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Choice Hotels International, Inc. v. Shah

United States District Court, D. Maryland, Southern Division

July 26, 2016

CHOICE HOTELS INTERNATIONAL, INC., Plaintiff,
v.
VIJAY SHAH, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          Paul W. Grimm, Judge United States District Court

         Plaintiff Choice Hotels International, Inc. (“Choice Hotels”) filed an application to confirm arbitration award against Pradip, LLC, Vijay Shah, Vijay Patel, and Pradip Shah. App., ECF No. 1. Choice Hotels subsequently filed a motion for default judgment against Vijay Shah, Vijay Patel, and Pradip Shah in the amount of $227, 084.11, plus post-judgment interest and $400.00 for the costs of this action. Pl.’s Mot., ECF No. 10. Because I find that I have jurisdiction to confirm the arbitration award and Defendants have not responded and demonstrated any basis for vacating the award, I will grant Choice Hotel’s motion for default judgment.

         I. BACKGROUND

         On June 24, 2015, an arbitration award was entered in favor of Plaintiff Choice Hotels and against Defendants Pradip, LLC, Vijay Shah, Vijay Patel, and Pradip Shah, jointly and severally. See Arbitration Award, ECF No. 1-1. The award consisted of $223, 121.61 in unpaid franchise fees, interest through November 2014, and liquidated damages, plus $3, 962.50 in arbitration fees. See id.; Kreindler Aff., ECF No. 10-1. On October 28, 2015, Choice Hotels filed its application to confirm arbitration award against Defendants, within one year of the arbitration award. See App. Defendants Vijay Shah, Vijay Patel, and Pradip Shah were properly served on November 5, 2015. See ECF No. 6. Pradip, LCC was dismissed from the action on November 13, 2015. See ECF No. 5. Defendants’ responses were due to be filed on or before November 27, 2015, and they have failed to answer or otherwise defend. The Clerk of the Court entered Defendants’ defaults on January 20, 2016. ECF No. 12. A hearing is unnecessary to determine the amount of liability given the information provided in the arbitration award, ECF No. 1-1, and affidavit provided by Plaintiff, ECF No. 10-1.

         II. DISCUSSION

         Choice Hotels moves for default judgment with respect to its arbitration award. The Fourth Circuit stated that

[j]udicial review of an arbitration award is “severely circumscribed.” Patten v. Signator Ins. Agency, Inc., 441 F.3d 230, 234 (4th Cir. 2006). In fact, the scope of judicial review for an arbitrator’s decision “is among the narrowest known at law because to allow full scrutiny of such awards would frustrate the purpose of having arbitration at all-the quick resolution of disputes and the avoidance of the expense and delay associated with litigation.”

Three S Del., Inc. v. DataQuick Info. Sys., Inc., 492 F.3d 520, 527 (4th Cir. 2007) (quoting Apex Plumbing Supply, Inc. v. U.S. Supply Co., Inc., 142 F.3d 188, 193 (4th Cir. 1998)). The Federal Arbitration Act provides that

[i]f the parties in their agreement have agreed that a judgment of the court shall be entered upon the award made pursuant to the arbitration, and shall specify the court, then at any time within one year after the award is made any party to the arbitration may apply to the court so specified for an order confirming the award, and thereupon the court must grant such an order unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of this title. If no court is specified in the agreement of the parties, then such application may be made to the United States court in and for the district within which such award was made.

9 U.S.C. § 9. “If there is a valid contract between the parties providing for arbitration, and if the dispute resolved in the arbitration was within the scope of the arbitration clause, then substantive review is limited to those grounds set out in [9 U.S.C. § 10].” Choice Hotels Int’l, Inc. v. Shriji 2000, No. DKC-15-1577, 2015 WL 5010130, at *1 (D. Md. Aug. 21, 2015) (citing Apex Plumbing, 142 F.3d at 193). 9 U.S.C. § 10 provides that a court may vacate an arbitration award

(1) where the award was procured by corruption, fraud, or undue means;
(2) where there was evident partiality or corruption in the arbitrators, or either of them;
(3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or
(4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the ...

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