Originally from AAA Yearbook on Arbitration and the Law - 26th Edition

6.01 Preclusion: Res Judicata and Collateral Estoppel

Lagstein v. Certain Underwriters at Lloyd's of London, 725 F.3d 1050 (9th Cir. 2013)

An arbitration award granting interest on a portion of the award does not preclude the district court from granting interest on the remaining portion of the award.

Disability insurer (Insurer) moved to vacate arbitration award in favor of insured (Insured), which issued full policy benefits, emotional distress damages, and punitive damages. After reversal and remand from the 9th Circuit, the district court confirmed, but denied interest on, the arbitration award.

An arbitration award that grants interest on a portion of the award does not preclude the district court from granting interest on the remaining portion of the award. In other words, the arbitrators’ explicit award of interest on the contract damages should be respected, and their failure to speak on interest otherwise does not constitute a denial of interest on other parts of the award. Here, the arbitration panel only awarded interest on the contract portion of the damages—not the punitive damages. Thus, Insured was entitled to interest on the punitive damages portion of the arbitration award.

Citations and References

a. Northrop Corp. v. Triad Int'l Mktg. S.A., 842 F.2d 1154, 1155 (9th Cir. 1988) (per curiam) (explaining that courts do not lack authority to award interest where an arbitration award is silent). b. Kyocera Corp. v. Prudential–Bache Trade Servs., Inc., 299 F.3d 769, 794–95 (9th Cir. 2002) (applying same reasoning to attorney's fees), vacated on other grounds by 341 F.3d 987, 994 n. 11 (9th Cir. 2003) (en banc).