Desousa v. Jabiru USA Sport Aircraft, LLC

Filing 24

MEMORANDUM AND ORDER: Plaintiff's 19 Motion for "Relief from Final Order, Reconsider, Vacate Award/Judgment & Reopen Case" is hereby DENIED. Signed by District Judge Harry S Mattice, Jr on 9/6/2011. (BJL) Modified on 9/6/2011 (BJL, ). Mailed to Plaintiff Desousa.

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
at WINCHESTER
ROGER DESOUSA,
Plaintiff,
v.
JABIRU USA SPORT AIRCRAFT, LLC,
and JABIRU AIRCRAFT PTY LTD.,
Defendants.

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Case No: 4:08-cv-44
Judge Mattice

MEMORANDUM AND ORDER
Before the Court is Plaintiff’s Motion for “Relief from Final Order, Reconsider,
Vacate Award/Judgement & Reopen Case” (“Motion to Vacate Award”) [Court Doc. 19],
filed November 17, 2010. Defendants filed their Response [Court Doc. 21] on November
22, 2010. As a reply, Plaintiff filed an “Additional Arguments for Relief from Final Order,
Reconsider, Vacate Award/Judgement & Reopen Case” (“Additional Arguments”) [Court
Doc. 22] on March 14, 2011. Defendants filed a response to Plaintiff’s Additional
Arguments [Court Doc. 23] on March 15, 2011. For the reasons explained below, Plaintiff’s
instant motion [Court Doc. 19] will be DENIED.
I.

PROCEDURAL BACKGROUND
The procedural history of this case is important to the Court’s consideration of the

instant motion. After Plaintiff filed his complaint [Court Doc. 1] on May 27, 2008,
Defendants filed both an answer [Court Doc. 2] and a Motion to Stay Action Pending
Arbitration [Court Doc. 3] on July 28, 2008. After Plaintiff filed his response in opposition
[Court Doc. 4], the Court referred the motion to stay the action pending arbitration to
Magistrate Judge Carter [Court Doc. 9] on October 30, 2008. Magistrate Judge Carter

made his Report and Recommendations (R&R) [Court Doc. 10] on November 3, 2008 and,
after neither party objected, on January 7, 2009, this Court accepted and adopted the
findings and conclusions in the R&R and stayed the action pending the completion of the
arbitration [Court Doc. 11].
By letter dated July 12, 2009, and received by the Court and filed on July 20, 2009
[Court Doc. 14], Plaintiff filed a status report indicating that the arbitration hearing was held
on May 21, 2009, that post-hearing briefs had been submitted, and that the arbitrator
stated he believed he would have a decision by the end of July. On August 26, 2009,
Defendants filed a status report [Court Doc. 15] stating that arbitration had been completed
and that the arbitrator had issued his opinion in an order dated July 20, 2009 that “awarded
judgment to the defendants with a provision that the fees of the arbitrator be paid by the
defendants,” and that “[e]ach party would bear their own costs.” The defendants further
reported that “[t]his decision of the arbitrator concludes this case, and an appropriate order
should enter.” Id.
Because the Court did not consider this language sufficient to qualify as an
application to confirm the award and because neither party had taken any additional steps
to seek to have the award confirmed, vacated, or modified, on August 27, 2009, the Court
issued an Order [Court Doc. 16] putting the parties on notice that, unless they filed a
motion to enter a final order and judgment by September 9, 2009, the Court would dismiss
the case with prejudice. Shortly thereafter, on September 1, 2009, Defendants filed a
Motion for Entry of Final Order [Court Doc. 17] moving the Court to enter a final order and
judgment and stating the following in support of their motion:
1. Following the report and recommendation of United States
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Magistrate Judge William E. Carter, this court remanded the
case for binding arbitration.
2. The arbitration proceedings were held on May 21, 2009,
before the Honorable Charles Gearhiser, an arbitrator chosen
by the parties and in accordance with an agreement to binding
arbitration signed by the parties.
3. The arbitrator has prepared and filed the arbitrator’s
decision and award which awarded judgment to the
defendants with the fees of the arbitrator to be paid by the
defendants.
After more than seven months passed without any objection or other motion from
Plaintiff, the Court entered an Order [Court Doc. 18] granting Defendants’ unopposed
Motion for Entry of Final Order and dismissed the case with prejudice. An additional seven
months passed before Plaintiff filed the instant motion to vacate the award on November
17, 2010.
II.

