OPINION AND ORDER

KENNETH MARRA, District Judge

THIS CAUSE is before the Court on Petitioner Vicki Deitchman's Amended Motion to Vacate Arbitration Award (under seal), Respondent Bear Stearns' Motion for Summary Judgment on the Amended Motion to Vacate Arbitration Award (under seal), Respondent's Motion for Summary Judgment on its Counter-Petition to Confirm Arbitration Award and Vacate in Part and on Entitlement to Statutory Attorneys' Fees (DE 25), and Respondent's Motions for Sanctions (DE 4, 25). The motions are now fully briefed and are ripe for review. The Court has carefully considered the parties' motions and is fully advised in the premises.

Background

The relevant facts, as gleaned from the parties' motions, affidavits, and exhibits are as follows: On February 19, 1999, Bear Stearns and Eastlake Capital, LLC ("Eastlake") entered into a clearing agreement. (Stmt. Cl. ¶ 8.) As explained at the arbitration hearing, "Bear Stearns was simply the clearing broker as part of an outsourcing agreement from Eastlake. Eastlake did not have the facility to clear for itself to provide the customer accounting, to supply the capital and to safekeep securities." (Arb. Hr'g Tr. 316.)

Prior to her relationship with Eastlake, Petitioner Vicki Deitchman ("Petitioner" or "Deitchman") had invested in securities for several years. (Arb. Hr'g Tr. 29.) She was described as an "extraordinarily aggressive investor" with her self-directed accounts. (Arb. Hr'g Tr. 29.) In 2000, Deitchman was "a 59 year old divorcee, self-employed in a small family jewelry business." (Stmt. Cl. ¶ 35.) At the recommendation of a friend, Deitchman met with an independent investment counselor named Dimitrios Lellos. (Stmt. Cl. ¶ 35.) Lellos represented himself as a licensed investment advisor. (Stmt. Cl. ¶ 35.) Deitchman claims that Lellos said he was "connected" with Bear Stearns and Eastlake. (Stmt. Cl. ¶¶ 36, 37.)

After the "destruction" of Deitchman's investment account ( see Stmt. Cl. ¶¶ 51-52), Deitchman initiated arbitration proceedings against Bear Stearns and Eastlake in 2002. (Resp't Mot. 4.) In Detichman's Second Amended Claim, she brought several claims against both Bear Stearns and Eastlake: one count against each for misrepresentation and failure to supervise under § 10(b) and § 20(a) of the Securities Exchange Act of 1934, one count for fraud and deceit, one count for violation of Florida Statutes § 517.301, one count under Florida Statutes § 517.12, multiple counts of negligent failure to supervise, and multiple counts of breach of fiduciary duty. However, at the final evidentiary proceeding before the arbitration panel, Petitioner only presented evidence relating to her claim under Florida Statutes § 517.12. (Resp't Mot. 5; Resp't Ex. I.)

Following a hearing in February 2007, the NASD arbitrators issued their opinion: "Respondent Bear Stearns is found not liable and all [of Deitchman's] claims are denied in their entirety." (Resp't Ex. I.) The panel also instructed the parties to bear their own costs and attorneys' fees, aside from those fees set by NASD as part of the arbitration. (Resp't Ex. I.)

Petitioner then filed a Motion to Vacate the Arbitration Award in the Circuit Court for the Seventeenth Judicial Circuit of Florida, on the grounds that the NASD did not have "jurisdiction to arbitrate this case," the arbitrator's award was "arbitrary and capricious," and the award was a "manifest disregard of the law." (DE 1.) Bear Stearns removed the case to this Court, and Petitioner was granted leave to amend her Motion to Vacate. Petitioner's Amended Motion to Vacate (DE 8) abandons these cited grounds for vacating the award and instead advocates vacatur on the sole ground that the arbitrators failed to consider material evidence in reaching their decision, thus prejudicing Petitioner's case.

The first document Petitioner sought to enter into evidence is a report resulting from a settlement agreement between Bear Stearns, the Securities and Exchange Commission ("SEC"), and the New York County District Attorney's Office entitled Report of the Independent Consultant Pursuant to the Order Instituting Proceedings in the Matter of Bear, Stearns Securities Corp. (Resp't Ex. E.) The report consists of a review of Bear Stearns' "supervisory and compliance policies" with recommendations to "assist Bear Stearns . . . in their stated goal of enhancing [their] supervisory and compliance policies, practices and procedures." (Resp't Ex. E at 132.) The report is dated August 4, 2000. ( Id.) The report and final recommendations were not immediately adopted in toto; Bear Stearns and the SEC engaged in negotiations for several years before settling on the specific procedures Bear Stearns would have to implement. (Arb. Hr'g Tr. 172.) After a brief oral argument at the arbitration hearing, the arbitrators excluded the Report and Recommendations on Bear Stearns' ore tenus motion. (Arb. Hr'g Tr. 167-74.)

