Thomas v. Imperial Industrial Supply Company et al

Filing 12

ORDER GRANTING RESPONDENTS' MOTION TO DISMISS, OR ALTERNATIVELY TO STAY, THE PETITION TO CONFIRM ARBITRATION AWARD AND TO ENTER JUDGMENT, FILED JUNE 12, 2020; REQUEST FOR JUDICIAL NOTICE OF CERTAIN ORDERS re 1 , 6 - Signed by JUDGE LES LIE E. KOBAYASHI on 10/27/2020. For the foregoing reasons, Respondents' "Motion to Dismiss, or Alternatively to Stay, the Petition to Confirm Arbitration Award and to Enter Judgment, Filed June 12, 2020; Reques t for Judicial Notice of Certain Order," filed July 2, 2020, is HEREBY GRANTED, and Thomas's June 12, 2020 Petition to Confirm Arbitration Award and to Enter Judgment is DISMISSED WITH PREJUDICE. The Clerk's Office is DIRECTED to enter judgment and close this case on November 12, 2020, unless a timely motion for reconsideration of the instant Order is filed. (emt, )

Case 1:20-cv-00282-LEK-RT Document 12 Filed 10/27/20 Page 1 of 13

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UNITED STATES DISTRICT COURT
DISTRICT OF HAWAII

QUINTINA MARIE THOMAS,

CIV. NO. 20-00282 LEK-RT

Petitioner,
vs.
IMPERIAL INDUSTRIAL SUPPLY
COMPANY, ETC, ET AL.,
Respondents.

ORDER GRANTING RESPONDENTS’ MOTION TO DISMISS, OR
ALTERNATIVELY TO STAY, THE PETITION TO CONFIRM
ARBITRATION AWARD AND TO ENTER JUDGMENT, FILED JUNE 12, 2020;
REQUEST FOR JUDICIAL NOTICE OF CERTAIN ORDERS
On June 12, 2020, pro se Petitioner Quintina Marie
Thomas (“Thomas”) filed a Petition to Confirm Arbitration Award
and to Enter Judgment (“Petition”).

[Dkt. no. 1.]

On July 2,

2020, Specially Appearing Respondents Imperial Industrial Supply
Company, doing business as Duramax Power Equipment and/or
Maxtool and/or Factory Authorized Outlets; Steven L. Feldman;
Robert Raskin; and Anthony Bustos (collectively “Respondents”)
filed a motion to dismiss the Petition or, in the alternative to
stay the case (“Motion”).
response to the Motion.

[Dkt. no. 6.]

Thomas has not filed a

The Court finds this matter suitable

for disposition without a hearing pursuant to Rule LR7.1(c) of
the Local Rules of Practice for the United States District Court
for the District of Hawaii (“Local Rules”).

On September 11,

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2020, an entering order was issued informing the parties of the
Court’s ruling on the Motion.

[Dkt. no. 11.]

supersedes that entering order.

This Order

Respondents’ Motion is hereby

granted for the reasons set forth below.
BACKGROUND
The Petition seeks confirmation of a Final Arbitration
Award (“Award”) issued in in Laurel Mississippi by Sitcomm
Arbitration Association (“Sitcomm”) on June 15, 2019.
[Petition, Exh. 1 (Award).]

The arbitration proceedings between

Thomas and Respondents was purportedly presided over by
Mark Moffett (“Moffett”) as “Arbitrator” and Sandra Goulette
(“Goulette”) as “Committee Member.”

[Id. at 1.]

The

arbitration proceedings were initiated with a dispute resolution
complaint submitted on January 8, 2019.

[Id. at 3, ¶ 3.]

According to the Award, an arbitration hearing was held on
June 16, 2019.

[Id. at 15, ¶ 48.c.]

The Arbitrator awarded

$1,500,000.00 to Thomas, including treble damages and punitive
damages.

[Id. at 16, ¶ 48.m.]
Prior to the submission of the dispute resolution

complaint, Thomas sent Respondents a document, dated
December 16, 2018, and titled “Conditional Acceptance for the
Value/For Proof of Claim Agreement” (“Conditional Acceptance”).
[Petition, Exh. A (Conditional Acceptance).]

Thomas stated she

accepted an unspecified offer by Respondents, and she demanded
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that Respondents provide a proof of claim.

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She asserted the

“failure to provide proof of claim or to deny refund payment
shall constitute a breach of this binding self-executing
irrevocable contractual agreement coupled with interest and
subject the breaching party to fines, penalties, fees and other
assessments.”

[Id. at 1.]

Thomas’s claims in the arbitration

arose from a portable gas generator that she purchased.

She

alleged it was defective and caused fire damage, resulting in
substantial losses.

[Id. at 2, ¶ 1.1.]

