DORAL FINANCIAL CORPORATION, Plaintiff, Appellant, v. Calixto GARCIA-VELEZ; Carmen T. Garcia-Velez, Defendants, Appellees.
No. 12-1519.
United States Court of Appeals, First Circuit.
July 31, 2013.
725 F.3d 27
v. Aldanondo-Rivera, 496 F.3d 51, 64 (1st Cir.2007). Here, the district court gave a general instruction that “arguments and statements by attorneys are not evidence,” and that in closing arguments, “each attorney for each side has the opportunity to summarize what he understands he has proven to you through the evidence and what the other party, perhaps, has not proven to you by the evidence; but those are arguments of counsel, they are not evidence.” Although this was a general instruction, not a curative one, Rekomdiv and Domingo offer no reason why the instruction given does not cure any possible adverse effects of the allegedly improper statements made by Portugues‘s counsel.
In sum, the allegations in the complaint fail to establish the causation element necessary to make out a plausible legal malpractice claim under Puerto Rico law. The court therefore did not err in dismissing sua sponte the legal malpractice suit.
CONCLUSION
We affirm the district court‘s denial of offset of the damages award and its sua sponte dismissal of the legal malpractice suit.
Jose Luis Gonzalez-Castaner, with whom Gonzalez Castaner, C.S.P., was on brief for appellees.
Before LYNCH, Chief Judge, TORRUELLA and SELYA, Circuit Judges.
TORRUELLA, Circuit Judge.
Plaintiff-Appellant Doral Financial Corp. (“Doral“) filed this appeal after the district court denied its petition to vacate an arbitral award. According to Doral, the district court incorrectly rejected its contention that the arbitration tribunal engaged in misconduct by denying the issuance of pre-hearing and hearing subpoenas. Doral also argues that the district court erred in its determination that the tribunal had authority to order the payment of pre-award interest. After carefully considering the record, we affirm.
I. Background
When Doral terminated Defendant-Appellee Calixto Garcia-Velez as the President of its Consumer Banking Division, Garcia-Velez began the arbitration proceedings underlying this appeal seeking the severance compensation that he felt was contractually due.1 Doral opposed the
The arbitration tribunal held a preliminary arbitration conference on March 23, 2009. It subsequently issued a scheduling order reflecting the agreements of the parties at the conference. As relevant here, the order established May 15, 2009, as the deadline for final requests for information, and August 7, 2009, for the submission of a final witness list. The order also stated that, “if a party wishes to issue a subpoena to a third party ... the parties shall first confer and determine if there is any disagreement to the date and propriety of the subpoena.... Any dispute, as to a subpoena, shall be resolved by the Tribunal....”
On September 4, 2009, five days before the first arbitration hearing was scheduled to begin, Doral filed an “Urgent Motion to Stay the Arbitration Proceedings,” stating that the Miami branch of the bank for which Garcia-Velez allegedly worked had merged with its Puerto Rico holding company. According to Doral, the merger proved the falsity of Garcia-Velez‘s contention that he exclusively worked for the Miami branch. The tribunal, however, denied the stay, and the arbitration hearings commenced as scheduled on September 9, 2009.
Garcia-Velez testified during the first days of the arbitration hearings. However, on September 14, 2009, due to a medical situation afflicting Doral‘s counsel, his testimony was interrupted and the hearings were postponed until December 14, 2009. Doral took advantage of the two-month recess to serve Garcia-Velez with a first set of interrogatories and a request for production of documents. Doral also notified Garcia-Velez‘s counsel that it intended to request pre-hearing third-party subpoenas from his employer. Garcia-Velez did not respond, and Doral filed a formal application with the tribunal to issue the pre-hearing subpoenas.3
Garcia-Velez immediately opposed the formal request. He argued that the subpoenas were untimely and that they sought to change the schedule agreed upon by the parties. Garcia-Velez also argued that the granting of the subpoenas would likely require the arbitration to be further delayed. The tribunal agreed with Garcia-Velez and denied Doral‘s requests as untimely.
Doral remained undeterred. On December 2, 2009, it filed an application for hearing subpoenas directed at Garcia-Velez‘s employer, seeking information and documents of the same nature as those
The tribunal denied the issuance of hearing subpoenas as well as Doral‘s reconsideration motion. As to the motion for reconsideration, it found “the subpoenas ... significantly broader in scope than it would have permitted had the request been timely submitted and the deadline for requesting such subpoenas has long past.” The tribunal held the same regarding the hearing subpoenas and added that Doral “could have/should have determined the witnesses it needed during the exchange of information process; and, it has had notice of the potential rebuttal witnesses it now wants to call since the September 10, 2009 [hearing].”