The other documents Deitchman claims were inappropriately excluded were a report of an investigation by NASD of the "principal" of Eastlake, Chris Lim, and his accompanying settlement with NASD ("letter of acceptance, waiver, and consent" or "AWAC"). (Resp't Ex. G, H.) The investigation revealed sizeable non-payroll payments Eastlake made to certain individuals, including Lellos. Neither document explained the nature of the payments to Lellos nor did either document reference any role played by Bear Stearns in making those payments. Prior to trial, the arbitrators excluded the AWAC from evidence. (Resp't Mot. 13.) The arbitrators excluded the report of the investigation after brief oral argument on Bear Stearns' ore tenus motion at the beginning of the arbitration hearing. (Arb. Hr'g Tr. 17-19.)

Bear Stearns argues first that the evidence Deitchman claims was inappropriately excluded by the arbitrators is irrelevant to Deitchman's claim under Florida Statutes § 517.12. (Resp't Mot. 15-16.) Bear Stearns then argues, even if those excluded documents were relevant, Deitchman was not prejudiced by the exclusion of evidence such that she was denied a full and fair hearing on her claims. (Resp't Mot. 21-22.) Finally, Bear Stearns avers that valid grounds exist to exclude the documents, so Plaintiff should not be permitted to prevail on her claim. (Resp't Mot. 22-24.)

I. MOTION TO VACATE/SUMMARY JUDGMENT TO CONFIRM ARBITRATION Standard of Review Arbitration Award

Any case "involving" interstate commerce where arbitration is at issue, like the instant case, will be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. See Allied-Bruce Terminix Companies, Inc. v. Dobson, 513 U.S. 265 (1995). When reviewing arbitration awards, courts are expected to give great deference to the awards. Brown v. Rauscher Pierce Refsnes, Inc., 994 F.2d 775, 778 (11th Cir. 1993); Robbins v. Day, 954 F.2d 679, 682 (11th Cir. 1992); First Preservation Capital, Inc., v. Smith Barney, Harris Upham Co., Inc., 939 F. Supp. 1559, 1563 (S.D. Fla. 1996). The Federal Arbitration Act presumes that reviewing courts will confirm arbitration awards and that the courts' review will be severely limited. Robbins, 954 F.2d at 682; see also AIG Baker Sterling Heights, LLC v. American Multi-Cinema, Inc., No. 07-10130, slip op. at 10-11 (11^th Cir. Nov. 28, 2007) ("Because arbitration is an alternative to litigation, judicial review of arbitration decisions is `among the narrowest known to the law.'") (internal citations omitted). Arbitration awards are presumed to be correct, and the burden is on the party requesting vacatur to rebut this presumption by refuting "every rational basis upon which the arbitrator could have relied." Robbins, 954 F.2d at 684; Schmidt v. Finberg, 942 F.2d 1571, 1574-75 (11^th Cir. 1991). The Eleventh Circuit has recognized the following grounds for vacating an award: 1) statutory grounds set forth in 9 U.S.C. § 10; 2) the award is arbitrary and capricious; or 3) the award is contrary to public policy. Robbins, 954 F.2d at 683; Brown, 994 F.2d at 780.

