UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF INDIANA

SOUTH BEND DIVISION

GARMIN WURZBURG GMBH, )

)

Plaintiff, )

)

v. ) 3:14-cv-02006-PPS-CAN

)

AUTOMOTIVE IMAGINEERING & )

MANUFACTURING, LLC, EXPRESSO )

SATELLITE NAVIGATION, INC., EXPRESSO )

SATELLITE NAVIGATION, LTD., MICHAEL )

ARONEY, and KELLY ARONEY, )

)

Defendants. )

OPINION AND ORDER

Plaintiff Garmin Wurzburg GmbH’s seeks summary judgment on Count I of its fivecount amended complaint against defendants Automotive Imagineering & Manufacturing,

LLC, Expresso Satellite Navigation, Inc., and Expresso Satellite Navigation, Ltd. In

particular, Garmin’s motion requests confirmation of an arbitration award and a

declaration that it is entitled to its costs incurred enforcing that award. Confirmation is

proper, and the defendants do not oppose the request, so Garmin’s motion will be granted. 

Also pending is individual defendant Kelly Aroney’s Motion to Dismiss Count III of

Garmin’s original (unamended) complaint that alleged a civil conspiracy. That motion will

be denied as moot because the amended complaint doesn’t contain the objectionable count.
BACKGROUND

Garmin,1 a German corporation with its principal place of business in that country

[DE 1 at 3], entered into a software license agreement with Defendant Automotive

Imagineering & Manufacturing, LLC (that’s a mouthful, so I’ll call it “AIM”), on April 17,

2009.[DE 1-2 at 3, 29-1 at 25.] Garmin agreed to develop software and license it to AIM, and

AIM agreed to pay an initial fee, a fee forthe software CD, and annual license fees. [Id.] The

parties agreed to arbitrate legal disputes arising out of the transaction. [DE 29-1 at 57; see

also DE 1-1.] Specifically, the parties agreed to arbitrate in Chicago through the American

Arbitration Association, and to award the prevailing party all costs and fees connected to

both the arbitration and enforcement of any arbitration award. [Id.] AIM is a Michigan

company and its only shareholder and officer is Michael Aroney. [DE 1-2 at 3; DE 29-1 at

5-6.] Expresso Satellite Navigation, Ltd., was formed in Hong Kong in July 2009 by AIM

and a company called Sky River, each owning about half, with AIM nominating one

director (it chose Michael Aroney) and Sky River nominating two. [DE 1-2 at 4.] (I’ll call

this company “Expresso HK.”) Expresso Satellite Navigation, Inc., was formed in Indiana

in August 2010, by sole shareholder Expresso HK, with the same directors as Expresso HK

and Michael Aroney as its President. [Id.]

Skipping ahead to the relevant point in time, after the defendants failed to pay

$749,630 in licensing fees, the parties participated in arbitration proceedings pursuant to

1

 When it made the deal, Garmin was called Navigon; it changed its name in

January 2012. [DE 29-1 at 26.]

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the license agreement. [DE1 at 5, 7; DE 1-2 at 10; DE 29-1 at 24-39.] On July 31, 2014, the

arbitrator awarded Garmin a “partial final award” of $1,090,014.61 for which the corporate

defendants were jointly and severally liable. [DE 29-1 at 32-33.] This included the $749,630

in unpaid licensing fees and $340,384.61 in interest on that amount. [Id.] Garmin was also

awarded future interest at 12 percent per year on the unpaid licensing fees until those fees

were paid in full. [Id.] Finally, the corporate defendants were ordered to pay certain to-bedetermined fees and costs of the arbitration pursuant to the licensing agreement. [Id. at 33.]

A “final award” signed on September 4, 2014, included legal costs of $198,039.38, plus

interest, and reimbursement of $32,588 in arbitration fees already paid by Garmin. [Id. at

38.]

On November 3, 2014, Garmin filed this case. [DE 1.] The Court permitted

extensions on responsive pleadings and motion briefing. Garmin eventually moved for

summary judgment on Count I of its complaint, arguing it is entitled to confirmation of the

arbitration award and that the corporate defendants are liable for fees and costs in

enforcing the award. [DE 1; DE 28; DE 29.] The defendants responded by stating they did

not oppose the motion, and noting that enforcement of the arbitration award applies only

to the corporate defendants, not the Aroneys individually. [DE 52.] Garmin’s reply points

out that Count I, the only count for which Garmin seeks summary judgment, is only

directed against the corporate defendants. [DE 53.]

