapplied the law in reaching this conclusion, this is a far cry from demonstrating that
he actively disregarded the law.
PilePro’s final argument on this point again attempts to complain of fact findings, specifically
three distinct findings of the arbitrator: (1) McShane was not in breach of the non-compete clause,
(2) McShane had not usurped a business opportunity, and (3) these actions had not damaged PilePro.
Again, PilePro presents no legal authorities to support its proposition that the arbitrator manifestly
disregarded the law when he made these fact findings. To repeat the point again, to demonstrate
manifest disregard a party must first identify a “clearly governing [legal] principle” that is “well
defined, explicit, and clearly applicable.” Prestige Ford 324 F.3d at 395. PilePro completely fails
to do so here. A finding of fact by an arbitrator is simply not challengeable on this basis.
Moreover, it is clear that, at the very least, the arbitrator attempted to apply the law—whether
he did so correctly or incorrectly is an inappropriate determination for this court. Therefore, even
if manifest disregard remains as a valid basis for vacatur, PilePro is unable to establish that the
arbitrator ignored clearly defined law in his conclusions regarding the breach of contract claims.
PilePro’s complaints regarding the attorney’s fees award suffer from the same deficiencies.
PilePro first objects to the fees award because the fees were paid by McShane’s current employer.
But the arbitrator considered the case law provided by PilePro to determine when a person may
recover fees not personally paid by the party. The arbitrator cited to, and distinguished, the cases,
noting that each interpreted the word “incurred,” which was not included in this arbitration
agreement. Dkt. No. 23-2 at 6 (citing Garcia v. Gomez, 319 S.W.3d 638, 642-43 (Tex. 2010);
Jackson v. S.O.A.H., 351 S.W.3d 290, 299 (Tex. 2011); and Aviles v. Aguirre, 292 S.W.3d 648, 649
(Tex. 2009)). The arbitration clause here discussed attorney’s fees “of the prevailing parties,”
whereas the statutes at issue in the above cases allowed for attorney’s fees “incurred” by the
prevailing party. The arbitrator found the use of the word “of” rather than “incurred” distinguished
those cases. The arbitrator quite plainly did not ignore clearly defined law. PilePro’s argument
disputes the merits of his decision, and falls well short of showing the “serious error” required to
overturn an arbitrator’s decision. E. Associated Coal Corp., 531 U.S. 57 at 62.
PilePro next objects to the arbitrator’s award of attorney’s fees that had been incurred during
state court litigation. PilePro fails to cite to any law clearly holding that the arbitrator was not
permitted to award fees from the state court litigation. See Dkt. No. 24 at 8. In fact, the only case
cited by PilePro on this issue is Arthur Anderson & Co. v. Perry Equip. Corp., 945 S.W.2d 812 (Tex.
1997). PilePro contends that Arthur Anderson holds that the “award of attorney’s fees in a case
extends only [to] the attorneys’ fees in that case.” Dkt. No. 12 at 11. However, in Arthur Anderson,
the court gave seven factors for courts to consider in granting attorney’s fees, merely noting that the
factors were to assist courts in determining whether the fees were “both reasonably incurred and
necessary to the prosecution of the case at bar.” 945 S.W.2d at 818. Nowhere does the case state
that a court can only award fees incurred during that particular case. In fact, the arbitrator considered
Arthur Anderson and found that the fees here were “necessary to advance or protect [McShane’s]
claims” in the arbitration. Dkt. No. 23-2 at 3 (emphasis added). As discussed previously, the
arbitrator found that PilePro had raised matters, including claims for damages, in state court
litigation that should have been before the arbitrator, or at the very least affected matters
appropriately before the arbitrator. As the arbitrator was applying the very case that PilePro cites
to, it is difficult to see how the arbitrator intentionally ignored the law.
PilePro additionally argues that the arbitrator manifestly disregarded the law by arbitrarily
reducing the fees by 34% rather than making a line-by-line determination as to each item in
McShane’s logs. Namely, PilePro argues that the arbitrator manifestly disregarded the law by not
requiring McShane to resubmit its logs to more clearly define which fees were assessed for matters
in the arbitration as opposed to other matters on which the attorneys worked. However, PilePro fails
to cite to any legal authority making the arbitrator’s approach impermissible, or that he was
otherwise aware of an ignored. Indeed, the arbitration clause gave the arbitrator “sole discretion”
to award fees. His determination that 66% of the fees were attributable to the arbitration was a
factual matter within his discretion.
Modification of Award
Finally, PilePro moves to modify the arbitration award under both the TAA and the FAA.
Both statutes allow for modification of an award when there is “an evident miscalculation of
numbers” or when the arbitrator made an award on matters not submitted to him. TEX. CIV. PRAC.
