FIA Card Services, N.A. v. Levy – 12/12/2008

December 22, 2008

Arizona Court ofAppeals Division Two Holds that Arizona Courts May Vacate an Arbitration Award Because of Undue Means Only When There Exists Proof that an Arbitrating Party Engaged in Intentional Misconduct.

Mr. Levy opened a credit card account with FIA.  The credit card agreement contained an arbitration clause.  Several years later, a dispute arose between Levy and FIA over the amount owed on the account.  FIA filed an arbitration claim with the National Arbitration Forum (NAF), and served Levy with two notices of the claim.  Levy failed timely to respond to either of them.  As a result, the arbitrator issued an award in FIA’s favor.  Thereafter, FIA filed in the Superior Court an Application to Confirm Arbitration Award, which after holding a hearing, the Superior Court granted.  This appeal followed.

On appeal, Levey argued that the Superior Court erred in confirming the arbitration award because FIA had procured the award using undue means.  The ArizonaAppeals Court explained that “undue means” is included as one of the proscribed, statutory grounds for refusing to confirm an arbitration award, but, adopting the federal courts’ interpretation of the term, held that “undue means” requires proof of intentional misconduct.  Because NAF adhered to the NAF Code in issuing the award and partiality by NAF, which Levy had no actual evidence of, is not a listed ground for vacating an arbitration award, the trial court correctly confirmed FIA’s award.