Weinberg v. Silber ( 2003 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
__________________________
No. 02-10381
__________________________
STEVE WEINBERG, STEVE WEINBERG & ASSOCIATES, INC.
Plaintiffs-Counter Defendants-Appellants,
versus
HOWARD F. SILBER, individually and doing business as
PACIFIC SPORTS & ENTERTAINMENT
Defendant-Counter Claimant-Appellee,
PACIFIC SPORTS AND ENTERTAINMEMT, INC.
Defendant-Appellee.
___________________________________________________
Appeal from the United States District Court
for the Northern District of Texas
(No. 99-CV-1432)
___________________________________________________
January 6, 2003
Before JOLLY, DUHÉ, and WIENER, Circuit Judges.
PER CURIAM*:
Plaintiff-Appellant Steve Weinberg appeals the district
court’s amended final judgment, confirming the arbitration award,
on several alternative grounds. Weinberg principally argues that
the district court’s amended judgment should be set aside because
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
the terms of the judgment are contradictory. Weinberg also
challenges the underlying arbitration agreement and award on
several bases. For the following reasons, the judgment of the
district court is AFFIRMED.
I.
FACTS AND PROCEEDINGS
This appeal arises from the “acrimonious” termination of a
joint venture agreement between two professional sports agents —
Weinberg and Defendant-Appellee Howard Silber. In June of 1998,
Weinberg and Silber entered into an oral agreement to represent
professional football players. The terms of their agreement were
never memorialized in a writing, but Weinberg and Silber
purportedly agreed to share equally in all expenses incurred in
recruiting clients and in commissions of up to 3% of their clients’
compensation.
The joint venture eventually dissolved, and Weinberg and
Silber each filed suit to resolve several disputed issues. In
December 1999 the parties agreed to “consolidate before [an
arbitrator] all claims and disputes of whatever nature made by the
parties against each other” and to stay all pending litigation.
The arbitration agreement specifically provided that the arbitrator
“will hear all complaints and defenses relating to any matters in
controversy between Weinberg and Silber” including “[t]he rights
liabilities, and indebtedness of any of the parties with respect
to” some fifty-one named athletes, including professional football
2
player Stephen Davis. An arbitration hearing was conducted on March
17, 2000.
In October 2000, the arbitrator issued an award, ordering “a
split on fees paid only with respect to one of their joint-
venture’s clients, Washington Redskins running back Stephen
Davis.”1 The arbitrator specifically noted that “it is an
undisputed fact that Mr. Weinberg acted as an agent of the
Weinberg/Silber joint-venture and on behalf of Stephen Davis in
negotiations with the Washington Redskins prior to and after June
1, 1999.”2 Accordingly, the arbitrator determined that Weinberg
and Silber should split fees earned both on Davis’s completed 1999
contract and on a more recent contract, which was signed in
September 2000 (six months after the arbitration hearing). The 2000
contract encompasses the 2000-08 football seasons and is valued at
approximately $135 million; the 3% agent fee amounts to over $4
million.
Silber filed a motion to confirm the arbitration award in the
Northern District of Texas; Weinberg filed a cross-motion to vacate
the award. The district court denied the motion to confirm without
prejudice; denied the motion to vacate with prejudice; and remanded
the case to the arbitrator for the limited purpose of making three
specific corrections and clarifications to the award. After the
1
2 R. 370.
2
Id.3
arbitrator amended the award, the district court confirmed it as
amended and entered final judgment in January 2002. After granting
Silber’s motion to amend that judgment, the district court entered
an amended final judgment on February 28, 2002; the only change was
in the post-judgment interest rate.
Weinberg timely appeals the amended final judgment on at least
six grounds. He argues that reversal of the district court’s
amended judgment is warranted because (1) the amended judgment
confirming the amended arbitration award is contradictory and
inconsistent; (2) the arbitrator based his award solely on post-
submission events; (3) the underlying agreement to arbitrate is
void because it does not contain procedural rules and guidelines;
(4) the award is not within the scope of the disputes submitted;
(5) the arbitrator’s seven-month delay in ruling was impermissible;
and (6) the lack of procedural rules constitutes a “jurisdictional
defect.”
II.
ANALYSIS
We review a district court’s confirmation of an arbitration
award de novo.3 Judicial review of arbitration awards is
“extraordinarily narrow,” and we will defer to the arbitrator’s
3
Executone Info. Sys., Inc. v. Davis, 26 F.3d 1314, 1320 (5th
Cir. 1994).
