1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

United States District Court 

Northern District of Californi

a

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

PARKRIDGE LIMITED and MABEL 

MAK, 

Plaintiffs, 

v. 

INDYZEN, INC. and PRAVEEN NARRA 

KUMAR, 

Defendants. 

Case No. 16-cv-07387-JSW 

ORDER DENYING MOTION TO 

VACATE, MODIFY, OR CORRECT 

ARBITRATION AWARD AND 

GRANTING MOTION TO CONFIRM 

ARBITRATION AWARD 

Re: Dkt. Nos. 83, 86 

 Now before the Court are the motion to vacate, modify, or correct the arbitration award 

filed by Plaintiffs Parkridge Limited and Mabel Mak and the cross-motion to confirm the 

arbitration award filed by Defendants Indyzen, Inc. and Praveen Narra Kumar. The Court has 

considered the parties’ papers, relevant legal authority, and the record in this case, and for the 

reasons set forth below, the Court HEREBY DENIES the motion to vacate and GRANTS the 

motion to confirm the arbitration award. The additional request for attorney’s fees is DENIED 

without prejudice and the stay is LIFTED. 

BACKGROUND 

 On December 29, 2016, Plaintiffs Parkridge Limited and Mabel Mak filed suit against 

Defendants Indyzen, Inc. and Praveen Narra, alleging breach of fiduciary duty, aiding and 

abetting, breach of contract, unjust enrichment, fraudulent misrepresentation, and fraudulent 

concealment in connection with the development of the Morfit App. 

Originating in 2013, Randy Dobson began working on developing on online personal 

Case 4:16-cv-07387-JSW Document 98 Filed 03/02/20 Page 1 of 8
2 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

United States District Court 

Northern District of Californi

a

training platform that would connect personal trainers with clients by utilizing a personality 

matching program, later known as Morfit (“Morfit App”). (Complaint at ¶ 7.) While at a business 

event, Dobson shared his idea with a small group of individuals, including Narra, who discussed 

his background and expertise in software development. Parkridge was formed in August 2013, 

and was owned by Dobson’s wife, Mabel Mak. Upon Narra’s recommendation, the company 

hired a software development company, TIBCO, to develop the app, but were ultimately not 

satisfied with their work. Narra then recommended his own software company, Indyzen, to 

develop the Morfit App. Narra represented that Indyzen could develop the app basically at cost 

and at a fraction of the price of competitors. Based on those representations, the parties entered 

into a Software Development and Licensing Agreement effective January 5, 2015 (the “Morfit 

Agreement”). The Morfit Agreement provided that Indyzen would develop a Morfit App for three 

different platforms and with thirty-two specific application features. (Dkt. No. 92-3, Declaration 

of Michael J. Smikun (“Smikun Decl.”), Ex. B.) The Agreement provided, should any dispute 

arise, it would be referred to arbitration in San Jose, California and conducted in accordance with 

the Commercial Arbitration Rules of the American Arbitration Association (“AAA”). (Id. at § 

11.) 

In April 2015, Indyzen delivered a version of the Morfit App to Parkridge, which Plaintiffs 

allege was grossly inadequate. (Complaint ¶ 32.) Although the parties continued to discuss 

resolution of the technical issues and Parkridge paid for the first phase of development, ultimately 

the app was never launched and payments ceased. (Id.at ¶¶ 34-37.) After a complaint was filed in 

this Court, by order dated April 18, 2017, the Court sent the parties to arbitration for resolution of 

their disputes and the case was stayed. By order dated April 13, 2018, this Court further 

compelled arbitration of the parties’ additional claims. 

Pursuant to Section 11 of the Morfit Agreement, Plaintiffs filed a demand for arbitration 

with AAA dated June 15, 2017 and alleged multiple causes of action, including breach of 

fiduciary duty, breach of contract, fraudulent misrepresentation, and fraudulent concealment under 

California law. Claimants sought damages in the amount of $2,800,000 and specific performance 

in connection with the Morfit App. Defendants filed an arbitration statement with affirmative 

Case 4:16-cv-07387-JSW Document 98 Filed 03/02/20 Page 2 of 8
3 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

United States District Court 

Northern District of Californi

a

defenses and counterclaims and, without stating a specific cause of action against Plaintiffs, 

sought damages in excess of $5,300,000 and a request for other relief as deemed appropriate. 

Following a nine-day evidentiary hearing before the arbitrator, both parties submitted 

written requests to recover their respective costs and attorneys’ fees. Based on his findings, the 

arbitrator awarded Defendants $678,825 in fees and costs, assessed jointly and severally, against 

Parkridge and Mak. (See Smikun Decl., Ex. A at ¶¶ 323-35.) Following receipt of the final 

award, both parties requested various corrections and modifications pursuant to AAA Commercial 

Arbitration Rule 50. In particular, Plaintiffs sought to relieve Mak of individual responsibility for 

fees and costs based on the fact that she was not a signatory to the original Morfit Agreement. On 

October 8, 2019, the arbitrator denied Plaintiffs’ request for the substantive modification, 

reaffirmed, and held that “the merits have been properly decided.” (Id., Ex. 4 at 3.) 

