Court Opinion

ID: 4911898
Source: CourtListenerOpinion
Date Created: 2021-09-17 18:00:33.689362+00
Date Added: 2024-06-11T08:13:35.716777
License: Public Domain

NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                 ___________

                                       No. 20-3515
                                       __________

                                    JOSEF S. BOZEK,
                                                Appellant

                                             v.

    PNC BANK, as service agent; WILMINGTON TRUST, N.A., Trustee for MFRA Trust
                              2014-2//Richard Gold, CEO
                      ____________________________________

                     On Appeal from the United States District Court
                        for the Eastern District of Pennsylvania
                         (D.C. Civil Action No. 2-20-cv-02875)
                      District Judge: Honorable John M. Younge
                      ____________________________________

                    Submitted Pursuant to Third Circuit LAR 34.1(a)
                                   August 18, 2021

             Before: MCKEE, SHWARTZ AND RESTREPO, Circuit Judges

                           (Opinion filed: September 17, 2021)
                                      ___________

                                        OPINION*
                                       ___________

PER CURIAM

*
 This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
       Josef Bozek appeals pro se from an order granting the defendants’ motions to

dismiss Bozek’s petition to enforce an arbitration award and to vacate the award. We

will affirm the District Court’s order.

                                              I.

       In November 2010, the defendants initiated a mortgage foreclosure action against

Bozek in the Circuit Court of Cook County, Illinois. After protracted litigation, the court

entered a final foreclosure order against Bozek on June 7, 2019. Several weeks later,

Bozek sent the defendants a demand letter (which he also characterized as a “conditional

acceptance” or “counteroffer” regarding his outstanding mortgage debt to the defendants)

appearing to seek an alternative resolution to the foreclosure action and requesting certain

information from the defendants. See generally Demand Letter, ECF No. 3-5. The letter

purported to mandate arbitration in the event that the defendants declined to provide the

requested information or failed to respond. The letter also stated that the defendants’

failure to respond would result in their “tacit acquiescence” to its terms. Id. ¶¶ 40, 41.

The defendants did not respond to the letter. In February 2020, the Cook County Circuit

Court ordered the sale of Bozek’s house and his eviction from the premises.

       In April 2020, Bozek filed a petition to confirm and enforce an arbitration award

against the defendants in the Court of Common Pleas of Bucks County, Pennsylvania.

According to the petition, Bozek and the defendants entered into an arbitration agreement

when Bozek sent them the demand letter and the defendants failed to respond. Bozek

alleged that an arbitration hearing was held on August 27, 2019, in Bucks County, which

the defendants were notified about but failed to attend. The hearing resulted in a

                                              2
purported award to Bozek in the amount of $3,430,800 issued by an entity called

“Dalwickman Arbitration Services.” Bozek sought to enforce the amount of the award,

plus punitive damages of $10,292,400, for a total of $13,723,200. See generally Petition,

ECF No. 1-5 at 15–60 (showing alleged arbitration award).

       The defendants removed the case to the District Court and filed a motion to

dismiss for failure to state a claim, arguing that Bozek was attempting to enforce a

fraudulent arbitration award. In particular, the defendants argued that Bozek relied on a

“sham document to create the appearance of an arbitration agreement, when no such

agreement exists.” Mem., ECF No. 3-2 at 1.

       The District Court determined that Bozek had failed to demonstrate that the parties

had agreed to arbitration as required under both the Federal Arbitration Act (“FAA”) and

state law governing the confirmation of arbitration awards.1 Through his demand letter,

the District Court concluded, Bozek had attempted to form a unilateral contract that was

not binding on the defendants. Thus, the District Court granted the defendants’ motion to

dismiss, denied Bozek leave to amend his petition, and vacated the arbitration award.

Bozek appealed.2

                                            II.

1
  Bozek brought his petition under 42 Pa. Cons. Stat. Ann. § 7342. However, after the
case was removed to the District Court, Bozek invoked the FAA in his filings. See, e.g.,
ECF No. 5 at 1 n.1 (citing 9 U.S.C. § 12). The District Court evaluated the defendants’
motions under both federal and state law, and Bozek refers to both federal and state law
in his filings on appeal.
2
  Bozek also filed a motion for reconsideration, which the District Court denied. See
generally Order, ECF No. 33. Bozek did not appeal that order.
                                             3
       We have jurisdiction over this appeal pursuant to 28 U.S.C. § 1291. We review de

novo the District Court’s grant of the defendants’ motion to dismiss pursuant to Federal

Rule of Civil Procedure 12(b)(6). See Newark Cab Ass’n v. City of Newark, 901 F.3d

146, 151 (3d Cir. 2018). We also review de novo legal questions that support the District

Court’s decision to vacate the arbitration award, but we evaluate any underlying factual

findings for clear error. See Opalinski v. Robert Half Int’l Inc., 761 F.3d 326, 330 (3d

Cir. 2014).