Specifically, 9 U.S.C. § 10(a)(3) allows the Court to vacate an arbitration award where the arbitrators either refused to postpone the evidentiary hearing or refused to hear material evidence and that behavior prejudiced one of the parties. "In making evidentiary determinations, arbitrators are not required to `follow all the niceties observed by the federal courts,' but they must give the parties a fundamentally fair hearing." Rosensweig v. Morgan Stanley Co., 494 F.3d 1328, 1333 (11<sup>th</sup> Cir. 2007) (internal citations omitted). Arbitrators are not bound by formal rules of procedure or evidence, and the Court may only vacate an arbitration award if the refusal to consider evidence prejudices the rights of the parties. Id. If the arbitrators do not explain why they reach a particular decision, the Court's inquiry is limited to whether "there was any reasonable basis for [the arbitrator's] decision." Id.; see also Robbins, 954 F.2d at 684 ("Where `a ground for the arbitrator's decision can be inferred from the facts of the case, the award should be confirmed.'"). The arbitrator need only give the parties an opportunity to present arguments and evidence; the arbitrator need not hear all evidence presented by the parties. Robbins, 954 F.2d at 685. "Vacatur is appropriate only when the exclusion of relevant evidence `so affects the rights of a party that it may be said that he was deprived of a fair hearing.'" Hoteles Condado Beach, La Concha and Convention Center v. Union De Tronquistas Local 901, 763 F.2d 34, 40 (1^st Cir. 1985).

Summary Judgment

The Court may grant summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The stringent burden of establishing the absence of a genuine issue of material fact lies with the moving party. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The Court should not grant summary judgment unless it is clear that a trial is unnecessary, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986), and any doubts in this regard should be resolved against the moving party. Adickes v. S.H. Kress Co., 398 U.S. 144, 157 (1970).

The movant "bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp., 477 U.S. at 323. To discharge this burden, the movant must point out to the Court that there is an absence of evidence to support the nonmoving party's case. Id. at 325.

After the movant has met its burden under Rule 56(c), the burden of production shifts and the nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Electronic Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). According to the plain language of Fed.R.Civ.P. 56(e), the non-moving party "may not rest upon the mere allegations or denials of the adverse party's pleadings," but instead must come forward with "specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e); Matsushita, 475 U.S. at 587.

Essentially, so long as the non-moving party has had an ample opportunity to conduct discovery, it must come forward with affirmative evidence to support its claim. Anderson, 477 U.S. at 257. "A mere `scintilla' of evidence supporting the opposing party's position will not suffice; there must be a sufficient showing that the jury could reasonably find for that party." Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1990). If the evidence advanced by the non-moving party "is merely colorable, or is not significantly probative, then summary judgment may be granted." Anderson, 477 U.S. 242, 249-50.

Discussion

In this case, Petitioner carries the burden of demonstrating both that the proffered evidence was material to her case and that exclusion of that material evidence prejudiced her case. To meet this extremely high burden, Petitioner must demonstrate that no rational basis existed for the arbitrators' decision to exclude the Report and Recommendations and the NASD Investigation Report. On the evidence submitted, even when considered in the light most favorable to Petitioner, Petitioner cannot meet this burden.

The Court agrees with Respondent that the arbitrators' decision to exclude the evidence in question could have been based in reason. The Independent Consultant's Report merely summarized Bear Stearns' compliance and internal operating policies for a period of years pursuant to a settlement with the U.S. Government prior to Bear Stearns' relationship with Eastlake. The Recommendations included with the report were non-binding and were not immediately nor collectively adopted. Bear Stearns' counsel reminded the arbitration panel that violation of any of the proposed rule changes in the Report could not give rise to any private cause of action. (Arb. Hr'g Tr. 172.) The arbitrators were thus faced with substantial questions as to the relevance of Petitioner's proffered evidence.

Bear Stearns also argued that the Report and Recommendations should be excluded based on the policy interest of keeping settlement negotiations and offers of compromise confidential. Specifically citing Federal Rule of Evidence 408, Bear Stearns argued that the Report should be excluded because it was the product of settlement negotiations with the SEC. Allowing admissions Bear Stearns made in one settlement to be used against it in other, unrelated litigation would discourage settlements. The arbitrators could have reasonably found that the Report and Recommendations were inappropriate forms of evidence based on the same considerations motivating Rule 408. The Court cannot conclude that Petitioner was denied a fair hearing due to the exclusion of the Report and Recommendations.

As for the NASD Investigation of Chris Lim, the Court similarly finds Petitioner's arguments unavailing. First, the Court fails to see how the Investigation report is relevant. The Investigation shows that Lellos received payments from Eastlake, but the Investigation report connects neither Eastlake nor Lellos to Bear Stearns. As Bear Stearns argued at the arbitration hearing, it would be reasonable to allow the Investigation report to be admitted as against Eastlake, but no nexus exists between the Investigation report and Bear Stearns. Thus, the relevance of the report is questionable at best. In addition, the arbitration panel had previously excluded the AWAC, and it does not appear irrational to the Court that the arbitration panel would also exclude the very document that led to the execution of the AWAC for the same or similar reasons. Again, the Court cannot conclude that Petitioner was denied a fair hearing.

