Wells Fargo Bank, National Ass'n v. Apache Tribe

2016 OK CIV APP 68, 384 P.3d 145, 2016 Okla. Civ. App. LEXIS 34
CourtCourt of Civil Appeals of Oklahoma
DecidedMarch 28, 2016
DocketCase Number: 112988
StatusPublished

This text of 2016 OK CIV APP 68 (Wells Fargo Bank, National Ass'n v. Apache Tribe) is published on Counsel Stack Legal Research, covering Court of Civil Appeals of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wells Fargo Bank, National Ass'n v. Apache Tribe, 2016 OK CIV APP 68, 384 P.3d 145, 2016 Okla. Civ. App. LEXIS 34 (Okla. Ct. App. 2016).

Opinion

JOHN F. FISCHER, JUDGE:

¶ 1 The Apache Tribe of Oklahoma appeals the district court’s order confirming an arbitration award in favor of Wells Fargo Bank. The Tribe argues that the parties contracted for expanded judicial review which the district court refused to grant.1 We find that 9 U.S.C. 10 and United States Supreme Court precedent preclude expanded review. We further find that the arbitrators did not exceed their authority and affirm the district court’s confirmation order,

BACKGROUND

¶ 2 This case arises from Wells Fargo’s efforts to enforce an equipment lease agreement with the Tribe. In 2008, Wells Fargo loaned $3,500,000 to TGS Anadarko, LLC. TGS used the loan to buy slot machines that it leased to the Tribe pursuant to an Equipment Lease Agreement. As security for the loan, TGS assigned all of its right and title in the Lease to Wells Fargo. Additionally, the Tribe issued an Estoppel Certificate to Wells Fargo, which extended the benefits of the Lease’s arbitration provision to certain disputes between Wells Fargo and the Tribe.

¶ 3 The Lease contains an arbitration provision at Section 22, which provides, in relevant part:

(c) ... Except to the extent such enforcement will be inconsistent with a specific provision of this Lease, arbitration awards made pursuant to this Section 22 shall be enforceable in federal court under Title 9 of the United States Code and any applicable tribal, federal or state- law governing the enforcement of arbitration awards.

In 2010, the Tribe stopped making lease payments. The parties commenced arbitration and the panel granted relief to TGS and Wells Fargo and awarded damages in the amount of $6,766,734.10. By stipulation between Wells Fargo and TGS, a portion of the damages, $2,156,614.44, plus $211.78 per day after July 1, 2013, was allocated to Wells Fargo based on TGS’s liability on the loan. The Estoppel Certificate allows Wells Fargo to collect the damages directly from the Tribe.

STANDARD OF REVIEW

¶4 To the extent the parties have agreed to arbitrate their disputes, judicial review of the substance of the arbitration award is constrained. “[T]he court will set [the arbitrator’s] decision aside only in very unusual circumstances.” First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 942, 115 S.Ct. 1920, 1923, 131 L.Ed.2d 985 (1995). Title 9 U.S.C. 10 and 11 provide the “exclusive regimes” for judicial review of an arbitration award pursuant to the Federal Arbitration Act. Hall Street Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 590, 128 S.Ct. 1396, 1406, 170 L.Ed.2d 254 (2008).

ANALYSIS

¶ 5 Neither party disputes the application of the Federal Arbitration Act’s requirements to this Court’s review. Title 9 U.S.C. 9 [147]*147provides: “[a] court must grant [an order confirming the award] unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of this title.” Title 9 U.S.C. 10(a)(4) provides for vacatur of an arbitration award “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.”

I. EXPANDED JUDICIAL REVIEW

¶6 Nonetheless, the Tribe asserts that this Court may expand the scope of our review. The Tribe argues that private parties may contract for expanded judicial review beyond the narrow parameters of the Federal Arbitration Act and that these parties have done so. The Tribe points to Section 22(c) of the Lease Agreement which states:

In addition to any basis for appeal of an arbitration award stated in Title 9 of the United States Code or any applicable law governing the enforcement of arbitration awards, any party hereto may appeal an arbitration award on the basis that the arbitrators incorrectly decided a question of law in making the award, or the award was made in an arbitrary or capricious manner or in manifest disregard of the factual evidence.

It is true that parties may customize many aspects of the arbitration agreement, including the issues to be arbitrated and the rules governing the arbitration proceedings. See Hall Street, 552 U.S. at 586, 128 S.Ct. at 1404; Volt Info. Sciences, Inc. v. Bd. of Trustees, 489 U.S. 468, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989). However, private parties have no power to alter the “national policy favoring arbitration with just the limited review needed to maintain arbitration’s essential virtue of resolving disputes straightaway.” Hall Street, 552 U.S. at 588, 128 S.Ct. at 1405. This is particularly true where Congress has clearly defined the scope of judicial review. Kyocera Corp. v. Prudential-Bache Trade Servs., Inc., 341 F.3d 987, 1000 (9th Cir. 2003). As the Tenth Circuit explained:

Contractually expanded standards, particularly those that allow for factual review, clearly threaten to undermine the independence of the arbitration process and dilute the finality of arbitration awards because, in order for arbitration awards to be effective, courts must not only enforce the agreements to arbitrate but also enforce the resulting arbitration awards.

Bowen v. Amoco Pipeline Co., 254 F.3d 925, 935 (10th Cir. 2001). The Federal Arbitration Act prevents the kind of expanded judicial review contracted for by these parties.2 Our review is exclusively limited to the narrow grounds listed in 9 U.S.C. 10.

II. ARBITRATORS’ AUTHORITY

¶ 7 Tribe also asserts that the arbitrators exceeded their powers by awarding damages in conflict with Oklahoma law. Title 9 U.S.C. 10(a)(4) authorizes a court to set aside an award “where the arbitrators exceeded their powers....” However, a party seeking relief under section 10 must meet a demanding burden of proof. “It is not enough ... to show that the panel committed an error—or even a serious error.” Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 671, 130 S.Ct. 1758, 1767, 176 L.Ed.2d 605 (2010). “The risk that arbitrators may construe the governing law imperfectly in the course of delivering a decision ... is a risk that every party to arbitration assumes, and such legal and factual errors lie far outside the category of conduct embraced by 10(a)(4).” Kyocera, 341 F.3d at 1003.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

First Options of Chicago, Inc. v. Kaplan
514 U.S. 938 (Supreme Court, 1995)
Hall Street Associates, L. L. C. v. Mattel, Inc.
552 U.S. 576 (Supreme Court, 2008)
Bowen v. Amoco Pipeline Co.
254 F.3d 925 (Tenth Circuit, 2001)
Matter of Estate of Walker
695 P.2d 1 (Supreme Court of Oklahoma, 1985)
Wells Fargo Bank, National Ass'n v. Apache Tribe of Oklahoma
2015 OK CIV APP 10 (Court of Civil Appeals of Oklahoma, 2014)

Cite This Page — Counsel Stack

Bluebook (online)
2016 OK CIV APP 68, 384 P.3d 145, 2016 Okla. Civ. App. LEXIS 34, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wells-fargo-bank-national-assn-v-apache-tribe-oklacivapp-2016.