E. Atl. States Reg'l Council of Carpenters, UBCJA v. Sage Constr. Sols.

1

EASTERN ATLANTIC STATES REGIONAL COUNCIL OF CARPENTERS, UBCJA, Petitioner, v. SAGE CONSTRUCTION SOLUTIONS, LLC, Respondent.

Civil Action No. 23-5208 (MAS) (JBD)

United States District Court, D. New Jersey

March 5, 2024

NOT FOR PUBLICATION

MEMORANDUM OPINION

Michael A. Shipp, United States District Judge.

This matter comes before the Court upon a petition to confirm arbitration award (ECF No. 1) filed by Petitioner Eastern Atlantic States Regional Council of Carpenters, UBCJA (“Petitioner or the “Union”). Respondent Sage Construction Solutions, LLC (“Respondent”) filed an opposition and cross-motion to vacate or modify the award. (ECF Nos. 10, 10-4.) The Court has carefully considered the parties' submissions and decides this matter without oral argument pursuant to Local Civil Rule 78.1. For the reasons set forth below, the Union's petition to confirm arbitration award is granted and Respondent's cross-motion to vacate or modify the award is denied.

I. BACKGROUND

The instant action concerns an arbitration related to Respondent's former employee and two separate agreements the parties entered into. (See generally Pet., ECF No. 1.) The Union alleges that in December 2020 Respondent's agent Joseph Gallardo (“Gallardo”) contacted Petitioner's Senior Council Representative Thomas Iveson (“Iveson”) to discuss a collective bargaining agreement (the “CBA”). (Id. ¶ 6.) Shortly thereafter, Petitioner and Respondent executed a short form CBA (the “Short Form CBA”).^[1] (Id.;, Resp't's Opp'n Br. 9, ECF No. 10-3.) The Short Form CBA provided, in pertinent part, that the Short Form CBA may be terminated with notice via certified mail “at least 90 days prior to [the] expiration of the then current collective bargaining agreement,” but otherwise remains in “full force and effect from year to year.” (Pet. ¶ 8; Short Form CBA, Ex. B *7^[2], ECF No. 10-1.)

In September 2022, Ramon Paige (“Paige”), a Union member, began working at Respondent's jobsite. (Pet. ¶ 10.) Paige worked 77 regular hours and 8.5 overtime hours over two weeks.^[3] (Id. ¶ 10.) Respondent maintains, however, that Paige stole “various materials,” falsified time sheets, and stole money during his employment. (Resp't's Opp'n Br. 4-5, 10; Gallardo Certification ¶¶ 10-11, ECF No. 10; see Ex. E. *27-28, ECF No. 10-1.) As a result of Paige's alleged misconduct, Respondent did not believe that Paige should be paid for his work. (See Gallardo Certification ¶ 11.)

In November 2022, after Respondent refused to pay Paige, the Union sent Respondent correspondence detailing alleged violations of the CBA.^[4] (Resp't's Opp'n Br. 5, 12-13; Ex. F *30, ECF. No. 10-1.) On March 14, 2023, Iveson, on behalf of the Union, initiated arbitration against Respondent. (Resp't's Opp'n Br. 3, ll.)^[5] After becoming aware of the arbitration, Respondent asked Arbitrator Louis P. Verrone (the “Arbitrator”) to “please cancel said [arbitration] scheduled for April 14” because Respondent was in the “process of filing a lawsuit against [] Iveson and [the Union].” (Resp't Opp'n Br. 3-4, 11-12; Ex. M *67, ECF. 10-2.)

In response to Respondent's cancellation request, the Arbitrator asked it to provide “a copy of the legal complaint” to “evaluate its impact” on the arbitration. (Ex. M *65-66, see Resp't's Opp'n Br. 3-4, 11-12.) Respondent did not provide a copy of a legal complaint, but instead demanded that the Arbitrator “cancel the hearing,” reiterating that Respondent was in the “process of filing a lawsuit against [] Iveson and [the Union].” (Ex. M *65-66, see Resp't's Opp'n Br. 3-4, 11-12.) Having not received a proposed legal complaint as requested, the Arbitrator declined Respondent's request to postpone the arbitration. (Resp't's Opp'n Br. 4, 12.)

Arbitration commenced on April 14, 2023 but Respondent did not attend. (Pet. ¶ 19.) On April 20, 2023, the Arbitrator found that Respondent violated Articles I and II of the Work Agreement with the Union, totaling $10,629.99 in damages from several contractual violations. (Id. ¶ 20; Ex. O *83, ECF No. 10-2.) Respondent alleges that it did not see this arbitration award until August 2023. (Resp't's Opp'n Br. 12.) The Union now moves to confirm the arbitration award (ECF No. 2), and Respondent seeks to vacate or modify it (ECF No. 10-4).

