Concierge Auctions v. ICB Properties of Miami

Case: 22-50850 Document: 00516848606 Page: 1 Date Filed: 08/07/2023
United States Court of Appeals
for the Fifth Circuit
United States Court of Appeals
Fifth Circuit
FILED
____________
August 7, 2023
No. 22-50850 Lyle W. Cayce
____________ Clerk
Concierge Auctions, L.L.C.,
Plaintiff—Appellee,
versus
ICB Properties of Miami, L.L.C.,
Defendant—Appellant.
______________________________
Appeal from the United States District Court
for the Western District of Texas
USDC No. 1:21-CV-894
______________________________
Before Wiener, Graves, and Douglas, Circuit Judges.
Per Curiam: *
ICB Properties of Miami, L.L.C. (“ICB”) appeals the district court’s
grant of Concierge Auctions, L.L.C.’s (“Concierge”) petition to confirm a
final arbitration award. Guided by the “extraordinarily narrow” standard of
review that applies to our consideration of arbitration awards, see Rain CII
Carbon, LLC v. ConocoPhillips Co., 674 F.3d 469, 471–72 (5th Cir. 2012)
(citation omitted), we AFFIRM.
_____________________
*
This opinion is not designated for publication. See 5th Cir. R. 47.5.
Case: 22-50850 Document: 00516848606 Page: 2 Date Filed: 08/07/2023
No. 22-50850
I.
ICB, a holding company, entered into an agreement (the “Auction
Agreement”) with Concierge, a real estate auction marketing firm, to auction
a luxury property owned by ICB in Florida. The Auction Agreement
contained an arbitration provision (the “Arbitration Provision” or
“Provision”), which required the parties to “submit any and all
controversies, disputes, claims, and matters of difference arising out of or
relating to this Agreement, . . . exclusively to arbitration in Austin, Texas in
accordance with the Commercial Arbitration Rules and Mediation
Procedures of the American Arbitration Association.”
The auction commenced in March 2019, and the property sold for
significantly less than ICB expected. 1 After a disagreement on who was to
pay the buyer’s broker commission, the broker sued ICB in Florida state
court. ICB then asserted third-party claims against Concierge, alleging,
among other things, that Concierge breached the Auction Agreement by
failing to properly conduct the auction.
In September 2019, Concierge invoked the Arbitration Provision in
the Auction Agreement and filed a Demand for Arbitration against ICB with
the American Arbitration Association (“AAA”) in Austin, Texas, alleging
that ICB breached the Arbitration Provision by filing claims against it in
Florida state court.
In July 2021, an arbitrator found in favor of Concierge on its breach of
contract claim and held that Concierge was entitled to recover attorneys’ fees
_____________________
1
ICB originally entered into a listing agreement with Engel & Völkers, an
international real estate agency, to list the property for $68 million. The property sold at
auction for $25.5 million.
2
Case: 22-50850 Document: 00516848606 Page: 3 Date Filed: 08/07/2023
No. 22-50850
and expenses incurred in the arbitration. 2 Concierge filed a petition to
confirm the arbitration award in the United States District Court for the
Western District of Texas, and ICB subsequently filed a motion to vacate the
award. Finding that ICB failed to demonstrate that the final arbitration award
should be vacated, modified, or corrected, the magistrate judge
recommended that the district court grant Concierge’s petition. The district
court adopted the recommendation.
***
ICB asserts two issues on appeal: (1) the arbitrator lacked jurisdiction
under the first-to-file rule, and (2) the arbitrator lacked jurisdiction to rule on
the arbitrability of the claims.
As to the first-to-file issue, ICB asserts that the arbitrator lacked
jurisdiction because the Florida state case was filed first, thus, the arbitrator
was required to decline arbitrating the dispute. “Under the first-to-file rule,
when related cases are pending before two federal courts, the court in which
the case was last filed may refuse to hear it if the issues raised by the cases
substantially overlap.” Cadle Co. v. Whataburger of Alice, Inc., 174 F.3d 599,
603 (5th Cir. 1999) (citations omitted). “The federal courts long have
recognized that the principle of comity requires federal district courts—
courts of coordinate jurisdiction and equal rank—to exercise care to avoid
interference with each other’s affairs.” Save Power Ltd. v. Syntek Fin. Corp.,
121 F.3d 947, 950 (5th Cir. 1997) (citation omitted). “The concern
manifestly is to avoid . . . rulings which may trench upon the authority of
_____________________
2
The Arbitrator ordered ICB to pay Concierge (1) $20,000 in attorneys’ fees,
costs, and expenses incurred in the Florida state court action; (2) $145,000 in attorneys’
fees and $122.70 in expenses incurred in the Arbitration proceeding; (3) $40,000 in
conditional attorneys’ fees if ICB unsuccessfully opposed confirmation of the final
arbitration award; and (4) $27,295 for arbitration fees and expenses.
