Court Opinion

ID: 4107048
Source: CourtListenerOpinion
Date Created: 2016-12-14 14:01:18.058902+00
Date Added: 2024-06-11T13:38:32.663344
License: Public Domain

Case: 16-10206    Date Filed: 12/14/2016   Page: 1 of 8

                                                         [DO NOT PUBLISH]

            IN THE UNITED STATES COURT OF APPEALS

                    FOR THE ELEVENTH CIRCUIT
                      ________________________

                            No. 16-10206
                        Non-Argument Calendar
                      ________________________

                  D.C. Docket No. 1:15-cv-01224-RWS

CAREMINDERS HOME CARE, INC.,

                                         Plaintiff-Counter Defendant-Appellee,

                                  Versus

LORI KIANKA,
COMPASSIONATE CARE, LLC,

                                    Defendants-Counter Claimants-Appellants.

                      ________________________

               Appeal from the United States District Court
                  for the Northern District of Georgia
                     ________________________

                            (December 14, 2016)

Before HULL, MARCUS, and ANDERSON, Circuit Judges.

PER CURIAM:
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      Defendant-appellants Lori Kianka and Compassionate Care, LLC

(collectively “Compassionate Care”) appeal a decision of the district court to

confirm an arbitration award under the Federal Arbitration Act in favor of plaintiff-

appellee CareMinders Home Care, Inc. (“CareMinders”). Compassionate Care,

formerly a franchisee of CareMinders, instituted this action in October of 2013 by

filing a demand for arbitration pursuant to their franchise agreement claiming

breach of contract and fraud related to the business relationship. CareMinders

asserted counterclaims and—after three separate continuances at Compassionate

Care’s request—an arbitrator issued an award for CareMinders of $232,789.30 and

granted injunctive relief enforcing non-compete and non-solicitation clauses in the

franchise agreements. The arbitrator denied each of Compassionate Care’s claims

over the course of his seventeen-page opinion.

      Immediately thereafter, CareMinders filed a petition to confirm the

arbitration award in the Northern District of Georgia on April 17, 2015.

Compassionate Care responded by filing an “Answer, Defenses, & Counterclaim

to Modify and/or Vacate Arbitration Award” on May 15, 2015. In that filing

Compassionate Care broadly alleged a basis to vacate or modify the arbitration

award grounded in the arbitrator’s denial of a fourth continuance, denial of a

motion to compel discovery, perceived bias and ex parte communications, and

ultimate decision to award attorney’s fees. Compassionate Care assured the court

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that these broad allegations would “be more fully outlined in a motion under 9

U.S.C. § 12.” This statement was in line with their position—noted in a prior filing

with the district court—that they intended to “serve notice of a motion to vacate an

award [under] 9 U.S.C. §§ 10 & 12.” However, they never filed such a motion and,

on July 28, 2015, CareMinders filed a supplemental brief arguing that the failure to

do so within three months, as required by the FAA, waived the right to vacate the

award or raise any defenses to its enforcement.

      On September 24, 2015, the district court entered an order confirming the

arbitration award and dismissing Compassionate Care’s counterclaims.

Compassionate Care filed a motion for reconsideration that was ultimately denied

on December 16, 2015. The court expressly found that Compassionate Care, by

failing to file a motion to vacate within three months, had waived their right to

review of the award and that, in any event, they had failed to carry their burden of

overcoming the presumption under the FAA that awards will be confirmed.

Accordingly, the court denied the motion to reconsider and awarded fees and costs

for post-judgment motions to CareMinders. This appeal followed.

      Orders confirming arbitration awards “are to be reviewed for clear error with

respect to factual findings and de novo with respect to the district court’s legal

conclusions.” Gianelli Money Purchase Plan & Trust v. ADM Inv’r Servs., Inc.,

146 F.3d 1309, 1311 (11th Cir. 1998). The FAA “imposes a heavy presumption in

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favor of confirming arbitration awards” and, accordingly “a court’s confirmation of

an arbitration award is usually routine or summary.” Riccard v. Prudential Ins. Co.,

307 F.3d 1277, 1288 (11th Cir. 2002). The party requesting vacatur bears the

burden of proving one of the four limited statutory bases 1 for overturning an award

as set forth in the FAA. Id.

       This Court has long held that the failure of a party “to move to vacate an

arbitral award within the three-month limitations period prescribed by section 12 of

the [FAA] bars [it] from raising the alleged invalidity of the award as a defense in

opposition to a motion brought under section 9 of the USAA to confirm the

award.” Cullen v. Paine, Webber, Jackson & Curtis, Inc., 863 F.2d 851, 854 (11th

Cir. 1989). Moreover, litigants may not raise new arguments in a motion to

reconsider brought under either the Northern District’s local rule 7.2(E) or under

Federal Rule 59(e). See Bryan v. Murphy, 246 F. Supp. 2d 1256, 1258–59 (N.D.

