MSV Synergy, LLC v. Shapiro

• Court: Court of Appeals for the Second Circuit
• Decided: January 30, 2026
• Docket: 25-77
• Status: Unpublished

Opinion

25-77 MSV Synergy, LLC v. Shapiro

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 30th day of January, two thousand twenty-six.

Present: DEBRA ANN LIVINGSTON, Chief Judge, WILLIAM J. NARDINI, ALISON J. NATHAN, Circuit Judges. _____________________________________ MARK BARRON, MSV SYNERGY, LLC,

Plaintiffs-Appellees,

v. 25-77

SAADIA SHAPIRO, SHAPIRO & ASSOCIATES ATTORNEYS AT LAW, PLLC, PAZ GLOBAL VENTURES, LLC,

Defendants-Appellants,

HARLEM SUNSHINE, LLC, HARLEM RESIDENTIAL, LLC, EAST 125TH DEVELOPMENT, LLC, VADIM LEYBEL, CAST CAPITAL LENDING CORP., PETER ZVEDENIUK, ARI FRIEDMAN, BORIS LEYBEL,

Defendants.

_____________________________________ For Plaintiffs-Appellees: Kevin Fritz, Meister Seelig & Fein, PLLC., New York, NY.

For Defendants-Appellants Shapiro and Associates Attorneys at Law, PLLC, and PAZ Global Ventures LLC: Marla Shapiro, Shapiro & Associates Attorneys at Law, PLLC, New York, NY.

For Defendant-Appellant Saadia Shapiro: Saadia Shapiro, pro se, New York, NY.

Appeal from a judgment of the United States District Court for the Southern District of

New York (Ramos, J.).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND

DECREED that the judgment of the district court is AFFIRMED.

Defendants-Appellants Saadia Shapiro (“Shapiro”), Shapiro & Associates Attorneys at

Law, PLLC (“Shapiro & Associates”), and PAZ Global Ventures LLC (“Paz”) (collectively

“Defendants”) appeal from a December 11, 2024 judgment of the United States District Court for

the Southern District of New York, confirming an arbitral award of $2,784,606.61 in favor of

Plaintiffs-Appellees Mark Barron (“Barron”) and MSV Synergy, LLC (“MSV”) (collectively

“Plaintiffs”). The dispute between the parties arose in relation to three agreements executed in

2020: (1) the Sales and Purchase Agreement (“SPA”) in which MSV agreed to purchase 250,000

boxes “of powder free nitrile medical examination gloves” from Paz, App’x 29, (2) the Escrow

Agreement between MSV and Shapiro & Associates, and (3) the Guarantee Agreement, executed

roughly forty five days after the first two agreements, between Shapiro and Barron.

Plaintiffs first filed suit in federal court in September of 2021. Plaintiffs’ Amended

Complaint, filed on January 26, 2022, raised claims against Defendant for, inter alia, breach of

contract and fraud. The district court granted Defendants’ motion to compel arbitration of all

claims on September 7, 2022, and on June 3, 2024, the arbitrator found Paz and Shapiro jointly

2 and severally liable and awarded Plaintiffs damages with prejudgment interest, administrative fees,

and attorney’s fees. We assume the parties’ familiarity with the underlying facts, the procedural

history of the case, and the issues on appeal, to which we refer only as necessary to explain our

decision to AFFIRM.

* * *

“This Court reviews a district court’s decision to confirm or vacate an arbitration award de

novo for questions of law. We review findings of fact for clear error.” Kolel Beth Yechiel

Mechil of Tartikov, Inc. v. YLL Irrevocable Tr., 729 F.3d 99, 103 (2d Cir. 2013) (citation omitted).

“We review de novo the district court’s application of the manifest disregard standard to an

arbitration award.” Seneca Nation of Indians v. New York, 988 F.3d 618, 625 (2d Cir. 2021)

(typeface altered). In determining whether to confirm or vacate an arbitration award, “courts

must grant an arbitration panel’s decision great deference.” Duferco Int’l Steel Trading v. T.

Klaveness Shipping A/S, 333 F.3d 383, 388 (2d Cir. 2003). Litigants “petitioning a federal court

to vacate an arbitral award bear[] the heavy burden of showing that the award falls within a very

narrow set of circumstances delineated by statute and case law.” Id. On appeal, Defendants

argue that the district court erred in rejecting their arguments that the arbitrator exceeded her

powers, denied them due process, and acted in manifest disregard of the law. We disagree.

