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Integrity National Corp. Inc. v. DSS Services, Inc.

United States District Court, D. Maryland, Southern Division

December 19, 2017

INTEGRITY NATIONAL CORPORATION, INC., Plaintiff,
v.
DSS SERVICES, INC., Defendant.

          MEMORANDUM OPINION AND ORDER

          PAUL W. GRIMM, UNITED STATES DISTRICT JUDGE.

         Plaintiff Integrity National Corporation Inc. (“Integrity”) filed suit against Defendant DSS Services, Inc. (“DSS”), seeking confirmation of a December 15, 2016 arbitration award. See Compl., ECF No. 1; Mot. to Confirm Arbitration Award, ECF No. 26. Because DSS did not file its Motion to Vacate, ECF No. 27, until it filed its opposition to Integrity's Motion to Confirm Arbitration Award, by which time DSS's motion was time barred, and that, in any event, it failed to prove any recognized basis for vacating the award, I must deny DSS's Motion to Vacate and grant Integrity's Motion to Confirm.

         Background

         The parties entered into a joint venture agreement in 2014 to seek a contract to perform custodial services at Fort Belvoir in Virginia. Jt. Venture Agr. § 1, ECF No. 27-2. They then entered into a Teaming Agreement (“Agreement”) on August 26, 2014, under which DDS would be the prime contractor and Integrity would be the subcontractor for custodial and related services to be performed at Fort Belvoir. Agr. ¶¶ 5, 16 & Addendum 1, ECF No. 21-7. They agreed that DDS would receive 51% of any gross profits, and Integrity would receive 49% of any gross profits. Id. Addendum 1. The Agreement also provided for arbitration in Maryland, under Maryland law, of “any and all controversies that may arise by, through or about th[e] Agreement, except for controversies that may arise by, through or about Confidential information in paragraph 13.” Id. ¶ 12 (“Arbitration Clause”).

         According to Integrity, on or about February 25, 2015, DSS obtained a government contract to supply janitorial services at Fort Belvoir's Child Development Center; Integrity, as the subcontractor, provided management support and technical advice. Pl.'s Mem. 2. But, Integrity claims, on or about March 4, 2016, DDS stopped honoring the Agreement with regard to the contract for services at Fort Belvoir's Child Development Center. Id. at 3. On that basis, Integrity filed an arbitration demand with the American Arbitration Association. Id.

         The arbitrator held a hearing on November 30, 2016; DDS did not participate. Award, ECF No. 1-1. Finding that DDS breached the Agreement, the arbitrator issued an award (“Award”) in favor of Integrity on December 15, 2016, awarding damages of $477, 698.28 against DDS. Id.

         When DDS failed to pay the damages by January 14, 2017, as ordered in the Award, see id., Integrity filed suit on January 18, 2017 to confirm the Award. Compl., ECF No. 1. I issued a Letter Order Regarding the Filing of Motions on January 23, 2017.[1] ECF No. 4. It provided:

In order to promote the just, speedy, and inexpensive resolution of this case, see Fed. R. Civ. P. 1, the following procedure will be followed with respect to the filing of substantive motions (such as motions to dismiss, to amend the pleadings, or case dispositive motions) . . . . Any party wishing to file a motion first will serve on all parties and file with the Court a letter (not to exceed three pages, single spaced) containing a brief description of the planned motion and a concise summary of the factual and legal support for it. Unless I notify you otherwise, no response to the letter should be filed. I will review the letter and determine whether to schedule an expedited telephone conference (usually within a week) to discuss the requested motion and to determine whether the issues may be resolved or otherwise addressed without the need for formal briefing. Where it would be more efficient simply to approve the request to file the motion, I will issue an order directing that the motion may be filed.
. . . . If the letter described above is filed within the time allowed by the Federal Rules of Civil Procedure, Local Rules of Court, or any order issued by me in which to file the motion that the letter addresses, the time for filing the motion will be tolled to permit the scheduling of the telephone conference without the need to request an extension of time.

         Notwithstanding this Order, Integrity filed its Motion to Confirm Arbitration Award and Memorandum in Support on March 16, 2017, without first filing a letter describing the motion. ECF Nos. 12, 13. The Clerk's Office issued a “QC Notice” that stated: “**ECF 12 and 13 have been stricken from the record pursuant to Chambers directive for failure to comply with the Pre-Motion Conference Letter, ECF 4 . It has been noted as FILED IN ERROR, and the document link has been disabled.” ECF No. 14.

         Thereafter, Integrity filed its pre-motion conference request, ECF No. 15, and on a conference call with regard to the proposed motion, I determined that, given that DDS's Answer, ECF No. 9, raised an affirmative defense that Integrity's counsel has a conflict of interest, it would be more efficient to address that issue before Integrity filed its motion. ECF No. 20. The parties briefed the issue, ECF Nos. 21, 22, 24, and I issued an order denying DDS's Motion to Disqualify Counsel. ECF No. 25. Integrity filed its Motion to Confirm Arbitration Award and Memorandum in Support, ECF Nos. 26 and 26-1, the next day, June 30, 2017. DDS filed its Opposition, which included a Motion to Vacate, ECF No. 27, along with a Memorandum in Support, ECF No. 27-1, on July 14, 2017, without first filing a letter pursuant to the Letter Order Regarding the Filing of Motions. Integrity filed a Reply, ECF No. 28. A hearing is not necessary. See Loc. R. 105.6.

         Governing Law

         Both parties seek relief pertaining to an arbitration award issued in Integrity's favor, with Integrity seeking to enforce it while DSS seeks to vacate it. There is an “emphatic federal policy in favor of arbitral dispute resolution.” Fakhri v. Marriot Int'l Hotels, Inc., 201 F.Supp.3d 696, 709-10 (D. Md. 2016) (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 631 (1985); citing, e.g., ESAB Grp., Inc. v. Zurich Ins. PLC, 685 F.3d 376, 390 (4th Cir. 2012)), appeal dismissed, No. 16-2061, 2016 WL 9724329 (4th Cir. Oct. 21, 2016). Consequently, “[j]udicial review of an arbitration award in federal court is ‘substantially circumscribed.'” Three S Del., Inc. v. DataQuick Info. Sys., Inc., 492 F.3d 520, 527 (4th Cir. 2007) (quoting Patten v. Signator Ins. Agency, Inc., 441 F.3d 230, 234 (4th Cir. 2006)). Indeed, given that “full scrutiny of such awards would frustrate the purpose of having arbitration at all- the quick resolution of disputes and ...


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