United States District Court, D. Maryland, Southern Division
Hotels International, Inc., Plaintiff, represented by Zachary
E. Berge, Choice Hotels International Inc.
J. HAZEL, District Judge.
to Fed.R.Civ.P. 55(b), Plaintiff Choice Hotels International,
Inc. ("Plaintiff" or "Choice") has tiled
a Motion for Default Judgment, with a supporting affidavit,
as to Defendant Harikrishna, Inc. ("Defendant" or
"Harikrishna, Inc."). ECF No. 7. A hearing is not
necessary in this case. See Loc. R. 105.6 (D. Md.).
For the reasons that follow, Plaintiff's Motion for
Default Judgment will be granted.
is a "publicly-traded company incorporated under the
laws of the State of Delaware, with principal headquarters in
Rockville, Maryland." ECF No. 11 Â¶ 1. Choice is
"primarily in the business of franchising hotels
domestically and internationally... including but not limited
to the trade and brand marks, names and systems associated
with Quality InnÂ®." Id. Defendant is
"based upon information, knowledge and belief, a limited
liability company organized under the laws of the State of
Nebraska, with principal place of business located in
Nebraska." Id. Â¶ 2. On or about December 28,
2010, Choice entered into a Franchise Agreement with
Defendant, under which Choice granted Defendant a limited and
revocable license to operate a Quality Inn hotel in Omaha.
Nebraska. Id. Â¶ 4. The parties' Franchise
Agreement contained an arbitration clause, stating in
relevant part that "any controversy or claim arising out
of or relating to this Agreement... will be sent to final and
binding arbitration before either the American Arbitration
Association, J.A.M.S., or National Arbitration Forum..."
See ECF No. 1-5. In Plaintiff's Supplemental
Motion for Default Judgment, Plaintiff states:
During the term of the Franchise Agreement, Defendants
transferred the Hotel to a new owner without Choice's
prior consent in violation of Section 9(d) of the Franchise
Agreement. Such action constituted material default of the
terms of the Franchise Agreement, and, accordingly, on or
about May 1, 2012, Choice terminated the Franchise Agreement
in accordance with Section 10 of the Franchise Agreement.
Id. Â¶ 5.
about January 29, 2015, Choice initiated arbitration
proceedings against Defendant with the American Arbitration
Association, Case No.: XX-XX-XXXX-XXXX, "seeking
resolution of its dispute with Defendants." Id.
Â¶ 7. "Specifically, Choice claimed that Defendant
materially breached the parties' Franchise Agreement and
owed Choice damages and costs incurred as a result of
Defendant's breach." Id.
proceedings were scheduled for August 13, 2015. See
ECF No. 7-1 Â¶ 3; ECF No. 1-4. Plaintiff sent notice of the
proceedings to Defendants at their last known address
"by regular mail, certified mail and/or overnight Fed Ex
delivery." ECF No. 11 Â¶ 9. "Defendants failed to
appear or participate during any proceeding."
Id. The Arbitrator determined that "Defendant
had received due and proper notice of all proceedings in
accordance with AAA's Commercial Rules, the Franchise
Agreement, and Maryland law" and entered an award in
Choice's favor against Defendant in the amount of $171,
360.00. ECF No. 11 Â¶ 11; ECF No. 1-4. The Arbitrator also
ordered Defendants to reimburse Choice in the sum total of
$7, 778.20 for "administrative fees and expenses"
and "compensation and expenses of the arbitrator."
ECF No. 1-4.
Hotels filed an "Application to Confirm Arbitration
Award" in this Court on November 20. 2015. ECF No. 1.
The "Ex Parte Award of Arbitrator, " signed by John
Connolly of the American Arbitration Association on August
13, 2015, is attached to the Application. ECF No. 1-4. Choice
Hotels named Harikrishna, Inc. and Mahendra Patel as
defendants. ECF No. 1. The court issued summons to Defendants
on November 24, 2015, and the summons were returned as
executed on December 14, 2015. ECF No. 3; ECF No. 4.
Plaintiff stipulated to the dismissal of Defendant Patel, and
Patel was terminated as a party on December 14, 2015.
See ECF No. 5. The Clerk made an entry of default
for want of answer against Harikrishna, Inc. on March 30,
2016. ECF No. 9. Choice Hotels now requests that the Court
issue judgment by default against Harikrishna, Inc. ECF No.
Motion for Default
defendant's default does not automatically entitle the
plaintiff to entry of a default judgment; rather, that
decision is left to the discretion of the court."
Choice Hotels Intern., Inc. v. Savannah Shakti
Corp., DKC-11-0438, 2011 WL 5118328 at * 2 (D. Md. Oct.
25, 2011) (citing Dow v. Jones, 232 F.Supp.2d 491,
494 (D. Md. 2002)). When a motion for default judgment is
based on an arbitration award, the plaintiff "must show
that it is entitled to confirmation of the award as a matter
of law." Id. (citations and internal quotation
the Federal Arbitration Act, a court may confirm an
arbitration award "[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..." 9
U.S.C. Â§ 9. The Court must confirm the award unless it
vacates, modifies, or corrects the award under 9 U.S.C. Â§Â§ 10
or 11. Id. "Federal courts may vacate an
arbitration award only upon a showing of one of the grounds
listed in the Federal Arbitration Act, or if the arbitrator
acted in manifest disregard of law." Apex Plumbing
Supply v. U.S. Supply Co., Inc.,142 F.3d ...