Kelly Aroney responded to the original complaint by moving to dismiss Count III,

which was titled “Civil Conspiracy (Kelly Aroney).” [DE 22.] Garmin filed an amended

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complaint that omitted any civil conspiracy claim. [DE 48.]

Before digging into the substantive law I must address an issue concerning the

amended complaint. The filing titled “Amended Complaint,” DE 48, begins by purporting

to “reallege[] and incorporate[] by this reference paragraphs 1-37 of [Garmin’s] original

Complaint . . . .” It seems obvious that it will be inconvenient throughout the rest of this

case for the Court and the parties to have to flip between different portions of different

docket entries to obtain a single operative complaint. The docket citations in this Order

demonstrate that inconvenience. In case it’s not obvious to a party, Local Rule 15-1(b)

prohibits the filing of amended complaints in this manner, requiring that amendments to

a pleading “must reproduce the entire pleading as amended, unless the court allows

otherwise” and “must not incorporate another pleading by reference.” The plaintiff did not

request or obtain the court’s permission to not reproduce the entire pleading, and in fact

such permission is not and would not have been granted. For the sake of avoiding delay

this Order addresses the two-document complaint as it stands, but the plaintiff is

ORDERED to file a complete amended complaint in a single document within seven (7)

days of the entry of this Order.

On this topic, I also note that the section headers in the answer to the amended

complaint are bizarre and confusing until one figures out what is going on. The defendants

restate the allegations of the amended complaint and answer each, but threw in labels

before the Introduction section and before each Cause of Action – these labels are “First

Defense” before the Introduction, “Second Defense” before Count I, “Third Defense”

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before Count II, and so on. One would typically expect to see numbered defense headers

before affirmative defenses. The defendants do assert affirmative defenses, but these are

lumped in one big section entitled “Additional and Affirmative Defenses.” (DE 51 at 22.)

I can only imagine this structuring of the document is the product of the misuse of a preformatted document combined with a dearth of proofreading. The rules require a

responsive pleading to restate verbatim the paragraphs of the complaint and to respond

to each paragraph immediately after restating it. See L.R. 10-1(a). The defendants restated

the paragraphs, but took out the “Count” headers and added in “Defense” headers. The

answer does include the relevant text from the complaint and answers to each paragraph,

however, so I won’t require the defendants to re-file. I’ll simply note that the formatting

was initially very confusing and will leave it at that.

DISCUSSION

Summary judgment is proper if the record shows “no genuine issue as to any

material fact and that the moving party is entitled to judgment as a matter of law.” Fed. R.

Civ. P. 56. A court must construe all facts and reasonable inferences in the light most

favorable to the nonmoving party when ruling on summary judgment. Nelson v. Stewart,

422 F.3d 463, 466 (7th Cir. 2005). Although the defendants have declined to oppose

Garmin’s motion, I still need to made sure that summary judgment is proper, although by

failing to present information the defendants did, in effect, “admit[] to many material facts

as the [moving party] presented them.” Johnson v. Gudmundsson, 35 F.3d 1104, 1112 (7th Cir.

1994); see also, D.H. Blair & Co. v. Gottdiener, 462 F.3d 95, 109-10 (2d Cir. 2006) (court must

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independently review propriety of summary judgment granting confirmation of arbitration

award even where non-moving party failed to respond).

Chapter Two of the Federal Arbitration Act (“FAA”) concerns agreements not 

exclusively between United States citizens, and generally applies the provisions of an

international agreement titled the Convention on the Recognition and Enforcement of

Foreign Arbitral Awards (the “Convention”). 9 U.S.C. §§ 201 et seq. Federal district courts

have subject matter jurisdiction over Chapter Two actions, id. at § 203, and venue is proper

if located where a suit with respect to the controversy may ordinarily be brought. Id. at §

204; see also Cortez Byrd Chips, Inc. v. Bill Harbert Const. Co., 529 U.S. 193, 195 (2000) (holding

venue for confirmation is notrestricted to district where arbitration award was made);Int’l

Ins. Co. v. Caja Nacional De Ahorro Y Seguro, 293 F.3d 392, 396 (7th Cir. 2002) (finding federal

question jurisdiction under 28 U.S.C. § 1331 in suit to confirm arbitration award based on

the Panama Convention, which incorporated the jurisdiction provision stated in 9 U.S.C.

§ 203, because the Convention was codified into U.S. law, and the case therefore arose

under U.S. law as required for jurisdiction under § 1331). Venue is proper in the Northern

District of Indiana: Expresso Satellite Navigation, Inc., was formed in Indiana in August

2010, the complaint alleges (and the Answer admits) that a substantial part of the events

leading to this case occurred in this district, and the answer to the amended complaint

admits that venue is proper in this district. [DE 1 at 2; DE 18 at 2-3; DE 51 at 3.]

