Alan Manchester v. Ceco Concrete Construction
706 F. App'x 425
| 9th Cir. | 2017Background
- Alan Manchester, a former employee, appealed the district court’s grant of summary judgment to Ceco Concrete Construction, LLC on all Hawaii state-law claims arising from his employment.
- A prior arbitration involving the company Manchester operated (and his wife owned) produced a confirmed award that addressed related factual and legal issues.
- Manchester argued he was not bound by the arbitration findings because he was not a party to the arbitration and urged the court to disregard the award.
- Manchester also asserted a negligent misrepresentation claim based on promises made by Greg Tadie during recruitment to Ceco; Tadie recruited Manchester on behalf of Ceco.
- The district court held Manchester was collaterally estopped by the confirmed arbitration award and granted summary judgment to Ceco on negligent misrepresentation, finding Tadie’s promises were imputed to Ceco and made with present intent to perform.
- The Ninth Circuit affirmed, awarding costs to appellee.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Manchester can avoid collateral estoppel from a confirmed arbitration award by claiming nonparty status | Manchester: not a party to arbitration, so award shouldn't bind him | Ceco: Manchester actively participated and was represented by an entity with identical interests | Affirmed: Manchester is bound; courts cannot relitigate arbitration findings |
| Whether the court may review arbitrator's factual/legal conclusions | Manchester: arbitrator erred; district court should review | Ceco: FAA precludes merits review of arbitral decisions | Affirmed: federal courts may not review arbitrator’s merits or factual findings |
| Whether Tadie’s recruitment promises can support negligent misrepresentation against Ceco | Manchester: promises gave rise to negligent misrepresentation | Ceco: promises imputed to company and were made with intent to perform | Affirmed: promises imputed to Ceco; Manchester failed to show present lack of intent, so claim fails |
| Whether summary judgment on negligent misrepresentation was improper due to factual disputes | Manchester: disputed facts about intent and reliance | Ceco: record shows present intent and no genuine dispute on material facts | Affirmed: no genuine issue; summary judgment proper |
Key Cases Cited
- Taylor v. Sturgell, 553 U.S. 880 (2008) (nonparty preclusion principles)
- Bosack v. Soward, 586 F.3d 1096 (9th Cir. 2009) (federal courts may not review arbitral findings)
- Major League Baseball Players Ass’n v. Garvey, 532 U.S. 504 (2001) (courts not authorized to review arbitrator’s merits decision)
- Paperworkers v. Misco, Inc., 484 U.S. 29 (1987) (limits on court review of arbitration awards)
- Kyocera Corp. v. Prudential-Bache Trade Servs., Inc., 341 F.3d 987 (9th Cir. 2003) (FAA bars review for erroneous legal conclusions or unsubstantiated factual findings)
- Santiago v. Tanaka, 366 P.3d 612 (Haw. 2016) (elements of negligent misrepresentation under Hawaii law)
- Joy A. McElroy, M.D., Inc. v. Maryl Grp., Inc., 114 P.3d 929 (Haw. Ct. App. 2005) (promise-based negligent misrepresentation requires proof promisor lacked intent to perform when made)
- Cosmopolitan Fin. Corp. v. Runnels, 625 P.2d 390 (Haw. Ct. App. 1981) (agency/principal liability for agents acting within apparent authority)