DetailXPerts Franchise System, LLC v. TKTM Enterprises, LLC et al

Filing 59

ORDER Granting in Part and Denying in Part 55 Plaintiff's Motion to Confirm Arbitration Award. Signed by District Judge Victoria A. Roberts. (LVer)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
DETAILXPERTS FRANCHISE
SYSTEMS, LLC,

Case No. 18-11823

Plaintiff,

Honorable Victoria A. Roberts

v.
TKTM ENTERPRISES, LLC,
et al.,
Defendant.
DETAILXPERTS FRANCHISE
SYSTEMS, LLC,

Case No. 19-10037

Plaintiff,

Honorable Victoria A. Roberts

v.
DECK, Inc., et al.,
Defendant.
DETAILXPERTS FRANCHISE
SYSTEMS, LLC,

Case No. 19-12607
Honorable Victoria A. Roberts

Plaintiff,
v.
SRQ DETAILERS, et al.,,
Defendants.
1

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S
MOTION TO CONFIRM ARBITRATION AWARD [ECF No. 55]
Plaintiff DetailXPerts Franchise Systems, LLC (“DetailXPerts”)
brought this case against its former franchisee – Deck, Inc.; that
franchisee’s principal – Matthew Chase Deck; and the principal’s spouse –
Veronica Deck (collectively, “Defendants”).
While this case was ongoing, Deck, Inc. and DetailXPerts engaged in
arbitration before the American Arbitration Association; both parties
asserted claims against the other. On March 6, 2020, an arbitrator entered
an Arbitration Award: (1) granting Deck, Inc. damages of $8,000; (2)
granting DetailXPerts damages of $500; (3) upholding in part a noncompete provision from DetailXPerts’ and Deck, Inc.’s franchise agreement
which prohibited Deck, Inc. – and its owners/principals and their family
members – from engaging in certain conduct for two years; and (4)
declining to award attorney fees, because bot parties prevailed in part.
DetailXPerts moves the Court to confirm the Arbitration Award. In
addition, DetailXPerts asks the Court to:
(1) order that Defendants must comply with the non-compete
provision as construed by the arbitrator – i.e., “order that Deck,
Inc. . . . is prohibited, until March 6, 2022, from having any
direct or indirect interest (through any immediate family
member of Deck, Inc. or its owners or otherwise) as a disclosed
or beneficial owner, investor, partner, director, officer, manager,
2

employee, consultant, representative or agent or in any other
capacity in any business offering Mobile Truck Washing
Services within (i) ten (10) miles of the former North Georgia
territory (which territory is depicted in Exhibit A-1) and (ii) ten
(10) miles of any franchised, company owned or affiliate
business of Plaintiff currently in operation offering Mobile Truck
Washing Services”; and
(2) “award [it] attorneys’ fees pursuant to Section 23.7 of the
Franchise Agreement as a prevailing party.”
[ECF No. 55, PageID.572-73].
The Court GRANTS IN PART and DENIES IN PART DetailXPerts’
motion [ECF No. 55], as follows.
The Court CONFIRMS the Arbitration Award.
This order extends to the individual Deck Defendants as well as
Deck, Inc., because the Arbitration Award upholds in relevant part the
covenant not to compete in the franchise agreement, and that covenant
applies not only to Deck, Inc. but also to Deck, Inc.’s owners/officers
(including Matthew Chase Deck) and family members (including Veronica
Deck).
The Court DENIES DetailXPerts’ request for attorney fees.
The Arbitration Award declined to award attorney fees because both
parties prevailed in part. Since the Court confirms the Arbitration Award, it
– like the Award – must also decline to award attorney fees. Additionally,

3

the Court agrees with the Arbitration Award that attorney fees are not
justified because both parties prevailed in part.
In its reply brief, DetailXPerts revises its basis for requesting attorney
fees. Instead of requesting attorney fees as the prevailing party under
section 23.7 of the franchise agreement, DetailXPerts says it is entitled to
attorney fees for having to bring the motion to confirm the Arbitration Award
under section 20.4 of the franchise agreement. The Court also DENIES
DetailXPerts’ request for attorney fees under section 20.4 of the franchise
agreement because it first raised this request and argument in its reply
brief, which is improper. See United States v. Owens, 458 Fed. Appx. 444,
446 (6th Cir. 2012) (“Arguments raised for the first time in a reply brief are
waived.”).
IT IS ORDERED.
s/ Victoria A. Roberts
Victoria A. Roberts
United States District Judge
Dated: October 19, 2020

4