Tomczak v. Raymour and Flanigan Furniture Company et al

Filing 26

-CLERK TO FOLLOW UP- ORDER: The stay of this action pending arbitration 22 is lifted. The defendants' motion to confirm the February 20, 2014 arbitration award 23 is granted. The Clerk of Court shall enter judgment dismissing the Complaint 2 with prejudice, and shall close the case. Signed by Hon. Richard J. Arcara on 7/9/14. (LAS)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK

JENNIFER TOMCZAK,
Plaintiff,
DECISION AND ORDER
13-CV-0709-A

v.
RAYMOUR AND FLANIGAN FURNITURE
COMPANY, and RAYMOUR AND
FLANIGAN FURNITURE , INC.,
Defendants.

On August 28, 2013, pretrial proceedings in this action alleging illegal
consumer credit fees were stayed pending arbitration. An arbitration award in favor
of defendants Raymour and Flanigan Furniture Company and Raymour and
Flanigan Furniture, Inc., was granted on February 20, 2014.
The arbitration award ruled that a claim of plaintiff Jennifer Tomczak under
the Truth in Lending Act, 15 U.S.C. § 1601, et seq., is time barred, and that her
remaining claims under New York law fail to allege viable claims as a matter of law.
Id. The award also ruled plaintiff Tomczak would not be able to correct the defects
in the state-law claims by revising the claims.
Plaintiff Tomczak has filed no motion to vacate, modify or correct the
arbitration award. Pursuant to section 12 of the Federal Arbitration Act, 12 U.S.C. §
12, the time for plaintiff to file and to serve such a motion lapsed 90 days after the
award was filed or delivered on or about February 20, 2014.

