Opinion
1:04CV0565.
July 19, 2006
ORDER AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
This matter is before the court on motions by Petitioners Investor Relations Services and Charles Arnold to strike (docket no. 22), to confirm the arbitration award (docket no. 9), and to take judicial notice (docket no. 21); and by Respondents to vacate the arbitration award (docket no. 12) and to dismiss (docket no. 15). The motions have been responded to or the time to do so has passed. In this posture, the motions are ripe for disposition. The parties have not consented to the jurisdiction of the magistrate judge, and this court must, therefore, deal with all dispositive motions by way of a recommendation. For the following reasons, this court will deny Petitioners' motion to strike as moot and grant Petitioners' motion to take judicial notice. Furthermore, it will be recommended that the district court grant Petitioners' motion to confirm the arbitration award, deny Respondents' motion to vacate the arbitration award, and deny the motion to dismiss. BACKGROUND
This case originated out of two written contracts in which Petitioners Investor Relations Services ("IRS") and Charles Arnold ("Arnold") agreed to provide financial consulting services to Respondent Michele Audio Corp. of America ("Michele Audio"). ( See Compl., Exs. 1 2.) By agreement these contracts became effective June 1, 2003. Part of the compensation package for each Petitioner included payment in preferred shares convertible to 4.9% of the common stock issued by Michele Audio. The contracts also included clauses providing that any disputes arising out of the contracts were subject to arbitration in accordance with the rules set by the American Arbitration Association ("AAA") and the Federal Arbitration Act ("FAA"). ( Id.) On July 23, 2003, Michele Audio participated in a "reverse merger" with Michelex Corporation, whereby Michele Audio stockholders exchanged their shares for stock in Michelex Corporation, a publicly traded entity. ( See Compl., Ex. 3 p. 2.) This stock exchange occurred after Petitioners IRS and Arnold signed their consulting agreements with Michele Audio. Petitioners maintain that if IRS and Arnold's shares had been properly issued, they would have been entitled to receive common shares of Michelex Corporation.
Petitioners allege that as a result of the merger Michele Audio became the subsidiary and sole business operation of Michelex Corporation. ( See Compl. ¶ 16.)
Petitioners maintain that after the merger they began working for Michelex Corporation and that Michelex Corporation received and accepted the benefits of Petitioners' work. A dispute soon arose concerning delivery of the stock to Petitioners, and Petitioners filed a Petition to Compel Arbitration against both Michele Audio and Michelex Corporation. In bringing the motion, Petitioners argued that Michelex Corporation succeeded Michele Audio as a party to the agreements and, therefore, the terms of the agreements were binding on Michelex Corporation. All four parties consented to arbitration and this court issued a Consent Order on August 30, 2004, ordering mediation and, if necessary, arbitration. ( See Consent Order and Judgment, docket no. 8.) Mediation efforts failed, and on August 1 and 2, 2005, an arbitration hearing was held. It is undisputed that Michelex Corporation attended the arbitration hearing, but it is not clear whether Michele Audio was also represented at the hearing. On October 27, 2005, the arbitrators issued an award in favor of each Petitioner against Michelex Corporation for breach of contract and fees and expenses. The order issuing the arbitration award did not mention Michele Audio; thus, the award was clearly entered against Michelex Corporation only. The pending motions followed.
DISCUSSION I. Petitioners' Motion to Take Judicial Notice of the AAA Case File
As an initial matter, Petitioners have filed a Motion to Take Judicial Notice pursuant to Rule 201, Federal Rules of Evidence, of the AAA case file for this case, number 31181J0005604. Respondents have not responded to the motion, and the court will, therefore, treat the motion as uncontested. See Local Rule 7.3(k). As the arbitration case file is "capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned," FED. R. EVID. 201, the court grants the motion and takes judicial notice of the AAA case file. II. Petitioners' Motion to Strike the Declaration of Ronald Kaufman
Rule 201 governs judicial notice of facts and provides, in relevant part, that "[a] judicially noticed fact must be one not subject to reasonable dispute in that it is either (1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned."