Finally, even if the evidence is relevant, Deitchman has not presented any persuasive argument that she was prejudiced by the exclusion of the evidence. The Court notes that Petitioner made no attempt or effort to establish a foundation or proffer substitute evidence. For instance, Petitioner did not call as a witness the NASD investigator who investigated Chris Lim to link Bear Stearns to the payments made by Eastlake to Lellos. The Court cannot conclude that the result of the arbitration would have been different but for the exclusion of this evidence. Petitioner could have, at very least, attempted to find other evidence and testimony to present at the hearing. Petitioner cannot and should not ask this Court to vacate her arbitration award based on her unsuccessful litigation strategy.

II. ENTITLEMENT TO ATTORNEYS' FEES

At the conclusion of the arbitration, the arbitrators refused to award either party attorneys' fees, stating "[t]he parties are to bear their own attorneys' fees." (Resp't Ex. I.) Bear Stearns challenges this portion of the arbitrator's ruling on the ground that neither of the parties submitted the issue of attorneys' fees to the arbitration panel. Under 9 U.S.C. § 11(b), the Court may modify an arbitration award "[w]here the arbitrators have awarded upon a matter not submitted to them, unless it is a matter not affecting the merits of the decision upon the matter submitted." Under this grant of authority, Bear Stearns asks this Court to vacate the arbitrator's ruling on attorneys' fees and consider the issue of entitlement de novo.

The law is well-settled that an arbitrator "can bind the parties only on issues that they have agreed to submit to him" and that the determination of "[w]hether an arbitrator has exceeded these bounds is an issue of judicial resolution." Piggly Wiggly Operators' Warehouse, Inc. v. Piggly Wiggly Operators' Warehouse Independent Truck Drivers Union, Local No. 1, 611 F.2d 580, 583 (5^th Cir. 1980). Bear Stearns did include, in its Answer to the Second Amended Statement of Claim, a request for "reasonable attorneys' fees." (Resp't Ans. 22.) Nevertheless, at the conclusion of the arbitration hearing, Bear Stearns expressly reserved the issue of attorneys' fees and withdrew the issue from consideration by the arbitrators. Petitioner did not object.

Instead, Deitchman argues that this dispute is controlled by Shields Co. v. Bright, 99 Fed. Appx. 875 (11^th Cir. 2004). The Court fails to understand Deitchman's argument. Bright is an order without an opinion issued by the Eleventh Circuit affirming in part and reversing in part a decision from the Middle District of Florida. Notably, the district court's opinion reviewed by the Eleventh Circuit did not address the issue of attorneys' fees.

Deitchman also points to a Florida case, Appelbaum v. Fayerman, 937 So. 2d 282 (4^th Fla. Dist.Ct.App. 2006). In Appelbaum, the court explained that Fla. Stat. § 682.11 governing fees and expenses related to an arbitration requires an "express waiver" of the right to have the entitlement to attorneys' fees decided by a court for the decision of the arbitrator to be binding. Id. at 284; see also Turnberry Associates v. Service Station Aid, Inc., 651 So. 2d 1173, 1175 (Fla. 1995). On the facts of that case, the court held that no on-the-record stipulation was made that the arbitrators would decide the entitlement to attorneys' fees nor could the court find "substantial, competent evidence to support" the finding of an express waiver. Id. at 284. Therefore, judicial determination of attorneys' fees was appropriate.

The Court again fails to see how this case supports Deitchman's position that the decision of the arbitrators is binding. While it is true that Bear Stearns initially waived the right to have a court determine its entitlement to attorneys' fees, Bear Stearns later withdrew that waiver, and Deitchman made no objection. Instead, counsel for Deitchman stated as follows: "As far as attorney's fees, we cannot — we would ask for the panel to decide the issue of entitlement to attorney's fees, but you can't unless both parties do that. So, that's going to be an issue, I guess, for the courts at some point in time." (Arb. Hr'g Tr. 419.) From this passage, Deitchman clearly understood the court's holding in Appelbaum. Thus, the Court can only assume that Deitchman's whole argument is that this Court should reject Appelbaum and adopt the "reasoning" of an unpublished, per curiam order of the Eleventh Circuit that, on its face, appears to have nothing to do with an arbitrator's determination of entitlement to attorneys' fees.

