United States District Court, D. Massachusetts
GERALD D. HOOLAHAN, Petitioner,
IBC ADVANCED ALLOYS CORP., Respondent.
ORDER CONFIRMING ARBITRATION AWARD
A. O'Toole, Jr. United States District Judge
petitioner, Gerald Hoolahan, filed a petition under the
Federal Arbitration Act, 9 U.S.C. §§ 9-11, for a
confirmation of a $1, 395, 434.32 arbitration award he
received against the respondent, IBC Advanced Alloys Corp.
(“IBC”), and concomitantly for an order of
judgment in conformity with that award. IBC opposes this
petition and has responded by filing a cross-petition to
vacate the award.
arbitration concerned Hoolahan's sale of capital stock in
his corporation to IBC for cash consideration and shares of
capital stock in IBC.
review of arbitration rulings “‘is extremely
narrow and exceedingly deferential,' and is indeed
‘among the narrowest known in the law.'”
Raymond James Fin. Servs., Inc. v. Fenyk, 780 F.3d
59, 63 (1st Cir. 2015) (citation omitted) (first quoting
Doral Fin. Corp. v. García-Veléz, 725
F.3d 27, 31 (1st Cir. 2013); and then quoting Me. Cent.
R.R. Co. v. Bhd. of Maint. of Way Emps., 873 F.2d 425,
428 (1st Cir. 1989)). Petitioners seeking to vacate an award
must “clear a high hurdle” by showing that the
arbitrator committed more than “a serious error.”
Stolt-Nielsen S.A. v. AnimalFeeds Int'l
Corp., 559 U.S. 662, 671 (2010); see Hall St.
Assocs., LLC v. Mattel, Inc., 552 U.S. 576, 582-84
Federal Arbitration Act specifies several circumstances under
which an arbitration award may be vacated by order of a
(1) where the award was procured by corruption, fraud, or
(2) where there was evident partiality or corruption in the
arbitrators, or either of them;
(3) where the arbitrators were guilty of misconduct in
refusing to postpone the hearing, upon sufficient cause
shown, or in refusing to hear evidence pertinent and material
to the controversy; or of any other misbehavior by which the
rights of any party have been prejudiced; or
(4) 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.
9 U.S.C. § 10(a).
does not argue that the arbitration award should be
overturned based on any of these circumstances. IBC instead
seeks relief from the award under what has been called the
“manifest disregard doctrine.” Distilled from the
common law, this doctrine has been invoked to justify vacatur
of an arbitration award when it is “‘contrary to
the plain language of the contract,' or ‘it is
clear from the record that the arbitrator recognized the
applicable law, but ignored it.'” Kashner
Davidson Sec. Corp. v. Mscisz, 531 F.3d 68, 74-75 (1st
Cir. 2008) (quoting Wonderland Greyhound Park, Inc. v.
Autotote Sys., Inc., 274 F.3d 34, 36 (1st Cir.
asserts that the arbitrator erred because Hoolahan's
claims were barred by the applicable statute of limitations.
The arbitrator considered the argument as it applied only to
a claimed violation by IBC of Massachusetts General Laws
Chapter 93A. The arbitrator completely denied the Chapter 93A
claim. Instead, he ruled in favor of Hoolahan based on the
finding that IBC breached its contractual duties, including
the implied covenant of good faith and fair dealing.
separately argues that the arbitrator erroneously based his
decision on an ethically improper communication by Bruce
Schoenberger, Hoolahan's attorney, with Simon Anderson,
IBC's CFO. The contention was that Schoenberger
improperly communicated with an adverse party whom he knew
was represented by counsel. The arbitrator found that
Schoenberger did call Anderson, but that it was only at the
end of that call that Anderson informed Schoenberger that he
was represented by counsel. Following the call, Schoenberger
sent both Anderson and Anderson's counsel an email
recapping the phone call. The arbitrator excluded the
substance of the email from consideration, but, because he
found that Schoenberger was not informed that Anderson was
represented until the end of the call, the arbitrator relied
on what he termed Schoenberger's “truthful and
credible” testimony at the hearing about his
conversation with Anderson in order to determine that
“ill-will” existed toward Hoolahan. This finding
served as the basis for the arbitrator's conclusion that
IBC breached the contract and the implied covenant of good
faith and fair dealing. The arbitrator provided his rationale
for excluding the email but still considering
Schoenberger's testimony, and IBC has not carried its
burden of demonstrating that the arbitrator's decision
was in manifest disregard of the law.
IBC argues that the arbitrator erred by awarding Hoolahan a
windfall because the award did not acknowledge that Hoolahan
still owned the IBC shares. It was IBC's point that by
benefitting from the award and still holding IBC shares,
Hoolahan was having his cake and eating it too. A review of
the record before the arbitrator demonstrates that both
parties submitted multiple briefs on the issue of damages,
and in those papers IBC never argued that the
arbitrator's decision should also address Hoolahan's
IBC shares. This issue was only raised by IBC after the ...