The court next considers Petitioners' Motion, pursuant to Rule 11(a) of the Federal Rules of Civil Procedure, to Strike the Declaration of Ronald Kaufman, which was filed with Respondents' brief in support of the motion to vacate the arbitration award. Rule 11(a) requires that all pleadings, motions, and "other papers" be signed by an attorney of record and that any unsigned papers must be stricken unless the omission is "corrected promptly after being called to the attention of the attorney." Kaufman's Declaration was not signed when it was initially filed with the court on March 6, 2006. Respondents have by now, however, submitted a signed copy of the Declaration. The motion will, therefore, be denied as moot.
III. Respondents' Motion to Vacate the Arbitration Award and Petitioners' Corresponding Motion to Confirm the Award
The court next considers Respondents' motion to vacate the arbitration award as well as Petitioner's corresponding motion to confirm the award. The federal court's review of an arbitrator's award is exceedingly narrow, and any grounds for vacating must be founded directly on the statutory language of the FAA, 9 U.S.C. § 10(a). See Union Pac. R.R. v. Sheehan, 439 U.S. 89, 91 (1978) (in the context of labor disputes, stating that the scope of review of an arbitration award is "among the narrowest known to the law"); Apex Plumbing Supply, Inc. v. U.S. Supply Co., 142 F.3d 188, 193, n. 5 (4th Cir. 1998) (noting that a narrow standard of review is necessary to preserve the benefits of arbitration); Upshur Coals Corp. v. United Mine Workers of Am., 933 F.2d 225, 229 (4th Cir. 1991) (noting that arbitration awards are "accorded great deference"). Section 10(a) sets forth the criteria by which a court can vacate an arbitration award, which include, among other things, where the award was procured by "corruption, fraud or undue means." 9 U.S.C. § 10(a)(1). Another possible ground for vacating the award is when the arbitrators refused to postpone the arbitration hearing, despite the requesting party's showing of "sufficient cause" for the postponement. 9 U.S.C. § 10(a)(3). Respondents rely primarily on this latter ground as the basis for vacatur, arguing that the arbitrators are guilty of misconduct in refusing to postpone the hearing upon sufficient cause shown. Respondents argue that sufficient cause was shown and that postponement should, therefore, have been granted for two chief reasons: (1) because Respondents were forced to hire new counsel a month before the arbitration hearing, which meant that counsel were under-prepared for the hearing; and (2) because the AAA sent mixed messages about whether the hearing would proceed as scheduled, which meant that certain witnesses could not be secured to give testimony at the hearing. For the following reasons, this court finds that Respondents have not established sufficient grounds to vacate the award based on the arbitrators' refusal to postpone the hearing.
As an initial matter, Respondents note correctly that a court may vacate an arbitration award when a request for postponement is arbitrarily denied or when the denial leads to the inability of the party to present "pertinent and material evidence." Naing Int'l Enters., Ltd. v. Ellsworth Assocs., Inc., 961 F. Supp. 1, 2-3 (D.D.C. 1997); Fairchild Co. v. Richmond, Fredericksburg Potomac R.R., 516 F. Supp. 1305, 1313 (D.D.C. 1981). This same authority, however, also holds that, when the arbitrator had a "reasonable basis" for refusing to postpone, the arbitrator should be granted "a degree of discretion" in exercising his judgment. Naing, 961 F. Supp. at 3; Fairchild, 516 F. Supp. at 1313-14 ("[A]ssuming there exists a reasonable basis for the arbitrators' considered decision not to grant a postponement, the Court will be reluctant to interfere with the award on these grounds."); see also ARW Exploration Corp. v. Aguirre, 45 F.3d 1455, 1463 (10th Cir. 1995) ("Because the primary purpose for the federal policy of favoring arbitration is to promote the expeditious resolution of disputes, a court's review of the arbitrator's decision to postpone or not postpone the hearing is quite limited."); and Choice Hotels Int'l, Inc. v. Johnson, No. Civ. A AW-01-3875, 2002 WL 32841634, at *5 (D. Md. Aug. 1, 2002) (holding that vacating the arbitrator's award was not appropriate because the arbitrator had "appropriate grounds" to deny the request for postponement). In this regard, it is the court's duty to determine whether the hearing was rendered "so fundamentally unfair as to violate § 10" by the exclusion of witnesses and other opportunities for preparation. Gallus Invs., L.P. v. Pudgie's Famous Chicken, Ltd., 134 F.3d 231, 233-34 (4th Cir. 1998).