3
Case: 22-50850 Document: 00516848606 Page: 4 Date Filed: 08/07/2023
No. 22-50850
sister courts.” Id. (citations omitted). “This concern applies where related
cases are pending before two judges in the same district . . . as well as where
related cases have been filed in different districts.” Id. (citations omitted).
As stated above, the rule applies to federal district courts, thus, the rule is
inapplicable here, where the dispute concerns a Florida state case and an
arbitration.
Thus, the crux of this appeal concerns whether the arbitrator lacked
jurisdiction to rule on the arbitrability of the claims.
II.
“We review the district court’s confirmation of an arbitrator’s
award de novo, but our review of the arbitrator’s award itself…is very
deferential.” Commc’ns Workers of Am., AFL-CIO v. Sw. Bell Tel. Co., 953
F.3d 822, 826 (5th Cir. 2020) (citation omitted). This standard of review has
been described as “extraordinarily narrow,” “severely limited,” and “one
of the most deferential standards ‘known to the law.’” Id. (citations omitted)
Our court “must affirm an arbitral award ‘as long as the arbitrator is even
arguably construing or applying the contract and acting within the scope of
his authority.’” Id. (citation omitted). “Even if an arbitrator committed
serious error, we may not reverse the arbitrator’s judgment if the decision
‘draw[s] its essence from the contract.’” Id. (citations omitted).
III.
ICB asserts that the arbitrator lacked jurisdiction to rule on the
arbitrability of the claims and thus exceeded his authority when he
determined that ICB breached the Arbitration Provision.
Under AAA Rule 7(a), “[t]he arbitrator shall have the power to rule
on his or her own jurisdiction, including any objections with respect to the
existence, scope, or validity of the arbitration agreement or to the arbitrability
4
Case: 22-50850 Document: 00516848606 Page: 5 Date Filed: 08/07/2023
No. 22-50850
of any claim or counterclaim.” Archer and White Sales, Inc. v. Henry Schein,
Inc., 935 F.3d 274, 279–80 (5th Cir. 2019) (citation omitted). A contract
“need not contain an express delegation clause.” Id. (citations omitted).
Rather, “an arbitration agreement that incorporates the AAA Rules
‘presents clear and unmistakable evidence that the parties agreed to arbitrate
arbitrability.’” Id. (citations omitted).
Here, the Arbitration Provision incorporates the AAA rules—it
provides that any arbitration shall be “in accordance with the Commercial
Arbitration Rules and Mediation Procedures of the American Arbitration
Association then in effect (the ‘Rules’).” In addition, the Provision
“grant[s] all powers to the arbitrator to the fullest extent of the Rules.”
Thus, the Provision presents clear and unmistakable evidence that the parties
agreed to arbitrate arbitrability. Archer, 935 F.3d at 279.
ICB points to a specific clause in the Arbitration Provision, 3 asserting
that the clause “vested ‘exclusive jurisdiction’ over the matter to Travis
County courts.” ICB contends that, while “this appeal appears to merely
ask whether to confirm or vacate an arbitrator’s award,” “a closer inspection
_____________________
3
The specific clause at issue reads:
Judgment upon the award may be entered in any court of competent
jurisdiction or application may be made to such court for a judicial
acceptance of the award and an order of enforcement. Each of the Parties
consents to the exclusive jurisdiction of the state and federal courts located
in the County of Travis, State of Texas (and of the appropriate appellate
courts therefrom) in any such action or proceeding (including an action to
compel arbitration or to stay any proceeding inconsistent with this
provision) and in any other action or proceeding arising out of or relating
to this Agreement, including but not limited to its performance,
enforcement, scope and/or interpretation, and waives any objection to
venue or to the jurisdiction of such courts.
5
Case: 22-50850 Document: 00516848606 Page: 6 Date Filed: 08/07/2023
No. 22-50850
reveals this case is really about contract interpretation.” The district court
found that ICB took the clause out of context.
Regardless of whether we agree or not, we “must sustain an
arbitration award even if we disagree with the arbitrator’s interpretation of
the underlying contract as long as the arbitrator’s decision ‘draws its
essence’ from the contract.” Timegate Studios, Inc., v. Southpeak Interactive,
L.L.C., 713 F.3d 797, 802 (5th Cir. 2013) (citations omitted) (alteration in the
original). Further, “we resolve all doubts in favor of arbitration.” Id.As stated above, the Provision required the parties to “submit any and
all controversies, disputes, claims, and matters of difference arising out of or
relating to this Agreement, . . . exclusively to arbitration in Austin, Texas in
accordance with the Commercial Arbitration Rules and Mediation
Procedures of the American Arbitration Association.” Accordingly, the
arbitrator had the authority to determine jurisdiction and arbitrability issues.
AFFIRMED.
6