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Choice Hotels International, Inc. v. The Joseph Group, LLC

United States District Court, D. Maryland, Southern Division

July 10, 2019

CHOICE HOTELS INTERNATIONAL, INC., Plaintiff,
v.
THE JOSEPH GROUP, LLC et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          Paul W. Grimm, United States District Judge.

         Plaintiff Choice Hotels International, Inc. ("Choice Hotels") filed an application to confirm an arbitration award against the Joseph Group, LLC and Charbel Joseph (collectively, "Defendants"). ECF No. 1. Choice Hotels subsequently filed a motion for default judgment against Defendants in the amount of $142, 275.00[1] plus post-judgment interest and $400 for the costs of this action. PL's Mot., ECF No. 7. Because I find that I have jurisdiction to confirm the arbitration award and Defendants have not responded and demonstrated any basis for vacating the award, I will grant Choice Hotel's motion for default judgment.

         FACTUAL BACKGROUND

         On May 17, 2018, an arbitration award was entered in favor of Plaintiff Choice Hotels against Defendants the Joseph Group, LLC and Charbel Joseph jointly and severally. See Arbitration Award, ECF No. 1-4. The award consisted of $25, 000 in an unpaid affiliation fee and $115, 200 in liquidated damages, plus $2, 275 in arbitration fees. See id.

         On August 22, 2018, Choice Hotels filed its application to confirm the arbitration award against Defendants. Appl., ECF No. 1. This was within one year of the arbitration award. See Id. Defendants the Joseph Group, LLC and Charbel Joseph were properly served on September 18, 2018. See ECF No. 5. Defendants were required to file their responses by October 9, 2018, and they have failed to answer or otherwise defend. The Clerk of the Court entered Defendants' defaults on November 6, 2018. ECF No. 9. A hearing is unnecessary to determine the amount of liability given the information provided in the arbitration award, ECF No. 1-4, and affidavit provided by Plaintiff, ECF No. 7-1.

         DISCUSSION

         Choice Hotels moves for default judgment with respect to its arbitration award. The Fourth Circuit has stated:

Judicial 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."

Three S Del, Inc. v. DataQuick Info. Sys., Inc., 492 F.3d 520, 527 (4th Cir. 2007) (quoting Apex Plumbing Supply, Inc. v. U.S. Supply Co., Inc., 142 F.3d 188, 193 (4th Cir. 1998)). The Federal Arbitration Act provides ("FAA") 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 unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of this title. If no court is specified in the agreement of the parties, then such application may be made to the United States court in and for the district within which such award was made.

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 [9 U.S.C. § 10]." Choice Hotels Int'l, Inc. v. Shriji 2000, No. DKC-15-1577, 2015 WL 5010130, at *1 (D. Md. Aug. 21, 2015). 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 ...

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