## Facts

- Guadalupe Duran, age 92, was admitted to a New Mexico nursing facility operated by THI for nursing-home care.
- During admission, Duran’s daughter signed an arbitration agreement on Duran’s behalf.
- The agreement required arbitration of “all disputes,” referenced the National Arbitration Forum Code of Procedure, and stated that the Federal Arbitration Act (FAA) governed.
- While in THI’s care, Duran fell, was injured, suffered a stroke during surgery related to the injuries, and later died.
- Mary Louise Lovato, as personal representative of Duran’s wrongful-death estate, filed wrongful-death and related tort claims against THI and others in New Mexico state court.
- THI petitioned in federal district court to compel arbitration under the FAA; the court ordered arbitration.
- The arbitrator issued an award for Lovato, including compensatory damages plus arbitration costs and interest, referencing remedial authority associated with New Mexico’s Uniform Arbitration Act (NMUAA).
- THI moved in federal district court to vacate or modify the award, arguing the arbitrator exceeded his authority by applying the NMUAA and by awarding costs and interest; Lovato moved to confirm.
- The district court confirmed the award, and THI appealed.

## Issues

1. Whether the arbitrator exceeded his powers under 9 U.S.C. § 10(a)(4) by awarding costs and interest and by relying on NMUAA concepts despite an FAA-governed arbitration agreement.
2. Whether the award should be vacated or modified on the ground of “manifest disregard of the law” based on the arbitrator’s treatment of governing law and remedies.

## Decision

- The Tenth Circuit affirmed the district court’s confirmation of the arbitration award.
- The court held the award did not exceed the arbitrator’s powers because it was supported by an arguable construction of the parties’ arbitration agreement.
- The court rejected vacatur based on manifest disregard, finding no showing that the arbitrator recognized and intentionally ignored clearly controlling law.
- The court emphasized the narrow scope of FAA review and the strong deference owed to arbitral decisions.

## Legal Principles

- Judicial review of arbitration awards under the FAA is highly limited; vacatur is available only in unusual circumstances specified by statute (and, if recognized, exceptionally narrow judicial doctrines).
- Under § 10(a)(4), an award may be vacated for exceeding powers only when the arbitrator strays beyond the contract and submission; an award that even arguably construes or applies the agreement must be upheld.
- “Manifest disregard of the law,” to the extent available, requires more than legal error; it requires proof the arbitrator knew of clearly governing law and deliberately refused to apply it.
- An arbitrator’s consultation of state-law remedial rules (such as provisions authorizing costs and interest) does not justify vacatur when that approach can reasonably be viewed as consistent with, or not clearly barred by, the parties’ agreement and submission.

## Conclusion

The court upheld confirmation of the wrongful-death estate’s arbitration award because THI failed to show that the arbitrator’s reliance on state-law remedial authority for costs and interest either exceeded contractual authority under the FAA or reflected intentional disregard of controlling law.


THI of N.M. at Vida Encantada, LLC v. Lovato, 864 F.3d 1080 (10th Cir. 2017)