Fia Card Services v. Douglas B. Levy
Opinion
FILED BY CLERK
IN THE COURT OF APPEALS DEC 12 2008 STATE OF ARIZONA COURT OF APPEALS DIVISION TWO DIVISION TWO
FIA CARD SERVICES, N.A., )
) 2 CA-CV 2008-0075 Plaintiff/Appellee, ) DEPARTMENT B )
v. ) OPINION )
DOUGLAS B. LEVY, )
)
Defendant/Appellant. )
)
APPEAL FROM THE SUPERIOR COURT OF PIMA COUNTY Cause No. C20080117
Honorable Paul E. Tang, Judge AFFIRMED
Fulton Friedman & Gullace LLP By Cynthia L. Fulton Phoenix Attorneys for Plaintiff/Appellee
Douglas B. Levy Tucson In Propria Persona
V Á S Q U E Z, Judge.
¶1 Appellant Douglas Levy appeals from the trial court’s judgment confirming an arbitration award in favor of appellee FIA Card Services, N.A., formerly known as MBNA America Bank, N.A. (hereinafter FIA), and its denial of his cross-motion to compel arbitration. For the following reasons, we affirm.
Facts and Procedural Background
¶2 The underlying facts are undisputed. In September 2002, Levy opened a credit card account with FIA. The credit card agreement contained an arbitration clause that required all claims and disputes to be resolved through arbitration before the National Arbitration Forum (NAF). A dispute arose concerning the amount Levy owed on the credit card. In February 2007, Levy paid $4,939.87, which he believed was the correct amount owed. He refused to pay the remaining balance of $3,861.55.
¶3 FIA filed an arbitration claim against Levy with the NAF, serving him a notice of the claim by mail on April 11, 2007. Levy failed to respond to this notice, and a second notice was sent on June 29, which informed him he had fourteen days within which to respond. NAF received Levy’s response on July 16, 2007. On July 30, the arbitrator issued an award in FIA’s favor in the amount of $3,861.55.
¶4 In January 2008, FIA filed an Application to Confirm Arbitration Award in the Pima County Superior Court. Levy opposed the application and filed a cross-motion to compel a second arbitration, arguing the first had been a “sham.” After a hearing, the trial court concluded Levy had failed to prove any of the grounds upon which a court may vacate
an arbitration award under A.R.S. § 12-1512, granted FIA’s motion to confirm the award, and denied Levy’s cross-motion. This appeal followed. We have jurisdiction pursuant to A.R.S. §§ 12-2101(B) and 12-2101.01(A)(6).
Discussion
¶5 On appeal, Levy contends the trial court erred by confirming the arbitration award, claiming it was procured by “undue means” under § 12-1512(A).1 He argues that he was “wrongfully denied” an opportunity to fully participate in the arbitration proceedings because “basic fairness in arbitration precludes the denial of an arbitration hearing if a party is but one day late in filing a response.” We review a trial court’s confirmation of an arbitration award for an abuse of discretion. Canon Sch. Dist. No. 50 v. W.E.S. Constr. Co., 180 Ariz. 148, 150, 882 P.2d 1274, 1276 (1994). But whether the court correctly interpreted a statute is a legal question that we review de novo. See Brake Masters Sys., Inc. v. Gabbay, 206 Ariz. 360, ¶ 4, 78 P.3d 1081, 1084 (App. 2003).
1 Although Levy suggests his right to an arbitration hearing under A.R.S. § 12-1505 was violated and for that reason alone the trial court should not have confirmed the arbitration award, he has failed to develop this argument, and it is therefore abandoned. See Ariz. R. Civ. App. P. 13(a)(6) (argument shall contain appellant’s contentions with citations to authorities); Brown v. U.S. Fid. & Guar. Co., 194 Ariz. 85, ¶ 50, 977 P.2d 807, 815 (App. 1998) (appellate court does not consider contentions unsupported by authority). In any event, as we discuss below, because Levy’s response was untimely he was not entitled to a “participatory hearing.”
