Court Opinion

ID: 6499948
Source: CourtListenerOpinion
Date Created: 2022-07-14 16:00:30.726453+00
Date Added: 2024-06-11T15:54:33.347312
License: Public Domain

Appellate Case: 22-1047     Document: 010110710743       Date Filed: 07/14/2022    Page: 1
                                                                                  FILED
                                                                      United States Court of Appeals
                       UNITED STATES COURT OF APPEALS                         Tenth Circuit

                              FOR THE TENTH CIRCUIT                           July 14, 2022
                          _________________________________
                                                                          Christopher M. Wolpert
                                                                              Clerk of Court
  EYOEL-DAWIT MATIOS, et al., in sui
  juris capacity,

        Plaintiff - Appellant,

  v.                                                          No. 22-1047
                                                 (D.C. No. 1:21-CV-02194-WJM-NRN)
  CITY OF LOVELAND, et al., in care of                         (D. Colo.)
  Stephen C. Adams, City Manager,

        Defendant - Appellee.
                       _________________________________

                              ORDER AND JUDGMENT*
                          _________________________________

 Before HARTZ, BALDOCK, and McHUGH, Circuit Judges.
                   _________________________________

       Eyoel-Dawit Matios brought a pro se1 Petition to Confirm an Arbitration

 Award issued in his favor against the City of Loveland (the “City”)2 by Brett “Eeon”

       *
         After examining the briefs and appellate record, this panel has determined
 unanimously that oral argument would not materially assist in the determination of
 this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
 ordered submitted without oral argument. This order and judgment is not binding
 precedent, except under the doctrines of law of the case, res judicata, and collateral
 estoppel. It may be cited, however, for its persuasive value consistent with
 Federal Rule of Appellate Procedure 32.1 and Tenth Circuit Rule 32.1.
       1
        Because Mr. Matios is proceeding pro se, we construe his filings liberally,
 but we will not act as his advocate. Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir.
 1991).
       2
         The Final Arbitration Award appears to have been awarded against the City
 and two of its employees, but Mr. Matios’s Petition seeks only to confirm the award
 issued against the City. Thus, we refer only to the arbitration award against the City.
Appellate Case: 22-1047    Document: 010110710743       Date Filed: 07/14/2022     Page: 2

 Jones of Sitcomm Arbitration Association (“Sitcomm”).3 The district court denied the

 Petition because there was no contract between the parties. Mr. Matios appeals.

 Because there is no federal subject-matter jurisdiction to grant or deny Mr. Matios’s

 Petition, we vacate and remand for the district court to dismiss the Petition without

 prejudice.

                                I.     BACKGROUND

       During a traffic stop, a City law enforcement officer gave Mr. Matios a

 citation for speeding. Mr. Matios then sent a document entitled “Notice of Verified

 Claim for Relief and Money Demand” to the City. ROA at 21. In this document,

 Mr. Matios alleged the traffic stop and citation violated numerous state and federal

 laws and argued the City owed him millions of dollars in damages as a result. This

 document also purports to be a “Self-Executing Contract Agreement Fee Schedule,”

 id., which Mr. Matios contends obligated the City to respond to his claims “point for

 point” or be deemed to have agreed to the claims and the terms in the “contract,” id.

 at 55–56. The document also includes an arbitration clause that establishes arbitration

 as the sole remedy for any issue associated with the “agreement.” Id. at 54–58.

       The City responded by generally denying the claims. Because the City did not

 respond to the claims “point for point,” however, Mr. Matios sent two

       3
          The Final Arbitration Award suggests Sitcomm recused itself, and Mr. Jones
 is an independent arbitrator separate from Sitcomm. But it appears Mr. Jones runs
 Sitcomm or is closely associated with Sitcomm. See Satcomm v. PayPal, No. 5:19-
 mc-10-MTT, 2020 WL 1609503, at *2 n.1, 3 (M.D. Ga. April 1, 2020) (recognizing
 Mr. Jones’s connection to Sitcomm).
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Appellate Case: 22-1047    Document: 010110710743        Date Filed: 07/14/2022      Page: 3

 communications warning the City that it had agreed with his claims and consented to

 all the terms contained in the document, including the arbitration clause. Id. at 86.

 Both times the City responded by rejecting and denying the claims. Mr. Matios then

 submitted the claims to arbitration with Sitcomm4 and notified the City of a hearing

 date. The City maintained it had not agreed to arbitration and stated it would not

 participate.

        Nevertheless, the arbitrator, Mr. Jones, issued a “Final Arbitration Award” that

 largely consisted of rambling and disjointed legalese. After parsing through the

 language in the award, it appears Mr. Jones concluded the parties had agreed to

 arbitrate because the City had a duty to respond but failed to do so and, without

 analyzing the claims, awarded Mr. Matios $300,000,000 against the City.

        Mr. Matios then filed a Petition to Confirm the Arbitration Award in the

 United States District Court for the District of Colorado. The magistrate judge

 ordered Mr. Matios to show cause why the Petition should not be dismissed for

 (1) lack of an enforceable agreement and (2) lack of subject-matter jurisdiction.

