Rick Capone v. Atlantic Specialty Ins. Co. ( 2020 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 20a0056n.06
No. 19-3760
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
RICK E. CAPONE, ) Jan 27, 2020
) DEBORAH S. HUNT, Clerk
Plaintiff-Appellant, )
)
ON APPEAL FROM THE
v. )
UNITED STATES DISTRICT
)
COURT FOR THE
ATLANTIC SPECIALTY INSURANCE )
NORTHERN DISTRICT OF
COMPANY, )
OHIO
)
Defendant-Appellee. )
)
Before: GILMAN, McKEAGUE, and KETHLEDGE, Circuit Judges.
KETHLEDGE, Circuit Judge. The district court dismissed Rick Capone’s claims against
his insurance company because an arbitrator had already resolved them. We affirm.
In 2011, Capone took his 60-foot Sunseeker yacht, named “Another Eriesponsible
Perchase,” to a mechanic for service. On the service invoice, the mechanic wrote that he had
changed the oil filters because the engine had been leaking oil. The invoice also included a “To
Do” list with the item “Oil cooler gasket seeping—[manufacturer] updated gaskets.” Yet Capone
did not have the gasket checked or replaced.
The next year, Capone purchased from Atlantic Specialty Insurance an insurance policy
for his yacht. The policy provided: “If you make a claim under this policy and we disagree about
whether the claim is payable . . . , the disagreement must be resolved by binding arbitration[.]” In
a section titled “Legal Action Against Us,” the policy also said, “You may not bring a suit against
us unless you have complied with all terms of this policy, including arbitration.”
No. 19-3760, Capone v. Atlantic Specialty Ins. Co.
In July 2013, Capone was piloting his yacht on Lake Erie when a leaking oil gasket caused
the engine to fail. He eventually paid more than $100,000 for repairs, which he asked Atlantic to
cover. Atlantic investigated and found that Capone had failed to maintain the engine properly after
the mechanic’s warning about the oil gasket. Atlantic therefore denied his claim.
Capone disagreed with Atlantic’s decision. In 2017, the parties submitted the dispute to
an arbitrator, who likewise found that the damage to the engine “was directly and proximately
caused by a lack of required maintenance[.]” The arbitrator thus entered an award in favor of
Atlantic.
Capone thereafter brought this suit, asserting two claims: first, that Atlantic breached the
policy when it denied him coverage; and second, that the policy entitled him to a declaratory
judgment that Atlantic owed him the cost of repairs. Atlantic moved to dismiss, arguing that the
arbitration award precluded Capone’s suit. The district court granted the motion. We review that
decision de novo. Buck v. Thomas M. Cooley Law Sch., 597 F.3d 812, 816 (6th Cir. 2010).
Capone asked the district court, in substance, to vacate the arbitrator’s award. The Federal
Arbitration Act authorizes federal courts to vacate arbitration awards only on four specific
grounds. See 9 U.S.C. § 10(a); accord Ohio Rev. Code § 2711.10. Capone alleged none of those
grounds, so the district court properly dismissed his suit.
Capone argues that the policy’s “Legal Action” section allowed him to reassert his claims
anew in this lawsuit, notwithstanding the prior “binding arbitration.” He is largely mistaken: we
can review only the arbitrator’s award, and our review of the award is necessarily limited to the
grounds set forth in the Act. Moreover, the arbitration provision says that the “arbitrator shall have
the same powers as arbitrators under the Federal Arbitration Act”; and those powers include the
power to enter awards that are final and enforceable except in extremely limited circumstances.
-2-
No. 19-3760, Capone v. Atlantic Specialty Ins. Co.
See 9 U.S.C. § 9; Samaan v. Gen. Dynamics Land Sys., Inc., 835 F.3d 593, 600 (6th Cir. 2016).
The arbitrator did that here, and—as the district court correctly observed—Capone has given us
no basis to vacate that award.
The district court’s judgment is affirmed.
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