In their motion to vacate, modify, or amend the award, Plaintiffs reiterate their contention 

that Mak should not be held individually liable for fees and costs incurred by Parkridge. 

Defendants, in their counter-motion to confirm the award, contend that Mak plainly acted in “her 

individual capacity, sought for years to wield the Morfit Agreement’s fee-shifting provision 

against Defendants [and h]aving lost on the merits, she cannot backtrack and deprive Defendants 

of the reciprocal remedy.” (Dkt. No. 84, Opp. Br. Motion to Vacate, at 5.) 

The Court will address additional facts as necessary in its analysis. 

ANALYSIS 

A. The Petition to Confirm the Arbitrator’s Award Is Granted. 

 This Court has authority to confirm the arbitration award because it issues the order 

compelling arbitration in the first instance. Where a court has authority under the Federal 

Arbitration Act (“FAA”) to stay an action pending arbitration, “the court also has authority to 

confirm the [arbitration] award.” Marine Transit Corp. v. Dreyfus, 284 U.S. 263, 275-76 (1932). 

 Section 9 of the FAA provides that a federal court must confirm an arbitration award 

“unless the award is vacated, modified, or corrected as prescribed in section 10 and 11 of this 

title.” 9 U.S.C. § 9. Section 10 of the FAA sets forth the limited grounds upon which an 

arbitration award may be vacated or modified: 

Case 4:16-cv-07387-JSW Document 98 Filed 03/02/20 Page 3 of 8
4 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

United States District Court 

Northern District of Californi

a

(1) where the award was procured by corruption, fraud or undue 

means; 

(2) where there was evidence 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 was not made. 

9 U.S.C. § 10. 

 These listed grounds are the exclusive grounds for vacating an arbitration award. Hall 

Street Assocs. LLC v. Mattel, Inc., 552 U.S. 576, 584 (2008). The Court must vacate an arbitration 

award “where the arbitrators exceeded their powers.” 9 U.S.C. § 10(4). However, the standard to 

vacate an arbitration award under Section 10(4) of the FAA is high. Lagstein v. Certain 

Underwriters at Lloyd’s London, 607 F.3d 634, 641 (9th Cir. 2010). An arbitrator may be held to 

exceed his powers where he demonstrates a “manifest disregard of the law,” or issues an award 

that is “completely irrational,” or the award is “incomplete, ambiguous, or contradictory.” 

Comedy Club, Inc. v. Improv. West Assocs., 553 F.3d 1277, 1290 (9th Cir. 2009). However, 

arbitrators do not exceed their powers merely by misinterpreting the law, failing to apply the law, 

or by applying the law incorrectly. Lagstein, 607 F.3d at 641. Rather, neither erroneous legal 

conclusions nor unsubstantiated factual findings justify vacatur of an arbitration award under the 

FAA. Bosack v. Soward, 586 F.3d 1096, 1102, 1104 (9th Cir. 2009). 

The Ninth Circuit has made clear that arbitrators “exceed their powers” within the meaning 

of 9 U.S.C. § 10(a)(4) “not when they merely interpret or apply the governing law incorrectly, but 

when the award is ‘completely irrational,’ . . . or exhibits a ‘manifest disregard of law.’” Kyocera 

Corp. v. Prudential Bache T Servs., 341 F.3d 987, 997 (9th Cir. 2003) (quoting French v. Merrill 

Lynch, Pierce, Fenner & Smith, Inc.,784 F.2d 902, 906 (9th Cir. 1986) and Todd Shipyards Corp. 

v. Cunard Line, Ltd., 943 F.2d 1056, 1059-1060 (9th Cir. 1991)). Federal courts have jurisdiction 

over a petition to vacate an award “where the basis for vacating an arbitration award is that the 

Case 4:16-cv-07387-JSW Document 98 Filed 03/02/20 Page 4 of 8
5 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

United States District Court 

Northern District of Californi

a

arbitrator manifestly disregarded federal law.” Carter v. Health Net of California, 374 F.3d 830, 

836 (9th Cir. 2004). “Where manifest disregard is pleaded, the federal court has subject matter 

jurisdiction.” Jenks v. DLA Piper (US) LLP, NO, 13-cv-05381 YGR, 2014 WL 527237, at *2 

(N.D. Cal. Feb. 6, 2014) (citing Luong v. Circuit City Stores, Inc. 368 F.3d 1109, 1111 (9th Cir. 

2004)). 

