United States District Court, D. Maryland
Xinis United States District Judge
before the Court is Defendant Vipul M. Patel's Motion to
Vacate (ECF No. 10) and Plaintiff Choice Hotels
International, Inc.'s (“Choice Hotels”)
Motion for Summary Judgment. ECF No. 16. For the following
reasons, Patel's motion is DENIED and Choice Hotels'
motion is GRANTED.
October 28, 2013, Choice Hotels entered into a franchise
agreement (the “Agreement”) with Bhole
Hospitality, Inc. (“Bhole”), which provided that
Bhole would open and operate a Choice Hotels-branded hotel in
Melrose Park, Illinois. ECF No. 16-1 at 1. The Agreement was
guaranteed by Defendant Vipul Patel, the sole owner of Bhole.
Id. at 30; ECF No. 1 ¶ 2. Under the
“Property Improvement Plan” attached to the
Agreement, Patel was required to make certain upgrades and
additions to the property. ECF No. 16-1 at 20. The Agreement
also included an arbitration provision in which the parties
agreed to resolve any disputes arising from the Agreement
through binding arbitration. Id. at 19. Further, the
prevailing party, “as determined by the court or
arbitrator, ” was to recover “any court
courts” from the other party. Id. at 15.
14, 2015, Choice Hotels issued a written notice of default to
Patel for failure to complete the property improvements and
to maintain the requisite minimum score on customer
satisfaction surveys. ECF No. 16-4 at 1. After giving Patel
time to cure these deficiencies, Choice Hotels terminated the
Agreement on January 11, 2016. Patel was thereafter obligated
to pay contractual fees, interest, liquidated damages, and
the balance due under an incentive promissory note under the
Agreement. ECF No. 16-5 at 2, 7-10. Patel failed to pay,
causing Choice Hotels to initiate arbitration proceedings
against him on September 11, 2017. ECF No. 16 at 3.
to Commercial Arbitration Rule 43, Patel was properly served
notice of the arbitration proceedings, but he did not attend
the arbitration or submit any evidence into the record. ECF
No. 16-6 at 1; Commercial Arbitration R-43. Following an
evidentiary hearing, the arbitrator found Patel and Bhole
jointly and severally liable for breaching the Agreement and
awarded damages for unpaid franchise fees of $25, 226.96;
interest of $8, 568.99; liquidated damages of $150, 926.16;
the promissory note balance of $26, 955.76; and the
arbitrator's compensation and expenses of $8, 205.00. The
award totaled $219, 882.87. ECF No. 16-6.
11, 2018, Choice Hotels brought this Application to Confirm
Arbitration Award against the franchisees, seeking the above
award along with post-judgment interest and court costs for
this action. ECF No. 1. On August 27, 2019, Patel moved
to vacate Choice Hotels' Application. ECF No. 10 at 3.
Choice Hotels next moved for summary judgment. ECF No. 16. On
July 5, 2019, the Court granted Patel an extension of time
nunc pro tunc to respond to the summary judgment
motion, but Patel has not done so. ECF No. 20. For the
following reasons, the Court denies Patel's motion to
vacate, grants Choice Hotels' motion for summary
judgment, and confirms the arbitration award.
merits, the parties have filed dueling motions: one asking
the Court to grant summary judgment confirming the
arbitration award, the other asking to vacate it. ECF Nos.
10, 16. The Federal Arbitration Act (“FAA”)
provides that within one year after an arbitration award is
filed, the prevailing party must apply to the Court to
confirm the award. 9 U.S.C. § 9. Importantly, the
Court's scope of review of an arbitrator's award is
“among the narrowest known at law.” Apex
Plumbing Supply, Inc. v. U.S. Supply Co., 142 F.3d 188,
193 (4th Cir. 1998). Because parties agree in advance to
arbitrate disputes so as to promote quick resolution and
avoid “the expense and delay associated with
litigation, ” judicial review must remain narrowly
circumscribed to advance this purpose. Id.
judgment is appropriate when the Court, viewing the evidence
in the light most favorable to the non-moving party, finds no
genuine disputed issue of material fact, entitling the movant
to judgment as a matter of law. See Fed. R. Civ. P.
56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322
(1986); Emmett v. Johnson, 532 F.3d 291, 297 (4th
Cir. 2008). “A party opposing a properly supported
motion for summary judgment ‘may not rest upon the mere
allegations or denials of [his] pleadings,' but rather
must ‘set forth specific facts showing that there is a
genuine issue for trial.'” Bouchat v. Baltimore
Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir.
2003) (quoting former Fed.R.Civ.P. 56(e)). “A mere
scintilla of proof . . . will not suffice to prevent summary
judgment.” Peters v. Jenney, 327 F.3d 307, 314
(4th Cir. 2003).
the FAA, the motion to vacate an arbitration award
“must be served upon the adverse party or his attorney
within three months after the award is filed or
delivered.” 9 U.S.C. § 12. “The Fourth
Circuit has not yet recognized equitable exceptions to the
FAA's three-month deadline.” Chase v.
Nordstrom, Inc., No. CCB-10-2114, 2010 WL 4789442, at *2
(D. Md. Nov. 17, 2010). Once the plaintiff has filed an
application to confirm the award, an untimely motion to
vacate generally will not be considered. Cf. Taylor v.
Nelson, 788 F.2d 220, 225 (4th Cir. 1986) (“We do
not consider, however, whether due diligence or tolling rules
are proper exceptions to the limitations period prescribed by
the Federal Arbitration Act.”).
motion to vacate the award is untimely. The three-month time
for filing the motion began to run on March 26, 2018, when
the American Arbitration Association sent a copy of the award
to Patel. ECF No. 16-6 at 2; Commercial Arbitration R-49.
Accordingly, Patel had until June 26, 2018, to move to vacate
the award. The only document that could be construed as such
a motion was filed on August 27, 2018, two months after the
deadline. ECF No. 10. Furthermore, under the Agreement, the
parties consented in advance that an award may be entered in
any party's absence at “any properly noticed
arbitration proceeding.” ECF No. 16-1 at 19. This is
precisely what occurred here. ECF No. 16-6. Thus, Patel moved
to vacate the award out of time.
Patel filed the motion in time, he has failed to assert
proper grounds to support the requested relief. An award may
be vacated only where the movant demonstrates that “(1)
the award was procured by corruption, fraud, or undue means;
(2) the arbitrator engaged in misconduct or was not
impartial; or (3) the arbitrator exceeded his powers.”
Choice Hotels Int'l, Inc. v. Niteen Hotels
(Rochester) LLC, 103 Fed. App'x 489, 492 (4th Cir.
2004); see also 9 U.S.C. § 10(a); Choice
Hotels Int'l, Inc. v. SM Prop. Mgmt., LLC, 519 F.3d
200, 207 (4th Cir.
Patel first asserts that, although he received notice of the
arbitration, he “was not properly notified”
because a Choice Hotels representative assured him the issue
would be “resolved.” ECF No. 10 at 2. Patel next
appears to challenge the Court's jurisdiction, asserting
the arbitration was “conducted outside of the
[j]urisdiction of [his] business” and ...