Plaintiff Choice Hotels International Inc. filed an application to confirm arbitration award and a motion for default judgment against a fanchisee company and its owner in connection with an arbitration initiated before the AAA as a result of the franchisees’ failure to pay royalties and fees under the governing franchise agreement. Choice Hotels alleged that it sent notices of the arbitration to the defendants “by regular mail, certified mail and/or overnight FedEx delivery,” but “Defendants failed to appear or participate during any proceeding.” The arbitrator noted that the defendants had “failed to respond” and “failed to submit documents after due notice by mail in accordance with the Rules.” The arbitrator awarded $83,726.63 in damages, and $2,750 for reimbursement of fees.
The court found that Choice Hotels was entitled to a default judgment because it met its obligation under the FAA to show that it was entitled to confirmation of the award as a matter of law. The court explained that Choice Hotels’ claims were properly before the AAA pursuant to the arbitration clause in the parties’ franchise agreement and that Choice Hotels was authorized under the AAA’s rules to present its evidence by supporting documentation and the submission of an affidavit. The court found that, after “having fully reviewed and considered” this evidence, the arbitrator entered its award, and there was “no reason in the record” to question its validity. The court therefore ruled that the confirmation of the award was proper and granted the default judgment in favor of Choice Hotels.
Choice Hotels Int’l, Inc. v. Laxmee, Inc., No. 8:18-cv-01818 (D. Md. Aug. 9, 2019).