JPMorgan Chase Bank v. KB Home Nevada Inc. , 478 F. App'x 398 ( 2012 )

FILED
NOT FOR PUBLICATION JUL 02 2012
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
JPMORGAN CHASE BANK, No. 10-17562
Plaintiff, D.C. No. 2:08-cv-01711-PMP-RJJ
and
MEMORANDUM *
FOCUS SOUTH GROUP, LLC; SOUTH
EDGE, LLC,
Petitioners - Appellees,
v.
KB HOME NEVADA INC.; COLEMAN-
TOLL LIMITED PARTNERSHIP, LLC;
PARDEE HOMES OF NEVADA;
BEAZER HOMES HOLDINGS CORP.;
MERITAGE HOMES OF NEVADA,
FKA MTH Homes Nevada, Inc.,
Defendants - Appellants.
Appeal from the United States District Court
for the District of Nevada
Philip M. Pro, District Judge, Presiding
Argued and Submitted February 15, 2012
San Francisco, California
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Before: THOMAS, FISHER and IKUTA, Circuit Judges.
Defendant-Appellant Meritage Homes of Nevada appeals the district court’s
order denying its motion to partially vacate a final arbitration award in favor of
Plaintiff-Appellee Focus South Group, LLC. We have jurisdiction pursuant to 28
U.S.C. § 1291, and we affirm.
The arbitration panel’s denial of Meritage’s counterclaim against South
Edge, LLC was not in manifest disregard of the law. See Kyocera Corp. v.
Prudential-Bache Trade Servs., Inc., 341 F.3d 987, 994 (9th Cir. 2003) (en banc)
(“Neither erroneous legal conclusions nor unsubstantiated factual findings justify
federal court review of an arbitral award under the [Federal Arbitration Act].”);
Health Plan of Nev., Inc. v. Rainbow Med., LLC, 100 P.3d 172, 179 (Nev. 2004)
(“Manifest disregard of the law goes beyond whether the law was correctly
interpreted, it encompasses a conscious disregard of applicable law.”). It is not
clear that the legal principle Meritage contends the arbitrators ignored exists. See
Graber v. Comstock Bank, 905 P.2d 1112, 1115 (Nev. 1995) (“[T]he term
‘disregard’ implies that the arbitrator appreciates the existence of a clearly
governing legal principle but decides to ignore or pay no attention to it.” (emphasis
added)). Even assuming that it does, however, Meritage has not shown that the
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arbitrators recognized but chose to ignore it. See Comedy Club, Inc. v. Improv
West Assocs., 553 F.3d 1277, 1290 (9th Cir. 2009) (“[F]or an arbitrator’s award to
be in manifest disregard of the law, it must be clear from the record that the
arbitrator recognized the applicable law and then ignored it.” (internal quotation
marks and alterations omitted)); Graber, 905 P.2d at 1115. Because the arbitrators
reasonably found that Focus notified Meritage of its defaults on March 28, 2008,
the arbitrators did not manifestly disregard the law in determining that Meritage
committed an event of default under the Operating Agreement, and thereupon
rejecting Meritage’s counterclaim.
The mandate shall issue in due course.
AFFIRMED.
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