& REM. CODE § 171.091; 9 U.S.C. § 11 (allowing for modification when there is “an evident
miscalculation of figures”). Here, PilePro makes the same arguments as were addressed in the
previous two sections, namely that the arbitrator improperly awarded fees (1) for legal services
provided by McShane’s employer, (2) for matters submitted to the state court, and (3) for matters
unrelated to the arbitration.
First, there is not an evident miscalculation of the award. Courts have only found an evident
miscalculation of figures when “the record that was before the arbitrator demonstrates an
unambiguous and undisputed mistake of fact and the record demonstrates strong reliance on that
mistake by the arbitrator in making his award.” Woods v. P.A.M. Trans. Inc.-L.U., 440 F. App’x
265, 269-70 (5th Cir. 2011) (quoting Prestige Ford v. Ford Dealer Computer Servs., Inc., 324 F.3d
391, 396 (5th Cir. 2003)); cf. Atlantic Aviation, Inc. v. EBM Grp., Inc., 11 F.3d 1276, 1284 (5th Cir.
1994) (modifying the arbitration award when the mistake was “in essence a clerical error” rather than
a substantive choice made by the arbitrator); Sydow v. Verner, Liipfert, Bernhard, McPherson and
Hand, Chartered, 218 S.W.3d 162, 170 (Tex. App.–Houston [14th Dist.] 2007) (allowing
modification under the TAA when it was a “mere error of form not affecting the merits of the
controversy”). This is clearly not the case here. PilePro has not pointed to an undisputed mistake
of fact in the record; rather, it points to a number of disputed facts about which the arbitrator made
a substantive decision on the merits. See Magnum Gas Pipeline, LLC v. Silver Oak Operating, LLC,
No. 11-0056, 2015 WL 1888517, at *6 (W.D. La. Apr. 24, 2015).
Similarly, the arbitrator did not award on matters not submitted to him. A court “must
sustain an arbitration award . . . as long as the arbitrator’s decision ‘draws its essence’ from the
contract.” Clarke’s Allied, Inc. v. Rail Source Fuel, LLC, 2015 WL 5635273, at *2 (E.D. Tex. Sept.
24, 2015) (quoting Timegate Studios, Inc. v. Southpeak Interactive, LLC, 713 F.3d 797, 802 (5th Cir.
2013)); cf. Monday v. Cox, 881 S.W.2d 381, 385 (Tex. App.–San Antonio 1994) (holding that under
the TAA “courts may modify an arbitrator’s award only if the issue to be modified was not submitted
to him”). As the arbitration agreement explicitly granted the arbitrator the power to decide attorney’s
fees in his sole discretion, the award of fees is far from an award on “matters” not submitted to him.
See Vandenavond v. i2 Techs., Inc., No. 3:08-CV-1000, 2008 WL 5336300, at *4 (N.D. Tex. Dec.
19, 2008) (applying a “broad interpretation of the word ‘matter’”).
When a party contracts for an arbitrated determination of a legal dispute, it gives up
important appellate rights. PilePro is not a legal novice, but rather is a business with legal counsel,
and knew this when it signed the contract with McShane. Indeed it drafted the agreement containing
the arbitration provision. Dkt. No. 23 at 11. Given this background, PilePro’s attempt here to spin
well-settled law to have its motion to vacate do service as a conventional appeal is nothing short of
disengenuous. It has failed rather poorly to carry the heavy burden of a party seeking to vacate an
Therefore, the Court RECOMMENDS that the District Judge GRANT IN PART and
DENY IN PART McShane’s Petition to Confirm Arbitration Award (Dkt. No. 1), and DENY
PilePro’s Counter-Petition for Partial Vacatur or Modification of Arbitration Award (Dkt. No. 12).
The parties may file objections to this Report and Recommendation. A party filing
objections must specifically identify those findings or recommendations to which objections are
being made. The District Court need not consider frivolous, conclusive, or general objections. See
Battle v. United States Parole Comm'n, 834 F.2d 419, 421 (5th Cir. 1987).
A party's failure to file written objections to the proposed findings and recommendations
contained in this Report within fourteen (14) days after the party is served with a copy of the Report
shall bar that party from de novo review by the District Court of the proposed findings and
recommendations in the Report and, except upon grounds of plain error, shall bar the party from
appellate review of unobjected-to proposed factual findings and legal conclusions accepted by the
District Court. See 28 U.S.C. § 636(b)(1)(C); Thomas v. Arn, 474 U.S. 140, 150-53, 106 S. Ct. 466,
472-74 (1985); Douglass v. United Servs. Auto. Ass’n, 79 F.3d 1415, 1428-29 (5th Cir. 1996) (en
SIGNED this 19th day of April, 2017.
ANDREW W. AUSTIN
UNITED STATES MAGISTRATE JUDGE
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