Opinion
No. C04-2516 SC.
September 24, 2004
ORDER RE: APPLICATION AND MOTION FOR JUDGMENT ON AN ARBITRATION AWARD
I. INTRODUCTION
Plaintiff Donald C. Eleanor J. Glanville Revocable Trust ("Plaintiff") has moved to confirm an arbitration award entered against Defendants Marion A. Dudek, Ken Decker, Nils Holgsetth, and Mar Transports Inc. For the reasons articulated below, the Court hereby grants Plaintiff's motion with respect to Defendant Marion Dudek ("Dudek"). Because proofs of service upon Defendant Ken Decker, Defendant Nils Holgsetth, and Defendant Mar Transports Inc. have not been filed with this Court, the Court hereby denies Plaintiff's motion with respect to these three defendants.
II. BACKGROUND
In October of 1997, the parties entered into an agreement by which Plaintiff chartered a barge to Defendants. Motion Exhibit A at 1. In September 2002, the barge suffered irreparable damages during a storm. Motion Exhibit C at 2. The parties disputed the financial consequences of the damages to the barge.
The agreement contained the following arbitration clause:
All claims, disputes and other matters in question arising out of this Charter or breach thereof shall be decided by binding arbitration. The arbitration shall be conducted by and pursuant to the rules of Judicial Arbitration and Mediation Service, 111 Pine Street, Suite 205, San Francisco, CA 94111 ("JAMS"), and the arbitrator's decision shall be binding, final and conclusive. Judgement upon the arbitrator's award may be entered by any court of competent jurisdiction. An arbitrator mutually agreeable to OWNER and CHARTERER shall be selected from a list of arbitrators provided by JAMS. In the event OWNER and CHARTERER cannot agree upon an arbitrator, one shall be appointed by JAMS. Any arbitration proceeding pursuant to this Charter Agreement shall be held in San Francisco, California.
Motion Exhibit A at 12. On April 20, 2004, the arbitrator found for Plaintiff and awarded the following: award of $240,644.20, attorneys' fees of $39,380.00; arbitration costs of $19,746.78; and reimbursement for defaulted amount of $6,434.73. Motion Exhibit C at 11. In this action, Plaintiff seeks to confirm the award totaling $306,205.71, plus interest and costs. Motion at 3.
Defendant Dudek has not filed any papers or motions related to this case. Dudek has contacted this Court twice by means of ex parte letters. The letters allege that no court has ever found Dudek subject to the jurisdiction of a court or arbitrator in California nor has a court determined whether Dudek is even bound to arbitrate under the above clause.
III. LEGAL STANDARD
Arbitration disputes are covered by the Federal Arbitration Act. 9 U.S.C. §§ 1-307. The Act states, "A written provision in any maritime transaction . . . to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . shall be valid, irrevocable, and enforceable." 9 U.S.C. § 2. A suit to confirm an arbitration award is normally made in the United States District Court in the district within which such award was made. 9 U.S.C. § 9.
Parties to an arbitration can move a district court to vacate an arbitration award. 9 U.S.C. § 10. Grounds for vacatur include fraud, bias by the arbitrators, or actions by the arbitrators beyond the scope of their powers. § 10(a). However, the factual conclusions of an arbitrator are not grounds for vacatur because a district court does not carry out a review of the merits of an arbitration award. Employers Ins. of Wausau v. Nat'l Union Fire Inc. Co., 933 F.2d 1481 (9th Cir. 1991) ("We emphasize at the outset the extremely narrow scope of our review of the arbitration panel's decision."). A court cannot set aside an arbitration award merely because it disagrees with an arbitrator's findings of fact or conclusions of law. Id. at 1486.
IV. DISCUSSION
The arbitration clause at issue here covers "all claims, disputes and other matters in question arising out of this Charter." Motion Exhibit A at 12. This incorporates the dispute at issue because the arbitration clause "reasonably can be interpreted as applying to the causes alleged." First Investors Corp. v. Am. Capital Fin. Services, Inc., 823 F.2d 307, 309 (9th Cir. 1987). To escape the mandate of the clause, Dudek must show "grounds as exist in law or equity for the revocation of any contract." Id. There is no such showing by Dudek, nor are there any allegations by Dudek that there are grounds to vacate under 9 U.S.C. § 10. To the contrary, Dudek has not actually filed any papers at all. Therefore, Dudek is bound by the arbitration clause.
