When Can A Party Recover Attorneys’ Fees Incurred Confirming An Arbitration Award?
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If you won your arbitration, it is vexing to have to spend many thousands more in attorneys’ fees opposing a motion to vacate the arbitration award. (That is especially true if you signed up for arbitration thinking it was faster and avoided appeals.) But, can you ask the court to award you the attorneys’ fees you incurred in confirming the arbitration award? That is a much more complicated question than it should be, and the Sixth Circuit took it on recently in Crossville Medical Oncology, P.C. v. Glenwood Systems, LLC, 2015 WL 1948329 (6th Cir. May 1, 2015).
In Crossville, two businesses had claims against each other in arbitration. Glenwood won. The arbitrator awarded Glenwood over $200,000 in damages, plus about $16,000 in attorneys’ fees. The losing party then challenged the award by arguing the arbitration agreement was invalid. The federal district court disagreed and confirmed the award. Glenwood then asked the district court to award it the attorneys’ fees it incurred in confirming the arbitration award. The district court denied the motion.
The Sixth Circuit affirmed the denial of fees. It analyzed the possibility of recovering fees to confirm an arbitration award by using the following rules/guidelines:
- “The FAA neither contemplates nor precludes an award of attorneys’ fees.” So, just like in any other situation, fees are only available if authorized by statute or contract. In this case, Glenwood only made arguments under its contract.
- The court may not award fees, even if an arbitration agreement authorizes fees to a prevailing party, if the arbitration agreement has broad language sending all disputes to arbitration. (Because then, even the dispute over the winner’s fees in confirming the arbitration award must go to an arbitrator.)
- Similarly, the court may not award fees if the arbitration agreement shows the parties’ intended to grant the power to award fees only to the arbitrator (not a court) .
- [Another guidepost from the 8th Circuit last year: if the arbitrator didn’t grant the winner its attorneys’ fees during the arbitration, the court is not likely to grant the winner fees incurred in post-arbitration proceedings.]
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