The background of this case can be found here. Floridians for Solar Choice, Inc. (“FSC”), is a Florida not-for-profit corporation formed for the purpose of qualifying for a solar energy amendment ballot initiative in Florida’s general election. FSC initially filed a complaint in Florida federal court in December 2015 against Defendants PCI Consultants, Inc. (“PCI”), a “national leader in obtaining signed petitions for ballot initiatives,” and PCI’s principal, Angelo Paparella (“Paparella”). The case stemmed from a failed ballot initiative to qualify a solar constitutional amendment for the 2016 election in Florida. In its complaint, FSC alleged causes of action for breach of contract, fraud in the inducement, conversion, and unjust enrichment against PCI, and fraud in the inducement and conversion against Paparella. FSC also filed a motion to compel arbitration, arguing that the claims asserted relate to contracts which contain arbitration clauses. The Florida district court granted the motion to compel in January 2016 and closed the case. In October 2017, Defendants filed a motion to reopen case, which was granted. In its motion, Defendants advised the court that the parties had participated in an arbitration administered by the American Arbitration Association (“AAA”) in April 2017, that the “sole arbitrator issued a non-final award on July 20, 2017 and on October 10, 2017, the arbitrator issued a ‘Final Award’ adopting the non-final award.” Defendants moved to vacate the award, and FSC moved to confirm the award.
In their motion to vacate, Defendants made five arguments: 1) the award must be vacated because FSC employed “fraud and/or undue means” to procure an arbitration award in its favor; 2) the arbitrator, acting alone, lacked jurisdiction under the AAA rules to enter an award exceeding one million dollars; 3) the arbitrator had “irrefutable bias” against Defendants; 4) the arbitrator failed to hear evidence related to FSC’s “surprise damages claim;” and 5) the AAA Rules barred entry of the October final award in favor of FSC because the July award was a “final award” that terminated the arbitrator’s jurisdiction. In response, FSC argued that the arbitrator’s award is supported by the record evidence and that Defendants failed to meet their burden on their claim of fraud or undue means and on their claim of arbitrator bias. FSC further argued that the Arbitrator had jurisdiction to issue an award above one million dollars and to enter the October final award. FSC also moved to confirm the July award, as amended by the October final award (and a later corrected November 1, 2017 award).
The court found that Defendants failed to meet their burden to demonstrate that FSC defrauded or used undue means to influence the arbitrator. The court also found that the arbitrator had the authority to enter the arbitration awards. The court also denied the motion to vacate on the ground that the arbitrator was biased. As to the arbitrator’ evidentiary rulings, the court noted that “[a]rbitrators enjoy wide latitude in conducting an arbitration hearing, and they are not constrained by formal rules of procedure or evidence,” and found that Defendants were not deprived of a fair hearing. Thus, the Florida federal court denied Defendants’ motion to vacate. As the Defendants did not meet the “heavy burden” to vacate the award, the Florida federal court also granted FSC’s motion to confirm the award.
Floridians for Solar Choice, Inc. v. PCI Consultants, Inc., No. 15-cv-62688 (USDC S.D. Fla. June 11, 2018).
This post written by Jeanne Kohler.
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