Dudek has, however, sent two ex parte letters to this Court, both of which he "CCed" to Plaintiff's lawyer. Dudek Letters, July 27, 2004 and September 10, 2004. The Court strongly reminds Defendant Dudek that under Local Rule 7-3, "Any opposition to a motion must be served and filed not less than 21 days before the hearing date." Letters sent to these chambers directly do not meet the requirements of this rule. Failure to follow the local rules alone can be grounds for ruling against a party. See Ghazali v. Moran, 46 F.3d 52, 53 (9th Cir. 1995).
Notwithstanding the improper submission of these letters, even if this Court takes into consideration the allegations raised by Dudek in his letters to this Court, the arbitration should be upheld. Dudek alleges that 1) "No court has ever determined that I am subject to the jurisdiction of a court or arbitrator in California," and 2) "No court has ever determined that I was bound to arbitrate under the Charter." Dudek Letter, September 10, 2004.
Neither of these allegations can support a decision to not confirm the arbitration award. As a signatory to the arbitration clause at issue, Marion Dudek is subject to the personal jurisdiction of this Court. Fireman's Fund Ins. Co. v. Nat'l Bank of Cooperatives, 103 F.3d 888, 893-94 (9th Cir. 1996). InFireman's Fund, agreeing to arbitration in California was sufficient to meet the requirements for a court to assert personal jurisdiction over a defendant. Id. ("By agreeing to arbitration in San Francisco, Aldus indicated its willingness to resolve disputes in California."). Here, Defendant Dudek was a signatory to the arbitration clause requiring arbitration in California, and thus he is subject to the personal jurisdiction of this Court.
This Court also notes that it cannot review any allegation of Defendant Dudek that suggests that he did not in fact sign the agreement in his personal capacity. Dudek Letter September 10, 2004. The arbitrator examined this allegation and found it lacking. Motion Exhibit C at 5-6. Under Employers Ins. of Wausau, 933 F.2d 1481, discussed above, this Court does not have the discretion to review that factual finding of the arbitrator.
Dudek also claims that no court has ever found that he was bound to arbitrate under the agreement. However, no court needs to find that Dudek is bound to arbitrate. Rather, for Dudek to escape arbitration under the clause, he must show that "justification for revocation of the agreement exists under contract law." First Investors Corp., 823 F.2d at 310. Moreover, "The Federal Arbitration Act provides that an arbitration clause 'shall be valid, irrevocable, and enforceable save upon such grounds as exist in law or equity for the revocation of any contract.'" Id. at 309. Defendant Dudek has made no such showing. He has filed no papers with this Court, nor do the improperly submitted ex parte letters put forth any such claim. Dudek Letters, July 27, 2004 and September 10, 2004. Therefore, the arbitration clause at issue is "valid, irrevocable, and enforceable," and Dudek is bound to arbitrate under it.
In his September 10, 2004 letter, Dudek does allege that Donald Glanville modified the agreement after the parties had signed it in order to include Dudek as an individual signatory, rather than simply as a corporate officer signatory. Dudek Letter, September 10, 2004. However, the arbitrator considered this general allegation and for the reasons above, this Court may not second-guess the factual determinations of an arbitrator.
Finally, Plaintiff also requests recovery of fees and costs in connection with this suit. Motion at 3. However, the Federal Arbitration Act does not provide for recovery of fees and costs upon confirmation of an arbitration award. See, e.g., Menke v. Monchecourt, 17 F.3d 1007, 1009 (7th Cir. 1994). Nor does the arbitration clause at issue mention any recovery of fees and costs. Motion Exhibit A at 12. Therefore, this Court does not see any basis for awarding recovery of fees and costs beyond those which the arbitrator has already awarded.
With respect to Defendants Ken Decker, Nils Holgsetth, and Mar Transports Inc., Plaintiff has not yet filed proofs of service of process pursuant to Fed.R.Civ.P. 4. Therefore, the Court must deny the motion with respect to these defendants. Plaintiff may continue to make efforts to serve these defendants subject to the requirements of Fed.R.Civ.P. 4(m).
V. CONCLUSION
For the reasons discussed above, Plaintiff's Application and Motion for Judgment on an Arbitration Award with respect to Defendant Ken Decker, Defendant Nils Holgsetth, and Defendant Mar Transports Inc. is hereby DENIED. Plaintiff's motion with respect to Defendant Marion Dudek is hereby GRANTED. Plaintiff is entitled to the award of $306,205.71, plus interest thereon from the date of entry of the award on April 21, 2004.
IT IS SO ORDERED.