United States District Court, W.D. Texas, Austin Division
HONORABLE ROBERT PITMAN UNITED STATES DISTRICT JUDGE
AMENDED  REPORT AND RECOMMENDATION OF
THE UNITED STATES MAGISTRATE JUDGE
HIGHTOWER UNITED STATES MAGISTRATE JUDGE
this Court are Stockade's Opposed Motion for Award of
Attorneys' Fees and Supporting Memorandum, filed June 6,
2019 (Dkt. No. 22); Defendant Gal Premer's Opposition to
Plaintiff's Motion for Attorneys' Fees, filed June
20, 2019 (Dkt. No. 24); Kelly Defendants' Opposition to
Plaintiff's Motion for Award of Attorneys' Fees,
filed June 20, 2019 (Dkt. No. 25); and Stockade's Reply,
filed June 27, 2019 (Dkt. No. 26).
October 16, 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)(B),
Federal Rule of Civil Procedure 72, and Rule 1(d) of Appendix
C of the Local Rules of the United States District Court for
the Western District of Texas.
4, 2014, Stockade Franchising, LP (“Stockade”),
as franchisor, and Kelly Restaurant Group, LLC
(“KRG”), as franchisee, entered into fifteen
franchise agreements for certain restaurant concepts owned by
Stockade. Dkt. No. 1-1 (“Franchise Agreements”).
In connection with the Franchise Agreements, Kelly Investment
Group, LLC (“KIG”), Michael Kelly
(“Kelly”), and Gale Premer (“Premer”)
executed Guaranties guaranteeing certain obligations of KRG.
On February 10, 2017, Stockade terminated the Franchising
Agreements with KRG for failure to pay $484, 456.00 due under
the Franchising Agreements contained a mandatory arbitration
clause requiring the Parties to arbitrate all disputes
arising out of the Agreements. Dkt. 1-1 at § 21.01
(“Arbitration Clause”). On May 20, 2017, pursuant
to the Arbitration Clause, Stockade filed a Demand for
Arbitration with the American Arbitration Association against
KRG, KIG, Kelly, and Premer (“Defendants”) for
breaches of the Franchising Agreements and Guaranties and
related claims. Defendants filed counterclaims for breach of
contract, defamation, and tortious interference.
5, 2018, the Arbitrator issued his Interim Partial Award
finding that Defendants breached the Franchising Agreements
and awarded Stockade $484, 456.00 for unpaid royalties and
fees due under the franchise, and $137, 812.63 for damages
under the Lanham Act and Texas Trademark Act. Dkt. No. 1-2 at
p. 1. The Arbitrator denied Stockade's claim for future
lost profits and Defendants' counterclaims. Id.
at p. 1-2. The Arbitrator noted that “the issue of
attorney fees and allocation of the expenses of this
arbitration have been bifurcated and will be taken up in a
separate hearing and included in the Final Award.”
Id. at p. 2.
October 1, 2018, the Arbitrator issued his Final Award
awarding Stockade the amounts identified in the Interim
Partial Award as well as $312, 911.36 of the $549, 261.57
requested by Stockade in attorneys' fees and expenses.
Dkt. No. 1-3. . The Arbitrator stated that “[t]his
Award is intended to resolve all of the claims,
counterclaims, and issues presented in this arbitration. All
claims for relief sought by any of the parties that are not
expressly awarded are hereby denied.” Id. at
October 24, 2018, Stockade Franchising, LP
(“Stockade”) filed this lawsuit, pursuant to 9
U.S.C. § 9, to confirm the Arbitrator's Final Award
against Defendants. On May 9, 2019, the District Court
entered a Final Judgment in this case stating the following:
Stockade is entitled to judgment confirming the October 1,
2018 final arbitration award entered in American Arbitration
Association No. 01-17-0003-1350 (“Final Award”),
and attached to this Final Judgment as Exhibit A.
Stockade is entitled to judgment against Defendants Kelly
Restaurant Group, LLC; Kelly Investment Group, LLC; Michael
Kelly; and Gale Premer on the terms set forth in the Final
Award. The terms of the Final ...