Opinion
Civil Action 02-2025
July 31, 2002
Before the Court is a Motion and Application for Confirmation of Arbitration Award filed on behalf of UBS Paine Webber Inc. The matter was taken under submission on July 24, 2002. The Court. having studied the evidence submitted, the Court's record, the law and applicable jurisprudence and noting that no opposition has been filed, is fully advised on the premises and ready to rule.
ORDER AND REASONS
I. BACKGROUND:
UBS Paine Webber Inc. ("UBS Paine Webber") is a member of the National Association of Securities Dealers. Inc. ("NASD"). an entity that is a "registered securities association" under § 15A of the Securities Exchange Act of 1934 ( 15 U.S.C. § 780-3) and a securities self-regulatory organization as defined in § 3(a)(26) of the Securities Exchange Act of 1934 (15 U.S.C. §(a)(26)). Under applicable provisions of the NASD rules, UBS Paine Webber is (with exceptions not relevant in this matter) obligated to arbitrate employment-related disputes that it has with its former employees utilizing the arbitration facilities of NASD-DR (an affiliate of the NASD).
Joey S. Stone ("Stone") is a former UBS Paine Webber employee who previously worked in UBS Paine Webber's Baton Rouge, Louisiana office as a registered representative. Stone resigned from his UBS Paine Webber employment on or about May 14, 2001. As a registered representative, Stone is obligated to arbitrate any employment-related disputes.
Following the termination of Stones employment with UBS Paine Webber, the firm instituted an arbitration proceeding against Stone and his new employer by filing a Statement of Claim with NASD-DR. That arbitration proceeding is styled UBS Paine Webber Inc. v. Stone, NASD-DR No. 01-02765. Through its Statement of Claim, UBS Paine Webber sought an award in the amount of the more than $366,000 remaining principal amount due under a promissory note that Stone had executed in connection with his employment by UBS Paine Webber. UBS Paine Webber also sought interest on the note, attorneys' fees, and expenses.
A panel of arbitrators was appointed and held an approximately eight-day arbitration hearing in which testimony, documentary evidence, and arguments were presented by Stone and UBS Paine Webber. The hearing was held in New Orleans, Louisiana.
After the hearing, the arbitration panel entered an award (the "Award") on or about June 21 2002, in favor of UBS Paine Webber and against Stone for: (a) awarding $366,575.60 on the Note; (b) awarding interest on the Note equal to the rate of interest announced from time to time by Citibank. N A. in New York. New York, at its base rate or "prime rate" of interest on loans to responsible and substantial borrowers, plus two percent compounded monthly, from May 12, 2001 until paid; (c) awarding S200,000 in attorneys' fees and expenses (pursuant to an attorneys' fees and expenses provisions in the parties' agreement); (d) awarding $1000.00 as a reimbursement of NASD-DR filing fees previously paid by UBS Paine Webber; (e) providing that Stone and UBS Paine Webber are solitarily liable for $22,350 in forum fees; and (f) dismissing Stone's counterclaims with prejudice. Stone has not paid anything on the Award, the entire amount of which remains outstanding.
II. LEGAL ANALYSIS:
The Federal Arbitration Act states that any party to an arbitration "may apply to the court" for an order confirming an arbitration award, and that, upon such an application, "the court must grant such an order unless the award is vacated, modified, or corrected." 9 U.S.C. § 9. If the parties have not specified a particular court for the confirmation, then venue is proper in "the district within such award was made." See Id. These provisions create a summary proceeding for arbitration awards. Under this summary procedure, a party applying for confirmation of an award may initiate and make such an application "by written motion," and may schedule the hearing on the motion pursuant to the rules for setting hearings on motions; the time delays for answering a complaint and summons do not apply. See Reed Marti. Inc. v. Westinghouse Electric Corp., 439 F.2d 1268, 1277 (2nd Cir. 1971). Therefore, in setting the hearing date, the party applying for confirmation may set a date that is prior to the lapse Federal Civil Procedure Rule 12's delays for answering a summons and complaint See Id.
An application for confirmation cannot be denied except in the most extraordinary of circumstances because judicial review of an arbitration award is "extraordinarily narrow." As the Fifth Circtut has stated:
Judicial Review of an arbitration award is extraordinarily narrow and this Court should defer to the arbitrator's decision when possible.
Antwine v. Prudential Bache Securities. Inc., 899 F.2d 410, 413 (5th Cir. 1990). The Fifth Circuit has further noted that "judicial review of an arbitration award is even narrower than judicial review of trial proceedings." Id.
A court reviews an arbitration award under a highly deferential standard that is "among the narrowest known to the law." ARW Exploration Corp. v. Aguirre, 45 F.3d 1455, 1462 (10th Cir. 1995), cert. denied, 119 S.Ct. 65 (1998). This narrow scope of review is consistent with the purposes of arbitration. By contracting for arbitration, parties exchange "the procedures and opportunity for review of the courtroom for the simplicity, informality, and expedition of arbitration." See Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628 (1985). Thus, confirmation is designed to be a summary procedure that makes the final arbitration award a judgment of the court. See, e.g. Florasynth. Inc. v. Pickholz, 750 F.2d 171, 176 (2d Cir. 1984): see also 9 U.S.C. § 9. "[C]onfirmation can only be denied if an award has been corrected, vacated, or modified in accordance with the Federal Arbitration Act." Taylor v. Nelson, 788 F.2d 220, 225 (4th Cir. 1986); see also, e.g., Booth v. Hume Publishing. Inc., 902 F.2d 925, 932 (11th Cir. 1990): Ottley v. Schwartzberg, 819 F.2d 373, 377 (2d Cir. 1987). "[I]t is only clear evidence of impropriety which justifies the denial of summary confirmation of an arbitration award." Ormsbee Dev. Co. v. Grace, 668 F.2d 1140, 1147 (10th Cir.), cert. denied, 459 U.S. 828 (1982).
Here, the Award has not been corrected, vacated, or modified. It could not be, for it is not subject to successful challenge on any ground specified by law. See 9 U.S.C. § 10. There is no evidence of impropriety. The Panel thoroughly' reviewed the testimony, documents, legal authorities, and arguments submitted to it by the parties. This is clearly reflected in the Award, with its recounting of the evidence and its discussion of its evaluation of the relative credibility of witnesses.
In view of the highly deferential standard that it to be applied to the confirmation of an arbitration award, this Award may be summarily confirmed. Stone agreed to arbitration, and had a full and far opportunity to present his case to the panel.
III. CONCLUSION
For the forgoing reasons, UBS Paine Webber's application and motion for confirmation of the Award is granted, and judgment entered on that Award.
Accordingly,
IT IS ORDERED that the Motion and Application for Confirmation of Arbitration Award filed on behalf of UBS Paine Webber Inc. is hereby GRANTED.
IT IS FURTHER ORDERED that the arbitration award entered on or about June 21, 2002, in favor of UBS Paine Webber, Inc. and against Joey S. Stone, in UBS Paine Webber, Inc v. Stone, NASD-DR No. 01-02765 is hereby made the judgment of this Court. Additionally, UBS Paine Webber, Inc. is awarded the costs of this proceeding.