ANALYSIS
The instant matter is governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq.,

as noted by the Magistrate Judge Carter’s R&R [Court Doc. 10] and the Court’s Order
staying the matter pending arbitration [Court Doc. 11]. The United States Court of Appeals
for the Sixth Circuit confirms and elaborates upon this point, noting: “In attempting to
vacate or modify an arbitration award governed by the Federal Arbitration Act, a
disappointed party must look to sections 10 and 11 of Title 9, which ‘provide [the] exclusive
regime[ ] for the review provided by the [Federal Arbitration Act].’ Section 10 enumerates
several grounds for vacating an award, while section 11 does the same for modifying an
award.” Grain v. Trinity Health, Mercy Health Srvc. Inc., 551 F.3d 374, 378 (6th Cir. 2008)
(quoting Hall Street Assoc., L.L.C. v. Mattel, Inc., 552 U.S. 576, 587 (2008)).
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Importantly, the United States Supreme Court case the Sixth Circuit was citing in
Grain discussed the absolutist nature of § 9:
the § 9 language, where provision for judicial confirmation
carries no hint of flexibility. On application for an order
confirming the arbitration award, the court “must grant” the
order “unless the award is vacated, modified, or corrected as
prescribed in sections 10 and 11 of this title.” There is nothing
malleable about “must grant,” which unequivocally tells courts
to grant confirmation in all cases, except when one of the
“prescribed” exceptions applies.
Hall Street Assoc., L.L.C., 552 U.S. at 587.
After Defendants applied to this Court for an order confirming the arbitration award
by entering a final judgment, the Court had no choice but to enter that final judgment
unless Plaintiff moved for the vacation, modification or correction of the award under 9
U.S.C. §§ 10-11. Further, “[n]otice of a motion to vacate, modify, or correct an award must
be served upon the adverse party or his attorney within three months after the award is
filed or delivered.” 9 U.S.C. § 12. See also, Nationwide Mut. Ins. Co. v. Home Ins. Co., 278
F.3d 621, 627 (6th Cir. 2002) (“a motion to vacate must be filed within three months from
the date the decision is issued.”)
Significantly, Plaintiff is clearly aware of this three-month deadline to file a motion
to vacate but has chosen to regard this time limit as “arbitrary” because “the short
timeframe doesn't seem to follow the reasoning often cited in establishing limits in common
law,” and because he believes that “the judicial branch cannot interpret any legislative law
[the FAA] in a manner that sidesteps its own power to enforce the most basic concepts of
law of 'fairness' and 'justice'.” (Pl.’s Add’l Arguments, 2-3.) Unfortunately for Plaintiff, the
Court’s power to review an arbitrator’s award is significantly constrained under the FAA,
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as the Supreme Court and the Sixth Circuit have repeatedly noted, and although Plaintiff
has chosen to ignore the constraints imposed by the FAA, this Court cannot. See, e.g., Hall
Street Assoc., L.L.C., 552 U.S. at 587; Grain, 551 F.3d at 378.
Although Plaintiff notes that the arbitrator did not file his decision with the Court, the
documents he attaches to his motion make clear that the arbitrator was merely sending the
award to the Court for its information, not filing it formally through the Court’s electronic
case management system. Regardless, 9 U.S.C. § 12 makes clear that the motion to
vacate must be filed within three months after the award is “filed or delivered.” 9 U.S.C. §
12 (emphasis added). Plaintiff himself notes that he received “the award and cover letter
back in July of 2009.” (Pl.’s Mot. to Vacate Award at 2.) Therefore, assuming generously
that he received the award on July 31, 2009, Plaintiff needed to file his motion to vacate
no later than October 31, 2009. Because Plaintiff did not file his Motion to Vacate until
November 17, 2010, his motion is clearly untimely and must be denied.1
Finally, even if Plaintiff’s Motion to Vacate had been timely filed, his arguments and

1

Plaintiff repeatedly asserts that a num ber of events that have transpired since the arbitrator issued
his decision and award that rendered him unable to object, including a hospital adm ission in which he was
subjected to “m ind controlling” drugs, trespasses into his hom e resulting in the original award he received
being replaced with an altered replacem ent, and “m an in the m iddle” fraud – apparently a reference to
electronic attacks on his com puter and telephone that prevents him from getting directly in contact with the
other interested parties. (Mot. to Vacate Award, 2-3.)
Plaintiff im plies, but never states, that these intrusions are related to the instant action. Further, the
“evidence” consists of insurance explanation of benefits m ailings (Mot. to Vacate Award, Exs. 5-7) showing
only a hospital adm ission and what appears to be a poorly-replicated screenshot of an error m essage on a
com puter (Mot. to Vacate Award, Ex. 8). This evidence is unconvincing and does not provide the Court with
any evidence of fraud.
Finally, only the hospital adm ission is even suggested as having prevented him from objecting to the
Court. Although he does not specify tim es, the other two circum stances are clearly alleged to have occurred
before Court issued its Order dism issing the case, and he was aware of those circum stances at the tim e, but
chose not to bring them to the Court’s attention. The hospital adm ission was alleged to have been on April
15 and 20-29, well after the tim e period for objecting. Even so, Plaintiff waited an additional seven m onths
after his release before filing his Motion to Vacate.