4
decision whenever possible.4 This de novo standard “is intended to
reinforce the strong deference due an arbitrative tribunal.”5
The Federal Arbitration Act prescribes the limited bases for
vacatur of an arbitration award. Under the act, a court may vacate
or modify an arbitration award only when (1) the award was procured
by corruption, fraud or undue means; (2) there was evident
partiality or corruption in the arbitrators; (3) the arbitrator was
guilty of misconduct in refusing to postpone the hearing, in
refusing to hear evidence, or other misbehavior; or (4) the
arbitrator exceeded his powers, or so imperfectly executed them
that a mutual, final, and definite award upon the subject matter
submitted was not made.6
We easily dispense with Weinberg’s arguments, as none falls
within the limited grounds for vacatur. First, Weinberg asserts
that the amended final judgment is “self-contradictory as to a
material term and incapable of compliance.”7 Weinberg reasons that
the amended final judgment is invalid because it requires him to
pay one-half of the 3% commission on Davis’s future earnings (his
4
Antwine v. Prudential Bache Sec., Inc. 899 F.2d 410, 413
(5th Cir. 1990).
5
McIlroy v. PaineWebber, Inc., 989 F.2d 817, 820 (5th Cir.
1993); see also Brook v. Peak Int’l, Ltd., 294 F.3d 668, 672 (5th
Cir. 2002) (explaining that “[i]n light of the strong federal
policy favoring arbitration, [j]udicial review of an arbitration
award is extraordinarily narrow”) (internal quotations omitted).
6
9 U.S.C. § 10(a)(1)-(4).
7
Appellant’s Br. at 14.
5
salary for the 2001-08 seasons) immediately, i.e., within ten days
of the date the final judgment is signed.8 According to Weinberg,
“[t]he judgment purports to require [him] to pay in ten days from
funds he does not have, will not have for many years, and may never
have.”9
This argument is specious. The amended final judgment
expressly incorporates the express terms and conditions of the
amended arbitration award, which states that “with respect to and
exclusively for Mr. Davis’ 1999 contract, Mr. Weinberg is ordered
to pay Mr. Silber a sum of $14,010.00 . . . no later than ten (10)
days from the date of this arbitration award.”10 The amended award
further provides:
Mr. Weinberg is therefore ordered to pay 1.5% of any
amounts currently paid to Mr. Davis under his 2000
through 2008 contract, and such payments are to be made
no later than ten (10) days from the date of this
Arbitration Award. Thereafter all payments from Mr.
Weinberg to Mr. Silber are to be paid no later than ten
(10) days from the date Mr. Davis is paid pursuant to the
subject 2000 through 2008 contract.11
8
Weinberg’s argument rests entirely on the district court’s
unqualified use of the word “sum” in the amended final judgment. In
the judgment, Weinberg is ordered to pay Silber “the sum specified
in the Clarified Arbitration Award . . . [t]hat sum is to include
. . . the amount (1.5% of earnings) under the NFL contracts for the
2001 t0 2008 seasons . . . [t]he sum is to be paid no later than
ten (10) days from the date this Judgment is signed.” Amended
Final Judgment, 7 R. at 861-62.
9
Id. (emphasis omitted).
10
6 R. at 612.
11
Id. at 614 (emphasis added).
6
The amended arbitration award thus clearly and unambiguously
specifies when payments to Silber are due: Amounts earned on the
1999 contract and any amounts already paid to Weinberg under the
2000-08 contracts are due within ten days of the date of the
arbitration award; all other payments are to be paid within ten
days of the date that Stephen Davis is paid.
Given the precise terms of the amended arbitration award, the
amended final judgment, which is “to conform with the terms and
conditions” of the amended award, is neither “self-contradictory”
nor invalid. Although the term “sum” as used in the final judgment
may be slightly ambiguous, the district court expressly adopted the
terms and conditions of the arbitration award, which dictates
beyond cavil Weinberg’s schedule of payments. Accordingly,
Weinberg’s argument that the final judgment is “incapable of
compliance” is meritless.
