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Young v. Brahmbhatt

United States District Court, D. Maryland, Southern Division

July 6, 2017



          Paul W. Grimm, Judge United States District Court.

         Petitioner Samuel David Young filed an application to confirm an arbitration award against Respondent Jinesh Pravin Brahmbhatt, Pet., ECF No. 1, and subsequently filed a Motion for Default Judgment in the amount of $2, 010, 000, plus additional prejudgment and postjudgment interest until paid, Pet'r's Mot. 3, ECF No. 32. A hearing is unnecessary to determine the amount of liability given the information provided in the arbitration award. See Arbitration Award, ECF No. 1-2; Loc. R. 105.6 (D. Md.). Because I find that I have jurisdiction to confirm the arbitration award and because Brahmbhatt has not responded and demonstrated any basis for vacating the award, I will grant Young's motion for default judgment, except with respect to his request for additional interest beyond what the arbitration panel awarded.

         I. Background

         On November 21, 2014, a Financial Industry Regulatory Authority (FINRA) arbitration panel awarded $2, 010, 000 to Young, who allegedly suffered injury from an illegal scheme orchestrated by his broker, Brahmbhatt, the scheme consisted of recommending the purchase of promissory notes issued by his firm's parent company. Pet. ¶¶ 1, 3. The award consisted of $600, 000 in compensatory damages plus 6% interest per annum from March 1, 2013 until payment of the award, $10, 000 in costs, $1, 000, 000 in punitive damages pursuant to the Federal Arbitration Act (FAA) 9 U.S.C. §§ 1-16, Securities Act of 1933, 15 U.S.C. §§ 77a-77aa, and Maryland Securities Act, Md. Code Ann., Corp. & Ass'ns Article §11-417 -701.1(b)(4); and $400, 000 in attorney's fees. Pet. ¶ 3. On October 28, 2015, Young filed an application to confirm arbitration award against Brahmbhatt, within one year of its issuance. See Arbitration Award, Pet'r's Mot. Ex. A., ECF No. 1-2; Pet. Young properly served Brahmbhatt on November 17, 2016, see ECF No. 30, who has failed to answer or otherwise defend. The Clerk of the Court entered Brahmbhatt's default on December 14, 2016. ECF No. 31.

         II. Discussion

         Young moves for default judgment with respect to his arbitration award. The Fourth Circuit has 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.” Apex Plumbing Supply, Inc. v. U.S. Supply Co., Inc., 142 F.3d 188, 193 (4th Cir. 1998).

Three S Del., Inc. v. DataQuick Info. Sys., Inc., 492 F.3d 520, 527 (4th Cir. 2007). 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 . . . .

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 [§ 10 of the FAA].” 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). Section 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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