                                            III.

       We agree with the District Court’s conclusion that Bozek failed to state a claim

because he failed to allege that there exists a valid agreement to arbitrate. When

determining whether there is a valid arbitration agreement under either the FAA or

Pennsylvania law, we look to the relevant principles of state contract law. See Aliments

Krispy Kernels, Inc. v. Nichols Farms, 851 F.3d 283, 288 (3d Cir. 2017); Quiles v. Fin.

Exch. Co., 879 A.2d 281, 287 (Pa. Super. Ct. 2005). Under Pennsylvania law, a valid

contract is formed where, among other things, there is mutual agreement between the

parties. See Blair v. Scott Specialty Gases, 283 F.3d 595, 603 (3d Cir. 2002). “[I]n

determining whether parties have agreed to arbitrate, courts should . . . adopt[] an

interpretation that gives paramount importance to the intent of the parties and ascribes the

most reasonable, probable, and natural conduct to the parties.” Quiles, 879 A.2d at 287

(internal quotation marks and citation omitted). “[N]o party can be forced to arbitrate

unless that party has entered an agreement to do so.” Pritzker v. Merrill Lynch, Pierce,

                                             4
Fenner & Smith, Inc., 7 F.3d 1110, 1114 (3d Cir. 1993) (internal quotation marks and

citation omitted).

       Bozek argues on appeal, as he did in the District Court, that the arbitration award

must be confirmed because the defendants failed to file a motion to vacate the award

within the time prescribed under the FAA. See 9 U.S.C. § 12 (allowing three months

after an arbitration award is filed or delivered to move to vacate the award). This

argument is unavailing. The defendants were not required to make such a motion in

response to Bozek’s petition—and the District Court was unable to confirm the award—

because Bozek failed to make any colorable showing of a valid agreement to arbitrate in

the first place. See 9 U.S.C. § 13(a) (requiring a petitioner seeking confirmation of an

arbitration award to file the agreement to arbitrate alongside his petition). Bozek failed to

attach an arbitration agreement to his petition. He also failed to allege that the defendants

discussed, negotiated, agreed to, or signed an arbitration agreement.

       Bozek’s demand letter (which was not attached to his petition) does not constitute

a valid contract because the defendants did not agree to its terms, including the arbitration

clause. Contrary to Bozek’s argument, the defendants’ failure to respond to his letter

does not amount to their assent. See Degenhardt v. Dillon Co., 669 A.2d 946, 950 (Pa.

1996) (“The formation of a valid contract requires the mutual assent of the contracting

parties.”). The letter’s statement about “tacit acquiescence” upon the defendants’ silence

does not allow Bozek to evade this essential requirement. Demand Letter, ECF No. 3-5

¶¶ 40, 41. While silence can, in exceptional circumstances, constitute assent, “[t]he mere

fact that an offeror states that silence will constitute acceptance does not deprive the

                                              5
offeree of his privilege to remain silent without accepting.” Restatement (Second) of

Contracts § 69 (Am. L. Inst. 1981). Here, the defendants’ lack of assent is clear from the

circumstances, where the defendants were successful in their foreclosure action to recoup

a mortgage debt that Bozek owed them before receiving the demand letter purporting to

seek an alternative resolution.3

       Finally, because there exists no valid arbitration agreement, the District Court’s

vacation of the arbitration award was proper. See 9 U.S.C. § 10(a); 42 Pa. Cons. Stat.

Ann. 7321.24(a)(5).4

                                             IV.

       Accordingly, we will affirm the District Court’s order granting the defendants’

motion to dismiss and vacating the award. Bozek’s motion to strike is denied.

3
  Bozek does not argue on appeal that the District Court should have granted him leave to
amend his petition, see In re Wettach, 811 F.3d 99, 115 (3d Cir. 2016) (holding that
arguments not raised in an appellant’s opening brief are forfeited), and he presents
nothing on appeal to suggest that further amendment would enable him to cure the
defects therein, see Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002)
(stating that allowing leave to amend is unnecessary if amendment would be futile).
4
  Bozek’s argument that the District Court lacked subject matter jurisdiction to review his
petition or vacate the arbitration award is unsupported and meritless, as the District Court
properly exercised diversity jurisdiction under 28 U.S.C. § 1332. Likewise, Bozek’s
argument that the Rooker-Feldman doctrine barred the District Court from reviewing his
petition or vacating the award is forfeited because Bozek raised it for the first time in his
reply brief. See Wettach, 811 F.3d at 115. Besides, the doctrine is inapplicable here
because the defendants did not seek review of a state-court judgment. See Exxon Mobil
Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005).
                                              6