United States District Court, D. Maryland
CHOICE HOTELS INTERNATIONAL, Inc. Plaintiff,
GREWAL PROPERTIES LLC. et al. Defendants
XINIS UNITED STATES DISTRICT DISTRICT JUDGE.
before the Court is Plaintiff Choice Hotels International.
Inc.'s ("Choice" or "Plaintiff")
Application to Confirm Arbitration Award, ECF No. I. and
Motion for Default Judgment. ECF No. 6. For the following
reasons, Choice's request for this Court to enter default
judgment in the amount of $82. 347.02 is GRANTED.
3, 2016. Choice filed its Motion to Confirm Arbitration
Award, ECF No. 1, after having obtained a judgment against
Defendants Grewald Properties ("Grewald") and
Amarjit John Singh ("Singh"), collectively,
"Defendants", in arbitration proceedings. Choice.
Grewald, and Singh had entered into a franchise agreement on
November 26, 2007 that provided for arbitration as its
dispute resolution mechanism for breach of the agreement. ECF
Nos. 6-1 & 6-2. Choice initiated arbitration proceedings
which neither Singh nor a representative of Grewald attended.
On January 21. 2016. an "Ex Parte Award of
Arbitrator" issued in the amount of S82.347.02
representing "franchise related fees . . . and interest
accrued through January 2016 on the franchise agreement,
" as well as administrative fees and expenses. ECF No.
were properly served on May 20, 2016 with the instant action.
ECF No. 4, and failed to respond to Choice's Motion or
otherwise contest Choice's claims. Choice then moved for
entry of Default. ECF No. 5, and Default Judgment, ECF No. 6.
Defendants did not respond to these motions, nor did they
respond when the Court served on the parties a request for
Choice to provide additional information related to the
arbitration award amount. ECF No. 7.
Standard of Review
to Federal Rule of Civil Procedure 55(a), "[w]hen a a
party against whom a judgment for affirmative relief is
sought has failed to plead or otherwise defend, and that
failure is shown by affidavit or otherwise, the clerk must
enter the parties default." Fed.R.Civ.P. 55(a).
Thereafter, the court may enter default judgment at the
plaintiffs request and notice to the defaulting party.
Fed.R.Civ.P. 55(b)(2). Plaintiff, however, is not
automatically entitled to default judgment simply because the
defendant has not responded. Rather, entry of default
judgment is left to the sound discretion of the court.
See, e.g., Choice Hotels International. Inc. v. Ja/Shree
Navdurga. LLC. DKC 11-2893. 2012 WL 5995248. at *1 (D.
Md. Nov. 29. 2012); see also Choice Hotels International,
Inc. v. Austin Area Hospitality, Inc.. TDC 15-0516. 2015
WL 6123523. at *l (D. Md. Oct. 14, 2015). Although the Fourth
Circuit has announced a "strong policy" in favor of
deciding cases on their merits. United States v. Schaffer
Equip. Co.. 11 F.3d 450, 453 (4th Cir. 1993). a default
judgment may be appropriate when a party is unresponsive.
S.E.C. V. LaM'baugh, 359 F.Supp.2d 418. 421 (D.
Md. 2005) (citing Jackson v. Beech. 636 F.2d 831.
836 (D.C. Cir. 1980)).
plaintiff moving for default judgment "must show that it
is entitled to confirmation of the arbitration award as a
matter of law." Choice, 2012 WL 5995248. at *2
(collecting cases). The Federal Arbitration Act, 9 U.S.C.
§ 9, provides that "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 so specified for an order
confirming the award." Here. Plaintiff filed its motion
for confirmation within one year. Section 9 further provides
that this Court must grant the order unless the award is
modified, vacated or corrected pursuant to sections 10 and 11
of the same Act. Id.
of an arbitration award is "severely circumscribed"
because to allow for a more expansive review 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." Apex Plumbing
Supply. Inc. v. U.S. Supply Co.. Inc.. 142 F.3d 188. 194
(4th Cir. 1998). Accordingly, this Court may vacate an
arbitration award based one of the grounds enumerated in the
Federal Arbitration Act or if the arbitrator acted in
manifest disregard of law. Id. Neither are at issue
the instant arbitration clause in the franchise agreement
specifically provides for final and binding arbitration for
any "controversy or claim arising out of or relating
to" the franchise agreement. ECF No. 1-5 at I. Although
Choice's motions do not expressly identify where
arbitration was held, the Franchise Agreement makes plain
that it would take place in Maryland, and the arbitration
award confirms the proceedings were held "in accordance
with the arbitration agreement entered into" between
Plaintiff and Defendants. ECF No. 6-2. The parties are also
diverse, and the amount of the arbitration award for which
the Plaintiff seeks confirmation exceeds the jurisdictional
minimum for diversity jurisdiction in this Court.
See 28 U.S.C. § 1332(a). The pleadings before
this Court, therefore, demonstrate that the arbitration award
can and should be confirmed.
arbitrator awarded Plaintiff S82.347.02, which was comprised
of $48, 365.17 in franchise fees. S29.781.85 in interest, and
$4, 200 in administrative expenses and arbitrator
compensation. ECF Mo. 1-4. Plaintiff requests entry of a
default judgment in that amount, "plus post-judgment
interest until paid and $400 for the costs of this
action." ECF No. 6. The Court grants entry of $82.
347.02 plus $400 in costs because Plaintiff requested the
same in its initial petition for confirmation of the
arbitration award. ECF No. 1. See Fed. R. Civ. P.
54(c). Insofar as Plaintiff seeks reimbursement for
post-judgment interest, such is awarded by operation of law
and not by Court order. See 28 U.S.C. §
1961(a); Choice, 2012 WL 5995248, at *4. Plaintiff
has demonstrated that it is entitled to the remaining
requested award and a default judgment in that amount will be
above-stated reasons. Plaintiff Choice's motion for
default judgment is ...