21-1008 Loch View LLC v. Seneca Ins. Co. Inc.

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING TO A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 25th day of April, two thousand twenty-two.

PRESENT: RICHARD J. SULLIVAN, STEVEN J. MENASHI, BETH ROBINSON, Circuit Judges. _____________________________________

LOCH VIEW LLC,

Plaintiff-Appellant,

v. No. 21-1008

SENECA INS. CO. INC.,

Defendant-Appellee. * _____________________________________

* The Clerk of Court is respectfully directed to amend the case caption as set forth above. FOR PLAINTIFF-APPELLANT: GREGORY JONES (Patrick Tomasiewicz, on the brief), Fazzano & Tomasiewicz, LLC, Hartford, CT.

FOR DEFENDANT-APPELLEE: CRISTIN E. SHEEHAN, Morrison Mahoney LLP, Hartford, CT.

Appeal from an order of the United States District Court for the District of

Connecticut (Victor A. Bolden, Judge).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,

ADJUDGED, AND DECREED that the order of the district court entered on

March 26, 2021, is AFFIRMED.

Plaintiff-Appellant Loch View LLC (“Loch View”) appeals from the district

court’s order confirming an arbitration award in Loch View’s dispute with its

insurer, Seneca Insurance Company, Inc. (“Seneca”). Loch View owns several

buildings in Willimantic, Connecticut, and insured them under a policy issued by

Seneca. After the buildings sustained damage from Superstorm Sandy in

October 2012, Loch View sought coverage pursuant to the policy. When Seneca

refused to pay the amount Loch View thought it was owed under the policy, Loch

View brought suit, alleging breach of contract and a number of other claims under

2 Connecticut state law. The district court granted Seneca’s motion to compel

arbitration pursuant to the Federal Arbitration Act (“FAA”), see 9 U.S.C. §§ 1–16,

201–08, 301–07, and the parties’ agreement to arbitrate in the event of a disputed

claim.

The parties each selected an arbitrator, who in turn jointly appointed an

umpire, Remo Capolino, to settle matters on which the two arbitrators could not

agree. The arbitrators could not agree on the sum to be awarded as justifiable

recompense for Loch View’s repairs, so they submitted written assessments to

Capolino, who awarded Loch View $284,438.43. Loch View moved the district

court to vacate the arbitration award, arguing that (1) the award was untimely

because Capolino rendered it more than thirty days after receiving the arbitrators’

submissions, (2) Capolino was biased in favor of Seneca because he had previously

conducted business with Seneca’s appointed arbitrator, Erik Jaeger, and

(3) Capolino made a number of errors in evaluating the evidence and arriving at

his award. The district court denied the motion to vacate and confirmed the

award. This timely appeal followed. We assume the parties’ familiarity with the

underlying facts, procedural history, and issues on appeal.

“In reviewing a district court’s confirmation of an arbitral award, we review

3 legal issues de novo and findings of fact for clear error.” Banco de Seguros del

Estado v. Mut. Marine Off., Inc.,

(2d Cir. 2003). As relevant here,

an arbitration award may be vacated “where there was evident partiality or

corruption in the arbitrators,”

(a)(2), or “where the arbitrators

exceeded their powers, or so imperfectly executed them that a mutual, final, and

definite award upon the subject matter submitted was not made,”

§ 10(a)(4).

The scope of our review is narrow: “an arbitration award should be enforced,

despite a court’s disagreement with it on the merits, if there is a barely colorable

justification for the outcome reached.” Landau v. Eisenberg,

(2d

Cir. 2019) (quoting Landy Michaels Realty Corp. v. Local 32B-32J Serv. Emps. Int’l,

(2d Cir. 1992)). “An arbitration award may be vacated if it exhibits

a manifest disregard of the law.” Goldman v. Architectural Iron Co.,

(2d Cir. 2002) (internal quotation marks omitted).

Before reaching the merits of the dispute, however, we first turn to a

procedural issue: the propriety of Loch View’s attempt to file in the district court

what it styled an “amended” motion to vacate the arbitration award. Loch View

filed its first motion to vacate on July 2, 2020. Seneca promptly filed a

memorandum in opposition to that motion on July 23, and Loch View

4 subsequently filed the contested “amended” motion to vacate the arbitration

award on October 26 – without moving for leave to amend or otherwise seeking

permission for that filing. Seneca objected to both the propriety and the

substance of the amended motion, after which Loch View filed a reply supporting

its amended motion. The district court declined to consider Loch View’s

amended motion and reply. Loch View now argues that that was error, likening

its amended motion to a pleading and citing the generous repleading standard of

Rule 15(a), which provides that “court[s] should freely give leave [to amend

pleadings] when justice so requires.” Fed. R. Civ. P. 15(a)(2).

We find that the district court committed no error in declining to consider

Loch View’s filings. First, we doubt that Loch View can avail itself of the

generous Rule 15(a) standards for amending pleadings with respect to its motion

to vacate the arbitration award, which it concedes is not a pleading. See

(“Any application to the court [under the FAA] shall be made and heard in the

manner provided by law for the making and hearing of motions, except as

otherwise herein expressly provided.”) (emphasis added). But even if we were

to engage in the typical Rule 15(a) abuse-of-discretion review of the district court’s

refusal to consider the amended motion, see McCarthy v. Dun & Bradstreet Corp.,

5

(2d Cir. 2007), we would find no abuse of discretion here for the

straightforward reason that Loch View never requested amendment – it simply

filed its amended motion on the docket. Obviously, a district court cannot be said

to err by “not permitting an amendment that was never requested.” Horoshko v.

Citibank, N.A.,

(2d Cir. 2004). Thus, we limit ourselves to the

grounds for vacatur that Loch View urged in its initial motion to vacate the award.