        4
          Federal courts have encountered several petitions to vacate or confirm
 arbitration awards issued by Sitcomm and/or Mr. Jones, and they have consistently
 questioned the validity of the underlying contracts and the subsequent arbitration
 awards. See, e.g., Mark Wayne Nation v. United States, No. 2022-1256, 2022 WL
 1655693, at *1 n.* (Fed. Cir. Feb. 23, 2022); Castro v. Bank of N.Y. Mellon, 852 F.
 App’x 25, 29 n.1 (2d Cir. 2021) (unpublished); United States v. Hallman, No. 3:05-
 376, 2021 WL 3773335, at *1 n.1 (D.S.C. Aug. 25, 2021); Anderson v. United States,
 No. H-21-1889, 2021 WL 2417157, at *1 (S.D. Tex. June 14, 2021); Nelson v.
 Jackson, No. 3:20-cv-28 (CAR), 2021 WL 5035027, at *1 (M.D. Ga. Apr. 28, 2021);
 Domino v. Barr, No. 20-2583 (ECT/BRT), 2021 WL 1795762, at *1 n.1 (D. Minn.
 Feb. 8, 2021).
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 Mr. Matios responded that (1) the City officials’ oaths of office and the self-

 executing contract established a valid contract and (2) the Federal Arbitration Act

 (“FAA”) provided federal subject-matter jurisdiction over the Petition. The

 magistrate judge recommended the Petition be denied because there was no valid

 agreement between the parties. Mr. Matios objected to that recommendation. Despite

 Mr. Matios’s objection, the district court denied the Petition and granted the City’s

 motion to dismiss for the reasons provided by the magistrate judge. Mr. Matios

 appeals the district court’s decision.

                                  II.     DISCUSSION

       As an initial matter, the City argues there is no federal subject-matter

 jurisdiction over the Petition because the FAA alone does not provide jurisdiction.

 Before we can turn to the merits of the Petition, we must determine whether federal

 subject-matter jurisdiction exists. Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006).

       The FAA “‘does not create any independent federal-question jurisdiction,’” so

 “‘there must be diversity of citizenship or some other independent basis for federal

 jurisdiction’ before a federal court can act under the FAA.” P&P Indus., Inc. v. Sutter

 Corp., 179 F.3d 861, 866 (10th Cir. 1999) (quoting Moses H. Cone Mem’l Hosp. v.

 Mercury Constr. Corp., 460 U.S. 1, 25 n.32 (1983)). The process for determining

 whether there is an independent basis for federal jurisdiction varies for different

 types of petitions brought under the FAA. See Badgerow v. Walters, 142 S. Ct. 1310,

 1316–18 (2022) (distinguishing the jurisdictional inquiry for a petition to compel

 arbitration and a petition to confirm an arbitration award). For a petition to confirm

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 an arbitration award under Section 9 of the FAA, like the one at issue here, courts do

 not “look through the . . . applications” to determine whether it would have

 jurisdiction over the underlying dispute. Id. at 1317. Courts look only to the face of

 the petition to confirm the arbitration award. Id. at 1316–18. Thus, we must

 determine whether the Petition itself raises a federal question without regard for the

 underlying claims, 28 U.S.C. § 1331, or whether there is diversity jurisdiction, id.

 § 1332.

        We begin by considering whether the Petition raises a federal question. In a

 petition to confirm an arbitration award, the parties are contesting “the enforceability

 of an arbitral award,” which is “no more than a contractual resolution of the parties’

 dispute.” Badgerow, 142 S. Ct. at 1316–17. These contractual disputes are issues of

 state law, not federal law. Id. at 1317. Thus, the Petition does not establish federal-

 question jurisdiction. Moreover, there is no diversity jurisdiction in this matter

 because Mr. Matios and the City are both citizens of Colorado. See ROA at 9 (noting

 Mr. Matios is a citizen of Colorado); Moor v. Alameda Cnty., 411 U.S. 693, 717–18

 (1973) (“[A] political subdivision of a State . . . is a citizen of the State for diversity

 purposes.”). As such, the district court lacked subject-matter jurisdiction, and the

 Petition must be dismissed without prejudice. Brereton v. Bountiful City Corp., 434

 F.3d 1213, 1216 (10th Cir. 2006) (noting that a dismissal for lack of jurisdiction must

 be without prejudice).

        The City also requests its attorney’s fees for defending the appeal because

 Mr. Matios brought the appeal in bad faith and for oppressive and vexatious reasons

                                              5
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 after being told numerous times the arbitration award was not valid. We lack

 jurisdiction to consider the merits of the Petition, but the method for determining

 jurisdiction for a petition to confirm an arbitration award was not settled until after

 Mr. Matios filed his Notice of Appeal. ROA at 237 (Notice of Appeal dated February

 17, 2022); Badgerow, 142 S. Ct. at 1317–18 (holding courts do not look to the

 underlying dispute to determine jurisdiction over petitions to confirm arbitration

 awards on March 31, 2022). Therefore, we deny the City’s request.

                                 III.   CONCLUSION

       For these reasons, we VACATE and REMAND the denial of the Petition and

 instruct the district court to dismiss it without prejudice. We also DENY the City’s

 request for attorney’s fees.

                                              Entered for the Court

                                              Carolyn B. McHugh
                                              Circuit Judge

                                             6