 “Manifest disregard of the law means something more than just an error in the law or a 

failure on the part of the arbitrators to understand or apply the law . . . [i]t must be clear from the 

record that the arbitrators recognized the applicable law and then ignored it.” Luong, 368 F.3d at 

1112 (quoting Michigan Mutual Ins. Co. v. Unigard Sec. Ins. Co., 44 F.3d 826, 832 (9th Cir. 

1995)). For a court to rely upon the doctrine of manifest disregard of the law in order to vacate an 

arbitral award, the court “must be persuaded that the arbitrators understood but chose to disregard 

a clearly defined law or legal principal applicable to the case before them. The error must be so 

palpably evident as to be readily perceived as such by the average person qualified to serve as an 

arbitrator.” Duferco Int’l Steel Trading v. T. Klaveness Shipping A/S, 333 F.3d 383, 385 (2d Cir. 

2003). 

 However, an “exception to [the rule affording federal jurisdiction] exists where the 

allegation that the arbitrator manifestly disregarded federal law is ‘patently without merit.’” 

Carter, 374 F.3d at 836-37; see also Perpetual Secs., Inc. v. Tang, 290 F.3d 132, 139 (2d Cir. 

2002) (holding that mere allegation of manifest disregard is insufficient to confer federal question 

jurisdiction if federal claims are completely without merit). It is not sufficient “for purposes of 

establishing the narrow grant of jurisdiction for petitions to vacate based on ‘manifest disregard’ 

of federal law to simply allege ‘error in the law or failure on the part of the arbitrators to 

understand or apply the law.’” Jenks, 2014 WL 527237, at *3 (internal citations omitted). 

“Manifest disregard of the law” may be established by showing that “the arbitrator 

recognizes the applicable law and then ignored it.” Swift Industries Inc. v. Botany Industries Inc., 

466 F.2d 1125, 1131 (3d Cir. 1972). An award may be vacated as “completely irrational” where it 

fails to draw “its essence from the agreement.” Comedy Club, 553 F.3d at 1288. A federal court 

will not confirm an arbitration award that is “legally irreconcilable with the undisputed facts” and 

Case 4:16-cv-07387-JSW Document 98 Filed 03/02/20 Page 5 of 8
6 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

United States District Court 

Northern District of Californi

a

where “an arbitrator’s failure to recognize undisputed, legally dispositive facts may properly be 

deemed a manifest disregard for the law.” Coutee v. Barington Capital Group, L.P., 336 F.3d 

1128, 1133 (9th Cir. 2003) (citing American Postal Workers Union v. United States Postal 

Service, 682 F.2d 1280, 1283-84 (9th Cir. 1982)). 

Under the FAA’s limited review, a party seeking to challenge an arbitration award as 

outside the power of the arbitrator bears a “heavy burden.” Oxford Health Plans, LLC v. Sutter, 

133 S. Ct. 2064, 2068 (2013). A court cannot find an arbitrator exceeded his or her powers “when 

they merely interpret or apply the governing law incorrectly.” Kyocera, 341 F.3d at 997. Rather, 

a court must uphold an arbitrator’s decision unless it is “completely irrational . . . or exhibits a 

manifest disregard of law[.]” Id. (internal quotations and citations omitted). 

 In this case, Plaintiffs contend that the arbitrator’s decision was a manifest disregard of the 

law on the basis that: (1) the arbitrator held that Mabel Mak was individually liable for assessed 

attorneys’ fees and costs, although she was a party to the arbitration but not a party to the contract 

at issue; and (2) the arbitrator found liability for declaratory relief where no separate cause of 

action for declaratory relief was pled. 

 1. Arbitrator Did Not Exceed His Authority in Awarding Attorneys’ Fees. 

 Arbitrators have long had the authority and ability to address requests for broad scope of 

relief within bilateral arbitration. See AAA Commercial Arbitration Rule 47(a) (“The arbitrator 

may grant any remedy or relief that the arbitrator deems just and equitable and within the scope of 

the agreement of the parties”). Here, although Mak was not a signatory to the contract providing 

for arbitration, she did file suit and submitted to and actively participated in the arbitration. In 

addition, this Court found, when compelling the parties to participate in arbitration, that “Plaintiff 

Mak is equitably estopped from seeking benefits of the Morfit Agreement while avoiding the 

arbitration provision. (Dkt. No. 24, Order dated April 18, 2017, at 8.) The arbitrator, early on in 

the process, underlined the Court’s finding in his Procedural Order dated November 6, 2017. 

