Inomedic/Innovative Health v. Noninvasive Medical Technologies, Inc.

Filing 32

ORDER Granting 23 Petitioner's Motion for Judgment on the Pleadings and Granting 1 Petition to confirm the Arbitration Award. Signed by Judge Richard F. Boulware, II on 10/11/2016. (Copies have been distributed pursuant to the NEF - DL)

1
2
3
4

UNITED STATES DISTRICT COURT

5

DISTRICT OF NEVADA

6

***

7
8

INOMEDIC/INNOVATIVE HEALTH
APPLICATIONS, LLC,
Petitioner,

9
10
11
12

Case No. 2:14-cv-01035-RFB-VCF
ORDER

v.
NONINVASIVE MEDICAL
TECHNOLOGIES, INC.,
Respondent.

13
14
15

I.

INTRODUCTION

16

This matter comes before the Court on two motions filed by Petitioner

17

Inomedic/Innovative Health Applications (IHA): Amended Petition to Confirm Arbitration

18

Award, ECF No. 20, and Motion for Judgment on the Pleadings, ECF No. 23. For the reasons

19

discussed below, the Court confirms the arbitration award and grants IHA’s motion for judgment

20

on the pleadings.

21
22

II.

23

IHA and Noninvasive Medical Technologies, Inc. (NMT) participated in arbitration

24

proceedings conducted by Arbitrator Jay Young. See ECF No. 20, Ex. D and E. Under the

25

Commercial Rules of the American Arbitration Association, Young awarded IHA $159,138.06

26

on June 2, 2014. ECF No. 20, Ex E.

27
28

BACKGROUND

IHA petitioned to confirm the arbitration award on June 24, 2014. ECF No. 1. NMT
subsequently moved to dismiss the petition for lack of jurisdiction on July 14, 2014. ECF No. 3.

1

After successfully moving to amend the petition to confirm the award, IHA filed an amended

2

petition on October 27, 2014. ECF No. 20. NMT answered the amended petition on November

3

10, 2014. ECF No. 22. IHA then moved for judgment on the pleadings on November 25, 2014.

4

ECF No. 23. NMT responded to the motion, arguing judgment on the pleadings would be

5

procedurally improper. ECF No. 24. Rather, NMT argues the court should determine whether to

6

confirm the arbitration award on NMT’s “forthcoming motion to vacate.” Id. IHA replied and

7

argued that NMT’s answer should be treated as a motion to vacate because it explicitly requests

8

the Court to set aside the award. ECF No. 25. It also argued that NMT can no longer file a

9

motion to vacate, because the Federal Arbitration Act requires that a motion to vacate an

10

arbitration award be filed within three months of the award’s issuance. Id. Accordingly, NMT’s

11

“forthcoming motion to vacate” would be untimely. Id. NMT has yet to file its “forthcoming

12

motion to vacate.”

13
14

III.

15

The Court first considers IHA’s petition to confirm the arbitration award and then IHA’s

16
17
18

DISCUSSION

motion for judgment on the pleadings.
A. Confirmation of An Arbitration Award
1. Legal Standard

19

The Federal Arbitration Act (FAA) permits any party to apply to the court to confirm,

20

vacate, modify, or correct an arbitration award. 9 U.S.C. § 9. A court must confirm an arbitration

21

award “unless the award is vacated, modified, or corrected.” 9 U.S.C. § 9; Kyocera Corp. v.

22

Prudential-Bache Trade Servs., Inc., 341 F.3d 987, 997 (9th Cir. 2003). “Under the statute,

23

confirmation is required even in the face of erroneous findings of fact or misinterpretations of

24

law.” Kyocera, 341 F.3d at 997 (internal quotation marks omitted).

25

A party moving to vacate an award must show that (1) the award was procured by

26

corruption, fraud, or undue means; (2) the existence of evident partiality or corruption in the

27

arbitrators; (3) any party was prejudiced by the arbitrator’s misconduct; or (4) the arbitrators

28

exceeded their powers. U.S. Life Ins. Co. v. Superior Nat. Ins. Co., 591 F.3d 1167, 1173 (9th Cir.

-2-

1

2010) (citing 9 U.S.C. § 10(a)). The grounds for vacatur of arbitration awards “afford an

2

extremely limited review authority, a limitation that is designed to preserve due process but not

3

to permit unnecessary public intrusion into private arbitration procedures.” Kyocera, 341 F.3d at

4

998 (9th Cir. 2003).

5

The party moving to vacate the award must serve notice to the opposing party of its intent

6

to do so within three months after the award is filed or delivered. 9 U.S.C. § 12. Failure to move

7

to vacate bars all defenses to arbitration awards. Sheet Metal Workers Int’l Assn., Local v.