On December 11, 2009, the tribunal issued a written decision further explaining the reasoning behind its prior order. There, the tribunal addressed the alleged misrepresentations by Garcia-Velez, stating that “[t]he fact that [Doral] has maintained the same claim against [Garcia-Velez] for his employment with ... the merged entity indicates that it should have requested the information it believed relevant to its claim during the Exchange of Information process.” The tribunal further established that Doral “has been aware since the beginning of these proceedings of the witnesses that it is now attempting to subpoena related to its non-competition claim[, because,] [f]or an extended period of time[, Doral has] been engaged in collateral litigation with [Garcia-Velez‘s] employer concerning the non-competition provision in the Employment Agreement.”
The arbitration hearings resumed on December 14, 2009, and Doral had the opportunity to cross-examine Garcia-Velez as well as to present evidence of its own. The tribunal then provided the parties with the opportunity to file post-hearing briefs and proposed awards.
The award was issued soon thereafter. In pertinent part, the tribunal found Garcia-Velez “entitled to be compensated pursuant to the terms of the Employment Agreement dealing with his termination without cause.”5 The tribunal also found that Doral had failed to “establish that Mr. Garcia-Velez breached the non-competition provision of the Employment Agreement” and held that he was entitled to pre-award interest pursuant to Rule 43(d) of the Commercial Arbitration Rules. The arbitral award totaled $2,396,609, including $163,008 in pre-award interest.6
In due course, Doral filed suit in the district court seeking vacatur of the award. It argued that the tribunal improperly denied the issuance of the subpoenas and thus engaged in “misconduct in refusing to hear evidence pertinent and material to the issue of Mr. Garcia-Velez[s] violation of the non-compete clause of the Employment Agreement.” Doral also posited that, “[b]y awarding pre-award interest, the [a]rbitrator[s] ... exceeded [their] powers under the Employment Agreement and engaged in a manifest disregard of the
The district court denied the relief Doral sought in a thorough written decision. Doral‘s reconsideration motion was also denied, and this appeal timely ensued.
II. Discussion
We review de novo a district court‘s decision to vacate or confirm an arbitration award. UMass Mem. Med. Ctr., Inc. v. United Food & Commer. Workers Union, Local 1445, 527 F.3d 1, 5 (1st Cir.2008). Our review, however, honors the parties’ decision “to have disputes settled by an arbitrator,” United Paperworkers Int‘l Union v. Misco, Inc., 484 U.S. 29, 37-38 (1987), and recognizes that the arbitration process seeks to ameliorate the time and expenses generally associated with judicial proceedings, Menorah Ins. Co., Ltd. v. INX Reinsurance Corp., 72 F.3d 218, 223 (1st Cir.1995). See also Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 31 (1991) (“[B]y agreeing to arbitrate, a party trades the procedures and opportunity for review of the courtroom for the simplicity, informality, and expedition of arbitration.“) (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628 (1985)) (internal quotations omitted). For those reasons, our de novo review in this area “is extremely narrow and exceedingly deferential,” Wheelabrator Envirotech Operating Servs. Inc. v. Mass. Laborers Dist. Council Local 1144, 88 F.3d 40, 43 (1st Cir.1996), so deferential indeed that we have stated that “[a]rbitral awards are nearly impervious to judicial oversight,” Teamsters Local Union No. 42 v. Supervalu, Inc., 212 F.3d 59, 61 (1st Cir.2000).
The limited scope of our review, however, “is not equivalent to granting limitless power to the arbitrator.” Georgia-Pacific Corp. v. Local 27, United Paperworkers Int‘l Union, 864 F.2d 940, 944 (1st Cir.1988). “Although we do not sit to hear claims of factual or legal error by an arbitrator as an appellate court does in reviewing decisions of lower courts, there are limited exceptions to the general rule that arbitrators have the last word.” Kashner Davidson Sec. Corp. v. Mscisz, 531 F.3d 68, 74 (1st Cir.2008) (internal quotations and citations omitted). One of those exceptions is encompassed in
Doral clings like a limpet in the heaviest sea to the “fair hearing” requirement subsumed in
First, the record is devoid of evidence showing that Doral was not afforded a “fair hearing.” The “fair hearing” requirement is rooted in due process concerns and thus calls for (1) notice, and (2) an opportunity to present relevant evidence and arguments. See Raytheon Co. v. Automated Bus. Sys., Inc., 882 F.2d 6, 8-9 (1st Cir.1989).8 Doral does not argue (nor could it) that the tribunal failed to provide adequate notice as to the schedule governing the arbitration proceedings. In fact, it is undisputed that the scheduling order the tribunal issued was agreed upon by the parties. Moreover, the record before us unequivocally shows that the tribunal granted Doral adequate notice in connection with the process governing the issuance of subpoenas. The scheduling order speaks for itself in this regard: “if a party wishes to issue a subpoena to a third party ... the parties shall first confer and determine if there is any disagreement to the date and propriety of the subpoena ... Any dispute, as to a subpoena, shall be resolved by the Tribunal....”