In this case, Bear Stearns put the issue of entitlement to attorneys' fees before the arbitrators, but then Bear Stearns withdrew that issue from consideration. Whether based on a misinterpretation of the law or a tactical error, Deitchman agreed to withdraw the attorneys' fees issue from consideration by the arbitrators. The Court concludes, therefore, that the decision of the NASD arbitration panel ordering each party to pay its own attorneys' fees must be vacated.

Florida Statutes § 517.211(6) states, in pertinent part: "In any action brought under this section . . . the court shall award reasonable attorneys' fees to the prevailing party unless the court finds that the award of such fees would be unjust." Deitchman's single cause of action submitted to the arbitration panel was under Fla. Stat. § 517.12. Thus, this case clearly falls under the ambit of this statute allowing the Court to award attorneys fees. Unless the award of fees would be unjust, the Court is compelled to award fees to the prevailing party. See Golub v. J.W. Gant Associates, 863 F.2d 1516, 1521 (11^th Cir. 1989).

To award attorneys' fees under Florida law, the party seeking fees must have pled or otherwise put the opposing party on notice that it was seeking fees. Stockman v. Downs, 573 So. 2d 835, 837-38 (Fla. 1991). In this case, Bear Stearns stated in its Answer to the Second Amended Statement of Claim that it was seeking attorneys' fees. Thus, Deitchman had notice that attorneys' fees would be an issue at the conclusion of the case. Additionally, it is beyond dispute that Bear Stearns is the "prevailing party" in this case — the arbitration panel ruled in favor of Bear Stearns on the merits.

Deitchman offers no rational reason to conclude that the award would be unjust. Instead, Deitchman concludes that an award of attorneys' fees would be "unjust" because "Bear Stearns in essence `made' Vicki Deitchman's case." (Pet. Resp. 5, Sep. 17, 2006.) The Court is at a loss as to the injustice that would be served on Deitchman here and how "making" the case is in any way related to an award of fees. Accordingly, statutory attorneys' fees under Fla. Stat. § 517.211(6) are hereby awarded to Bear Stearns.

III. RULE 11 SANCTIONS

Bear Stearns asks this Court to sanction Petitioner under Rule 11(c) of the Federal Rules of Civil Procedure. Bear Stearns bases its request on the Eleventh Circuit's holding in B.L. Harbert International, LLC v. Hercules Steel Co., 441 F.3d 905 (11^th Cir. 2006). In that case, the Court stated, in pertinent part:

Courts cannot prevent parties from trying to convert arbitration losses into court victories, but it may be that we can and should insist that if a party on the short end of an arbitration award attacks that award in court without any real legal basis for doing so, that party should pay sanctions. Id. at 913.

In essence, the Eleventh Circuit held that sanctions are appropriate where the losing party in arbitration brings a motion to vacate the arbitration award where there is no evidence to support nor any basis in law for the attack on the arbitration. Id.

In this case, the Court cannot conclude that Deitchman's challenge was utterly devoid of a basis in law that would compel the Court to impose sanctions. The improper exclusion of evidence from an arbitration hearing is a valid ground for vacatur, and Deitchman identified two items of evidence that were excluded by the arbitrators. While the Court disagrees with Deitchman's argument that the exclusion of such evidence is prejudicial to her case (or, for that matter, relevant to her case), the Court refuses to sanction a party solely for losing their argument in court. Had Deitchman alleged that the arbitrators manifestly disregarded the law, as the losing party did in B.L. Harbert, then the Court would be more inclined to entertain the notion of sanctions because no rational basis in law or fact would exist to support that form of attack. Accordingly, Bear Stearns' Motions for Sanctions are denied.

IV. CONCLUSION

It is hereby ORDERED AND ADJUDGED as follows:

1. The arbitrator's decision is CONFIRMED IN PART and VACATED IN PART.

2. Deitchman's Amended Motion to Vacate Arbitration Award is DENIED;

3. Bear Stearns' Motion for Summary Judgment on the Amended Motion to Vacate Arbitration is GRANTED;

4. Bear Stearns' Motion for Summary Judgment on its Counter-Petition to Confirm Arbitration Award and Vacate in Part and on Entitlement to Statutory Attorneys' Fees (DE 25) is GRANTED;

5. Bear Stearns' Motions for Sanctions (DE 4, 29) are DENIED. DONE AND ORDERED in Chambers at West Palm Beach, Palm Beach County, Florida.