Brown-Thill v. Brown
929 F. Supp. 2d 887
W.D. Mo.2013Background
- Brown and Brown-Thill are siblings and co-trustees of the Eugene D. Brown Trust (EDB).
- James Cooper is the sole trustee of the Saurine L. Brown Trust (SLB).
- Trusts own two family limited partnerships (FLP I and FLP II) and Brown Bear, L.L.C., controlled by trusts as General Partner.
- Arbitration agreement (March 2010) covers disputes arising from administration and investment of the trusts, including employment and trustee matters.
- Brown resigned as co-trustee and unilaterally appointed Rubenstein as successor co-trustee; Brown-Thill contested the appointment and pursued arbitration.
- McLeod was named arbitrator; on December 12, 2011 he awarded (1) extending Pomeranke’s employment, (2) finding Brown’s resignation invalid, and (3) removing Brown as Trustee; subsequently Brown moved to vacate and Brown-Thill moved to confirm.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the arbitrator had jurisdiction over the challenged disputes. | Brown-Thill argued arbitrator exceeded authority by involving third parties. | Brown contends disputes fell outside arbitration scope or involved non-signatories. | The court held arbitrator did not exceed authority; disputes were within broad arbitration clause. |
| Whether Brown’s removal as co-trustee was proper under the trust and applicable statutes. | Removal justified under Florida/Missouri statutes and trust provisions. | Removal improper; statutory removal required court process or different interpretation. | Removal fell within arbitrator’s powers; joinder of beneficiaries not required; no vacatur. |
| Whether Rubenstein’s unilateral appointment as successor co-trustee was valid. | Brown-Thill consent needed for appointment under Article V; unilateral appointment invalid. | Brown argues appointment valid under §A(4) and potential assent by Brown-Thill. | Unilateral appointment invalid; Rubenstein never properly appointed; award grounded on valid dispute. |
| Whether there was misconduct or bias warranting vacatur. | McLeod’s ex parte conduct and statements show bias. | No proven ex parte misconduct affecting outcome; statements insufficient for vacatur. | No grounds established for vacatur based on misconduct or bias. |
| Whether Brown-Thill is entitled to attorneys’ fees under the arbitration agreement. | Fees recoverable as costs of enforcing arbitration award. | Fees barred by the agreement’s scope and the nature of the proceeding. | Court denied attorneys’ fees to Brown-Thill. |
Key Cases Cited
- First Options of Chi., Inc. v. Kaplan, 514 U.S. 938 (U.S. 1995) (arbitrability questions may be decided by court if not submitted to arbitration)
- Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (U.S. 1983) (strong policy favoring arbitration; doubts resolved in favor of arbitration)
- Hall Street Assocs. L.L.C. v. Mattel, Inc., 552 U.S. 576 (U.S. 2008) (FAA grounds are exclusive for vacatur/modification/correction)
- United Steelworkers of Am. v. Warrior & Gulf Nav. Co., 363 U.S. 574 (U.S. 1960) (arbitrator’s powers derive from agreement; limits on review)
- Hope Elec. Corp. v. Int’l Brotherhood of Elec. Workers, 380 F.3d 1084 (8th Cir. 2004) (jurisdictional questions distinct from merits; court decides arbitrability)
- Schoch v. Info-USA, Inc., 341 F.3d 785 (8th Cir. 2003) (limited grounds for vacatur; deference to arbitration awards)
- Medicine Shoppe Int’l, Inc. v. Turner Inves. Inc., 614 F.3d 485 (8th Cir. 2010) (extraordinary deference to arbitration awards; limited grounds for vacatur)
- Major League Baseball Players Assn. v. Garvey, 532 U.S. 504 (U.S. 2001) (arbitrators’ powers and duties limited to contract interpretation)