United States District Court, W.D. Texas, Austin Division
REPORT AND RECOMMENDATION OF THE UNITED STATES
HIGHTOWER UNITED STATES MAGISTRATE JUDGE
HONORABLE LEE YEAKEL UNITED STATES DISTRICT JUDGE
this Court are Defendant’s Rule 12(b)(1) Motion to
Dismiss, filed on May 23, 2019 (Dkt. No. 10);
Plaintiff’s Response, filed on June 7, 2019 (Dkt. No.
11); Defendant’s Reply, filed on June 14, 2019 (Dkt.
No. 13); and Plaintiff’s Surreply, filed on July 17,
2019 (Dkt. No. 17). On July 17, 2019, the District Court
referred the above motion to the undersigned Magistrate Judge
for Report and Recommendation pursuant to 28 U.S.C. §
636(b)(1), Federal Rule of Civil Procedure 72, and Rule 1 of
Appendix C of the Local Rules of the United States District
Court for the Western District of Texas (“Local
Accordant Communications, LLC (“Accordant”) is a
limited liability company organized under the laws of Georgia
with its principal place of business in Seminole County,
Florida. Defendant Sayers Construction, LLC
(“Sayers”) is a limited liability company
organized under the laws of Texas with its principal place of
business in Travis County, Texas.
December 6, 2017, Accordant filed an arbitration proceeding
with the American Arbitration Association against Sayers
pursuant to the arbitration clause contained in the
parties’ contract. See Exh. A to Dkt. No. 1
(Case No. 01-17-007-4311). Accordant sought damages against
Sayers relating to work performed by Accordant as a
subcontractor for certain electric utility construction in
South Florida for which Accordant allegedly was not
compensated. Accordant asserted causes of action for breach
of contract, quantum meruit, and fraud. Sayers
asserted counterclaims for breach of contract.
March 22, 2019, the Arbitration Tribunal
(“Tribunal”) issued its “Partial
Award” finding that Accordant was the prevailing party
in the proceeding and awarded Accordant $459, 392.09 in
monetary damages, “plus an amount to be determined by
the Arbitrator for interest, reasonable costs, expenses and
attorney’s fees.” See Exh. A to Dkt. No
1 at p. 41, 43. The Tribunal also found that Sayers should
recover nothing on its counterclaims. The Partial Award
further stated that: “This Award is intended to fully
address all claims and defenses submitted in these
proceedings exclusive of reasonable attorney’s fees,
costs, expenses and interest.” Id. at p. 43.
The Tribunal ordered the parties to submit briefing on the
issue of attorney’s fees, costs, expenses, and
interest. Id. at p. 41-42.
April 10, 2019, Accordant filed its “Application to
Confirm Arbitration Award” seeking to confirm the
Partial Award. Dkt. No. 1. The Application also notified the
Court that it “will amend this application upon entry
of an award for attorney’s fees, costs, expenses, and
interest.” Id. at ¶ 10. Accordant further
asserted that the Court had jurisdiction over this case based
on diversity jurisdiction under 28 U.S.C. § 1332(a).
9, 2019, the Tribunal issued its “Order on
Accordant’s Application for Award of Fees, Costs and
Interest and Final Award, ” further awarding Accordant
$792, 565 in attorneys’ fees, $12, 989.04 in litigation
costs, $72, 250 in arbitration expenses, and $59, 240.58 in
prejudgment interest, with post-judgment interest from March
22, 2019 (the date of the Partial Award) until paid in full.
Exh. A to Dkt. No. 7. The Final Award also stated that:
“This Award is intended to fully address all claims and
defenses submitted in these proceedings exclusive of
reasonable attorney’s fees, costs, expenses and
interest.” Id. at p. 43. Also on May 9, 2019,
Accordant filed its Amended Application to Confirm
Arbitration Award asking the Court to affirm the Final Award
in favor of Accordant in the amount of “$1, 397,
436.71, plus post-judgment interest and post-award interest
to be determined by the Court.” Dkt. No. 7 at p. 3.
23, 2019, Sayers filed the instant Motion to Dismiss this
case under Federal Rule of Civil Procedure 12(b)(1) for lack
of subject matter jurisdiction. Sayers contends that courts
are only permitted to confirm final arbitration awards and
lack subject matter jurisdiction to confirm partial awards.
Sayers argues that because Accordant filed this lawsuit
before the Final Arbitration Award was issued and sought only
to confirm the Partial Award, this Court lacked subject
matter jurisdiction at the time this suit was filed. Sayers
further argues that the Amended Application to Confirm the
Arbitration Award cannot cure the original deficiency because
jurisdiction cannot be created retroactively. In its Reply,
Sayers changes tack, arguing that the Court lacked subject
matter jurisdiction at the time this action was commenced
because the Partial Award was not a final arbitration award
and, thus, was not ripe for adjudication by this Court. Dkt.
No. 13 at p. 4.
courts are courts of limited jurisdiction, possessing only
that power authorized by Constitution and statute.”
Gunn v. Minton, 568 U.S. 251, 256 (2013) (quoting
Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S.
375, 377 (1994)). Subject matter jurisdiction can be
established by a federal question or diversity of citizenship
between the parties. 28 U.S.C. §§ 1331, 1332.
Federal question jurisdiction authorizes original
jurisdiction over “all civil actions arising under the
Constitution, laws, or treaties in the United States.”
28 U.S.C. § 1331. Diversity jurisdiction authorizes the
courts to have jurisdiction if the “matter in
controversy exceeds the sum or value of $75, 000” and
the parties are diverse in citizenship. 28 U.S.C. §
The Federal Arbitration Act ...