Chapter Two of the FAA applies in this case. The parties to the license agreement

here are companies formed in Germany, China, and the United States, each of which has

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consented to be bound by the Convention. See “New York Convention Countries,” available

at http://www.newyorkconvention.org/contracting-states (last visited July 23, 2015).

Applying the relevant laws to the contract and facts in this case, confirmation of the

arbitration award is proper, and Garmin will be granted summary judgment on Count I.

Count I seeks $749,630 in past-due license fees plus interest on the past-due license fees at

the rate of 12 percent per annum, plus costs and fees of the arbitration as described in the

arbitration award, plus the costs and fees of this case to enforce the arbitration award. [DE

1 at ¶¶ 20-25.] Confirmation of an arbitration award does not involve a detailed

reexamination of facts; it is a summary proceeding meant to determine only whether the

statutory conditions for confirmation or refusal are present. See, e.g., Zeiler v. Deitsch, 500

F.3d 157, 169 (2d Cir. 2007); Int’l Trading & Indus. Inv. Co. v. DynCorp Aerospace Tech., 763

F. Supp. 2d 12, 20 (D.D.C. 2011). This is because confirmation simply makes a final

arbitration award an enforceable judgment. See D.H. Blair & Co. v. Gottdiener, 462 F.3d 95,

110 (2d Cir. 2006). Furthermore, there is a strong public policy of judicial efficiency that

favors confirmation of international arbitration awards. Encyclopaedia Universalis S.A. v.

Encyclopaedia Britannica, Inc., 403 F.3d 85, 90 (2d Cir. 2005). The Seventh Circuit has

confirmed that there is a presumption for enforcement, unless one of the grounds for nonenforcement specified in the Convention is demonstrated:

The Convention on the Recognition and Enforcement of Foreign

Arbitral Awards, commonly known as the New York Convention and

incorporated into American law at 9 U.S.C. sec. 201 et seq., governs

judicial confirmation of arbitration decisions like this that arise out of

agreements between a U.S. citizen [] and a citizen of a foreign nation

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such as France that signed the convention []. “The court shall confirm

the award unless it finds one of the grounds for refusal or deferral of

recognition or enforcement of the award specified in the said

Convention.” 9 U.S.C. sec. 207.

Publicis Commun. v. True North Communs. Inc., 206 F.3d 725, 728 (7th Cir. 2000).

Article V states that a court may refuse confirmation of an award “only if [the party

seeking refusal] furnishes to the competent authority where the recognition and

enforcementis sought” proof of one of seven enumerated reasons forrefusing to recognize

an award. United Nations Conference on International Commercial Arbitration,

Convention on the Recognition and Enforcement of Foreign Arbitral Awards, Art. V, June

10, 1958, available at http://www.newyorkconvention.org/texts.2

Under Chapter Two of the FAA, a party has three years to seek a district court’s

confirmation of an arbitral award. 9 U.S.C. § 207; see also Employers Ins. v. Banco de Seguros

del Estado, 199 F.3d 937, 942 (7th Cir. 1999). On the other hand, a party seeking to vacate,

2

 Garmin argues that confirmation is mandatory because the defendants have not

identified and cannot identify any ground for refusal under Article V. [DE 29 at 7.]

Article V(2), providing for refusal where a matter is incapable of settlement by

arbitration or where confirming an award would be contrary to public policy, does not

reiterate the Article V(1) requirement that a defendant must raise a ground for refusal

for a court to consider it. Nonetheless, that requirement has been interpreted to apply to

Article V(2). See Telenor Mobile Comm’c’ns v. Storm, L.L.C., 584 F.3d 396, 405 (2d Cir.

2009) (citing Encyclopaedia Universalis, 403 F.3d at 90 (“The party opposing enforcement

of an arbitral award has the burden to prove that one of the seven defenses under the

New York Convention applies.”)); see also 3 Fed. Proc., L. Ed. § 4:145 (2015) (stating

grounds for refusal of foreign arbitral award will not be considered when motion to

confirm award is unopposed).

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modify, or correct an award must do so within three months of the award, 9 U.S.C. § 12,3

and forfeits the right to oppose confirmation if it fails to do so. See, e.g., Lander Co. v. MMP

Invs., Inc., 107 F.3d 476, 478 (7th Cir. 1997).