Loch View’s objection to the timeliness of the award is rooted in Connecticut

state law, which provides that, when the parties have not contracted on a timetable

for the arbitration, an award made more than “thirty days” following either “the

hearing” or, if the parties are to submit additional material after the hearing, “the

date fixed . . . for the receipt of the material,” “shall have no legal effect.”

(a). All agree that the award in this case was issued more than

thirty days after the final submission to the arbitrator. According to Loch View,

the district court erred when it did not vacate the arbitration award as untimely

under the “manifest disregard of the law” standard.

We disagree. Assuming without deciding that Loch View is right that the

“manifest disregard” framework applies to its challenge to the arbitration award

based on the Connecticut timeliness provision, Loch View has failed to

6 demonstrate a manifest disregard in this case. 1 “To succeed in challenging an

award under the manifest disregard standard, a party must make a showing that

the arbitrators knew of the relevant legal principle, appreciated that this principle

controlled the outcome of the disputed issue, and nonetheless willfully flouted the

governing law by refusing to apply it.” Seneca Nation of Indians v. New York,

(2d Cir. 2021) (internal quotation marks omitted). In other words,

“to intentionally disregard the law, the arbitrator must have known of its

existence, and its applicability to the problem before him.” T.Co Metals, LLC v.

Dempsey Pipe & Supply, Inc.,

(2d Cir. 2010) (quoting Stolt-Nielsen

SA v. AnimalFeeds Int’l Corp.,

(2d Cir. 2008)).

Even if Connecticut’s timeliness provision applies to the arbitration in this

case, Loch View has failed to show that the umpire intentionally disregarded the

1 We also doubt that the Connecticut timeliness requirement upon which Loch View relies applies to this arbitration in the first place. To be sure, parties to an arbitration agreement can agree to be bound by the arbitration procedures of a particular state, see, e.g., Sec. Ins. Co. of Hartford v. TIG Ins. Co.,

, 325–26 (2d Cir. 2004), but they did not do so here. No provision of the contract between Loch View and Seneca indicates that disputes will be arbitrated pursuant to the law of the State of Connecticut, and the Supreme Court has made clear that individual states cannot impose extracontractual conditions on parties to an arbitration agreement that “conflict with the FAA or frustrate its purpose to ensure that private arbitration agreements are enforced according to their terms.” AT&T Mobility LLC v. Concepcion,

, 347 n.6 (2011); see also West Rock Lodge No. 2120 v. Geometric Tool Co.,

, 286–87 (2d Cir. 1968) (declining to incorporate

(a) into the federal statutory scheme on labor relations). Still, because Loch View cannot prevail even if Connecticut’s provision on arbitration timeliness applies, we need not resolve this issue.

7 law in his award. No provision of the contract between Loch View and Seneca

indicates that disputes will be arbitrated pursuant to the law of the State of

Connecticut, and nothing more than speculation indicates that the umpire knew

he was obliged to issue an award within thirty days of the final submissions. We

therefore will not disturb the arbitration award on this ground.

Loch View next argues that the district court should have vacated the

arbitration award because of Capolino and Jaeger’s prior business relationship, or

else that it should have at least held an evidentiary hearing on that issue before

confirming the award. We will find “evident partiality within the meaning of

. . . where a reasonable person would have to conclude that an

arbitrator was partial to one party to the arbitration.” Scandinavian Reinsurance

Co. Ltd. v. Saint Paul Fire and Marine Ins. Co.,

(2d Cir. 2012) (quoting

Morelite Constr. Corp. v. N.Y.C. Dist. Council Carpenters Benefits Funds,

,

84 (2d Cir. 1984)). Here, all Loch View alleged in its motion to vacate was that it

had “learned that [Jaeger’s] firm and [Capolino’s] firm have conducted business

together [prior to this arbitration], which information was not disclosed as part of

the appraisal process,” and that Jaeger and Capolino had “engaged in ex parte

communications.” App’x at 30. In response to Loch View’s motion to vacate,

8 Jaeger submitted an affidavit attesting that Loch View’s arbitrator, Andrew

Luciano, was made aware of Capolino and Jaeger’s prior dealings and, following

inquiry into them, consented to using Capolino as the umpire. That affidavit also

attested that Jaeger’s ex parte contacts with Capolino were about procedural and

administrative issues, such as how Capolino should format his written appraisal.

But putting aside Seneca’s factual defenses, Loch View’s assertions do not even

connect Jaeger and Capolino individually. Instead, Loch View alleged merely that

their firms had had prior interactions. Such a threadbare allegation – that would

not show “evident partiality” even if true – does not require the district court to

hold a hearing on the allegation, let alone vacate the award.

Finally, Loch View contests the arbitration award on the ground that the

umpire performed inadequately by, for instance, not noting whether his final

award included amounts for damage to the entirety of the building, rather than

just the roof, and not determining whether repairing (rather than replacing) the

roof was even feasible in light of the extensive damage. The award in this case,

however, easily clears the applicable bar of bearing “a barely colorable justification

for the outcome reached.” Landau,

(quoting Landy Michaels Realty

Corp.,

). Capolino explained, for instance, that he had considered

9 and tested whether shingles on the roof could be removed such that repair – rather

than replacement – of the roof was possible. And Loch View’s contention that

Capolino should have awarded costs for facets of the building other than the roof –

or else have delineated more clearly which portion of his award was meant for

those parts of Loch View’s property – was not raised in its original motion or

passed on by the district court, so we likewise decline to consider it.

We have considered all of Loch View’s remaining arguments and have

found them to be without merit. For the foregoing reasons, we AFFIRM the

order of the district court.

FOR THE COURT: Catherine O’Hagan Wolfe, Clerk of Court

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