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the “evidence” he presents in support is unconvincing and does not provide the Court with
any ground upon which it would order the award vacated. The FAA allows this Court to:
make an order vacating the award upon the application of any
party to the arbitration-(1) where the award was procured by corruption, fraud, or
undue means;
(2) where there was evident partiality or corruption in the
arbitrators, or either of them;
(3) where the arbitrators were guilty of misconduct in refusing
to postpone the hearing, upon sufficient cause shown, or in
refusing to hear evidence pertinent and material to the
controversy; or of any other misbehavior by which the rights of
any party have been prejudiced; or
(4) where the arbitrators exceeded their powers, or so
imperfectly executed them that a mutual, final, and definite
award upon the subject matter submitted was not made.
9 U.S.C. § 10(a).
In his Motion to Vacate the Award, Plaintiff argues that “arbitrator's award and the
events transpired are inconsistent enough to indicate that, at minimum, fraud (and possibly
collusion) transpired.” (Mot. to Vacate at 1.) The “events” to which Plaintiff refers as
grounds to vacate the award are:
1. The Defendants mailed their Motion to Dismiss to the
Plaintiff’s old address in Port Townsend.
2. The court ordered that a final order and judgment confirming
the arbitrator's findings pursuant to 9 U.S.C. § 9. However, the
award has not been filed by the Defendants. The cover letter
and award in the Plaintiffs possession are attached as exhibit
#3 and #4 respectively.
3. The arbitrator's cover letter states "I am sending a copy of
this opinion to Judge Mattice for his information."
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4. Award not filed as claimed by arbitrator and Defendants'
counsel.
5. The Defendants haven't put in a motion claiming that the
arbitrator exceeded his powers. Surely the Dedendants'
counsel noticed that the award was not filed.
6. 'Man in the middle' fraud at minimum.
Id.
As already noted, Plaintiff’s allegations, particularly the “man-in-the-middle” fraud,
seem to center on a vaguely-defined conspiracy wherein his copies of the arbitration
decision and award were stolen and replaced with slightly-altered versions and where
unspecified parties engaged in “man in the middle” fraud – apparently an allegation that
unknown parties were intercepting his calls, electronic communications, and mail,
mimicking the individuals he believed he was contacting and altering the communications
and documents in an unknown fashion. This conspiracy is alleged to have culminated in
his admission to a hospital and the involuntary administration of mind-controlling drugs and
a brief imprisonment. Plaintiff’s “evidence” consists of terms of the original contract, the
arbitration agreement and decision, insurance explanation of benefits mailings showing
(only) a hospital admission, and what appears to be a poorly-replicated screenshot of an
error message on a computer. (Mot. to Vacate Award, Exs. 1-8.)
Although Plaintiff implies these events are related to this arbitration by repeatedly
noting that they occurred after he filed this case, he never actually alleges the involvement
of Defendants or the arbitrator – except to note that the arbitrator’s award of July 2009
differed in tone, content, and detail from what transpired at the hearing and that the
arbitrator has since stated he cannot remember the answers to certain of Plaintiff’s
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questions – and the evidence and arguments he submits do not support such a conclusion.
Further, as to the six grounds asserted by Plaintiff, even his allegations, if accepted
by the Court, would have been insufficient for this Court to vacate the award.
For instance, as to his first argument, although Defendants did indeed mail the
Motion for Entry of Final Judgment to Plaintiff’s old address, the electronic case
management system reflects that the Clerk’s Office mailed a copy of the motion to
Plaintiff’s updated address on file. In addition, Plaintiff’s fifth argument – that Defendants
should have objected that the arbitrator exceeded his powers – is baseless. Defendants
clearly did not object to the arbitrator’s award or exercise of his powers, as they sought to
confirm the award by motion for entry of final judgment.
Likewise, Plaintiff’s allegations of “man in the middle” fraud are unsupported and
unavailing. The record shows only some sort of computer error message without any
evidence of improper interception or the involvement of any parties to this action.
Plaintiff’s remaining arguments relate to the “filing” of the award. Although
Defendants did not file a copy of the arbitrator’s decision on file with the Court, they
repeatedly filed the “award” which, in this case, was that judgment was awarded to
Defendants, but with Defendants paying all the arbitrator’s fees and each party otherwise
bearing its own costs. See (Court Doc. 15, Defs.’ Post-Arbitration Status Report; Court
Doc. 17, Defs.’ Mot. for Entry of Final Order.) This award corresponds with the judgment
and fees awarded in Plaintiff’s copy of the arbitrator’s decision and award (Court Doc. 194), and Plaintiff does not allege that this language was affected by the alleged replacement
of his copy of the decision and award. (Court Doc. 19-4, Arbitrator’s Decision and Award,
at 9.) The alleged inconsistencies in the arbitrator’s statements are countered by the face
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of the documents; the arbitrator never claims to be filing a copy with the Court, but rather
says he is simply sending a copy of the opinion to chambers for informational purposes.
Even though the procedure was somewhat unusual, as previously noted, this Court was
required to confirm the award absent a motion to vacate or modify from Plaintiff, and the
time for any objection on any ground passed long before Plaintiff filed the instant motion
to vacate.
Finally, even his allegations of bias and fraud appear to be inconsistent. Plaintiff first
claims that the arbitrator’s decision was misleading because it implied the Defendants
offered an expert witness in person at the arbitration (Mot. to Vacate Award at 2), and then
clarifies that the Defendants did have an expert witness, but he wasn’t at the arbitration
(Add’l Arguments at 5). The decision does discuss the Defendants’ expert, Doug Smith,
but does not imply that he was at the hearing. (Court Doc. 19-4, Arbitrator’s Decision and
Award, at 3.) Where his allegations are consistent – for instance, that the arbitrator was
biased in not considering him sufficiently qualified to serve as an expert as to the design
of the brakes – the arbitrator’s decision makes clear that he thoroughly considered all the
relevant evidence and issued a thoughtful opinion.
Therefore, Plaintiff does not show any good cause2 for his failure to act timely;
instead, he clearly understood the applicable rules and chose not to abide by them due to
his philosophical disagreements. Further, even if Plaintiff’s Motion to Vacate were not
untimely, his arguments and “evidence” are unconvincing and the arbitrator’s decision and
award not only does not appear to be the product of fraud or coercion or arbitrator bias or