3 I. The Arbitrator’s Authority

The Federal Arbitration Act (“FAA”) provides that a court may vacate an award “where

the arbitrators exceeded their powers.” 9 U.S.C. § 10(a)(4). “Because the FAA establishes a

strong presumption in favor of enforcing an arbitration award, and an award is presumed valid

unless proved otherwise, the court’s inquiry under Section 10(a)(4) ‘focuses on whether the

arbitrators had the power, based on the parties’ submissions or the arbitration agreement, to reach

a certain issue, not whether the arbitrators correctly decided that issue.’” Smarter Tools Inc. v.

Chongqing SENCI Imp. & Exp. Trade Co., 57 F.4th 372, 382 (2d Cir. 2023) (quoting Westerbeke

Corp. v. Daihatsu Motor Co., 304 F.3d 200, 220 (2d Cir. 2002)).

Defendants argue that the arbitrator lacked the power to adjudicate claims against Shapiro

because he was not a party to the SPA, which contained the arbitration provision. We agree with

the district court’s application of judicial estoppel in declining to “depart from its prior holding

that all claims related to the SPA, escrow, and guarantee agreements are within the scope of the

SPA’s arbitration.” MSV Synergy, LLC v. Shapiro, No. 21 CIV. 7578 (ER), 2024 WL 4931868,

at *8 (S.D.N.Y. Dec. 2, 2024). “Where a party assumes a certain position in a legal proceeding,

and succeeds in maintaining that position, he may not thereafter, simply because his interests have

changed, assume a contrary position, especially if it be to the prejudice of the party who has

acquiesced in the position formerly taken by him.” New Hampshire v. Maine, 532 U.S. 742, 749

(2001) (quoting Davis v. Wakelee, 156 U.S. 680, 689 (1895)) (alteration accepted).

In their 2022 memorandum of law in support of the motion to compel arbitration, a filing

signed by Shapiro in his personal capacity, Defendants stated that “the arbitration provision in the

SPA is applicable to the Escrow Agreement and thus the Plaintiff must arbitrate any dispute related

to the SPA and the Escrow Agreement.” Supp. App’x 97. Defendants further argued that

4 because “the SPA, the Escrow Agreement and the Guarantee were part of a global transaction

. . . it is foreseeable that the [sic] Mr. Shapiro would invoke the arbitration clause.” Supp. App’x

98 (emphasis added). Defendants’ contention that these statements referred only to the claims

ultimately included in Plaintiffs’ arbitration demand, a document that did not exist at the time,

defies credulity. The memorandum stated that “the Plaintiff has expressly agreed to arbitrate the

claims they now impermissibly assert in the Complaint,” Supp. App’x 97 (emphasis added), and

the amended complaint included an array of claims against Shapiro in his personal capacity,

including a claim for fraud. In another filing with the district court, Defendants stated “Plaintiffs’

claims including fraud . . . should be presented to arbitration.” Supp. App’x 121 (emphasis

added). The district court correctly held that Defendants’ position following the issuance of the

award was “clearly inconsistent,” New Hampshire, 532 U.S. at 750, with these prior

representations.

Nor do we discern any merit in Defendants’ argument that Plaintiffs’ arbitration demand

otherwise limited the arbitrator’s authority to adjudicate a fraud claim against Shapiro. The

arbitration provision in the SPA stated that “any dispute . . . shall be resolved by arbitration

according to the rules of the American Arbitration Association.” App’x 33. Rule 49(a) of the

American Arbitration Association Commercial Arbitration Rules and Mediation Procedures

provides that the arbitrator “may grant any remedy or relief that the arbitrator deems just and

equitable and within the scope of the agreement of the parties.” And, as discussed above,

Defendants are judicially estopped from abandoning their prior position that all claims stated in

Plaintiffs’ complaint were subject to arbitration pursuant to the various agreements.

5 II. Fundamental Fairness of the Proceedings

A court may also vacate an award “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.” 9 U.S.C. § 10(a)(3). Under section 10(a)(3) of the FAA, “[o]ur

review is restricted to determining whether the procedure was fundamentally unfair.” Tempo

Shain Corp. v. Bertek, Inc., 120 F.3d 16, 20 (2d Cir. 1997) (citation omitted).

Defendants argue that the arbitration was fundamentally unfair because the arbitrator ruled

that Shapiro was personally liable to Plaintiffs as a participant in the fraud without providing an

opportunity to respond. Even assuming arguendo that the amended complaint and the evidence

presented during the arbitration did not sufficiently place Defendants on notice of the need to

address this issue, Defendants have not established that the procedure was fundamentally unfair.

