31 F.4th 367
6th Cir.2022Background
- Attorney Craig Romanzi referred a fatal personal-injury case (the Thomas matter) to his employer, Fieger & Fieger, which later settled for $11.9 million; the state-court settlement awarded the firm roughly $3.55 million in attorney fees. Romanzi’s employment contract entitled him to one-third of fees for cases he originated.
- Romanzi left the firm before settlement and later was placed into involuntary Chapter 7 bankruptcy; Kenneth Nathan was appointed trustee and sued Fieger & Fieger to recover Romanzi’s one-third share (breach of contract, quantum meruit, and conversion).
- The parties agreed to binding arbitration. After a four-day hearing, a 2–1 panel issued a terse award for the Trustee totaling $1,325,247.84 but gave no reasoning or allocation.
- The district court refused to vacate the award under 9 U.S.C. § 10(a) and remanded to the panel for a “brief reasoned decision.” The panel requested submissions; the Trustee supplied proposed findings, the Firm did not.
- The arbitrators issued a supplemental award adopting the Trustee’s reasoning and calculations (awarding $1,182,513.74 plus interest). The district court confirmed the supplemental award. The Firm appealed; the Trustee cross-appealed the bankruptcy court’s dismissal of the statutory conversion claim.
Issues
| Issue | Nathan's Argument | Fieger & Fieger's Argument | Held |
|---|---|---|---|
| Whether the district court should have vacated the original arbitration award under 9 U.S.C. § 10(a) for lack of a "brief reasoned decision" / manifest disregard | Nathan: original award could be clarified; remand is proper remedy for an insufficiently explained award | Fieger: the terse award exceeded arbitrators’ authority and precluded meaningful review; vacatur required (manifest disregard / § 10(a)(4)) | Court: No § 10(a) basis to vacate; remand for clarification is the correct remedy; no manifest disregard shown |
| Whether remanding the award and allowing the arbitrators to seek supplemental submissions violated functus officio | Nathan: clarification-completion exception permits remand and limited supplementation to explain reasoning | Fieger: functus officio bars reopening; the award was not susceptible to clarification and remand improperly reopened merits | Court: Remand fell squarely within the clarification-completion exception; soliciting submissions to explain reasoning was permissible |
| Whether the supplemental award should be vacated (ex parte contact, misconduct, exceeding powers, or imperfect execution under § 10(a)) | Nathan: supplemental award simply explained earlier decision per the district court’s instructions; adopting Trustee’s submission was proper | Fieger: panel acted one-sidedly, accepted only Trustee’s proposed findings, engaged in ex parte communications and misconduct, so vacatur required | Court: No ex parte contact—Firm was copied and declined to respond; no misconduct or § 10(a) violation; supplemental award confirmed |
| Whether the Trustee’s statutory-conversion claim (treble damages) survived summary judgment | Nathan: conversion claim alleges Firm converted Romanzi’s fee share and used it for its own benefit | Fieger: no property interest shown; trustee cannot prove funds were used for Firm’s “own use” | Court: Affirmed dismissal of statutory-conversion claim—Trustee failed to present evidence that Firm used the funds for its own use, so treble damages unavailable |
Key Cases Cited
- Green v. Ameritech Corp., 200 F.3d 967 (6th Cir. 2000) (remand to arbitrator for clarification is proper remedy when award lacks required explanation)
- Excelsior Foundry Co. v. Local 182B, 56 F.3d 844 (7th Cir. 1995) (describes clarification/completion exceptions to functus officio and cautions about post-award communications)
- Dawahare v. Spencer, 210 F.3d 666 (6th Cir. 2000) (defines manifest-disregard standard for vacatur under § 10(a))
- Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Jaros, 70 F.3d 418 (6th Cir. 1995) (arbitration-review principles; manifest-disregard threshold)
- Federated Dep’t Stores, Inc. v. J.V.B. Indus., Inc., 894 F.2d 862 (6th Cir. 1990) (arbitrators exceed authority only in manifest disregard of law)
- Grain v. Trinity Health, Mercy Health Servs., Inc., 551 F.3d 374 (6th Cir. 2008) (discusses § 10(a) vacatur standards)