Garmin has properly sought confirmation within the three-year window. The

defendants have not contested the arbitrator’s decision (within three months or otherwise).

The defendants raise no grounds now forrefusal to grant the motion seeking confirmation

of the arbitration award. Because there are no issues of material fact in this regard, Garmin

is entitled as a matter of law to confirmation of the arbitration award.

Garmin also seeks an award to cover the costs and fees spent in pursuing this case

to enforce the arbitration award, which naturally wasn’t addressed in the arbitration award

– at that point the arbitrator could reasonably assume that the parties would abide by the

arbitration decision, and no federal suit for enforcement would be necessary. The Federal

Arbitration Act contains no requirement that a prevailing party be awarded costs incurred

in confirming or enforcing an arbitration award. Menke v. Monchecourt, 17 F.3d 1007, 1009

(7th Cir. 1994) (superseded in part on another issue by a change to Fed. R. Civ. P. 4, as

noted in Marcello v. Maine, 238 F.R.D. 113, 117 (D. Me. 2006)). But parties can contract

around the prevailing “American Rule” that each party in federal litigation pays their own

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 Chapter One concerns arbitration agreements among United States citizens and

applies to Chapter Two where not in contradiction to Chapter Two or the Convention. 9

U.S.C. § 208. Under Section 208 of Chapter Two, Chapter One’s three-month limitation,

9 U.S.C. § 12, to move to vacate, modify, or correct an award also applies to Chapter

Two, and therefore would apply to an attempt in this case to overturn the arbitration

decision. Gonsalvez v. Celebrity Cruises, Inc., 750 F.3d 1195, 1197 (11th Cir. 2013).

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costs. Esposito v. Piatrowski, 223 F.3d 497, 500 (7th Cir. 2000) (“Federal courts adhere to the

‘American Rule,’ which recognizes that attorneys’ fees are not generally a recoverable cost

of litigation (unless specifically ordered by the court or provided by contract).” (citation

omitted.)).

The controlling agreement in this case is the “Agreement to Arbitrate - Addendum

to Non-Exclusive Software License Agreement, April 17, 2009.” [DE 1-1 at 2.] It states in

relevant partthat “[t]he prevailing party in any [proceeding for a court’s entry ofjudgment

upon an arbitration award] shall be entitled to all costs, including but not limited to all

attorney’s fees, in collection [sic] with the arbitration and enforcement of the arbitrator’s

award.” [Id. at ¶ 1 (emphasis added).] The same language also appears in the software

license agreement itself at section 12.10. [DE 29-1 at 57.] The parties contracted to allow the

party enforcing the arbitration decision in court to recover the costs of that enforcement,

and the defendants haven’t challenged the plain reading of the contracts attached to

Garmin’s filings. Therefore the contract’s plain meaning governs here, and Garmin is

entitled to all costs of enforcement, including attorney’s fees. Garmin has stated that it will

wait until the conclusion of the matter to submit the specific cost amount for the Court’s

review. [DE 29 at 8.]

The final pending issue is Kelly Aroney’s 12(b)(6) motion to dismiss Count III of

Garmin’s original complaint. It seeks the dismissal of a claim that doesn’t appear in the

current complaintfiled February 23, 2015.[DE 48.] The amended CountIII does not merely

re-labelthe original CountIII, butpurports topleadfraud, not civil conspiracy, so Aroney’s

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attacks on the civil conspiracy claim are irrelevantto the current complaint. Kelly Aroney’s

motion is therefore moot, and is DENIED. [DE 22.]

CONCLUSION

Forthe foregoing reasons, Garmin’s motion for summary judgment is GRANTED,

and I confirm Garmin’s arbitration award. [DE 28.] Automotive Imagineering &

Manufacturing, LLC, Expresso Satellite Navigation, Inc., and Expresso Satellite Navigation,

Limited, are jointly and severally liable to Garmin for unpaid licensing fees, interest, and

costs and fees of arbitration as described in the final arbitration award. The company

defendants are also liable to Garmin for its costs and fees incurred in pursuing this case to

enforce the arbitration award.

Kelly Aroney’s motion to dismiss Count III of Garmin’s original complaint is

DENIED AS MOOT. [DE 22.]

Additionally, the plaintiff is hereby ORDERED to file a complete amended

complaint in a single document within seven (7) days of the entry of this Order to bring

the amended complaint into compliance with Local Rule 15-1(b).

SO ORDERED.

Entered: July 23, 2015

/s/Philip P. Simon________________

PHILIP P. SIMON, CHIEF JUDGE 

UNITED STATES DISTRICT COURT

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