The Arbitrator referred

to the Conditional Acceptance as “a written, Self-executing
[sic], binding, irrevocable, contractual agreement coupled with
interests, for the complete resolution of their misconvictions
and other conflicts respecting their previous relationship.”
[Petition, Exh. 1 (Award) at 5, ¶ 18.]
In the instant Motion, Respondents state Thomas also
sent them a “Notice of Fault and Opportunity to Cure and Contest
Acceptance” (“Notice of Fault”).

[Mem. in Supp. of Motion at 2;

Motion, Decl. of Sarah K.Z. Campbell (“Campbell Decl.”), Exh. 2
(Notice of Fault).]

Respondents argue the Notice of Fault and

the Conditional Acceptance were “nonsensically worded” documents
that were part of a sham arbitration agreement, which was never
signed by the parties but was “concocted by Sitcomm.”
Supp. of Motion at 2.]

[Mem. in

Respondents state their counsel objected

to the arbitration in writing, but their objections were
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ignored, and the Award was issued without a noticed arbitration
hearing.
I.

[Id.]

Mississippi Action
On September 6, 2019, Respondents filed a Complaint

for Declaratory Judgment, to Vacate Arbitration Award, and for
Injunctive Relief (“Mississippi Complaint”) in the United States
District Court for the Southern District of Mississippi, Eastern
Division (“Mississippi District Court”).

[Motion, Decl. of

Steven L. Feldman (“Feldman Decl.”), Exh. 3 (Mississippi
Complaint);1 see also Petition, Exh. A (Conditional Acceptance),
Exh. F (Award).]

On January 8, 2020, the district court issued

an order granting the motion to vacate the Award (“Mississippi
Order”), finding that there was no valid arbitration agreement
between the parties and concluding that Sitcomm did not have any
authority to issue the Award.

[Campbell Decl., Exh. 5 (motion

to vacate), Exh. 17 (Mississippi Order).]

Thomas appealed the

Mississippi Action to the Fifth Circuit, and the appeal was
pending at the time the Motion was filed.
Motion at 3.]

[Mem. in Supp. of

The Fifth Circuit subsequently issued an opinion

affirming the judgment in the Mississippi Action.

Imperial

Indus. Supply Co. v. Thomas, No. 20-60121, 2020 WL 5249574 (5th

1

The case arising from the Mississippi Complaint is
Imperial Industry Supply Co., et al. v. Thomas, et al., Cause
No. 2:19-cv-129-KS-MTP (“Mississippi Action”).
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Cir. Sept. 2, 2020) (per curiam).

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According to the Fifth

Circuit’s docket, the mandate was issued on September 24, 2020.
The time for Thomas to seek a writ of certiorari from the United
States Supreme Court has not yet passed.
II.

See 28 U.S.C. § 2101.

Thomas’s First Hawai`i Action
While the Mississippi Action was pending, Thomas

initiated an action against Respondents in this district court
in which she also sought confirmation of the Award.

[Thomas v.

Imperial Indus. Supply Co., et al., CV 19-00540 JMS-WRP (“CV 19540”), Aff. of Truth Petition to Confirm Arbitration Award and
to Enter Judgment, filed 10/4/19 (dkt. no. 1).]

The magistrate

judge issued deficiency notices on December 30, 2019 and
January 10, 2020 because of Thomas’s failure to serve the
Petition on Respondents.

[CV 19-540, dkt. nos. 7, 9.]

On

March 3, 2020, the magistrate judge issued his Findings and
Recommendation to Dismiss this Action Without Prejudice, based
on the failure to complete service, and the district court
adopted the findings and recommendation in an April 10, 2020
order (“CV 19-540 Order”).

[CV 19-540, dkt. nos. 11, 12.]

final judgment was issued on the same day as the order.
540, dkt. no. 13.]

The

[CV 19-

Thomas did not appeal from the judgment in

CV 19-540.

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III. Arguments in the Motion
Respondents argue the Petition in the instant case
must be dismissed because: 1) Thomas did not complete proper
service of the Petition on Respondents; and 2) this Court lacks
subject matter jurisdiction over this action, or should decline
to exercise jurisdiction, because the Award was vacated in the
Mississippi Action.2

In the alternative, Respondents argue this

case should be stayed, pending the resolution of the appeal from
the Mississippi Action.
DISCUSSION
I.

Judicial Notice
Respondents ask this Court to take judicial notice of

the Mississippi Order and the CV 19-540 Order.
n.2.]

[Motion at 3

A court may take judicial notice of “a fact that is not

subject to reasonable dispute because it” is “generally known”
or it “can be accurately and readily determined from sources
whose accuracy cannot reasonably be questioned.”
Evid. 201(b)(1)-(2).

Fed. R.