¶6 A trial court may only refuse to confirm an arbitration award on the grounds set forth in § 12-1512(A). Id. ¶ 11; Pawlicki v. Farmers Ins. Co., 127 Ariz. 170, 173, 618 P.2d 1096, 1099 (App. 1980). These grounds include the following:
1. The award was procured by corruption, fraud, or other undue means;
2. There was evident partiality by an arbitrator appointed as a neutral or corruption in any of the arbitrators or misconduct prejudicing the rights of any party;
3. The arbitrators exceeded their powers;
4. The arbitrators refused to postpone the hearing upon sufficient cause being shown . . . or refused to hear evidence material to the controversy or otherwise so conducted the hearing . . . , as to prejudice substantially the rights of a party;
or
5. There was no arbitration agreement and the issue was not adversely determined in proceedings under [A.R.S.] § 12-1502 and the adverse party did not participate in the arbitration hearing without raising the objection . . . .
§ 12-1512(A). Levy seems to argue that the denial of what he characterizes as his rights of participation in the arbitration—the right to be present, conduct discovery, receive notice of the hearing date and arbitrator, and participate in the hearing—constitutes “undue means” for purposes of § 12-1512(A)(1).
¶7 Arizona courts have not determined what constitutes “undue means” under § 12-1512(A). However, we adopt the interpretation of the federal courts that have considered its meaning in relation to 9 U.S.C. § 10, the federal analog of our statute. See Pawlicki, 127 Ariz. at 174, 618 P.2d at 1100. Such courts have “uniformly construed the
term undue means as requiring proof of intentional misconduct.” PaineWebber Group, Inc. v. Zinsmeyer Trusts P’ship, 187 F.3d 988, 991-94 (8th Cir. 1999) (collecting cases; party’s erroneous assertion documents were privileged not undue means); see also A.G. Edwards & Sons, Inc. v. McCollough, 967 F.2d 1401, 1403-04 (9th Cir. 1992) (undue means “clearly connotes behavior that is immoral if not illegal” and does not include “sloppy or overzealous lawyering”); Amer. Postal Workers Union, AFL-CIO v. United States Postal Serv., 52 F.3d 359, 362 (D.C. Cir. 1995) (undue means requires action by arbitrating party “equivalent in gravity to corruption or fraud”); Shearson Hayden Stone, Inc. v. Liang, 493 F. Supp. 104, 108 (N.D. Ill. 1980) (undue means “requires some type of bad faith in the procurement of the award”), aff’d, 653 F.2d 310 (7th Cir. 1981). There is nothing in the record before us to support Levy’s argument that either the denial of his participation in the arbitration process or the award itself was the product of undue means.
¶8 Levy nevertheless argues that it is “Draconian” and “remarkably unfair” for the arbitration to proceed in accordance with Rule 36 of the NAF Code (the Code) merely because his response was untimely.2 But when Levy entered into the original contract with
2 Levy cites two cases, Brown v. Dillard’s, Inc., 430 F.3d 1004 (9th Cir. 2005), and Wages v. Smith Barney Harris Upham & Co., 188 Ariz. 525, 937 P.2d 715 (App. 1997), but neither case supports his position. He cites Brown in support of his argument that an arbitration forum is required to take measures to ensure the defendant is affirmatively choosing not to participate in the arbitration. But Brown only stands for the proposition that a party may not initially refuse to participate in arbitration proceedings and later attempt to compel arbitration under the arbitration contract. 430 F.3d at 1009-10. And, although the court in Wages considered the panel’s striking of Smith Barney’s defense as proof of evident partiality, this inference was permissible only under the unique facts of the case which
FIA, he agreed to be bound by the Code. See Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 57-58 (1995) (contracting parties may specify rules under which arbitration will be conducted). Thus, to the extent the Code differs from Arizona’s rules of procedure for arbitration, it controls. Id.; see generally Ariz. R. Civ. P. 72 through 77.
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