Zurich American Insurance Company v. CLB Management, Ltd. et al
Filing
12
Memorandum Opinion and Order granting 7 Motion to Confirm Arbitration Award. (Ordered by Judge Sam A Lindsay on 6/19/2012) (twd)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
ZURICH AMERICAN INSURANCE
COMPANY,
Petitioner,
v.
CLB MANAGEMENT, et al.,
Respondents.
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Civil Action No. 3:11-CV-2755-L
MEMORANDUM OPINION AND ORDER
Before the court is Petitioner Zurich American Insurance Company’s Motion to Confirm
Arbitration Award, filed February 29, 2012 (Doc. 7). Petitioner Zurich American Insurance
Company (“Zurich”) seeks confirmation of an arbitration award issued August 18, 2011, against
CLB Management, Ltd., CLB Partners, Ltd., and CLB Holdings, LLC (collectively, “Respondents”),
and entry of judgment in its favor. Based on the relevant filings and applicable law, the court
determines that the motion should be and is hereby granted.
I. Background
Zurich and CLB Management, Ltd. (“CLB”) entered into written agreements in connection
with workers compensation and general liability insurance policies that Zurich issued to CLB. (Doc.
7, 2.) The agreements provided for arbitration of any dispute arising out of the interpretation,
performance, or alleged breach of the agreements. The agreements state in pertinent part: “Any
dispute arising out of the interpretation, performance, or alleged breach of this Agreement, shall be
Memorandum Opinion and Order - Page 1
settled by binding arbitration administered by the American Arbitration Association (“AAA”) under
its Commercial Arbitration Rules . . . .” (Doc. 1, Exhibit A, ¶ N.)
On June 2, 2010, Zurich demanded arbitration of a dispute that arose between Zurich and
CLB regarding payments due and owing to Zurich. (Doc. 1, ¶ 10.) Zurich filed its demand with the
AAA. (Id.) Pursuant to the arbitration agreement, Zurich appointed Mary Ellen Burns as its
arbitrator. (Id., ¶ 11.) CLB did not initially appear in the arbitration, and as provided by the terms
of the agreements, Zurich selected Nancy Gervinski as the arbitrator for CLB. (Id., ¶ 11 and Exh.
A, ¶ N.) The party-appointed arbitrators chose Daniel Formeller as the third arbitrator pursuant to
the terms of the arbitration agreement. (Id., ¶ 11.) CLB subsequently appeared in the arbitration.
(Id., ¶ 12.) CLB Partners, Ltd., and CLB Holdings, LLC, later agreed to be added as respondents to
the arbitration proceeding. (Id.)
The arbitration was scheduled for January 18, 2011, in Schaumburg, Illinois. (Doc. 1, ¶ 13.)
On or about December 16, 2010, however, the parties agreed to resolve their disputes and jointly
requested the arbitrators to enter a final award. (Id.) On August 18, 2011, the arbitrators confirmed
the parties’ settlement agreement and entered a final award entitling Zurich to an award of damages
from the Respondents, jointly and severally, in the amount of $702,137.85 plus post-award interest
at an annual rate of 9 percent (Final Award). (Id., Exh. B.) Respondents have failed to satisfy the
Final Award. (Doc. 1, ¶ 15.)
Zurich filed this action on October 17, 2011. (Doc. 1.) It served the Respondents and their
attorney with a notice of suit and a form Waiver of Service of Summons on November 14, 2011, and
Respondents’ counsel filed the executed waiver on December 20, 2011. (Doc. 6.) Respondents
subsequently failed to file an answer or otherwise respond to the petition. (Doc. 7, 5.) Zurich filed
Memorandum Opinion and Order - Page 2
its motion to confirm the arbitration award on February 29, 2012. (Doc. 7.) The Respondents again
failed to respond.
II. Analysis
Zurich seeks entry of the order confirming the August 18, 2011 arbitration award and entry
of a judgment in its favor in accordance with the provisions of 9 U.S.C. § 9.
