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Keywords

contractarbitrationattorneystatuteappealhearingtestimonycross-examinationimplied contractwitness testimony

arbitrationstatutehearingtestimonycross-examinationwitness testimony

Related Cases

Knight v. Merrill Lynch, Pierce, Fenner & Smith, 350 Fed.Appx. 119, 2009 WL 3368439

Facts

Robert J. Knight, a former employee of Merrill Lynch, brought an action against the firm for breach of an implied contract and other claims related to his termination. After Merrill Lynch moved to dismiss Knight's claims as untimely under California's statutes of limitations, the arbitration panel held two telephonic conferences to address the matter. Knight argued that the panel did not conduct an adequate hearing according to the NASD Code of Arbitration Procedure and the arbitration agreement, as no witnesses were sworn or cross-examined, and only attorneys attended the hearings.

Knight contends that the arbitration panel exceeded its authority by not holding an adequate hearing on his claims pursuant to the NASD Code of Arbitration Procedure and the parties' arbitration agreement.

Issue

Did the arbitration panel exceed its authority or manifestly disregard the law when it issued its decision in favor of Merrill Lynch?

We must determine whether the arbitration panel exceeded its authority or manifestly disregarded the law when it issued its decision in favor of Merrill Lynch.

Rule

The arbitration panel must operate within the authority granted by the NASD Code of Arbitration Procedure and the parties' arbitration agreement, which do not explicitly define the requirements for a hearing.

Neither the NASD Code of Arbitration nor the parties' arbitration agreement defines the requirements of a hearing, and the arbitration panel reasonably decided to conduct the hearings telephonically without live witness testimony and cross-examination.

Analysis

The court determined that the arbitration panel did not exceed its authority by conducting telephonic hearings without live witness testimony or cross-examination. The panel reasonably decided that the legal issues regarding the applicability of California's statutes of limitations could be resolved without live testimony, especially since there were no material factual disputes. Knight was represented by counsel during the hearings, and he was not precluded from participating.

The arbitration panel did not exceed its authority in determining the manner in which it conducted the hearings on Knight's claims.

Conclusion

The Court of Appeals affirmed the district court's decision, holding that the arbitration panel acted within its authority and correctly applied California's statutes of limitations to Knight's claims.

We see no such error and, accordingly, we affirm.

Who won?

Merrill Lynch prevailed in the case because the arbitration panel's decision was upheld, confirming that the panel acted within its authority and properly applied the law.

The arbitration panel correctly applied the California statutes of limitations to all of Knight's claims.

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