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Freaner v. Lutteroth Valle

United States District Court, S.D. California

August 22, 2014

ARIEL FREANER, Plaintiff,
v.
ENRIQUE MARTIN LUTTEROTH VALLE, an individual; HOTELERA CORAL, S.A. de C. V. a stock company of Baja California, Republic of Mexico; and DOES 1 through 10, Defendants.

ORDER (1) GRANTING EX PARTE APPLICATION TO CONFIRM ARBITRATION AWARD; (2) AWARDING DAMAGES ON COUNTERCLAIM FOR BREACH OF CONTRACT; AND, (3) SETTING DEADLINE FOR FILING OF JOINT MOTION FOR FINAL JUDGMENT

JANIS L. SAMMARTINO, District Judge.

Presently before the Court is Defendants Enrique Martin Lutteroth Valle and Hotelera Coral, S.A. de C.V.'s ("Hotelera Coral, " and collectively, "Defendants") unopposed Ex Parte Application to Confirm Final Award and Modification to Final Award. (Mot. to Confirm Arbit. Award, ECF No. 107.) Also before the Court are the parties' supplemental filings regarding the amount of damages on Hotelera Coral's pending breach of contract counterclaim against Plaintiff Ariel Freaner ("Plaintiff, " or "Freaner"). ( See Pl.'s Suppl. Br. Re: Damages, ECF No. 103-2; Def.'s Suppl. Br. Re: Damages, ECF No. 104.) Having considered the parties' arguments and the law, the Court GRANTS Hotelera Coral's motion to confirm the arbitration award and AWARDS damages of $14, 139.54 on Hotelera Coral's counterclaim. As this Order disposes of all remaining issues in this litigation, the Court SETS a deadline of September 12, 2014 for the parties to file a joint motion for final judgment.

BACKGROUND

This order incorporates by reference the factual and procedural background as set forth in the Court's prior orders. ( See Order Granting Motion to Compel Arbitration and Denying Motion to Remand, Nov. 17, 2011, ECF No. 23; Order Denying Motion to Compel Arbitration; Granting in Part and Denying in Part Motion for Partial Summary Judgment, and Setting Deadline for Completion of Pending Arbitration Proceedings, Aug. 22, 2013, ECF No. 93.) A summary of the most relevant facts is presented here only to provide context for the issues discussed below.

In this breach of contract case, Freaner sued Hotelera Coral, a hotel and resort located in Baja California, Mexico, seeking compensation for graphic design and advertising services that he provided pursuant to a written agreement reached by the parties in June 2008. (Notice of Removal, Ex. A, ECF No. 1-2.) Hotelera Coral removed the action to this Court and subsequently filed a counterclaim, alleging that Freaner breached his own obligation to deliver marketing materials and services pursuant to a subsequent agreement that was in effect between July 2009 and June 2010. (Counter Compl., ECF No. 7.)

The Court referred Freaner's claims to arbitration, but retained jurisdiction over Hotelera Coral's counterclaim. (Order, Nov. 17, 2011, ECF No. 23; Order, Aug. 22, 2013, ECF No. 93.) In light of Freaner's acknowledgment that he failed to complete performance of the July 2009 contract, the Court entered summary judgment in favor of Hotelera Coral as to liability only. (Order, Aug. 22, 2013, ECF No. 93.) A genuine factual issue remained as to the appropriate amount of damages, however, and the Court ordered the parties to provide supplemental briefing and evidence regarding that issue. Freaner filed his supplemental briefing regarding damages on February 20, 2014. (Pl's Suppl. Br. Re: Damages, ECF No. 103-2.) Hotelera Coral filed its supplemental materials on March 5, 2014. (Def.'s Suppl. Br. Re: Damages, ECF No. 104.)

Freaner's claims were resolved in an arbitral proceeding conducted under the aegis of the American Arbitration Association's International Centre for Dispute Resolution. The arbitrator, Richard W. Page, issued a final award on December 16, 2013 absolving Hotelera Coral of liability. (Mot. to Confirm Arbit. Award, Ex. A, ECF No. 107-1.) The arbitrator determined that Freaner failed to prove that he had obtained prior written approval for additional services as required by the terms of the parties' agreement. ( Id. ) The arbitrator subsequently entered a modification of the final award on February 26, 2014, awarding attorney's fees and costs to Hotelera Coral in the amount of $105, 714. (Mot. to Confirm Arbit. Award, Ex. B, ECF No. 107-2.)

The parties filed a Joint Status Report on March 27, 2014, indicating that they had reached a stipulation as to confirmation of the arbitral award. (Status Report, ECF No. 105.) Subsequently, Freaner declined to sign onto a joint motion requesting confirmation of the award by this Court. Hotelera Coral filed the present ex parte application seeking confirmation of the award on April 16, 2014. (Mot. to Confirm Arbit. Award, ECF No. 107.) Freaner has not filed a response or opposition to Hotelera Coral's ex parte application and there is no indication that he has withdrawn his earlier stipulation to confirmation of the arbitral award.

DISCUSSION

1. Ex Parte Application to Confirm Arbitration Award

The Court referred Freaner's breach of contract claims to arbitration because the June 2008 printed contract between the parties contained a binding and enforceable arbitration clause. (Order, Nov. 17, 2011, ECF No. 23.) As the Court previously indicated, the arbitration clause is governed by the Inter-American Convention on International Commercial Arbitration, also known as the Panama Convention. (Order, Nov. 17, 2011, ECF No. 23; Order, Aug. 22, 2013, ECF No. 93.)

"Confirmation of an arbitration award under the Panama Convention is a summary proceeding." Empresa De Telecommunicaciones De Bogota S.A. E.S.P. v. Mercury Telco Grp., Inc., 670 F.Supp.2d 1357, 1361 (S.D. Fla. 2009) (citing American Life Ins. Co. v. Parra, 269 F.Supp.2d 519, 524 (D.Del. 2003)). "[A] district court's role in reviewing an arbitral award [rendered under the Panama Convention] is strictly limited." Banco de Seguros del Estado v. Mut. Marine Offices, Inc., 257 F.Supp.2d 681, 685-86 (S.D.N.Y. 2003). "The court is required to confirm the award unless it finds one of the grounds for refusal or deferral of recognition or enforcement of the award specified in the [Panama Convention].'" Id. at 686 (quoting 9 U.S.C. § 302 (incorporating 9 U.S.C. § 207)).

Article 5 of the Panama Convention presents "just five possible grounds for a district court to refuse to recognize and execute [an] arbitral decision." Empresa Constructora Contex Limitada v. Iseki, Inc., 106 ...


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