UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 12-1464
WELLS FARGO ADVISORS, LLC,
Claimant - Appellee,
v.
CLIFFORD JOHN WATTS,
Respondent - Appellant.
No. 12-1484
WELLS FARGO ADVISORS, LLC,
Claimant - Appellant,
v.
CLIFFORD JOHN WATTS,
Respondent - Appellee.
Appeals from the United States District Court for the Western
District of North Carolina, at Statesville. Max O. Cogburn,
Jr., District Judge. (5:11-cv-00048-MOC-DLH)
Submitted: July 29, 2013 Decided: October 1, 2013
Before MOTZ and DIAZ, Circuit Judges, and John A. GIBNEY, Jr.,
United States District Judge for the Eastern District of
Virginia, sitting by designation.
Affirmed in part; reversed and remanded in part by unpublished
per curiam opinion.
Matthew K. Rogers, LAW OFFICE OF MATTHEW K. ROGERS, PLLC,
Hickory, North Carolina, for Appellant/Cross-Appellee. Charles
E. Raynal, Matthew H. Mall, PARKER POE ADAMS & BERNSTEIN, LLP,
Raleigh, North Carolina, for Appellee/Cross-Appellant.
Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:
Clifford John Watts (“Watts”), a former employee of Wells
Fargo Advisors, LLC (“Wells Fargo”), appeals a judgment of the
district court enforcing an arbitration award against him.
Wells Fargo cross-appeals the district court’s refusal to
enforce the arbitrator’s award of attorneys’ fees to it. We
affirm in part and reverse and remand in part.
I.
In October 2007, Watts signed a retention bonus agreement
providing that he would receive a bonus of $306,726 from Wells
Fargo’s predecessor, Wachovia, to be paid in monthly
installments. The same day, Watts also signed a promissory note
allowing him to receive his full bonus upfront as a “loan” and
repay the loan in monthly installments, which the monthly bonus
payments would offset. The retention bonus agreement and
promissory note explained that, should Watts terminate his
employment, he would stop receiving bonus payments and would be
liable to pay the amount outstanding on his loan. Both
agreements also included clauses designating arbitration as the
“exclusive remedy” for adjudicating disputes arising out of the
agreements.
In July 2009, Watts resigned from Wells Fargo.
Approximately $237,000 remained unpaid on the promissory note.
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Wells Fargo moved to collect the balance from Watts. When he
refused to pay, Wells Fargo initiated an arbitration proceeding.
The arbitration panel enforced the note, entering an award in
favor of Wells Fargo. Relying on a provision in the note
stating that Watts “agree[d] to pay . . . without limitation,
reasonable attorneys’ fees,” the arbitrators also granted Wells
Fargo attorneys’ fees in the amount of $60,480.25.
Watts moved to vacate the arbitration award –- including
both the unpaid balance and the attorneys’ fees award. Wells
Fargo moved to confirm the full award. As to the unpaid
balance, the district court denied Watts’ motion to vacate and
granted Wells Fargo’s motion to confirm. But, as to the
attorneys’ fees, the district court vacated the award on the
ground that the arbitration panel had not articulated “any
analysis whatsoever” to explain the amount of the award. This
appeal and cross-appeal followed.
II.
We review a district court’s legal conclusions de novo.
MCI Constructors, LLC v. City of Greensboro, 610 F.3d 849, 857
(4th Cir. 2010). But “[o]ur authority to review the arbitration
award[] at issue, like the authority of the district court to do
the same, is substantially circumscribed.” Id. (internal
quotation marks omitted). In fact, “the scope of judicial
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review for an arbitrator’s decision is among the narrowest known
at law.” Id. (internal quotation marks omitted). “In order for
a reviewing court to vacate an arbitration award, the moving
party must sustain the heavy burden of showing one of the
grounds specified in the Federal Arbitration Act (the ‘FAA’) or
one of certain limited common law grounds.” Id.
The very limited statutory grounds for vacating an
arbitration award are: “(1) where the award was procured by
corruption, fraud, or undue means; (2) where there was evident
partiality or corruption in the arbitrators . . . ; (3) where
the arbitrators were guilty of misconduct . . . ; or (4) 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.” 9 U.S.C. § 10(a). The
equally circumscribed common-law grounds may “include those
circumstances where an award fails to draw its essence from the
contract, or the award evidences a manifest disregard of the
law.” MCI Constructors, 610 F.3d at 857 (internal quotation
marks omitted).
III.
Watts presents no basis for vacating any portion of the
arbitration award covering the unpaid balance on the promissory
note. As the district court properly held, Watts failed to
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offer any particularized support for his argument that Wells
Fargo somehow engaged in fraud, corruption, or undue means in
procuring its award, including in its conduct during discovery.
Watts similarly failed to provide any particularized support for
his argument that the arbitrators engaged in any improprieties
within the scope of the FAA. Further, he made no showing that
the arbitrators engaged in “manifest disregard of the law,” a
“carefully circumscribed” concept that requires that “the
arbitrator refused to heed” a “clearly defined” legal principle
that is “not subject to reasonable debate.” Wachovia Sec., LLC
v. Brand, 671 F.3d 472, 483 (4th Cir. 2012) (internal quotation
marks omitted).
Nor has Watts presented a basis for vacating this portion
of the arbitration award on public policy grounds. Watts has
offered no “well defined and dominant” public policy reason to
refuse to enforce the retention bonus agreement or promissory
note that is “ascertained by reference to law[] . . . and not
from general considerations of supposed public interests.” See
W.R. Grace & Co. v. Local Union 759, Int’l Union of the United
Rubber Workers, 461 U.S. 757, 766 (1983). This is no surprise.
For there is no such reason. The bonus agreement and promissory
note that the arbitrators enforced clearly explain the nature of
the transaction Watts entered and are standard agreements in the
industry that courts routinely uphold.
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IV.
These same principles render the district court’s holding
vacating the arbitrators’ award of attorneys’ fees to Wells
Fargo error. A court must defer to the arbitrators’ findings as
to the appropriate amount of attorneys’ fees. The strict
deference courts owe to arbitrators applies to factual findings
as well as legal determinations. See Upshur Coals Corp. v.
United Mine Workers, Dist. 31, 933 F.2d 225, 229 (4th Cir.
1991). Moreover, “[a]rbitration panels are not required to
explain their decisions.” MCI Constructors, 610 F.3d at 859
n.6. Thus, a court must defer to arbitrators’ factual findings
on attorneys’ fees even if the arbitrators do not explain a
basis for the precise amount. This deference seems particularly
appropriate in this case, given that the arbitrators awarded an
attorneys’ fees amount well below Wells Fargo’s request and the
district court made no findings as to the excessiveness of the
award.
V.
Accordingly, we affirm the district court’s denial of
Watts’ motion to vacate the arbitration award covering the
unpaid balance on the promissory note and grant Wells Fargo’s
motion to confirm that award. We reverse the district court’s
ruling vacating the arbitration panel’s grant of attorneys’
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fees. We remand the case to the district court for entry of an
order enforcing the attorneys’ fees award. We dispense with
oral argument because the facts and legal contentions are
adequately presented in the materials before this court and
argument would not aid the decisional process.
AFFIRMED IN PART;
REVERSED AND REMANDED IN PART
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