Parker v. CollegeAmerica

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NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Supreme Court 111(c); ARCAP 28(c); Ariz. R. Crim. P. 31.24 IN THE COURT OF APPEALS STATE OF ARIZONA DIVISION ONE EDWIN J. PARKER, ) ) Plaintiff/Appellee, ) ) v. ) ) COLLEGEAMERICA ARIZONA, INC., ) ) Defendant/Appellant. ) __________________________________) No. 1 CA-CV 10-0844 DIVISION ONE FILED: 11/03/2011 RUTH A. WILLINGHAM, CLERK BY: DLL DEPARTMENT B MEMORANDUM DECISION (Not for Publication Rule 28, Arizona Rules of Civil Appellate Procedure) Appeal from the Superior Court in Maricopa County Cause No. CV 2010-092729 The Honorable Karen A. Potts, Judge AFFIRMED Jackson White P.C. By Michael R. Pruitt Christine Farnsworth Crockett Attorneys for Plaintiff/Appellee Snell & Wilmer L.L.P. By Stephanie R. Leach Duane Morris L.L.P. By Keith Zakarin Edward M. Cramp Courtney L. Bunt Co-Counsel for Defendant/Appellant D O W N I E, Judge Mesa Phoenix San Diego ¶1 CollegeAmerica Arizona, Inc. ( College ) appeals from the superior court s confirmation of an arbitration award in favor of Edwin J. Parker. Finding no error, we affirm. FACTS AND PROCEDURAL HISTORY ¶2 2002. Parker began working for College in the summer of He was fired on July 9, 2004, after making allegations of sexual harassment in the workplace. terminated Parker, who was the The College employee who alleged harasser, wrote on a personnel form that Parker was fired for falsely accus[ing] a coworker of sexual harassment. ¶3 Parker filed a charge Opportunity Commission ( EEOC ). with the Equal Employment After an investigation, the EEOC found reasonable cause to believe College had retaliated against Parker because of his discharging him from employment. protected activity, by Parker thereafter filed suit against College, alleging retaliation in violation of Title VII of the Civil Rights Act of 1964 ( Title VII ). ¶4 Because Parker had an arbitration clause contract with College, his claim was arbitrated. in his The parties agreed the Federal Arbitration Act ( FAA ) and Federal Rules of Evidence would govern the arbitration proceedings. ¶5 During the arbitration hearing, College sought to introduce copies of two Internet postings authored by Parker. College argued the postings demonstrated 2 that Parker makes things up. After an off-the-record discussion with the parties, the arbitrator ruled the postings inadmissible under Federal Rules posting, of dated references attribute to to Evidence March and 1997, so-called the 403 404. contained evils government. a that The The first list Parker second, excluded of general appeared dated March to 2002, alert[ed] people to potential threats created by the passage of illegal immigrants across the United States border. ¶6 After a four-day hearing that included 9 witnesses and approximately decision 100 that conclusions of exhibits, contained law. the arbitrator detailed The issued findings arbitrator of concluded a 95-page fact College and had violated Title VII by terminating Parker in retaliation for his sexual harassment complaints. ¶7 Pursuant section 12-1511, to Parker He awarded Parker $263,274.74. 1 Arizona applied Revised to confirmation of the arbitration award. award over College s objection. have jurisdiction pursuant to the Statutes superior ( A.R.S. ) court for The court confirmed the College timely appealed. A.R.S. §§ 12-2101(B) We and -2101.01(A)(6). 1 The award includes the principal sum of $95,518.33, attorneys fees of $147,437.24, taxable costs of $9083.70, and non-taxable costs and expenses of $11,235.46. 3 DISCUSSION ¶8 We generally review the confirmation of an arbitration award for an abuse of discretion. FIA Card Servs. v. Levy, 219 Ariz. 523, 524, ¶ 5, 200 P.3d 1020, 1021 (App. 2008). However, we review de novo the superior court s application of statutes. 2 Id. ¶9 [A] court must confirm an arbitration award unless it is vacated, modified, or corrected as prescribed in [the FAA]. 3 Hall St. Assocs. v. Mattel, Inc., 552 U.S. 576, 582 (2008) (quoting 9 U.S.C. § 9). Under the FAA, vacatur of an arbitration award is available: (1) where the award was procured corruption, fraud, or undue means; by (2) where there was evident partiality or corruption in the arbitrators . . . ; (3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing . . . 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 2 Even under a de novo standard, our review is limited by the FAA, which enumerates the exclusive grounds on which a court may vacate, modify, or correct an arbitral award. Kyocera Corp. v. Prudential-Bache Trade Servs., 341 F.3d 987, 994 (9th Cir. 2003). Under neither state nor federal law are the arbitrator s findings of fact reviewed de novo. And as we discuss infra, judicial review of an arbitrator s legal rulings is limited. 3 The parties arbitration agreement states that [t]here shall be no appeal from the award except on those grounds specified by the FAA and case law interpreting the FAA. 4 (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). ¶10 College argues the award should not have been confirmed because the arbitrator refused to consider material evidence and exceeded his authority. I. We disagree. Alleged Refusal to Hear Material Evidence ¶11 To receive relief based on an arbitrator s erroneous evidentiary ruling, a party must establish that its rights were prejudiced. See Emp rs Ins. of Wausau v. Nat l Union Fire Ins. Co. of Pittsburgh, 933 F.2d 1481, 1490 (9th Cir. 1991). Vacatur under § 10(a)(3) requires proof that the excluded evidence was material to the case and that its exclusion was prejudicial. Id. The deprives exclusion the of offering evidence party of is a prejudicial fair only hearing. if it Newark Stereotypers' Union 18 v. Newark Morning Ledger Co., 397 F.2d 594, 599 (3d Cir. 1968). Error that does not deprive a party of a fair hearing is not grounds for vacatur. Cf. Barnes v. Logan, 122 F.3d 820, 823 (9th Cir. 1997); Coutee v. Barington Capital Grp., 336 F.3d 1128, 1134 (9th Cir. 2003); U.S. Life Ins. Co. v. Superior Nat l Ins. Co., 591 F.3d 1167, 1174 (9th Cir. 2010) (citing multiple cases holding that a party must show that, but for the evidentiary ruling, the arbitrator should have made a 5 different award). rises to Not every error in the admission of evidence this high standard. An arbitration hearing is fundamentally fair if it includes adequate notice, a hearing on the evidence, and an impartial decision by arbitrator. 4 the Carpenters 46 N. Cal. Counties Conf. Bd. v. Zcon Builders, 96 F.3d 410, 413 (9th Cir. 1996). ¶12 College postings deprived precluded argues evidence unreasonableness paranoia it and the of a would of exclusion fair have Parker s delusions of of Parker s hearing. It demonstrated system of contends the beliefs, persecution, and Internet the inherent shown established his a hatred of authority and an inability to distinguish fantasy and reality. ¶13 Even evidentiary assuming ruling was legally received a fair hearing. it received hearing, the witnesses present the arbitration exhibits. College and unreasonable workplace. the arbitrator s College nonetheless College does not challenge the notice permitted case that erroneous, arbitrator and its allegedly the regarding arguendo to persuade beliefs College proceedings. both had the ample 4 sexual asked to its of the present opportunity arbitrator regarding specifically parties At to Parker s harassment in witnesses to College does not allege that the arbitrator was biased, and our own review of the record reveals no bias. 6 testify about Parker s beliefs. It also apparently used Parker s own testimony to argue that he held irrational beliefs. 5 College has not established that preclusion of two Internet postings unrelated to sexual harassment or College deprived it of a fair arbitration hearing. ¶14 We disagree with College s suggestion that our focus should be on whether the Federal Rules of Evidence. the scope committed decision. of his serious exclusion improper under the If an arbitrator is acting within authority, error was that does not a court suffice is convinced to overturn he his United Paperworkers Int l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 38 (1987). An arbitrator s erroneous ruling is actionable only if the arbitrator acts in bad faith or the error was so gross as to amount to affirmative misconduct. Id. at 40 (even if the arbitrator erred in refusing to consider evidence, because his errors were neither committed in bad faith nor so gross as to constitute affirmative misconduct, they did not justify vacatur under § 10(a)). exacting standards to which This difference between the judges 5 are subject and the Because the complete arbitration transcript is not in the record, we cannot make a definitive statement on this issue. However, in College s briefs, it cites Parker s arbitration testimony that illustrate[d] the unreasonableness of his beliefs. College also states that Parker himself testified