8

Standard Sheet Metal, Inc., 699 F.2d 481, 483 (9th Cir. 1983) (“Although this circuit has not

9

ruled that failure to move to vacate bars all defenses to arbitration awards, other circuits have so

10

held . . . We accept the rule in the Third and Seventh Circuits and hold that the statute of

11

limitations bars Standard’s defenses.”).

12

2. Discussion

13

In this matter, Arbitrator Young issued the arbitration award to IHA on June 2, 2014,

14

which IHA moved to confirm. ECF No. 20, Ex. E. This Court must confirm the arbitration award

15

unless it is vacated, modified, or corrected. Moreover, over two years have passed since Young

16

issued the award. This Court, therefore, may not consider the “forthcoming motion to vacate”

17

promised in NMT’s papers, because the three-month period in which NMT needed to serve

18

notice of its intent to do so expired. The Ninth Circuit has held that failure to move to vacate bars

19

all defenses to arbitration awards. Sheet Metal Workers Int’l Assn., Local, 699 F.2d at 483.

20

Nonetheless, even if the defenses here could be considered, they would not be grounds to vacate.

21

The Court finds no grounds on which to vacate, modify, or correct the arbitration award.

22

While Respondents allege in their Answer to Amended Petition (ECF No. 22) several affirmative

23

defenses, such as the arbitrator’s decision exceeding the scope of its authority, Respondents have

24

failed to provide any evidence or allege any facts in support of their affirmative defenses in their

25

responsive motions. The arbitration decision itself does not indicate “evident partiality or

26

corruption;” does not show misconduct or prejudice because of misconduct; and does not show

27

that Young exceeded his powers.

28

-3-

1

Therefore, given the Court’s “extremely limited review authority” of arbitration awards,

2

and the lack of any evidence to suggest that vacatur, modification, or correction of the award is

3

appropriate in this case, the Court grants Petitioner’s Amended Petition to Confirm Arbitration

4

Award (ECF No. 20).

5

B. Judgment on the Pleadings

6

IHA’s “Motion for Judgment on the Pleadings Confirming Arbitration Award and

7

Denying Respondent’s Request to Vacate the Award,” amounts to a second petition to confirm

8

the arbitration award, pled with reference to the Federal Rules of Civil Procedure in addition to

9

the Federal Arbitration Act. IHA argues the court must confirm the award on two bases. First,

10

IHA argues NMT’s answer qualifies as a motion to vacate the award. ECF No. 23. Therefore,

11

under Local Rule 7-2, NMT needed to include points and authorities supporting its request to set

12

aside the award. Id. Second, IHA argues the award must be confirmed under the Federal

13

Arbitration Act because the limited circumstances in which an award may be vacated do not

14

exist. NMT argues that federal law dictates that a Motion for Judgment on the Pleadings is not

15

the appropriate vehicle for deciding whether or not an arbitration award should be vacated, and

16

that the Court must wait to consider the forthcoming motion to vacate.

17

The standard for assessing a motion for judgment on the pleadings under 12(c) is the

18

same as the standard for a 12(b)(6) motion to dismiss. Enron Oil & Transp. Co. v. Walbrook Ins.

19

Co., Ltd., 132 F.3d 526, 529 (9th Cir. 1997). “A judgment on the pleadings is a decision on the

20

merits, and we review it de novo. Judgment on the pleadings is proper when there are no issues

21

of material fact, and the moving party is entitled to judgment as a matter of law. All allegations

22

of fact by the party opposing the motion are accepted as true, and are construed in the light most

23

favorable to that party.” General Conference Corp. of Seventh-Day Adventists v. Seventh-Day

24

Adventist Congregational Church, 887 F.2d 228, 230 (9th Cir. 1989) (internal quotations and

25

citations omitted)

26

As the Court finds that NMT was barred from asserting defenses to the arbitration award,

27

and is barred from filing any motion to vacate—and did not file the “forthcoming” motion in the

28

more than three months from when it stated its intent to do so to when the Court entered its

-4-

1

judgment on these Motions—and as NMT has presented no facts and made no non-conclusory

2

arguments as to why the award should be vacated under the “extremely limited review” afforded

3

by the Federal Arbitration Act, the arbitration award must be confirmed as a matter of law.

4

Therefore, the Court grants the Motion for Judgment on the Pleadings Confirming Arbitration

5

Award and Denying Respondent’s Request to Vacate the Award.

6
7

IV.

8

For the reasons discussed above,

9

IT IS ORDERED that Petitioner Inomedic/Innovative Health Applications’ Motion for

10
11
12

CONCLUSION

Judgment on the Pleadings, ECF No. 23, is GRANTED.
IT IS FURTHER ORDERED that the Petition to Confirm the Arbitration Award, ECF
No. 1, is GRANTED.

13
14

DATED: October 11, 2016.

15

____________________________
RICHARD F. BOULWARE, II
United States District Judge

16
17
18
19
20
21
22
23
24
25
26
27
28

-5-