Ga. 2003) (“Reconsideration [under Local Rule 7.2(E)] is only ‘absolutely

necessary’ where there is: (1) newly discovered evidence; (2) an intervening

development or change in controlling law; or (3) a need to correct a clear error of

law or fact.”); O’Neal v. Kennamer, 958 F.2d 1044, 1047 (11th Cir. 1992)

1
  Awards will only be vacated if “(1) the award was procured by corruption, fraud, or undue
means; (2) there was evident partiality or corruption in the arbitrators; (3) the arbitrators were
guilty of misconduct in refusing to postpone the hearing when there was good cause to postpone,
or in refusing to hear pertinent and material evidence, or were guilty of any other misbehavior
which may have prejudiced any party; or (4) the arbitrators exceeded their powers so much so
that a mutual, final, and definite award upon the subject matter submitted was not made.”
Riccard, 307 F.3d at 1288 (citing 9 U.S.C. § 10(a)).
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(“Motions to amend [under Rule 59(e)] should not be used to raise arguments

which could, and should, have been made before the judgment was issued.”).

Finally, in order to establish mistake, inadvertence, or excusable neglect under

Rule 60(b)(1), “a defaulting party must show that: (1) it had a meritorious defense

that might have affected the outcome; (2) granting the motion would not result in

prejudice to the non-defaulting party; and (3) a good reason existed for failing to

reply to the complaint.” In re Worldwide Web Sys., Inc., 328 F.3d 1291, 1296

(11th Cir. 2003).

      As an initial matter, we are persuaded that the district court was obligated to

grant CareMinders’ petition to confirm the arbitration award based on

Compassionate Care’s failure to file a motion to vacate within 90 days. On appeal,

Compassionate Care argues that the district court should have considered its

Answer, Defenses, and Counterclaim to Modify and/or Vacate the Arbitration

Award as a motion to vacate under 9 U.S.C. Sections 9 and 12. In support of this

argument, Compassionate Care notes that we have previously affirmed the decision

of a district court to consider a request to vacate made in a complaint, rather than

by motion. Johnson v. Directory Assistants Inc., 797 F.3d 1294, 1299 (11th Cir.

2015) (“[T]he Federal Rules are liberal, such that ‘an erroneous nomenclature does

not prevent the court from recognizing the true nature of a motion . . . .’ ”); see also

O.R. Sec., Inc. v. Prof’l Planning Assocs., Inc., 857 F.2d 742, 746 (11th Cir. 1988)

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(affirming district court’s decision to consider a motion to dismiss as a motion to

vacate an arbitration award).

      However, the cases cited by Compassionate Care do not control the instant

action for two reasons. First, in both Johnson and O.R. Securities, this Court

merely affirmed a decision of the district court to construe a facially non-compliant

filing in a way that comported with the requirements of the FAA. Nothing in those

two decisions should be interpreted as requiring the district court to relax the strict

procedural requirements of the FAA to the point that any filing will be deemed

sufficient to raise the issue of vacatur. More importantly however, the present case,

unlike Johnson and O.R. Securities, is not an instance of “erroneous nomenclature”

where the parties otherwise fully briefed the issue of vacatur. Rather,

Compassionate Care was fully aware of its responsibility to submit an additional

motion to vacate the arbitration award—twice advising the court of its intent to do

so—and simply failed to meet its burden in the allotted time. While our previous

cases suggest that we may have been willing to sanction a decision of the district

court to construe Compassionate Care’s filings as a motion to vacate—something

we need not decide—the court was certainly under no affirmative obligation to do

so. Accordingly, the decision of the district court to confirm the award based solely

on Compassionate Care’s failure to file a motion to vacate within 90 days is due to

be affirmed.

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       Additionally, the district court was correct in denying Compassionate Care’s

motion to reconsider under Local Rule 7.2(E) and Federal Rules 59(e) and

“60(a)(b).”2 Compassionate Care failed to identify any newly discovered evidence,

a change in controlling law, or a need to correct a clear error of law or fact that

would warrant reconsideration under Local Rule 7.2(E). Moreover, having failed to

raise their arguments before the district court confirmed the arbitrator’s award,

Compassionate Care was barred by the terms of Federal Rule 59(e) from raising

them in a motion to amend. Finally, Compassionate Care has failed to establish

any, let alone all, of the three requirements entitling them to relief based on

mistake, inadvertence, or excusable neglect under Federal Rule 60(b).

Accordingly, the district court’s decision to deny the motion for reconsideration

was not in error and is also due to be affirmed.

       Finally, even if the district court incorrectly concluded that Compassionate

Care failed to satisfy the procedural requirements of the FAA and even if it

impermissibly denied the motion to reconsider—which it decidedly did not—the

arguments in favor of vacatur were meritless. Compassionate Care has simply

failed to demonstrate any of the four statutory bases for overturning an arbitrator’s

2
  The Court is aware that Federal Rule “60(a)(b)”—under which Compassionate Care requested
relief from a final judgment in the district court—does not exist. We are also aware that Federal
Rule “60(b)(1)(6)”—under which they request relief in this Court—is similarly nonexistent.
However, because Compassionate Care’s brief on appeal alleges that their failure to file a motion
to vacate was due to “mistake, inadvertence and excusable neglect” we consider the requested
relief as arising under Federal Rule 60(b)(1) and proceed accordingly.
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decision and has, accordingly, fallen well short of overcoming the heavy

presumption under the FAA that arbitration awards will be enforced. Accordingly,

the district court’s conclusion that “the arbitrator issued a reasoned award” is

independently sufficient to affirm its decision on appeal.

      Therefore, because we find no error in the district court’s dismissal of

Compassionate Care’s challenges to the arbitration award as time barred, in its

denial of their motion for reconsideration, or in its ultimate conclusion that any

challenges were meritless, the decision of the district court is AFFIRMED.

      AFFIRMED.

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