683 F. App'x 468
6th Cir.2017Background
- Willacy and LoPresti formed an Ohio law partnership in 1979; later partners Marcovy and Marotta joined. Partnership agreement provided arbitration for disputes over "method and details of liquidating the partnership business."
- Amendments (2007, 2009, 2010) modified valuation and retirement/half-draw payment rules; 2010 amendment provided retiring partner one-half of non-retiring partners' draws.
- Willacy entered transitional retirement and later sought a large buyout; LoPresti, Marcovy, and Marotta dissolved the firm in 2014 and initiated AAA arbitration over distribution.
- Arbitrator awarded Willacy $41,281.05 (particular allocations of capital, half-draws, and asset shares) and split arbitration fees between the two sides; Willacy challenged the award and filed suit in federal court.
- District court confirmed the arbitration award, denied Willacy’s motions to vacate/modify and to file a second amended complaint (including a renewed RICO claim), denied his costs, and declined interest; Sixth Circuit affirmed most rulings but remanded on prejudgment and post-judgment interest.
Issues
| Issue | Plaintiff's Argument (Willacy) | Defendant's Argument (LoPresti/others) | Held |
|---|---|---|---|
| Arbitrability of half-draw/distribution claims | Half-draw claim is separate from liquidation and not covered by clause; district court should have decided arbitrability | Clause covers disputes "arguably" related to liquidation; arbitrator/AAA rules can decide scope | Court: dispute was arguably covered; stay and arbitration proper (presumption of arbitrability applies) |
| Confirmation / vacatur of arbitration award | Arbitrator misapplied partnership terms and miscalculated amounts; award should be vacated or corrected | Arbitrator reasonably construed contract and accounted facts; courts review merits only rarely | Court: confirmed award; no basis to vacate under narrow judicial review of merits |
| Procedural: leave to file second amended complaint & RICO claim | New RICO allegations improve earlier pleading and avoid arbitration bar | RICO claims overlap with arbitrated issues and were not materially improved; permitting amendment prejudicial and untimely | Court: denial of leave to amend was not an abuse of discretion; RICO claims cannot evade arbitration |
| Costs and interest (pre- & post-judgment) | Entitled to costs and interest on award | Defendants prevailed on confirmation and opposed Willacy; costs belong to defendants; interest governed by law | Court: Willacy not prevailing party for costs; but under Ohio law prejudgment interest on the confirmed award is mandatory — remand to calculate prejudgment and to decide post-judgment interest under federal law |
Key Cases Cited
- United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574 (establishes presumption favoring arbitration coverage)
- AT & T Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643 (presumption of arbitrability where contract contains arbitration clause)
- Turi v. Main St. Adoption Servs., LLP, 633 F.3d 496 (6th Cir.) (delegation to arbitrator applies only to claims arguably covered)
- Bratt Enters., Inc. v. Noble Int’l Ltd., 338 F.3d 609 (6th Cir.) (narrow arbitration clause interpretation — related but distinct claims may remain nonarbitrable)
- Mich. Family Res., Inc. v. Serv. Emps. Int’l Union Local 517M, 475 F.3d 746 (6th Cir.) (courts defer to arbitrator; vacatur standard is narrow)
- Fazio v. Lehman Bros., Inc., 340 F.3d 386 (6th Cir.) (tort claims can be arbitrable if they touch matters covered by agreement)
- Shearson/American Express Inc. v. McMahon, 482 U.S. 220 (civil RICO claims are arbitrable if covered by agreement)
- Simon v. Pfizer Inc., 398 F.3d 765 (6th Cir.) (narrow arbitration clause limits; cannot compel arbitration of issues not agreed to)
- Southland Corp. v. Keating, 465 U.S. 1 (federal law governs arbitrability issues under FAA)
- Lincoln Elec. Co. v. St. Paul Fire & Marine Ins. Co., 210 F.3d 672 (6th Cir.) (state law governs prejudgment interest entitlement)
- Broad Street Energy Co. v. Endeavor Ohio, LLC, 806 F.3d 402 (6th Cir.) (post-judgment interest issue governed by federal law)
- Cranpark, Inc. v. Rogers Grp., Inc., 821 F.3d 723 (6th Cir.) (remand to calculate appropriate prejudgment/post-judgment interest)