Piller v. Valentino

Opinions of the United
2004 Decisions States Court of Appeals
for the Third Circuit
7-22-2004
Piller v. Valentino
Precedential or Non-Precedential: Non-Precedential
Docket No. 00-1146
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Recommended Citation
"Piller v. Valentino" (2004). 2004 Decisions. Paper 473.
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 00-1146
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SHAINDE PILLER
Appellant
v.
JOHN J. VALENTINO; MARY CLARE VALENTINO; 3177-79 RICHMOND
ST; 3036 RICHMOND STREET CORP., t/a JV DISTRIBUTING
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On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil No. 99-mc-00040)
District Judge: The Honorable Stewart Dalzell
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Submitted Under Third Circuit LAR 34.1(a)
June 21, 2004
Before: NYGAARD, McKEE, and CHERTOFF, Circuit Judges.
(Filed: July 22, 2004)
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OPINION OF THE COURT
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NYGAARD, Circuit Judge.
Appellant Shainde Piller appeals from an order granting the appellees’ motion to
confirm their arbitration award. We will affirm.
I.
Various individuals and corporations, including Piller and referred to herein as the
Kent parties, had business relationships with John J. and Mary Claire Valentino, 3177/79
Richmond Corp., and 3036 Richmond Street Corp., t/a JV Distributing. The Kent parties
purchased electronics goods from JV. Through an unwritten agreement, the parties also
formed 1832 MacAurthur Corporation.
A dispute between the Kent parties and JV occurred when JV alleged that the Kent
parties refused to pay for approximately $1,000,000 in goods (the accounts receivable
claims), and the parties disagreed about capital contributions to 1832 Corp. (the 1832
claims). JV filed suit, and the parties agreed to arbitrate the dispute before the American
Arbitration Association. After eighteen months of arbitration, the arbitrator awarded JV
$878,122.23 on the accounts receivable claims and $203,479.27 on the 1832 claims, and
additionally ordered that 1832 Corp. be liquidated. JV filed an action to confirm the
arbitration award and the Kent parties moved to vacate the award. After the parties
agreed the awards were flawed and should be vacated, the District Court issued such an
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order. The matter was remanded to the AAA and, after consideration of new submissions
by the parties and reconsideration of the materials previously before him, the arbitrator
entered a final award in favor of JV that was similar to the initial award. Shainde Piller,
the remaining Kent party, filed an action in the District Court to vacate the final award.
The Court granted JV’s cross-petition to confirm the final award and this appeal
followed.
II.
The courts have very limited discretion to disturb an arbitration award. See, e.g.,
Amalgamated Meat Cutters & Butcher Workmen v. Cross Bros. Meat Packers, Inc., 518
F.2d 1113, 1121 (3d Cir. 1975) (noting that our scope of review under the FAA is
“narrow in the extreme”); see also 9 U.S.C. §§ 9-10. Section 10(a) of the FAA limits the
grounds on which a court may vacate an arbitration award to: (1) awards procured by
corruption, fraud, or undue means; (2) cases where there was evident partiality or
corruption by the arbitrator(s); (3) cases where the arbitrator(s) acted with misconduct so
as to prejudice a party; or (4) cases where the arbitrator(s) exceeded or imperfectly
executed their powers such that a final and definite award was not made. 9 U.S.C. §
10(a). We have held that
an arbitrator’s award must be upheld if the interpretation can in
any rational way be derived from the agreement, viewed in the
light of its language, its context, and any other indicia of the
parties’ intention; only where there is a manifest disregard of the
agreement, totally unsupported by principles of contract
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construction and the law of the shop, may a reviewing court
disturb the award.
U.S. Steel & Carnegie Pension Fund v. McSkimming, 759 F.2d 269, 270-71 (3d Cir.
1985) (internal quotations omitted).
III.
On appeal, Piller makes two arguments attacking the arbitrator’s award. First, she
argues that the arbitrator exceeded his authority by deviating from the parties’ agreement
to be bound by the report of the accounting firm Tait, Weller & Baker (“TWB”).
Arbitrators derive their authority from the arbitration agreement, and where action
is taken in excess of this granted authority, a court may vacate the award. We have used a
two-step process to determine whether an arbitrator exceeded his powers: (1) the form of
the award must be rationally derived either from the agreement between the parties or
from the parties’ submission to the arbitrators, and (2) the terms of the award must not be
“completely irrational.” Mut. Fire, Marine & Inland Ins. Co. v. Norad Reinsurance Co.,
868 F.2d 52, 56 (3d Cir. 1989).
Here, the arbitrator did not exceed his authority because the terms of the award
were not irrational and it was derived from the agreement of the parties and the parties’
submissions. The parties had agreed to retain TWB to report on the accounts receivables
and the 1832 claims, and these reports were admitted into evidence and considered by the
arbitrator. In addition, however, the arbitrator appropriately considered the testimony of a
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number of individuals and extensive documentary evidence. In doing so, the arbitrator
did not exceed his powers.
Piller’s second argument is that the arbitrator’s award should be vacated because
the arbitrator acted in manifest disregard of the law and facts. We have held that in order
for a court to vacate an arbitration award, there must be absolutely nothing in the record
to justify the arbitrator’s decision. See News Am. Publ’ns, Inc. v. Newark, 918 F.2d 21,
24 (3d Cir. 1990). “As long as the arbitrator has arguably construed or applied the
contract, the award must be enforced.” Id. at 24 (emphasis in original) (citing United
Paperworkers Int’l Union v. Misco, 484 U.S. 29, 38 (1987)).
As discussed above, the arbitrator’s decision was based on a consideration of all
the evidence before him. Piller has identified no specific facts that the arbitrator
manifestly disregarded. Thus under our highly deferential standard of review, we will
affirm.
IV.
For the reasons set forth, we will affirm the District Court’s order granting the
appellees’ motion to confirm the award.
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