A.
Confirmation of Award
The parties’ arbitration agreement provides that “Confirmation of the award may be entered
in any court having jurisdiction.” (Id., ¶ 16 and Ex. A, ¶ N.6.) The parties also agreed to arbitrate
their disputes in accordance with the AAA’s Commercial Arbitration Rules; Commercial Arbitration
Rule R-48(c) states that “Parties to an arbitration under these rules shall be deemed to have
consented that judgment upon the arbitration award may be entered in any federal or state court
having jurisdiction thereof.” (Id., ¶ 17 and Pet.’s App. 14.)
Pursuant to the Federal Arbitration Act, if the parties have agreed that a judgment of the court
shall be entered upon the entry of an arbitration award, then upon application by a party, the court
must grant such an order unless the award is vacated, modified, or corrected. 9 U.S.C. § 9. The
record reveals no grounds for vacation, modification or correction of the award pursuant to either
9 U.S.C. §§ 10-11 or any of the non-statutory grounds enunciated by the Fifth Circuit. See Glover
v. IBP, Inc., 334 F.3d 471, 473-74 (5th Cir. 2003); Exxon Corp. v. Baton Rouge Oil and Chem.
Workers, 77 F.3d 850, 853 (5th Cir. 1996); Manville Forest Prods. Corp. v. United Paperworkers
Int’l Union, 831 F.2d 72, 74 (5th Cir. 1987); Nauru Phosphate Royalties, Inc. v. Drago Daic
Interests, Inc., 138 F.3d 160, 164 (5th Cir. 1998). Accordingly, Zurich is entitled to entry of an order
confirming the Final Award.
Memorandum Opinion and Order - Page 3
B.
Post-judgment Interest
In addition to confirmation of the Final Award, Zurich also seeks post-judgment interest at
the rate of 9% per annum. “The post-judgment interest rate for all judgments entered in federal
courts, including those in diversity cases, is governed by 28 U.S.C. § 1961.” See Woods v. P.A.M.
Transport Inc.-L.U., 440 F. App’x 265, 270 (5th Cir. 2011) (emphasis in original). In this case, the
Final Award entitles Zurich to recover post-award interest at the requested rate of 9% per annum.
(Doc. 1, Exh. B.) Zurich is therefore entitled to recover post-award interest at the rate of 9% per
annum from the date of the Final Award, August 18, 2011, until the date of judgment. Zurich will
be entitled to recover post-judgment interest at the applicable federal rate1 from the date of entry of
judgment until it is paid in full.
III. Conclusion
For the reasons explained, Petitioner Zurich American Insurance Company’s Motion to
Confirm Arbitration Award, filed February 29, 2012 (Doc. 7), is granted.
It is hereby ordered, adjudged, and decreed that the Final Award dated August 18, 2011,
in the arbitration matter between Zurich American Insurance Company and CLB Management, Ltd.,
CLB Partners, Ltd., and CLB Holdings, LLC awarding Zurich American Insurance Company
damages in the amount of $702,137.85, plus post-award interest at the rate of 9% per annum, is in
all respects confirmed.
It is further ordered that Zurich American Insurance Company shall recover $702,137.85
in damages from CLB Management, Ltd., CLB Partners, Ltd., and CLB Holdings, LLC, as
1
The postjudgment interest rate is based upon the applicable federal rate. See 28 U.S.C. § 1961.
Memorandum Opinion and Order - Page 4
contemplated by the Final Award, plus post-award interest at the rate of 9% per annum from August
18, 2011, through the date judgment is entered.
It is further ordered that Zurich American Insurance Company shall recover post-judgment
interest at the applicable federal rate from the date judgment is entered until it is paid in full. The
court, as required by Rule 58 of the Federal Rules of Civil Procedure, will issue judgment by
separate order.
It is so ordered this 19th day of June, 2012.
____________________________________
Sam A. Lindsay
United States District Judge
Memorandum Opinion and Order - Page 5
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