The court first addresses Respondents' argument that vacatur is appropriate because Respondents' new counsel were under-prepared for the hearing. Respondents were represented by attorney Ronald Kaufman up until early July 2005. Respondents, however, informed AAA by letter on June 14, 2005, that Mr. Kaufman was withdrawing as counsel for Respondents. On at least June 14, June 24, and July 21, Michelex Corporation's President Thomas Gramuglia requested that AAA postpone the scheduled arbitration hearing, citing the inability of new counsel to have sufficient time to prepare for the hearing. On July 19, during a conference call, Mr. Kaufman also requested postponement of the hearing. ( See Pet'rs' Resp., Exs. 2, 3, 4.) By order dated July 1, 2005, the arbitrators denied Gramuglia's requests for a postponement and confirmed that the hearing would be held on July 27, 2005. ( See Pet'rs' Resp., Ex. 8.) In the order denying the requests for postponement, the arbitrators granted the successor counsel for Respondents until July 8 to file a good-cause petition for continuance. (Pet'rs' Resp. Ex. 8.) In their Entries of Appearances dated July 8, 2005, Respondents' new attorneys specifically noted that they were not seeking a continuance of the hearing and reconfirmed the date of the arbitration hearing. ( See Entry of Appearance, Badillo, Pet'rs' Resp. Ex. 9; Entry of Appearance, Wallis, Id., Ex. 10.)
The court has noted that, while it is clear that Michelex Corporation participated in the arbitration hearing, it is not as clear whether Michele Audio's interests were likewise represented at the hearing. The court uses the term "Respondents" here only because both Michelex Corporation and Michele Audio have joined in the motion to vacate and not to imply that Michelex Corporation and Michele Audio are the same entity and that they both participated in arbitration. It appears at least from the record that, in the various requests for postponement of the hearing, Michelex Corporation's President Thomas Gramuglia and his counsel were acting on behalf of Michelex Corporation only.
This court finds that there has not been a sufficient showing of cause to have warranted postponement based on under-preparation of counsel. First, even though Respondents' new counsel did not make their Entries of Appearances until July 8, it is clear that Respondents knew from at least the beginning of June that Mr. Kaufman would be stepping aside as counsel. Using the June 14 letter from Respondents to AAA as a benchmark, there was nearly a month and a half between this time and when the arbitration hearing was scheduled. More significant, however, is the fact that Respondents' new counsel, in the above-mentioned July 8 Entries of Appearance, specifically rejected the need for a continuance of the hearing. This court sees no reason to second-guess Respondents' counsel on this point and finds that the arbitration panel had a reasonable basis for denying the postponement.
The second prong of Respondents' argument for vacatur is that AAA itself sent mixed signals as to whether the hearing would proceed as scheduled. According to Respondents, this confusion caused Respondents to stop preparing for the hearing and foreclosed the possibility of getting certain witnesses to testify at the hearing. The court does not agree with Respondents' categorization of the AAA's communications regarding suspension of the hearing. The record shows that AAA first informed Respondents by letter on July 1 that Respondents had not paid their AAA fees for the arbitration. The letter warned that if payment was not received by July 8 the arbitrator "may suspend or terminate the proceeding." (Resp. Reply to Mot. to Vacate, Ex. A.) On July 14, AAA sent another letter saying that because the parties had not paid the fees "the panel is suspending administration of this matter." ( Id., Ex. B.) The letter also noted that once payment was received the parties would be notified when the hearing would proceed. At this point, Respondents argue, they "naturally" accepted AAA's representations and suspended their own preparation and told their witnesses that the hearing was suspended. Then, Respondents contend, AAA "suddenly reversed course" on July 19 during a conference call and said that the hearing would be on August 1. ( See Resp. Reply, p. 2.) It was at this conference that Mr. Kaufman requested postponement. On July 21, AAA sent a letter confirming that the hearing would be pushed back until August 1. Sometime later, Mr. Gramuglia requested another postponement by phone, and his request was denied. (Gramuglia Decl.)