during the arbitration hearing that [w]e were all kind [sic] of cautious, paranoid, whatever you want to call the word, about what was going on. 7 broad-ranging discretion that the law affords arbitrators is one of the risks a party takes when it chooses to include an arbitration provision in a contract. ¶15 The record here reveals no bad faith or affirmative misconduct. with the The arbitrator held an off-the-record conference parties before issuing his evidentiary ruling. He stated the federal rule-based reasons for excluding the Internet postings. Nothing establishes, that grossly as to in the the record arbitrator constitute suggests, acted affirmative in let bad faith alone so Even misconduct. or if College did not enjoy a perfect hearing . . . it did receive a fair hearing. It had . . . the opportunity to be heard and to present relevant and material evidence, and the [arbitrator was] not infected with bias. Emp rs Ins. of Wausau, 933 F.2d at 1491. II. Alleged Abuse of Power ¶16 if The FAA allows a court to vacate an arbitration award the arbitrator[] 10(a)(4). exceeded [his] power[]. 9 U.S.C. § [A]rbitrators exceed their powers . . . not when they merely interpret or apply the governing law incorrectly, but when the award is completely irrational, or exhibits a manifest disregard of law. (internal citations omitted). Kyocera, 341 F.3d at 997 An award is completely irrational only where [the arbitration decision] fails to draw its essence 8 from the agreement. Hoffman v. Cargill Inc., 236 F.3d 458, 461-62 (8th Cir. 2001); see also Bosack v. Soward, 586 F.3d 1096, 1106 (9th Cir. 2009) ( [T]he question is whether the award is irrational with respect to the contract, not whether the . . . findings of fact are correct or internally consistent. ) (citation omitted). This is an extremely limited basis for vacatur. Comedy Club, Inc. v. Improv W. Assocs., 553 F.3d 1277, 1288 (9th Cir. 2009). Thus, when an arbitrator s findings and conclusions inconsistent are not with the terms of the arbitration agreement, the award is not completely irrational. Bosack, 586 F.3d at 1107 (when the award is based on the governing law set forth in the agreement, it is not completely irrational). ¶17 Manifest disregard of law requires more than just an error in the law or failure on the part of the arbitrator[] to understand or apply the law. Mich. Mut. Ins. Co. v. Unigard Sec. 832 Ins. Co., 44 F.3d 826, (9th Cir. 1995) (citation omitted); see also Kyocera, 341 F.3d at 1003 ( The risk that arbitrators may construe the governing law imperfectly in the course of . . . [a] good faith [attempt] to interpret the relevant law . . . is a risk that every party to arbitration assumes, and such legal and factual errors lie far outside the category record of must conduct embraced establish that by the 9 § 10(a)(4). ). arbitrator Indeed, the recognized the applicable law and then ignored it. (citations omitted). Mich. Mut., 44 F.3d at 832 Applying these legal tenets to the case at bar, we find no basis for reversal. A. Reasonable Belief of Sexual Harassment ¶18 [A] plaintiff alleging a retaliation claim under Title VII must begin by establishing a prima facie case . . . . Little v. United Techs., Carrier Transicold Div., 103 F.3d 956, 959 (11th Cir. 1997). faith, reasonable The plaintiff must show he had a good belief that the unlawful employment practices. employer was engaged in Id. at 960 (noting that the plaintiff must have both a subjective and objective reasonable belief). ¶19 The arbitrator cited several facts in support of his conclusion that Parker had a subjective and objective reasonable belief that College female employees. engaged in harassing Though College may conduct toward its disagree with the arbitrator s conclusions, or even his application of the law, [t]he risk that arbitrators may construe the governing law imperfectly in the course of . . . [a] good faith [attempt] to interpret the relevant law . . . is a risk that every party to arbitration assumes, and such legal and factual errors lie far outside the category of conduct Kyocera, 341 F.3d at 1003. 