United States District Court, D. Maryland, Southern Division
J. HAZEL UNITED STATES DISTRICT JUDGE.
action, Plaintiff Choice Hotels International, Inc.
(“Plaintiff” or “Choice”) seeks to
confirm an arbitration award pursuant to the Federal
Arbitration Act, 9 U.S.C. §§ 9 and 13, against
Defendants Kazi Hossain, MD Khalequzzaman and K B H, LLC. ECF
No. 1. Pursuant to Fed.R.Civ.P. 55(b), Choice has filed a
Motion for Default Judgment with a supporting affidavit. ECF
No. 7. No. hearing is necessary. See Loc. R. 105.6
(D. Md. 2016). For the following reasons, 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. 1 ¶ 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 Inn®.” Id.
Defendant K B H, LLC is a Kansas corporation with no place of
business in either Maryland or Delaware. Id. ¶
2. Defendants Kazi Hossain and MD Khalequzzaman own Defendant
K B H, LLC. Id. Kazi Hossain is domiciled in
Colorado and is neither employed nor resides in Maryland or
Delaware. Id. ¶ 3. MD Khalequzzaman is
domiciled in Virginia and is neither employed nor resides in
Maryland or Delaware. Id. ¶ 4.
30, 2015, Choice entered into a Franchise Agreement in
Maryland with Defendants through which Choice granted
Defendants a license to operate a hotel in Dodge City,
Kansas. Id. ¶ 5. The Franchise Agreement
required Defendants to pay in a timely manner, time being of
the essence, specified monthly Royalty Fees, and
Marketing/Reservation/System Fees calculated as a fixed
percentage of the preceding month's Gross Room Revenues.
Id. ¶ 6.
fell behind on required monthly fee payments. Id.
¶ 7. Accordingly, on April 4, 2016, Plaintiff sent
Defendants a written Notice of Default, advising that
Defendants were currently in default of material obligations
arising under the payment provisions of the Franchise
Agreement and providing Defendants with 10 days to cure the
default. Id. Plaintiff advised Defendants that if
the default was not cured by the deadline, the Franchise
Agreement would be terminated pursuant to §10(b)(1)(a)
and that Defendants would be liable to Plaintiff for damages,
including liquidated damages in accordance with
§10(d)(2) of the Franchise Agreement. Id.
did not pay the contractually specified fees, interest, or
liquidated damages to Plaintiff. Id. ¶ 9.
Accordingly, Plaintiff initiated arbitration proceedings with
the American Arbitration Association against Defendants on or
about December 19, 2017, pursuant to the arbitration clause
of the parties' Franchise Agreement (the
“Arbitration Agreement”). Id. The
Arbitration Agreement states 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 . . . the American Arbitration Association . .
.” Id.; ECF No. 1-3 ¶ 21. The parties
also agreed that “[i]f any party fails to appear at any
properly noticed arbitration proceeding, an award may be
entered against the party, notwithstanding its failure to
appear.” ECF No. 1-3 ¶ 21. Further the arbitration
clause states that “[j]udgment on the arbitration award
may be entered in any court having jurisdiction.”
proceedings were scheduled for May 24, 2018. See ECF
No. 1 ¶ 12; ECF No. 1-4 at 1. Plaintiff sent notice of
the proceedings to Defendants “by regular mail,
certified mail and/or overnight FedEx delivery.” ECF
No. 1 ¶ 11. Nonetheless, Defendant failed to appear or
participate during the arbitration proceeding. Id.
The arbitrator found that “due notice was provided to
all parties” and entered an award in Choice's favor
against Defendants in the amount of $129, 962.05. ECF No. 1-4
at 1. The Arbitrator also ordered Defendants to reimburse
Choice for $4, 935.00 of “administrative fees and
expenses.” Id. at 2.
Hotels filed an “Application to Confirm Arbitration
Award” in this Court on September 21, 2018. ECF No. 1.
The Arbitrator's ex parte award, signed by Patricia Horen
Latham of the American Arbitration Association on June 6,
2018, is attached to the Application. ECF No. 1-4. Defendants
K B H, LLC and Kazi Hossain were served with summonses and
copies of the application to confirm arbitration award on
October 3, 2018. ECF No. 7 ¶ 1. Defendant MD
Khalequzzaman was served with summonses and a copy of the
application to confirm arbitration award on October 29, 2018.
ECF No. 7 ¶ 2. The Clerk made an entry of default for
want of answer against Defendants on May 20, 2019. ECF Nos.
9, 10. Choice Hotels now requests that the Court issue
judgment by default against Defendants. ECF No. 7.
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:
In any 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 the application ...