United States District Court, D. Maryland, Southern Division
J. Hazel, United States District Judge
to Fed.R.Civ.P. 55(b), Plaintiff Choice Hotels International,
Inc. ("Plaintiff* or "Choice''') has
filed a Request for Default by Judgment, with a supporting
affidavit, against Defendants SNV Hospitality, LLC and
Muklesh Patel (collectively, "Defendants"). ECF No.
6; ECF No. 6-2. Presently pending before the Court is
Plaintiffs Amended Motion for Judgment by Default. ECF No.
10. A hearing is not necessary in this case. See
Loc. R. 105.6 (D. Md.). For the reasons that follow,
Plaintiffs Amended Motion for Judgment by Default will be
is a "publicly-traded company incorporated under the
laws of the State of Delaware, with principal headquarters in
Rockville, Maryland." ECF No. 10 ¶ 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 Comfort Inn®.*' Id.
Defendant SNV Hospitality, LLC is "based upon
information, knowledge and belief, a limited liability
company organized under the laws of the State of Ohio, with
principal place of business located in Ohio."
Id. ¶ 2. Defendant Muklesh Patel is "based
upon information, knowledge and belief, a resident and
citizen of the State of Ohio." Id. ¶3. On
or about December 29, 2005, Choice entered into a Franchise
Agreement with Defendants, individually, jointly and
severally, under which Choice granted Defendants a limited
and revocable license to operate a Comfort Inn hotel in
Wapakoneta. Ohio. Id. ¶ 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. 1-2 at I. In Plaintiffs
Amended Motion for Judgment by Default, Plaintiff states:
During the term of the Franchise Agreement, Defendants
defaulted on their material obligations to make timely
payment to Choice of franchise-related fees. Choice issued
Defendants a written Notice of Default, and Defendants failed
to cure said Default. Accordingly and as a result of
Defendants' material breach, Choice terminated the
Id. ¶ 5.
about August 21, 2014, Choice initiated arbitration
proceedings against Defendant with the American Arbitration
Association, Case No.: 01-14-0001-2633, "seeking
resolution of its dispute with Defendants." Id.
¶ 7. "Specifically, Choice claimed that Defendant
materially breached the parties' Franchise Agreement and
owed Choice fees, damages, interest, and costs incurred as a
result of Defendant's breach." Id.
proceedings were scheduled for March 17, 2015. See
ECF No. 1 at 1; ECF No. 1-1. Plaintiff sent notice of the
proceedings to Defendants at their last known address
"by regular mail, certified mail and/or overnight FedEx
delivery." ECF No. 10 ¶ 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 Defendants in the amount of $80,
961.94. ECF No. 10 ¶ 11; ECF No. 1-1. The Arbitrator
also ordered Defendants to reimburse Choice in the sum total
of $2, 850.00 for "administrative filing fees of the
AAA" and "fees and expenses of the
arbitrator." ECF No. 1-1.
filed an "Application to Confirm Arbitration Award"
in this Court on August 12, 2015. ECF No. 1. The "Ex
Parte Award of Arbitrator, " signed by Kathryn P.
Broderick of the American Arbitration Association on March
17, 2015, is attached to the Application. ECF No. 1-1. Choice
named SNV Hospitality, Inc. and Muklesh Patel as defendants.
ECF No. 1. The court issued summons to Defendants on August
14, 2015, and the summons were returned as executed on
October 8, 2015. ECF No. 3; ECF No. 4. The Clerk made an
entry of default for want of answer against Defendants on
December 3, 2015. ECF No. 8. This Court issued a Letter Order
directing Plaintiff to supplement its Motion for Default
Judgment, and Plaintiff filed its currently pending Amended
Motion for Judgment by Default on August 2, 2016. ECF No. 10.
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. § 9. The Court must confirm the award unless it
vacates, modifies, or corrects the award under 9 U.S.C.
§§ 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 188,
193 (4th Cir. 1998). The situations permitting a court to
vacate an arbitration award are found at 9 U.S.C. §
10(a), which provides:
of the following cases the United States court in and for the
district wherein the award was made may make an order
vacating the award upon ...