Plaintiffs represented to the district court that “Defendants did not seek to submit further evidence

concerning Plaintiffs’ claim to hold Shapiro personally liable under the SPA, the Escrow

Agreement, and/or the Guarantee Agreement.” Supp. App’x 151 (Decl. ¶ 21). On appeal,

Defendants do not contest this representation or otherwise assert that—prior to the issuance of the

award—they sought an opportunity to respond to Plaintiffs’ Supplemental Post-Hearing Brief. In

light of their failure to do so, they cannot now argue they did not receive “an adequate opportunity

to present [their] evidence and argument.” Tempo Shain, 120 F.3d at 20.

We agree also with the district court’s rejection of “Defendants’ claims that the Arbitrator

ignored, misunderstood, or improperly declined to take judicial notice of certain evidence.”

MSV, 2024 WL 4931868, at *9. As an initial matter, Defendants’ disagreement with the

arbitrator’s interpretation of the evidence does not establish that “the procedure was fundamentally

6 unfair.” Tempo Shain, 120 F.3d at 20 (quotation marks omitted). And, with respect to

Defendants’ arguments regarding various newspaper articles, the arbitrator’s rejection of that

evidence as untimely fell squarely within her “substantial discretion to admit or exclude evidence”

and did not, in any case, implicate fundamental fairness. LJL 33rd St. Assocs., LLC v. Pitcairn

Props. Inc., 725 F.3d 184, 195 (2d Cir. 2013); see also Kolel, 729 F.3d at 107 (“The Panel’s

decision to hear only one witness does not make the arbitration fundamentally unfair.”).

III. Manifest Disregard of the Law

“We have held that ‘as judicial gloss on the specific grounds for vacatur of arbitration

awards’ in the FAA, an arbitrator’s ‘manifest disregard’ of the law or of the terms of the arbitration

agreement ‘remains a valid ground for vacating arbitration awards.’” Seneca Nation, 988 F.3d

at 625 (quoting Schwartz v. Merrill Lynch & Co., 665 F.3d 444, 451–52 (2d Cir. 2011)) (alteration

accepted). Demonstrating that an arbitrator ruled in “manifest disregard” of the law requires

showing “something beyond and different from a mere error in the law or failure on the part of the

arbitrators to understand or apply the law.” Westerbeke, 304 F.3d at 208 (quoting Saxis S.S. Co.

v. Multifacs Int’l Traders, Inc., 375 F.2d 577, 582 (2d Cir. 1967)). “Rather, ‘the award should

be enforced, despite a court’s disagreement with it on the merits, if there is a barely colorable

justification for the outcome reached.’” T.Co Metals, LLC v. Dempsey Pipe & Supply, Inc., 592

F.3d 329, 339 (2d Cir. 2010).

Accordingly, “[t]o succeed in challenging an award under the manifest disregard standard,

a party must make ‘a showing that the arbitrators knew of the relevant legal principle, appreciated

that this principle controlled the outcome of the disputed issue, and nonetheless willfully flouted

the governing law by refusing to apply it.’” Seneca Nation, 988 F.3d at 626 (quoting Schwartz,

665 F.3d at 452). “In addition to this ‘subjective component,’ a finding of manifest disregard

7 requires an objective determination that the disregarded legal principle was ‘well defined, explicit,

and clearly applicable.’” Id. (quoting Westerbeke, 304 F.3d at 209).

We reject Defendants’ arguments that the arbitrator manifestly disregarded the law through

her ruling on fraud and her interpretation of the contract. As discussed above, Defendants

declined to make additional legal arguments regarding fraud. Because they did not present their

legal arguments on fraud to the arbitrator prior to the issuance of the award, they cannot establish

the subjective component of manifest disregard. In any case, we agree with the district court that

“[i]n evaluating Shapiro’s conduct, the Arbitrator carefully considered Shapiro’s obligations under

the SPA, escrow, and guarantee agreements, the defenses Shapiro proffered at the evidentiary

hearing, and the testimony provided by rebuttal witness Germain.” MSV, 2024 WL 4931868, at

*10. At the very least, the arbitrator’s analysis “offers a barely colorable justification for the

outcome reached.” Jock v. Sterling Jewelers Inc., 646 F.3d 113, 122 (2d Cir. 2011) (quotation

marks omitted).

With respect to interpretation of the contracts, we agree also with the district court that “the

Arbitrator meaningfully engaged with the relevant contract provisions and carefully considered

their applicability.” MSV, 2024 WL 4931868, at *11. Defendants thus have likewise failed to

meet their burden to establish the arbitrator lacked “a barely colorable justification for [her]

interpretation of the contract.” Westerbeke, 304 F.3d at 222.

8 We have considered Defendants’ remaining arguments and find them to be without merit.1

Accordingly, we AFFIRM the judgment of the district court.

FOR THE COURT: Catherine O’Hagan Wolfe, Clerk

1 In addition, we deny Defendants’ motion to file a supplemental appendix as moot.