10 embraced by § 10(a)(4). ¶20 It is clear from his detailed findings of fact and conclusions of law that the arbitrator did not ignore pertinent law. The arbitrator stated the requirements for a prima facie case and cited evidence supporting his conclusion that Parker carried his burden of proof. College claims the arbitrator ignored the law by finding that Parker had a subjective belief of sexual harassment, retraction letter. even after We disagree. Parker wrote a so-called The arbitrator made several findings regarding this apparent inconsistency. He concluded the retraction letter was written when Parker legitimately feared that his job was in jeopardy. Based on the totality of circumstances, the letter did not persuade the arbitrator that Parker actually lawful. As believed the the superior allegedly court harassing correctly conduct noted, was [t]he arbitrator s Finding that [Parker] had a reasonable belief is a classic example of his role as the finder of fact. ¶21 An arbitration award should be confirmed unless the arbitrator could not have rendered the same award without manifestly disregarding the governing law. See Barnes, 122 F.3d at did 823. In this case, the arbitrator not manifestly disregard the law, and the facts he deemed credible supported his application of the law. 11 B. ¶22 Inconsistent Testimony Finally, authority by testimony. College failing to Credibility argues the reject of arbitrator the entirety witnesses is exceeded of always his Parker s for the factfinder, and this is especially so when the factfinder is an arbitrator. Pawlicki v. Farmers Ins. Co., 127 Ariz. 170, 173, 618 P.2d 1096, 1099 (App. 1980). ¶23 1049 Both parties cite Lopez-Umanzor v. Gonzales, 405 F.3d (9th Cir. 2005), Parker s testimony. to support their positions regarding In Lopez-Umanzor, the court stated it has long recognized that a person who is deemed unbelievable as to one material fact may be disbelieved in all other respects. Id. at 1059 (emphasis added) (citation omitted). does not stand for the proposition that a Lopez-Umanzor factfinder who disbelieves some of a witness s testimony must reject all of it, though the trier of fact has the ability to do so. Indeed, the Ninth Circuit s rather unremarkable holding is consistent with jury instructions routinely given in regarding the credibility of witnesses. Arizona civil trials See, e.g., Rev. Ariz. Jury Instr. ( RAJI ) Civil Preliminary 5 ( In deciding the facts of this case, you should consider what testimony to accept, and what to reject, you may accept everything a witness says, or part of it, or none of it. ) (emphasis added). 12 ¶24 What is required is that a neutral factfinder give parties the opportunity to present making credibility determinations. relevant evidence before See Lopez-Umanzor, 405 F.3d at 1059 (before determining a witness s credibility, a party must be given decisionmaker ). hearing. a fair hearing in front of a neutral As discussed supra, College received a fair The arbitrator was impartial, admitted and reviewed voluminous exhibits, and heard testimony from multiple witnesses. Although Parker was successfully impeached at times (as were other witnesses), the arbitrator had the opportunity to observe the witnesses and to assess their credibility and [h]e accepted the testimony of [Parker] as reliable. Kirschner v. West Co., 247 F. Supp. 550, 553-54 (E.D. Pa. 1965). We will not to substitute our judgment for the arbitrator s as the credibility of witnesses who appeared before him, nor can we conclude that the testimony of certain witnesses should not have been accepted as true. P.2d at 1099; Kirschner, See Pawlicki, 127 Ariz. at 173, 618 247 F. Supp. at 553 (because the alleged inconsistencies in the oral testimony of [the party] and alleged conflicts between oral testimony and writings in evidence . . . were all [before] the arbitrator, a court will not substitute its judgment absent the express exceptions in § 10(a)). 13 III. Attorneys Fees on Appeal ¶25 Both parties request an award of attorneys fees on appeal pursuant to A.R.S. § 12-1514. 6 the recovery proceedings, of fees and including costs at the in Section 12-1514 permits arbitration appellate confirmation level. Steer v. Eggleston, 202 Ariz. 523, 528, ¶¶ 23-25, 47 P.3d 1161, 1166 (App. 2002). We therefore award Parker his fees incurred on appeal upon compliance with ARCAP 21(a). and costs College is not the prevailing party and is not entitled to a fee award. CONCLUSION ¶26 For the reasons stated, we affirm the judgment of the superior court. /s/ MARGARET H. DOWNIE, Presiding Judge CONCURRING: /s/ PETER B. SWANN, Judge /s/ DONN KESSLER, Judge 6 Parker also requests fees under 42 U.S.C. 2000e-5(k). Because we award him fees pursuant to A.R.S. § 12-1514, we need not decide whether he is also entitled to fees under federal law. 14

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