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DCK World Wide, LLC v. Pacifica Riverplace, LP

United States District Court, W.D. Texas, Austin Division

February 16, 2018




         BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause, and specifically Plaintiff DCK World Wide, LLC (DCK)'s Opposed Motion for Leave to File Out of Time Plaintiffs Response to Defendant's Motion to Compel Arbitration [#21], Defendant Pacifica Riverplace, LP (Pacifica)'s Response [#23] in opposition, and DCK's Reply [#31] in support; Pacifica's Motion for Entry of Default [#24]; Pacifica's Motion to Confirm Arbitration Award and Enter Judgment [#43], and DCK's Response [#49] in opposition; as well as DCK's Motion to Vacate Arbitration Award [#48], and Pacifica's Response [#51] in opposition. Having considered the case file and the applicable law, the Court enters the following opinion and orders.


         This case relates to the arbitration of a dispute involving construction of a Residence Inn Hotel owned by Pacifica. The property owner, Pacifica, hired Summit dck, LLC (Summit) to perform construction on the hotel. See Mot. Prelim. Inj. [#4-3] Ex. 2 (Contract). Summit hired JA Plumbing, Inc. (JA Plumbing) as a subcontractor to provide plumbing work for the project. See Mot. Vacate [#48] at 2. Citing unpaid bills, JA Plumbing sued Pacifica and Summit on August 25, 2015 in the 53rd Judicial District state court in Travis County. Id. Pacifica filed a cross-claim against Summit and sought leave to join Summit's indirect corporate parent, DCK. Id. Before the Court addressed Pacifica's request for leave to add DCK, Summit, JA Plumbing, and Pacifica agreed to, arbitrate their disputes, and the state court issued an order to abate the proceedings pending the outcome of arbitration. See id.; Mot. Prelim. Inj. [#4-7] Ex. 6 (Apr. 13, 2016 Agreed Order). Pacifica sought to add DCK as a party to the arbitration proceedings, and DCK objected. See Mot. Vacate [#48] at 2-3. DCK filed this lawsuit on June 8, 2016, requesting declaratory and injunctive relief against the arbitration proceedings. See Compl. [#1].

         Initially, DCK requested a preliminary injunction to enjoin Pacifica from pursuing claims against DCK in the arbitration. See Mot. Prelim. Inj. [#4]. DCK argued the arbitrator lacked jurisdiction to determine whether DCK is bound by the Contract's arbitration provision. See Id. at 6. Before the Court ruled on DCK's request for a preliminary injunction, the arbitrator issued her July 18, 2016 ruling denying DCK's objections to arbitrability, effectively compelling DCK to the arbitration. See Supplement [#20-1] Ex. A (Arbitrator Ruling). Shortly thereafter, this Court denied DCK's request for a preliminary injunction for failing to meet its burden for the requested relief. See Order of Jul. 29, 2016 [#29]. The Court granted the parties' joint motion to stay the case pending the outcome of arbitration. See Order of Sep. 2, 2016 [#33]. The final arbitration hearing was conducted on July 10, 2017, and the arbitrator issued a final award on October 25, 2017. See Mot. Confirm Arbitration [#43-2] Ex. B (Final Award).

         At issue now is the effect of the Final Award. Pacifica requests this Court confirm the Final Award and enter judgment in its favor. DCK asserts the arbitrator exceeded her powers, and therefore the Final Award should be vacated. The parties' motions are ripe and ready for consideration.


         I. Preliminary Matters

         Pacifica's July 5, 2016 response to DCK's request for a preliminary injunction also included a motion to compel arbitration and stay these proceedings pending the outcome of the arbitration. See Resp. [#15]. Sixteen days later, DCK sought leave to file a response to Pacifica's motion to compel arbitration. See Mot. Leave [#21]. These motions are moot in light of the Court's order staying these proceedings for arbitration and the arbitrator's Final Award. See Order of Sep. 2, 2016 [#32]; Final Award.

         Pacifica also requested entry of default for its counterclaims against DCK on July 25, 2016. See Mot. Default [#24]. DCK filed an answer to Pacifica's counterclaims later the same day. Although DCK's answer was untimely, a default judgment is not warranted.

         II. Motions on Arbitrator's Final Award

         The parties disagree on the enforceability of the arbitrator's Final Award. Pacifica contends the Final Award is enforceable and seeks to confirm the award under § 9 of the Federal Arbitration Act (FAA). See Mot. Confirm [#43] at 4-7. DCK asserts the Final Award must be vacated because the arbitrator exceeded her powers in adjudicating the arbitrability of the parties' dispute. See Mot. Vacate [#48] at 4-7. Under the correct law, DCK argues, the arbitrator should have deferred the issue of arbitrability to this Court since DCK did not agree to delegate arbitrability to the arbitrator. Id.

         Below, the Court addresses the issues of arbitrability, DCK's obligation to arbitrate, and confirmation of the Final Award.

         A. ...

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