“Accordingly, a court may take judicial

notice of matters of public record without converting a motion
to dismiss into a motion for summary judgment.

2

But a court

Respondents also argue the Fifth Circuit is currently
exercising jurisdiction over the appeal in the Mississippi
Action, which addresses the same claims and issues as the
instant case. However, that is no longer the case because the
Fifth Circuit issued its opinion and mandate since the filing of
the Motion.
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cannot take judicial notice of disputed facts contained in such
public records.”

Khoja v. Orexigen Therapeutics, Inc., 899 F.3d

988, 999 (9th Cir. 2018) (brackets, internal quotation marks,
and citations omitted).
Respondents submitted copies of the Mississippi Order
and the CV 19-540 Order with the Motion.

[Campbell Decl.,

Exh. 4 (CV 19-540 Order), Exh. 17 (Mississippi Order).]

Thomas

has not disputed the authenticity of these exhibits, and this
Court has also confirmed their authenticity through this
district court’s and the Mississippi District Court’s respective
electronic case filing systems.

Respondents’ request for

judicial notice of the Mississippi Order and the CV 19-540 Order
is therefore granted.

Accord Strojnik v. Host Hotels & Resorts,

Inc., CIV. NO. 19-00136 JMS-RT, 2020 WL 2736975, at *2 & n.3 (D.
Hawai`i May 26, 2020) (granting request for judicial notice of
district court dismissal orders where there was no reasonable
dispute as to the authenticity of orders).

This Court also

takes judicial notice of the appellate proceedings following the
Mississippi Action because there is no reasonable dispute as to
the records of the Fifth Circuit.

See Fed. R. Evid. 201(c)(1)

(stating a court “may take judicial notice on its own”).

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II.

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First-to-File Rule
As to the merits of the Motion, the Court turns first

to Respondents’ argument that it should decline to exercise
jurisdiction over this case under the first-to-file rule.
[T]he first-to-file rule[ is] a judicially
created “doctrine of federal comity,” Pacesetter
Sys., Inc. v. Medtronic, Inc., 678 F.2d 93, 94–95
(9th Cir. 1982), which applies when two cases
involving “substantially similar issues and
parties” have been filed in different districts,
Kohn Law Grp., Inc. v. Auto Parts Mfg. Miss.,
Inc., 787 F.3d 1237, 1239 (9th Cir. 2015). Under
that rule, “the second district court has
discretion to transfer, stay, or dismiss the
second case in the interest of efficiency and
judicial economy.” Cedars–Sinai Med. Ctr. v.
Shalala, 125 F.3d 765, 769 (9th Cir. 1997).
In re Bozic, 888 F.3d 1048, 1051–52 (9th Cir. 2018).

When

determining whether the first-to-file rule applies, “a court
analyzes three factors: chronology of the lawsuits, similarity
of the parties, and similarity of the issues.”

Kohn Law Grp.,

Inc. v. Auto Parts Mfg. Miss., Inc., 787 F.3d 1237, 1240 (9th
Cir. 2015).
The first factor supports the application of the
first-to-file rule because Respondents filed the Mississippi
Action before Thomas filed either CV 19-540 or the instant case.
As to the second factor, Thomas and Respondents were all parties
to the Mississippi Action, although Sitcomm, Moffett, and
Goulette - who are not parties to the instant case - were
Thomas’s co-defendants in the Mississippi Action.
8

See generally

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Feldman Decl., Exh. 3 (Mississippi Complaint).

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The fact that

the two actions do not involve identical parties does not
preclude application of the first-to-file rule because “only
substantial similarity of parties” is required.
Grp., 787 F.3d at 1240.

See Kohn Law

This Court concludes that the parties

in the instant case are sufficiently similar to the parties in
the Mississippi Action for the first-to-file rule to apply.
Finally, the Mississippi Action addressed similar
issues to those presented in the instant case.

Although, in the

instant case, Thomas seeks confirmation of the Award pursuant to
9 U.S.C. § 9, and the Mississippi Action sought to have the
Award vacated pursuant to 9 U.S.C. § 10(a), both cases involve
the same threshold issue - whether there was a binding
arbitration agreement between the parties.

See 9 U.S.C. § 9

(“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 . . . .”), § 10(a) (“In any of the following
cases the United States court in and for the district wherein
the award was made may make an order vacating the award upon the
application of any party to the arbitration . . . (4) where the
arbitrators exceeded their powers . . . .”).

Thus, all of the

factors in the first-to-file analysis support the application of
the rule in the instant case.

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The satisfaction of the three factors does not end the
inquiry.

