21st Century Financial Services, L.L.C. v. Manchester Financial Bank, 2014 U.S. App. LEXIS 5957

Manchester Financial Bank (in organization) entered a 2008 services agreement with 21st Century that included an arbitration clause and an address listed in La Jolla; bank organizers/MFG handled some communications.
A dispute arose over invoices and deposits after the bank’s principal investor decided not to proceed; communications between Mandelbaum (bank organizer), 21st Century, and counsel failed to resolve the claim.
21st Century demanded arbitration; the AAA and claimant sent multiple notices to various addresses and to bank organizers and counsel (San Diego and La Jolla addresses); some mail to La Jolla was returned.
Bank organizers and counsel received and exchanged several letters/emails acknowledging the arbitration demand and notices; no one appeared for Manchester at the January 13, 2010 hearing.
The arbitrator awarded 21st Century roughly $532,000 (damages, fees, costs). The district court confirmed the award; Manchester appealed, arguing defective notice and failure to conduct required senior-management good-faith negotiations before arbitration.

Issue	Plaintiff's Argument (21st Century)	Defendant's Argument (Manchester Bank)	Held
Whether defective notice (not sent by certified/registered mail to contract address) requires vacatur	Adequate notice was provided in fact; AAA and claimant made repeated, multi-address attempts and organizers received actual or constructive notice	Award should be vacated because notice did not strictly comply with §15.2 (certified/registered mail to La Jolla address)	Court: Actual/constructive notice existed; under Bernstein Seawell v. Bosarge, defective technical notice does not vacate an award when party had actual notice — affirmed.
Whether arbitration was barred because claimant failed to negotiate in good faith with senior management as required by contract	Parties engaged in good-faith negotiations at the operational level; communications were escalated and senior-level contact occurred; §11.1 does not plainly require senior-management negotiations as a precondition to arbitration	Arbitration clause limited arbitrator authority because the contract required escalation to senior management first; absent senior-level negotiations, tribunal exceeded powers	Court: §11.1 does not unambiguously require senior-management negotiation or condition arbitration on it; operational-level good-faith negotiations occurred — arbitrator did not exceed powers; affirmed.

Hall St. Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576 (U.S. 2008) (FAA provides mechanisms to confirm, vacate, or modify arbitration awards).
Bernstein Seawell & Kove v. Bosarge, 813 F.2d 726 (5th Cir. 1987) (award not vacated where party had actual or constructive notice despite technical notice defects).
Apache Bohai Corp. LDC v. Texaco China BV, 480 F.3d 397 (5th Cir. 2007) (arbitrator exceeds powers when acting contrary to express contractual limits; such limits must be plain and unambiguous).
Brook v. Peak Int’l, Ltd., 294 F.3d 668 (5th Cir. 2002) (resolve doubts in favor of arbitration; parties may contractually limit scope).
Choice Hotels Int’l, Inc. v. SM Prop. Mgmt., LLC, 519 F.3d 200 (4th Cir. 2008) (vacatur upheld where record showed absence of actual or constructive notice).
Harris v. Parker Coll. of Chiropractic, 286 F.3d 790 (5th Cir. 2002) (judicial review of arbitration awards is narrow).