Beumer Corporation; Beumer Kansas City, LLC, Plaintiffs - Appellees,
ProEnergy Services, LLC; Western Surety Company, Defendants - Appellants.
Submitted: April 12, 2018
from United States District Court for the Western District of
Missouri - Kansas City
COLLOTON, MELLOY, and SHEPHERD, Circuit Judges.
COLLOTON, Circuit Judge.
Services, LLC, and its surety Western Surety Company
(collectively, "ProEnergy") appeal a judgment of
the district court confirming an arbitrator's award of
attorney's fees and expenses to Beumer Corporation and
Beumer Kansas City, LLC (collectively, "Beumer").
We conclude the arbitrator acted within the scope of his
authority, and we therefore affirm.
in November 2011, Beumer and ProEnergy contracted for
ProEnergy to furnish and fabricate steel as part of
Beumer's construction of a pipe conveyor system. Beumer
complained, however, that ProEnergy's work was deficient,
and withheld payment to cover its alleged damages. The
contract included an arbitration clause, and ProEnergy
initiated an arbitration proceeding in response to
Beumer's refusal to pay. ProEnergy sought approximately
$500, 000 for the withheld payment, and Beumer counterclaimed
for $2.3 million in damages.
the arbitration proceedings, the parties disputed whether
their contract's provision on limitation of liability was
enforceable and the extent to which it limited
ProEnergy's liability. The provision states:
"Notwithstanding any of the foregoing or any other term
in this Contract, the total liability of Contractor for any
loss, indemnity, damage or delay of any kind will not under
any circumstances exceed 100% of the Contract Sum."
arbitrator determined that the provision was enforceable, and
that the liability cap (the Contract Sum) was $699, 702.39.
The arbitrator, however, concluded that the limitation on
liability did not extend to attorney's fees, and that an
award of damages plus attorney's fees could exceed the
cap. Citing four decisions-including one from this court-that
applied law from Illinois, Texas, Arizona, and Florida,
respectively, the arbitrator observed that "[i]n the
limitation of liability context, courts routinely classify
attorneys' fees and legal expenses not as damages but as
costs that are not subject to the limitation of
liability." The arbitrator ultimately awarded Beumer
$699, 702.39 in damages plus $191, 680.14 in pre-judgment
interest, 9% post-judgment interest, and $916, 027.90 in
attorney's fees and expenses.
moved in the district court to confirm the award. ProEnergy
paid the damages award and the accompanying pre- and
post-judgment interest, but moved to vacate the
attorney's fees award as beyond the arbitrator's
authority under the contract. The district court confirmed
the award, and ProEnergy appeals. We review the district
court's legal conclusions de novo and its
factual findings for clear error. Medicine Shoppe
Int'l, Inc. v. Turner Invs., Inc., 614 F.3d 485, 488
(8th Cir. 2010).
the Federal Arbitration Act, 9 U.S.C. § 9, a court must
confirm an arbitration award unless the award is vacated
under 9 U.S.C. § 10, or modified or corrected pursuant
to 9 U.S.C. § 11. Sections 10 and 11 set forth the
exclusive grounds for vacating or modifying an award. See
Hall Street Assocs., LLC v. Mattel, Inc., 552 U.S. 576,
584 (2008). ProEnergy seeks to vacate the attorney's fees
award under § 10 on the ground that the arbitrator
"exceeded [his] powers." 9 U.S.C. § 10(a)(4).
arbitrator does not "exceed his powers" by making
an error of law or fact, even a serious one. The parties
agreed that disputes would be finally determined by
arbitration, and "so long as the arbitrator is even
arguably construing or applying the contract and acting
within the scope of his authority," the award should be
confirmed. Medicine Shoppe, 614 F.3d at 488 (quoting
McGrann v. First Albany Corp., 424 F.3d 743, 748
(8th Cir. 2005)). ProEnergy does not dispute that the
contract includes a valid attorney's fees provision, or
that the arbitrator was "arguably construing" the
limitation on liability provision when he determined that the
provision did not extend to attorney's fees.
ProEnergy contends the arbitrator exceeded his powers because
he did not follow the contract's section on governing
law. The provision specifies that "[t]his Agreement will
be subject to, governed by and construed in accordance with
the laws of the State of Missouri, without giving effect to
its conflict of law rules." Missouri law, ProEnergy
asserts, considers attorney's fees to be "loss"
or "damage," so that any amount awarded for fees
should count toward the limit of liability under the
contract. ProEnergy urges that the arbitrator exceeded his
powers when he "disregarded" the choice-of-law
provision, cited cases applying the law of jurisdictions
other than Missouri, and construed the provision limiting
liability to exclude attorney's fees.
face of the arbitrator's decision does not support the
assertion that he ignored the section on governing law. He
did not, as ProEnergy suggests, "specifically and
expressly disregard an unequivocal choice-of-law
provision." The arbitrator cited Missouri law throughout
his order. He relied on Missouri law when assessing whether
one version of the parties' contract constituted a
novation of a prior version. And he applied Missouri law to
determine the applicable rate of pre- and post-judgment
complains that the arbitrator did not cite Missouri decisions
when addressing whether attorney's fees were covered by
the limit on liability. The arbitrator, however, never said
that he substituted his own choice-of-law preference for the
contractual provision, and the absence of Missouri citations
on this issue more likely suggests that the arbitrator found
no Missouri authority on point. We follow a similar practice
in diversity cases: when the State whose law we are applying
has not addressed a particular ...