Shaffer v. PriorityOne Bank ( 2023 )

Case: 21-60802 Document: 00516693195 Page: 1 Date Filed: 03/29/2023
United States Court of Appeals
for the Fifth Circuit
United States Court of Appeals
Fifth Circuit
____________ FILED
March 29, 2023
No. 21-60802 Lyle W. Cayce
____________ Clerk
Eileen N. Shaffer, Chapter 7 Trustee for the Bankruptcy
Estate of Debtors Danny & Judy Hall,
Plaintiff—Appellee,
versus
PriorityOne Bank,
Defendant—Appellant.
______________________________
Appeal from the United States District Court
for the Southern District of Mississippi
USDC No. 3:15-CV-304
______________________________
Before Davis, Elrod, and Haynes, Circuit Judges.
Per Curiam:*
The opinion issued March 9, 2023, is withdrawn by the panel, and the
following is issued in its place:
Acting as trustee of a bankruptcy estate, Eileen Shaffer received a
favorable arbitration award against PriorityOne Bank. The Bank sought to
vacate that award in the district court, arguing that the arbitrator had a
_____________________
*
This opinion is not designated for publication. See 5th Cir. R. 47.5.
Case: 21-60802 Document: 00516693195 Page: 2 Date Filed: 03/29/2023
No. 21-60802
conflict of interest. The district court held that even though the arbitrator
did have a conflict, the Bank had constructive knowledge of that conflict and
therefore had waived any ability to challenge the award on that
ground. Having considered the briefing, oral argument, and relevant
portions of the record, we conclude that the district court did not commit a
reversible error in refusing to vacate the award on conflict-of-interest
grounds.
The district court also held that the Bank’s argument that the
arbitrator manifestly disregarded Mississippi law cannot stand as a
permissible statutory ground for vacatur under the Federal Arbitration Act.
Even assuming without deciding that manifest disregard of the law can be a
basis for challenging an award under the FAA as an argument that an
arbitrator “exceeded his powers” under 9 U.S.C. § 10(a), the Bank fails to
show that the arbitration award was in manifest disregard of Mississippi law.
For the reasons stated above, we AFFIRM. PriorityOne Bank’s
petition for panel rehearing is DENIED as moot.
2