At oral argument, Weinberg advanced yet another, equally
unavailing, theory of internal “inconsistency” in the arbitration
award. He maintains that paragraph five of the award, in which the
arbitrator broadly orders “a split on fees paid only with respect
to . . . Stephen Davis” conflicts with paragraph nine of the award,
which specifically orders all prospective payments from Weinberg to
Silber to be paid within ten (10) days from the date Stephen Davis
is paid. According to Weinberg, the award is unclear as to whether
Weinberg is to pay Silber one-half of “fees paid” as they are
received by Weinberg, or one-half of 3% of Davis’s salary as it is
7
paid to him, regardless of whether (or when) Weinberg receives the
3% commission from Davis.
After careful review of the record, the original and amended
arbitration awards and judgments, and the parties’ briefs, we are
satisfied that these two paragraphs are readily reconcilable and do
not warrant modification of the award or remand to the arbitrator.
Paragraph five sets forth the arbitrator’s award in general terms
— Weinberg and Silber are to split agent commissions, i.e., “fees
paid,” with respect to one client, Stephen Davis. Paragraph nine
outlines, in detail, the payment arrangement: Weinberg is to pay
Silber “1.5% of each dollar earned by Stephen Davis” no later than
ten days from the date that Davis is paid. We acknowledge that
under this payment plan, any risk of Davis’s default is to be
shouldered exclusively by Weinberg, whose obligation to Silber is
triggered by the Redskins payment to Davis, regardless of whether
Davis in turn pays Weinberg. We nevertheless decline to reexamine
either the arbitrator’s motive in crafting the payment terms or the
merits of the underlying award. We conclude that the two provisions
are compatible and that remand is not warranted on the basis of
ambiguity or inconsistency.
We briefly address — and dispose of — Weinberg’s remaining
arguments, which are equally meritless and border on frivolousness.
First, Weinberg contends that the arbitrator exceeded his authority
by considering, and basing his award on, Stephen Davis’s 2000
contract with the Washington Redskins. Weinberg argues that because
8
the arbitration hearing was held on March 17, 2000, and the Davis
contract was not signed until September 2, 2000, the contract was
beyond the temporal scope of the parties’ agreement to arbitrate
and was improperly factored into the final award.
This argument fails for several reasons. First, contrary to
Weinberg’s assertion, the Agreement to Arbitrate Disputes vests the
arbitrator with broad authority to determine “the rights,
liabilities, obligations and indebtedness of any of the parties to
each other with respect to . . . Stephen Davis.”12 Given this broad
mandate, the arbitrator did not exceed his jurisdiction in
determining the “obligations and indebtedness” of the parties with
respect to Stephen Davis’s contract.13
Second, to the extent that Weinberg’s argument is a thinly-
veiled challenge to the arbitrator’s resolution of the disputed
12
Weinberg’s heavy reliance on Gulf Coast Indus. Workers Union
v. Exxon Co., U.S.A., 991 F.2d 244 (5th Cir. 1993) is misplaced. In
Gulf Coast, the court determined that an arbitrator’s reliance on
the plaintiff-employee’s post-discharge rehabilitative efforts was
improper because the only question before the arbitrator was
whether the defendant had “just cause” to terminate the plaintiff
on a specific date. In this case, the arbitrator had broad
authority to resolve the “rights, liabilities, and indebtedness” of
the parties with respect to some fifty-one clients, including
Stephen Davis.
13
See Valentine Sugars, Inc. v. Donau Corp., 981 F.2d 210, 213
(5th Cir. 1993) (explaining that even though the “broad notice of
arbitration . . . seems to give the arbitrator jurisdiction over
anything under the sun . . . [t]he parties agreed to arbitration
. . . and must accept the loose procedural requirements along with
the benefits which arbitration provides”).
9
issues, it also fails.14 Weinberg has repeatedly demonstrated that
he is quite dissatisfied with the result in the arbitration. He has
not, however, established that any one of his complaints falls
within the narrow grounds for vacatur of an arbitration award. We,
like the district court, will not second-guess the arbitrator’s
resolution of this dispute.15 The arbitrator was not required to
give reasons or an explanation in support of his award,16 and absent
evidence of clear error, reliance on the Davis contract (which was
expressly included in the parties’ broad agreement to arbitrate)
does not warrant vacatur of the arbitrator’s award.