The first-to-file rule is not to be applied in a

rigid, mechanical manner; “‘[w]ise judicial
administration, . . . conservation of judicial resources and
comprehensive disposition of litigation’” must be considered.
Alltrade, Inc. v. Uniweld Prod., Inc., 946 F.2d 622, 627–28 (9th
Cir. 1991) (some alterations in Alltrade) (quoting Kerotest Mfg.
Co. v. C–O–Two Fire Equipment Co., 342 U.S. 180, 183, 72 S. Ct.
219, 221, 96 L. Ed. 200 (1952)).

Thus, exceptions to the first-

to-file rule have been applied in cases involving circumstances
such as:
bad faith, see Crosley Corp. v. Westinghouse
Elec. & Mfg. Co., 130 F.2d 474, 476 (3d Cir.),
cert. denied, 317 U.S. 681, 63 S. Ct. 202, 87 L.
Ed. 546 (1942); anticipatory suit, and forum
shopping, see Mission Ins. Co. v. Puritan
Fashions Corp., 706 F.2d 599, 602 n.3 (5th Cir.
1983) (“Anticipatory suits are disfavored because
they are aspects of forum-shopping”); Factors,
Etc., Inc. v. Pro Arts, Inc., 579 F.2d 215, 217,
219 (2d Cir. 1978), cert. denied, 440 U.S. 908,
99 S. Ct. 1215, 59 L. Ed. 2d 455 (1979);[3]
Mattel, Inc. v. Louis Marx & Co., 353 F.2d 421,
424 n.4 (2d Cir.), cert. dismissed, 384 U.S. 948,
86 S. Ct. 1475, 16 L. Ed. 2d 546 (1965).
Id. at 628.

Because there are no circumstances such as these

present in this case, there are no “fairness considerations nor
equitable concerns [that] bar the application of the [first-to-

3

Factors Etc. was abrogated on other grounds by Pirone v.
MacMillan, Inc., 894 F.2d 579, 585-86 (2d Cir. 1990).
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file] rule to the instant case.”

See id.

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This Court therefore

declines to exercise jurisdiction over the instant case, based
on the first-to-file rule.
The only remaining question is whether the instant
case should be transferred, stayed, or dismissed.
888 F.3d at 1052.

See Bozic,

In Alltrade, the Ninth Circuit held that,

although the district court did not abuse its discretion in
applying the first-to-file rule, the decision to dismiss the
case outright was an abuse of discretion because there were
doubts regarding merits of the first-filed case.

946 F.2d at

628-29; see also id. at 629 (“where the first-filed action
presents a likelihood of dismissal, the second-filed suit should
be stayed, rather than dismissed” (citations omitted)).
similar concerns are present in the instant case.

No

The

Mississippi Action has proceeded to judgment, and the judgment
has been affirmed on appeal.

In light of the advanced stage of

the proceedings in the Mississippi Action, this Court concludes
that dismissal of the instant case is warranted.
Respondents’ Motion is therefore granted because this
Court declines to exercise jurisdiction over the case, based on
the first-to-file rule.

In light of this Court’s ruling, it is

not necessary to address Respondents’ remaining arguments.
Thomas’s Petition is dismissed, and the dismissal must be with
prejudice because it is absolutely clear that Thomas cannot
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amend the Petition to cure the defects.

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See Lucas v. Dep’t of

Corr., 66 F.3d 245, 248 (9th Cir. 1995) (per curiam) (“Unless it
is absolutely clear that no amendment can cure the defect,
however, a pro se litigant is entitled to notice of the
complaint’s deficiencies and an opportunity to amend prior to
dismissal of the action.” (citations omitted)).
CONCLUSION
For the foregoing reasons, Respondents’ “Motion to
Dismiss, or Alternatively to Stay, the Petition to Confirm
Arbitration Award and to Enter Judgment, Filed June 12, 2020;
Request for Judicial Notice of Certain Order,” filed July 2,
2020, is HEREBY GRANTED, and Thomas’s June 12, 2020 Petition to
Confirm Arbitration Award and to Enter Judgment is DISMISSED
WITH PREJUDICE.
The Clerk’s Office is DIRECTED to enter judgment and
close this case on November 12, 2020, unless a timely motion for
reconsideration of the instant Order is filed.
IT IS SO ORDERED.

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DATED AT HONOLULU, HAWAII, October 27, 2020.

QUINTINA MARIE THOMAS VS. IMPERIAL INDUSTRIAL SUPPLY COMPANY,
ETC., ET AL; CV 20-00282 LEK-RT; ORDER GRANTING RESPONDENTS’
MOTION TO DISMISS, OR ALTERNATIVELY TO STAY, THE PETITION TO
CONFIRM ARBITRATION AWARD AND TO ENTER JUDGMENT, FILED JUNE 12,
2020; REQUEST FOR JUDICIAL NOTICE OF CERTAIN ORDERS

13