This court finds that Respondents have not shown that the suspension letters from AAA and the resulting denials for a postponement unfairly prejudiced Respondents in preparing for the hearing. Respondents' potential list of witnesses was submitted to AAA as early as June 30. This filing indicates that AAA, Respondents, and the witnesses should have been on notice that hearings were pending, even despite the letters from AAA regarding non-payment of fees. In this regard, the court disagrees with Respondents' characterization of the letters from AAA concerning the suspension of the hearing. The letters stated that the suspension was conditioned on the paying of the fees and that once those fees had been paid instructions to proceed would be sent. To be sure, Respondents were obliged to keep their potential witnesses on notice that they might be called on to testify at the hearing, despite the suspension. In addition, since Respondents themselves caused the initial suspension of the hearing by failing to pay their fees, Respondents cannot now claim that they were somehow prejudiced by AAA's letters. Furthermore, Respondents have simply not shown that were unfairly deprived of the opportunity to present material evidence. Respondents argue that the testimony of the listed witnesses "may" have improved the case presented before the arbitrators. ( See Resp. Br. Supp. Mot. to Vacate.) The strong policy of upholding the arbitrator's findings would be frustrated if an award could be vacated on such a slim showing of materiality. See, e.g., Apex Plumbing, 142 F.3d at 193 ("[T]he scope of review of an arbitrator's valuation 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."). That Respondents were given a fair hearing is also supported by the fact that the arbitrator's award is a small fraction of the amount that Petitioners were seeking. In sum, this court finds that Respondents have not met the burden of showing that they had sufficient cause for postponement and that a request was arbitrarily denied by the arbitrators. It will be recommended that the district court deny the motion to vacate.
Petitioners were seeking a total, combined award of $1,494,716. ( See Arbitration Hearing, p. 16, line 17, located at Ex. F-1 to Pet'rs' Resp.) The arbitrators ultimately awarded to Petitioners a total, combined award, including interest, of $201,864, plus $48,280 in attorneys fees, as well as additional amounts for AAA administrative fees and other expenses.
As for Petitioners' corresponding motion to confirm the arbitration award, the FAA, 9 U.S.C. § 9, states that when an application for confirmation is made to the court, the court "must grant such an order unless the award is vacated, modified or corrected" as specified in §§ 10 and 11 of the FAA. The narrow standard of review discussed in the context of Respondents' Motion to Vacate applies in a motion to confirm an award in the absence of adequate grounds for denying the motion, as listed in § 10. See, e.g., Apex, 142 F.3d at 193; Jih v. Long Foster Real Estate, Inc., 800 F. Supp. 312, 317 (D. Md. 1992) (discussing the narrow standard of review for arbitration awards and the substantial showing that is required to avoid confirmation); Md. Transit Admin. v. Nat'l R.R. Passenger Corp., 372 F. Supp. 2d 478, 481-83 (D. Md. 2005) (same). The deference given to the arbitrator's findings even extends to legal interpretations. See Upshur Coals Corp., Dist. 31, 933 F.2d at 229. Thus, in reviewing arbitration awards, courts "are confined to ascertaining `whether the arbitrators did the job they were told to do — not whether they did it well, or correctly, or reasonably, but simply whether they did it.'" Md. Transit Admin., 372 F. Supp. 2d at 481-83 (quoting Richmond, Fredericksburg Potomac R.R. v. Transportation Commc'ns Int'l Union, 973 F.2d 276, 281 (4th Cir. 1992)). As noted, Respondents filed their Motion to Vacate in opposition to Petitioners' Motion to Confirm, and the undersigned will recommend that the district court deny Respondents' motion; there have been no other challenges to the arbitrators' award founded on § 10 of the FAA. See, e.g., Ottley v. Schwartzberg, 819 F.2d 373, 376 (2nd Cir. 1987) (describing the duty of the court to confirm absent statutory basis for vacatur). It will be recommended that the district court grant Petitioners' motion to confirm the arbitration award against Michelex Corporation.
More specifically, Title 9, § 9 states, in pertinent part:
If 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 confirming the award, and thereupon the court must grant such 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.