2

W hether the FAA lim itations period is even subject to equitable tolling is unclear. See, e.g., Mrrill Lynch,
Pierce, Fenner & Smith, Inc. v. Berry, 92 F. App’x 243, 246-47 (6th Cir. 2004).

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misconduct, but appears to be well within the arbitrator’s powers and satisfactorily exected
as well-reasoned and supported by the evidence. Therefore, this Court would not have
issued an order vacating the award.
Plaintiff also brings his Motion to Vacate pursuant to Federal Rule of Civil Procedure
60(b), which provides that, “[o]n motion and upon such terms as are just,” a court may
“relieve a party . . . from a final judgment, order, or proceeding,” but only for the following
reasons:
(1) mistake, inadvertence, surprise, or excusable neglect; (2)
newly discovered evidence that, with reasonable diligence,
could not have been discovered in time to move for a new trial
. . . ; (3) fraud . . . , misrepresentation, or other misconduct of
an adverse party; (4) the judgment is void; (5) the judgment
has been satisfied, released, or discharged, or a prior
judgment upon which it is based has been reversed or
otherwise vacated, or it is no longer equitable that the
judgment should have prospective application; or (6) any other
reason justifying relief from the operation of the judgment.
“[T]he party seeking relief under Rule 60(b) bears the burden of establishing the grounds
for such relief by clear and convincing evidence.” Satyam Comp. Srvc., Ltd. v. Venture
Global Eng’g, LLC, 323 F. App’x 421, 427 (6th Cir. 2009) (quoting Info-Hold, Inc. v. Sound
Merch., Inc., 538 F.3d 448, 454 (6th Cir.2008) while discussing Rule 60 and vacating
arbitration awards).
Plaintiff’s motion can only be construed as arguing for relief pursuant to Rule
60(b)(1) due to excusable neglect – his hospitalization preventing his objecting to the
Court’s final order – and pursuant to Rule 60(b)(3) due to fraud. As discussed in detail
above, even Plaintiff’s allegations on this point are insufficient to support relief pursuant to
Rule 60: his hospitalization had no effect on the untimeliness of the motion to vacate, and
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he does not allege that Defendants caused the “man in the middle” fraud, nor does he
explain how it prevented his objecting timely, particularly as he was aware of it before the
order was entered. Further, his “evidence” not only falls well short of the“clear and
convincing” standard, but is altogether unconvincing. Accordingly, Plaintiff’s Motion to
Vacate Award will also be denied to the extent it is brought pursuant to Fed. R. Civ. P. 60.
III.

CONCLUSION
Accordingly, for the reasons explained above, Plaintiff’s Motion for “Relief from Final

Order, Reconsider, Vacate Award/Judgement & Reopen Case” [Court Doc. 19] is hereby
DENIED.
The case shall remain closed.

SO ORDERED this 6th day of September, 2011.

/s/Harry S. Mattice, Jr.
HARRY S. MATTICE, JR.
UNITED STATES DISTRICT JUDGE

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