                                                                           FILED
                             NOT FOR PUBLICATION                            JUL 20 2012

                                                                        MOLLY C. DWYER, CLERK
                      UNITED STATES COURT OF APPEALS                     U .S. C O U R T OF APPE ALS




                             FOR THE NINTH CIRCUIT



METZLER CONTRACTING CO. LLC,                     No. 11-15749

                Petitioner-cross-respondent -    D.C. No. 1:10-cv-00516-ACK-
Appellee,                                        BMK

  v.
                                                 MEMORANDUM *
PAUL STEPHENS; ELLE STEPHENS,

                Respondents-cross-petitioners
- Appellants.



METZLER CONTRACTING CO. LLC,                     No. 11-15833

                Petitioner-cross-respondent -    D.C. No. 1:10-cv-00516-ACK-
Appellant,                                       BMK

  v.

PAUL STEPHENS; ELLE STEPHENS,

                Respondents-cross-petitioners
- Appellees.



                     Appeal from the United States District Court
                              for the District of Hawaii

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
                    Alan C. Kay, Senior District Judge, Presiding

                        Argued and Submitted June 13, 2012
                                Honolulu, Hawaii

Before: SCHROEDER, CALLAHAN, and N.R. SMITH, Circuit Judges.

      Paul and Elle Stephens (“the Stephens”) appeal from the district court’s

order denying their motion to vacate an arbitration award, and confirming the

award. Metzler Contracting Co. (“Metzler”) appeals from the district court’s order

denying its request for attorney fees. We affirm.

      The Stephens sought vacatur on the ground that the arbitrator exceeded his

powers in interpreting the contract. See 9 U.S.C. § 10(a)(4). An award may not be

vacated, however, so long as the arbitrator’s interpretation of the contract was

“plausible.” Lagstein v. Certain Underwriters at Lloyd’s, London, 607 F.3d 634,

643 (9th Cir. 2010) (citations omitted). The issue here involved the parties

intended basis of payment. The arbitrator determined that the parties had entered

into a cost-plus contract and concluded that the parties, through their acts and

conduct, had waived the Change Order requirement of Supplemental Condition

§ 7.1.3.1. See Wilart Associates v. Kapiolani Plaza, Ltd., 766 P.2d 1207, 1210–11

(Haw. Ct. App. 1988). We have held that waiver is possible even where there is a

contract provision purporting to limit the parties ability to waive contract



                                           2
provisions. See Certified Corp. v. Haw. Teamsters & Allied Workers, Local 996,

597 F.2d 1269, 1271 (9th Cir. 1979). The arbitrator’s interpretation of the contract

was, at the least, plausible. Metzler was entitled to be compensated for the cost of

work the Stephens requested. Hawaiian law has long recognized this principle.

See Stewart v. Spalding, 23 Haw. 502, 511 (Terr. 1916).

      This case is not like Polimaster Ltd. v. RAE Systems, Inc., 623 F.3d 832, 840

(9th Cir. 2010), where the arbitrator was held to have violated the conditions under

which the arbitration was to take place. The arbitrator here was interpreting the

contract itself in light of the parties’ acts and conduct. He acted within his powers,

and his interpretation was plausible. The district court therefore properly denied

the Stephens’ motion to vacate and granted Metzler’s motion to confirm. See

Lagstein, 607 F.3d at 643; 9 U.S.C. § 9.

      Metzler cross appeals the district court’s denial of its request for attorney

fees for the confirmation proceedings. We have said there is a “strong default

presumption that [federal law], not state law, supplies the rules for arbitration,” but

that this can be overturned by a showing of the parties’ “clear intent to incorporate

state law rules for arbitration.” Johnson v. Gruma Corp., 614 F.3d 1062, 1066–67

(9th Cir. 2010) (citations omitted). Metzler argues for the first time on appeal that

both parties’ conduct showed a clear intent to apply the Hawaiian rule that gives a


                                           3
court discretion to grant attorney fees in a contested confirmation proceeding. See

Haw. Rev. Stat. § 658A-25(c). Metzler made no such argument in district court

and therefore waived the position it now seeks to maintain. The district court

correctly denied the fee request under the applicable federal law.

      AFFIRMED.




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