On June 17, 2014, the Raymour and Flanigan defendants moved pursuant to
section 9 the Federal Arbitration Act, 9 U.S.C. § 9, for summary confirmation of the
February 20, 2014 arbitration award. Dkt. No. 23. No response to defendants’
motion to confirm the award has been filed by plaintiff Tomczak. Argument of
defendants’ motion to confirm was scheduled for July 9, 2014, but was adjourned by
the Court on July 7, 2014, and the motion was deemed submitted, when plaintiff did
not seek to file a response.
Authority for a Summary Confirmation Proceeding. As a preliminary
matter, although it has been neither raised nor addressed by the Raymour and
Flanigan defendants, the Court must consider its authority to act upon the arbitral
award by summary proceeding. “Arbitration awards are not self-enforcing.” Hoeft v.
MVL Grp., Inc., 343 F.3d 57, 63 (2d Cir. 2003), overruled on other grounds by Hall
St. Assocs. L.L.C. v. Mattell, Inc., 552 U.S. 576 (2008). “Normally, confirmation of
an arbitration award is a summary proceeding that merely makes what is already a
final arbitration award a judgment of the court, and the court must grant the award
unless the award is vacated, modified, or corrected.” D.H. Blair & Co. v. Gottdiener,
462 F.3d 95, 110 (2d Cir. 2006).
However, summary confirmation of an arbitration award pursuant to Section 9
of the Federal Arbitration Act is available “only where the parties in their agreement
have agreed that a judgment of the court shall be entered upon the award.” Varley
v. Tarrytown Associates, Inc., 477 F.2d 208, 210 (2d Cir. 1973) (emphasis added);
see Idea Nuova, Inc. v. GM Licensing Grp., Inc., 617 F.3d 177, 180 (2d Cir. 2010).
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Section 9 of the Act provides, 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.
9 U.S.C. § 9. In this case, the parties conducted the arbitration pursuant to a prior
written arbitration agreement that did not expressly provide that a judgment would be
entered in a specified court upon the arbitration award. Dkt. No. 23-5, pp. 28-33.
Nevertheless, even where parties arbitrate pursuant to an arbitration
agreement that does not have an express entry-of-judgment clause, the Second
Circuit has ruled that a sufficient basis for summary confirmation of an award under
Section 9 of the Act may be found where: (1) an arbitration clause provides that an
arbitral award “shall be final;” and, (2) the parties have participated fully in the
arbitration. I/S Stavborg v. Nat'l Metal Converters, Inc., 500 F.2d 424, 425-27 (2d
Cir. 1974); see also Kallen v. District 1199, Nat'l Union of Hosp. and Health Care
Employees, 574 F.2d 723, 724-26 (2d Cir. 1978). In this case, although the parties
conducted the arbitration pursuant to an agreement that did not contain an express
entry-of-judgment clause, the agreement did provide the arbitration is “BINDING
ARBITRATION.” Dkt. No. 23-5, p. 33; see Dkt. No. 23-5, p. 4 (“final and binding
arbitration”); pp. 5, 15, (¶ 15). The agreement also states:
YOU UNDERSTAND THAT YOU ARE VOLUNTARILY
WAIVING YOUR RIGHT TO A JURY TRIAL OR A JUDGE
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TRIAL FOR SUCH DISPUTE.
Id. at p. 33.
While it is not apparent from the Raymour and Flanigan defendants’ motion
for summary confirmation of the arbitration award whether the parties’ arbitration
agreement incorporated arbitration rules providing for entry of judgment confirming
the arbitral award, docket minutes and a Text Order entered by Magistrate Judge
Jeremiah J. McCarthy, who was authorized to conduct pretrial proceedings under 28
U.S.C. § 636(b), establish that the parties’ agreement to arbitrate, when they stated
it to the Magistrate Judge on August 27, 2013, ratified their prior written arbitration
agreement, confirmed the parties’ agreement to resolve the claims raised in this
action by arbitration, and indicated that a motion to confirm or vacate the award
would lie after arbitration. Dkt. Nos. 21, 22. Plaintiff Tomczak’s failure timely to
challenge the arbitral award, and her failure to respond to defendants’ June 17,
2014 motion for summary confirmation of the arbitral award, also tends to confirm
that the parties’ agreed to final resolution of the claims arising in this action by
arbitration.
Finally, it is apparent from the record before the Court that plaintiff Tomczak
fully participated in the arbitration proceedings. Dkt. No. 23-1. The award shows
that all parties’ claims and arguments were thoroughly argued. Id. In light of all of
these circumstances, the Court finds the entry-of-judgment requirement of section 9
of the Federal Arbitration Act, as interpreted by the Second Circuit, has been met,
and the Court therefore has authority to proceed by summary proceeding. See Idea
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Nuova, Inc. v. GM Licensing Grp., Inc., 617 F.3d 177, 180 (2d Cir. 2010).
There may be an unresolved question whether the express entry-of-judgment
requirement of section 9 of the Federal Arbitration Act authorizing a summary
proceeding is also necessary predicate for an exercise of federal subject matter
jurisdiction. Compare Varley v. Tarrytown Associates, 477 F.2d 208 (2d Cir. 1973)
and Smiga v. Dean Witter Reynolds, Inc., 766 F.2d 698, 705 (2d Cir. 1985), with I/S
Stavborg v. National Metal Converters, Inc., 500 F.2d 424 (2d Cir. 1974) and Kallen
v. District 1199, National Union of Hospital & Health, 574 F.2d 723, 725 (2d Cir.
1978). However, because the Truth in Lending Act claim alleged by plaintiff
Tomczak raises an independent federal question under 28 U.S.C. § 1331 sufficient
to invoke the Court’s subject matter jurisdiction, and because of the parties’
particular agreements and conduct in this case, the Court concludes pursuant to
Second Circuit law that it has authority for this summary confirmation proceeding.
The Award. As mentioned above, section 9 of the Federal Arbitration Act
provides that where a party properly moves for summary confirmation of an
arbitration award, “the court must grant such an order unless the award is vacated,
modified, or corrected as prescribed” in the remainder of the Act. 9 U.S.C. § 9.
The Act then provides that a court may change or vacate an arbitration award only
where “the award was procured by corruption, fraud, or undue means”; where
“there was evident partiality or corruption in the arbitrators”; where the “arbitrators
were guilty of misconduct in refusing to postpone the hearing”; where the
“arbitrators exceeded their powers”; where there was “evident material
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miscalculation of figures”; or where “the arbitrators have awarded upon a matter not
submitted to them.” Id. §§ 10-11. The Court’s review of the arbitration award is
therefore “severely limited.” Willemijn Houdstermaatschappij, BV v. Standards
Microsystems Corp., 103 F.3d 9, 12 (2d Cir. 1997).
The Court has carefully reviewed the February 20, 2014 arbitration award.
Dkt. No. 23-1. The Court finds no basis for vacating, modifying, or correcting the
award. 9 U.S.C. §§ 10-11. Accordingly, it is hereby
ORDERED, the stay of this action pending arbitration entered by Magistrate
Judge McCarthy, Dkt. No. 22, is lifted, and it is further
ORDERED, pursuant to section 9 of the Federal Arbitration Act, the motion of
defendants Raymour and Flanigan Furniture Company and Raymour and Flanigan
Furniture, Inc., to confirm the February 20, 2014 arbitration award, Dkt. No. 23, is
granted. The claim of plaintiff Jennifer Tomczak under the Truth in Lending Act, 15
U.S.C. § 1601, et seq., raised in the Complaint is time barred, plaintiff’s New York
state-law claims in the Complaint fail to allege viable claims as a matter of law, and
re-pleading those claims would be futile. The Clerk of the Court shall enter
judgment dismissing the Complaint, Dkt. No. 2, with prejudice, and close the case.
IT IS SO ORDERED.

____Richard J. Arcara____________
HONORABLE RICHARD J. ARCARA
UNITED STATES DISTRICT COURT
Dated: July 9, 2014
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