IV. Respondent Michele Audio's Motion to Dismiss
This court next considers Respondent Michele Audio's motion to dismiss pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. Before addressing each party's contentions, the court first notes that the record does not reveal the exact relationship between Michele Audio and Michelex Corporation with respect to the written contracts at issue. In the initial demand for arbitration dated February 6, 2004, Petitioners made a demand for arbitration against Michelex Corporation only. ( See docket no. 1, Ex. 5.) In response, Michelex Corporation's President Tom Gramuglia sent a letter to an AAA representative in which Gramuglia asserted that Michelex Corporation was not a signatory to the contracts, that Michele Audio and Michelex Corporation were entities entirely distinct from one another, and that "Michele Audio Corporation has never agreed to assign [the contracts] to Michelex Corporation nor is Michelex Corporation a successor to Michele Audio Corporation of America." The letter further stated that "[i]f the parties wish to refile their demand for arbitration against Michele Audio Corporation of America, we will respond accordingly." ( See docket no. 1, Ex. 6.) In response, Petitioners made a demand against both Michelex Corporation and Michele Audio and subsequently obtained this court's Consent Order requiring the two entities to participate in mediation and, if necessary, arbitration. Mediation failed, so the parties proceeded to arbitration, and a hearing was held on August 1, 2005. The caption in the transcript for the hearing identifies Investor Relations Services, Inc. and Charles Arnold as the "Claimants" and Michelex Corporation as the "Respondents." Michele Audio is not listed in the caption. Moreover, the hearing transcript does not shed any light on the parties' respective positions regarding Michele Audio's liability apart from that of Michelex Corporation. In any event, the arbitration award was entered against Michelex Corporation only, and no issue was raised at the hearing over whether Michele Audio was being represented or whether it was otherwise a participant in the hearing.
The hearing transcript further identifies the "Claimants" in the hearing as Charles Arnold and Richard Fixaris (the president of IRS), and it identifies the "Respondents" in the hearing as Thomas Gramuglia and Sharon Bishop, Michelex Corporation's corporate secretary.
Indeed, at numerous points in the hearing, the parties simply refer to "the company," without drawing any distinction between Michelex Corporation and Michele Audio. ( See Arbitration Hearing, located at Pet'rs' Resp. to Michele Audio's Mot. Dismiss, Exs. F-1 thru F-5.)
In support of its motion to dismiss, Respondent Michele Audio contends that it remained an independent entity after the merger with Michelex Corporation and that the arbitration award was against Michelex Corporation alone. Michele Audio argues that since an arbitration award cannot be enforced against a party that was not part of the arbitration, it should be dismissed from the action. See Tanoma Mining Co. v. Local Union No. 1269, United Mine Workers of Am., 896 F.2d 745, 750 (3rd Cir. 1990) (in the context of labor arbitration, noting that an arbitration award cannot be enforced against a non-party to the arbitration). In response, Petitioners argue, first, that Rule 12(b)(1) is not a valid basis for dismissal because jurisdiction was already established by 9 U.S.C. § 9 and by the court's Consent Order, which ordered both Michelex Corporation and Michele Audio to participate in mediation and, if necessary, arbitration. Petitioners further argue that Rule 12(b)(6) is also inapplicable because Petitioners' motion to confirm was merely a motion and not a new claim seeking relief. Finally, Petitioners point out that Michele Audio already consented to arbitration and joined with Michelex Corporation in bringing the motion to vacate the arbitration award. Petitioners contend that dismissal is, therefore, not appropriate under either Rule 12(b)(1) or Rule 12(b)(6).