The tribunal also provided Doral ample opportunity to present its position regarding the subpoenas. In fact, the tribunal allowed Doral three opportunities at bat: (1) the application for pre-hearing subpoenas; (2) the application for hearing subpoenas; and (3) the motion to reconsider the pre-hearing subpoenas order. On all three occasions, Doral had the opportunity to argue why the subpoenas were warranted even though the deadline to request information had lapsed, the hearings were already underway, and Garcia-Velez had already testified at length.
The tribunal afforded Doral many other procedural safeguards, including the health-related two-month continuance its counsel obtained as well as the opportunity to (1) weigh in on the scheduling order governing the arbitration proceedings; (2) cross-examine Garcia-Velez; (3) introduce evidence of its own; and (4) file a post-hearing memorandum and a proposed award. Furthermore, the tribunal provided Doral with ample support, in written and unequivocal form, for its decision to deny the subpoenas and for its arbitration award, despite having no obligation to do so. See Zayas v. Bacardi Corp., 524 F.3d 65, 70 (1st Cir.2008) (“Although arbitrators frequently elect to explain their decisions in written opinions, they are under no compulsion to do so.“). We are therefore not persuaded by Doral‘s arguments that the tribunal failed to satisfy the “fair hearing” exigencies behind
Second, Doral‘s position is premised on unsupported and unwarranted factual assumptions. On this front, we note that even though Doral‘s proposed subpoenas requested a wide range of information from Garcia-Velez‘s employer, it is uncertain whether such information was available for production. But more importantly, even assuming that the information sought was accessible to Doral, there is nothing concrete in the record that would
As it did in the district court, Doral places undue weight on the “misrepresentations” Garcia-Velez allegedly made during the arbitration in connection with the merger of his employers. Doral presented the same argument to the arbitration tribunal. But the tribunal discarded it, reasoning, inter alia, that “[t]he fact that [Doral] has maintained the same claim against [Garcia-Velez] for his employment with ... the merged entity indicates that it should have requested the information it believed relevant to its claim during the Exchange of Information process.” We have no authority to second guess the tribunal‘s decision on this issue.9 See Asociacion de Empleados del E.L.A. v. Union Internacional de Trabajadores de la Industria de Automoviles, et al., 559 F.3d 44, 47 (1st Cir.2009) (“We do not sit as a court of appeal to hear claims of factual or legal error by an arbitrator or to consider the merits of the award.“); see also Prudential-Bache Sec., Inc. v. Tanner, 72 F.3d 234, 240-41 (1st Cir.1995) (declining to revisit arguments presented to, and rejected by, an arbitration tribunal); Dean v. Sullivan, 118 F.3d 1170, 1173 (7th Cir.1997) (stating that courts have no authority to consider afresh arguments decided by an arbitration tribunal).
In sum, Doral‘s contentions ring hollow. The record before us contains no evidence to support a finding that the tribunal engaged in
The same holds true for the relief Doral seeks in connection with the grant of pre-award interest. As stated above, Doral argues that the tribunal exceeded its authority in awarding pre-award interest to Garcia-Velez and asks us to vacate that portion of the award. We cannot do so. The record is uncontested that the parties agreed to arbitrate their dispute in accordance with the Commercial Arbitration Rules of the American Arbitration Association. In granting pre-award interest to Garcia-Velez, the tribunal explicitly referenced Rule 43(d)(1) of the Commercial Arbitration Rules, which, in pertinent part, establishes that “[t]he award of the arbitrator(s) may include ... interest at such rate and from such date as the arbitrator(s) may deem appropriate.” The record contains no evidence that the parties limited the applicability of Rule 43(d)(1) in
III. Conclusion
For the foregoing reasons, the district court decision is affirmed.
Affirmed.
Elizabeth MANNING et al., Plaintiffs, Appellants, v. BOSTON MEDICAL CENTER CORPORATION; Elaine Ullian; James Canavan, Defendants, Appellees, Boston Regional Medical Center, Inc.; Boston Regional Medical Center, LLC; Boston Medical Center 403B Retirement Plan, Defendants.
Nos. 12-1573, 12-1653.
United States Court of Appeals, First Circuit.
Aug. 1, 2013.