Weinberg’s remaining arguments, that the award was not timely,
that the agreement to arbitrate was “void for vagueness,” and that
the lack of formal procedures and rules was a “jurisdictional
defect” are similarly feckless. The arbitration agreement between
Weinberg and Silber prescribed no time limit for decision, and
Weinberg offers no case law to support his bald, sweeping assertion
14
Weinberg questions “how is it equitable for one to pay $2
million to the other for doing nothing?” and contends that “Davis
did not know Silber and would not have consented to his
representation, because Silber represented one of Davis’
competitors.” Appellant’s Br. at 18.
15
See Memorandum Op. & Order, 6 R. 571 (“The Court will not
engage in Monday morning quarter-backing with respect to the
arbitrator’s interpretation of the numerous documents and
correspondence upon which Weinberg and Silber based their
relationship, or his conclusion as to exactly when that extremely
contentious relationship finally and legally disintegrated.”).
16
Antwine, 899 F.2d at 412 (“It has long been settled that
arbitrators are not required to disclose or explain the reasons
underlying an award.”).
10
that a seven-month delay is per se unreasonable.17 This “timeliness”
argument reflects nothing more than Weinberg’s deep dissatisfaction
with what he considers to be the arbitrary and summary disposition
of this case; it is not grounded in law or fact.18
Finally, we note that Weinberg’s residual challenges to the
underlying arbitration agreement are inapt. He cites no case law —
and we have found none — in support of his theory that an agreement
to arbitrate must include procedural “ground rules” to govern the
proceedings.19 On the contrary, “[a]s a speedy and informal
17
Weinberg improperly relies on Jones v. St.Louis-San
Francisco Ry. Co., 728 F.2d 257 (6th Cir. 1984). In Jones, the
arbitration agreement at issue included an express fifteen-day time
limit, but the award was issued some fourteen months after the
hearing date. Moreover, unlike Weinberg, “the appellant made
numerous attempts to have a decision rendered in a timely manner.”
Id. at 266. The court further noted that “some courts have held
that the authority of the arbitrator does not expire until after a
reasonable time beyond the original time limitation provided in the
agreement . . . [t]his rule of reasonableness developed to prohibit
parties from waiting until an award is made and objecting to it on
the basis of its untimeliness only after they receive an
unfavorable decision.” Id. In this case, the record on appeal
reflects that Weinberg did not object to the timeliness of the
arbitrator’s decision — or any other alleged procedural defects —
until he received an (unfavorable) result.
18
Weinberg irrelevantly speculates that during the seven-month
interval between the arbitration hearing and the award the
arbitrator “was not reviewing the documents, considering the
testimony, recalling the arguments” but was “wait[ing] for some
advantageous and unpredictable event to solve his puzzle.”
Appellant’s Br. at 19-20; see also Appellant’s Reply Br. at 13
(“The length of delay perhaps would not be problematic standing
alone, had the arbitrator been diligently fulfilling his task . .
. [b]ut that was not what the arbitrator was doing.”) (emphasis
omitted).
19
Weinberg’s theory in this regard is two-pronged. First, he
asserts that underlying arbitration agreement is “void for
11
alternative to litigation, arbitration resolves disputes without
confinement to many of the procedural and evidentiary strictures
that protect the integrity of formal trials.”20 We have previously
explained that “[p]arties to voluntary arbitration may not
superimpose rigorous procedural limitations on the very process
designed to avoid such limitations.”21
Furthermore, in this case any procedural objections were
likely waived, as Weinberg participated fully in the arbitration
proceedings yet never complained about any lack of rules or
procedures (or any other defect) until he received an unfavorable
result. “It is well settled that a party may not sit idle through
an arbitration procedure and then collaterally attack the procedure
on grounds not raised before the arbitrator[] when the result turns
out to be adverse.”22
III.
Conclusion
vagueness” because “there was no contract telling the arbitrator
what the ‘ground rules’ were.” Appellant’s Br. at 26. Second, he
argues that this purported lack of procedural rules “amounts to an
absence of jurisdiction on the part of the arbitrator.” Id. at 27.
20
Forsythe Int’l, S.A. v. Gibbs Oil Co., 915 F.2d 1017, 1022
(5th Cir. 1990).
21
Id. (emphasis added).
22
Brook, 294 F.3d at 674 (quoting Marino v. Writers Guild of
Am., East, Inc., 992 F.2d 1480, 1484 (9th Cir. 1993)).
12
For the foregoing reasons, the judgment of the district court
is AFFIRMED.
13