More specifically, the Consent Order stated that "[IRS], Charles Arnold, Michele Audio Corporation of America, Inc., and Michelex Corporation are compelled to engage in a mediation and arbitration, with regard to [the two written agreements]. . . ." ( See Consent Order and Judgment, p. 4, docket no. 8)
This court agrees with Petitioners that dismissal is not proper under Rule 12(b)(1) since the court, through its prior Consent Order, has already found that Michele Audio is subject to the court's jurisdiction. As for dismissal under Rule 12(b)(6), Respondent Michele Audio is correct in noting that, in the absence of some showing that the corporate veil should be pierced, a confirmation of the arbitration award will be effective as to Michelex Corporation only since the award document itself is directed specifically to Michelex Corporation only. Moreover, Petitioners have not presented a fully developed "alter ego" argument, nor have they shown how Michele Audio could otherwise be liable for the award entered against Michelex Corporation only. Even so, this court finds that it is not appropriate to dismiss Michele Audio from the case at this point. Although the Fourth Circuit does not appear to have addressed the issue, courts in other jurisdictions have held that an action to confirm an arbitration award is not the proper time for a party to attempt to pierce the corporate veil and that the veil-piercing analysis must take place only after the award has been confirmed. See, e.g., Orion Shipping Trading Co. v. Eastern States Petroleum Corp. of Panama, S.A., 312 F.2d 299, 301 (2nd Cir. 1963) (stating that a motion to confirm an arbitration award is "not the proper time for a [court] to `pierce the corporate veil'" since such an action would require the court to confront in detail the corporate structure of the parties and this may "unduly complicate and protract the proceedings"); UA Local 343, United Ass'n of Journeymen Apprentices of Plumbing Pipefitting Indus. v. Nor-Cal Plumbing, Inc., 48 F.3d 1465, 1476 (9th Cir. 1994) (stating that actions to confirm arbitration awards are not the proper mechanisms for piercing the corporate veil and that veil-piercing may be available after the plaintiffs establish their right to a money judgment against the primary defendants); see also Dist. Council No. 9 v. APC Painting, Inc., 272 F. Supp. 2d 229, 241 (S.D.N.Y. 2003) (where defendants sought to dismiss an individual defendant on the ground that the arbitration award could not be confirmed against him, denying the motion and stating that "while this Court may not confirm an award against [the individual defendant], entry of judgment against him in the future may be appropriate upon a proper factual showing" that he was the alter ego of the corporate defendants); see also Overseas Private Inv. Corp. v. Marine Shipping Corp., No. 02 Civ. 475TPG, 2002 WL 31106349, at *3 (S.D.N.Y. Sept. 19, 2002) (denying a motion to dismiss an individual defendant after confirming an arbitration award against a corporate entity, stating that "[n]o purpose would be served by dismissing this case as against [the individual defendant] and forcing [plaintiff] to go through the formality of bringing a new action [asserting alter ego theories against the individual defendant]"). If the court dismisses Michele Audio now, Petitioners will have to file an entirely new action if they later seek to recover against Michele Audio under an alter ego or other theory of liability if Michelex Corporation fails to pay the award. Furthermore, dismissing Michele Audio now could raise collateral estoppel concerns if Petitioners attempt to proceed later with a separate action against Michele Audio. For these reasons, the court should, therefore, deny Michele Audio's motion to dismiss. It bears repeating, however, that the arbitration award is clearly entered against Michelex Corporation only and not also against Michele Audio; therefore, a confirmation of the award by the court would only be effective as to Michelex Corporation, absent some later showing that the corporate veil should be pierced as to Michele Audio. It will be recommended that the court deny Michele Audio's motion to dismiss. CONCLUSION
To pierce the corporate veil, a party must meet a distinct set of criteria under North Carolina law. See Atlantic Tobacco Co. v. Honeycutt, 101 N.C. App. 160, 164-65, 398 S.E.2d 641, 643-44 (1990) (describing three factors of the instrumentality rule and three factors that must be present to pierce the corporate veil); see also Glenn v. Wagner, 313 N.C. 450, 455, 329 S.E.2d 326, 330 (1985).
Petitioners mention in their brief the possibility of an "inadvertent mistake" in the arbitration award in failing to include Michele Audio in the award document, but Petitioners do not argue that there was in fact a mistake. Absent a proffer by either party, this court has no duty to independently investigate whether the arbitration panel made an inadvertent mistake in the award document itself.
For these reasons, Petitioners' Motion to Strike the Kaufman Declaration (docket no. 22) is DENIED as moot, and Petitioners' Motion to Take Judicial Notice (docket no. 21) is GRANTED. Furthermore, IT IS RECOMMENDED that the court DENY Respondents' Motion to Vacate (docket no. 12); GRANT Petitioners' Motion to Confirm (docket no. 9); and DENY Respondent Michele Audio's Motion to Dismiss (docket no. 15).