(Dkt. No. 92-5, Smikun Decl., Ex. D.) The arbitrator found that “no contest was made by the 

parties as to the jurisdictional standing of Claimant Mak” and “no claims by Claimants and against 

Respondents are clearly excluded from arbitration.” (Id. at 3-4.) In addition, in his Final Award, 

Case 4:16-cv-07387-JSW Document 98 Filed 03/02/20 Page 6 of 8
7 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

United States District Court 

Northern District of Californi

a

the arbitrator found that “the fees and costs incurred by both sides are reasonable given the skill 

and experience of counsel, the difficulty of the questions involved, the issues raised by the parties, 

and the generally prevailing market rate for complex international arbitration cases in the San 

Francisco Bay Area.” (Dkt. No. 92-2, Smikun Decl, Ex. A at 93.) The parties engaged in full 

discovery, motion practice, extensive pre-hearing and post-hearing proceedings involving 

pleadings, discovery, witnesses, and expert discovery, both sides made sizeable damages claims 

and offered complex expert analysis and participated in a nine-day evidentiary hearing with the 

arbitrator. (Id. at 94.) The arbitrator also found that, during the course of the proceedings, the 

parties engaged in needless and inefficient discovery tactics, advocacy strategy, and 

gamesmanship resulting in increased fees and costs. (Id. at 95.) The arbitrator explicitly cited 

AAA Commercial Arbitration Rule 47(b) which “allows the arbitrator to assess fees, expenses and 

compensation in accordance with the Rules and in such amounts as the Arbitrator determines 

appropriate.” (Id. at 92-93.) 

Here, Mak filed suit as a party, participated as a claimant in the extensive and expensive 

arbitration proceedings, and expressly requested reimbursement of her attorneys’ fees and costs. 

(Id. at 92.) Under these circumstances, it is reasonable for the arbitrator to have assessed fees and 

costs against both claimants Parkridge and Mak jointly and severally. The Court finds that the 

arbitrator’s decision to find Plaintiff Mak severally liable for attorneys’ fees accumulated during 

the extended arbitration was not a manifest error or disregard of the law. Accordingly, the Court 

DENIES the motion to vacate or modify the arbitration award and GRANTS the motion to enforce 

the award on this basis. 

2. Arbitrator Did Not Exceed His Authority in Awarding Declaratory Relief. 

 Plaintiffs assert that no request for declaratory relief was placed before the arbitrator for 

adjudication and therefore the arbitrator erred and exceeded his authority by awarding the 

Defendants declaratory relief. However, while it is true that a separate claim for declaratory relief 

was not before the arbitrator, it is clear that in their counterclaim, Defendants were seeking 

declaratory relief. A separate cause of action is not required. See Olszewski v. Scripps Health, 30 

Cal. 4th 798, 807 (2003) (holding that where the “complaint asked the court to adjudge the rights 

Case 4:16-cv-07387-JSW Document 98 Filed 03/02/20 Page 7 of 8
8 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

United States District Court 

Northern District of Californi

a

and duties of plaintiff and defendants . . . and alleged facts establishing an ‘actual controversy’ 

appropriate for declaratory relief, such relief is properly pled). In addition, early on in his 

Procedural Order, the arbitrator made it clear that he interpreted the counterclaim to request 

declaratory relief. (Dkt. No. 92-5, Smikun Decl, Ex. D at 6 (order states that Defendants “seek 

compensatory and punitive damages, declaratory relief and other relief.”). Accordingly, the Court 

DENIES the motion to vacate or modify the arbitration award and GRANTS the motion to enforce 

the award on this alternate basis. 

C. Defendants’ Request for Attorneys’ Fees Is Denied Without Prejudice. 

In their motion, Defendants argue they are entitled to their attorney’s fees incurred in 

bringing this action to confirm the arbitrator’s Final Award. (See Motion at 11.) Under Federal 

Rule of Civil Procedure 54(d), “[a] claim for attorney’s fees and related nontaxable expenses must 

be made by motion unless the substantive law requires those fees to be proved at trial as an 

element of damages.” Fed. R. Civ. P. 54(d)(2)(A). In addition, this district’s local rules provide 

certain requirements for attorneys’ fees motions. See Civ. L.R. 54-5(b). Defendants have not filed 

a separate motion for attorneys’ fees or complied with the requirements of the local rules. 

Accordingly, Defendants’ request for attorneys’ fees is DENIED without prejudice to renewal in a 

procedurally proper motion. 

CONCLUSION 

 For the foregoing reasons, Defendants’ motion to confirm the arbitration award is 

GRANTED and Plaintiffs’ motion to vacate, modify, or correct the arbitration award is DENIED. 

The Court CONFIRMS the arbitration award. The stay of this matter is LIFTED and the parties 

are HEREBY ORDERED to propose a schedule by no later than March 20, 2020, for resolution of 

the remaining matters before the Court. 

IT IS SO ORDERED. 

Dated: March 2, 2020 

______________________________________ 

JEFFREY S. WHITE 

United States District Judge 

Case 4:16-cv-07387-JSW Document 98 Filed 03/02/20 Page 8 of 8