II. LEGAL STANDARD

“To preserve the parties' agreement for arbitration in lieu of litigation, ‘[t]here is a strong presumption under the [FAA] in favor of enforcing arbitration awards.'” France v. Bernstein, 43 F.4th 367, 377 (3d Cir. 2022) (quoting Brentwood Med. Assocs. v. United Mine Workers, 396 F.3d 237, 241 (3d Cir. 2005)). “[T]he standard of review of the arbitrator's decision is extremely deferential.” Id. (quoting Indep. Lab'y Emps.' Union, Inc. v. Exxon Mobil Rsch. & Eng'g Co., 11 F.4th 210, 215 (3d Cir. 2021)). “If a dispute-resolution mechanism indeed constitutes arbitration under the FAA, then a district court may vacate it only under exceedingly narrow circumstances.” Dluhos v. Strasberg, 321 F.3d 365, 370 (3d Cir. 2003). “Confirming an arbitration award under § 9 is not to be confused with litigating a dispute over the validity or accuracy of that award under § 10 or § 11. . . .” Teamsters Loc. 177 v. United Parcel Serv., 966 F.3d 245, 252 (3d Cir. 2020) (“Section 9 expressly provides for confirmation in the absence of such disputes.”).

Confirmation of an arbitration award is a summary proceeding authorized by § 9 of the FAA. Id. at 253-54 (citation omitted) (“In the interest of further explaining the path forward, we analogize the confirmation of arbitration awards to other summary proceedings in which a district court enters orders without the parties filing complaints and appearing before it to litigate a matter in full”); see also Cont'l III. Nat.'l Bank & Tr. Co. of Chi. v. Chi., Rock Island & Pac. Ry. Co., 294 U.S. 648, 682 (1935) (holding that a district court can preside over summary proceedings “without the formality in respect of pleadings which is required in actions at law or suits in equity”). “[M]otions to vacate under FAA Section 10 also result in summary proceedings.” PG Publ'g, Inc. v. Newspaper Guild of Pittsburgh, 19 F.4th 308, 313 (3d Cir. 2021) (citations omitted). “The summary proceedings that result from an FAA motion to confirm or vacate an arbitration award are not intended to involve complex factual determinations, other than a determination of the limited statutory conditions for confirmation or grounds for refusal to confirm.” Id. at 314 (citations omitted) (“A court can, within its discretion, decide an FAA motion without conducting a full hearing or taking additional evidence.”).

III. DISCUSSION

In opposing Petitioner's motion to confirm arbitration award, Respondent moves to vacate the arbitration award under 9 U.S.C. § 10(a)(1) and § 10(a)(3), or modify it under 9 U.S.C. § 11(b). (See Resp't's Opp'n Br. 1-2, 6-13.) Given the presumption in favor of confirming arbitration awards under the FAA, the Court will grant Petitioner's motion to confirm unless Respondent can show that there is sufficient reason to vacate or modify the arbitration award.

Under § 10 of the FAA, the Court “may make an order vacating the [arbitration] award” where: (1) “the award was procured by corruption, fraud, or undue means”; (2) “there was evident partiality or corruption in the arbitrators”; (3) “the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced”; or (4) “the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.” 9 U.S.C. § 10(a). Under § 11(b) of the FAA, the Court “may make an order modifying or correcting the [arbitration] award” where “the arbitrators have awarded upon a matter not submitted to them, unless it is a matter not affecting the merits of the decision upon the matter submitted.” 9 U.S.C. § 11(b).

Here, Respondent contends the arbitration award should be vacated or modified because: (1) the Union fraudulently misrepresented the Short Form CBA and withheld the entire CBA for two years, and therefore, fraudulently procured the arbitration award; (2) the Arbitrator impermissibly refused to postpone the arbitration hearing; and (3) the Arbitrator materially erred in rendering his arbitration decision. (See generally Resp't's Opp'n Br.)^[6] The Court addresses each contention in turn.

A. Fraud under 9 U.S.C. § 10(a)(1)

Respondent first maintains that Iveson made several misrepresentations while entering into the short-form CBA. (See Resp't's Opp'n Br. 3, 7, 9.) These misrepresentations, Respondent contends, constitute sufficient bases to vacate the arbitration award. The Court disagrees.

“Challenges to the validity of arbitration agreements ‘upon such grounds as exist at law or in equity for the revocation of any contract' can be divided into two types”: (1) “challenges [to] the validity of the agreement to arbitrate”, and (2) “challenges [to] the contract as a whole.” Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 444 (2006) (citation omitted). Critically, if a respondent's claim “is fraud in the inducement of the arbitration clause itself... [a] federal court may proceed to adjudicate it. But the statutory language does not permit the federal court to consider claims of fraud in the inducement of the contract generally.” Id. at 445 (quoting Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 403-04 (1967)).

Importantly Respondent does not allege that it was fraudulently induced to enter into the Short Form CBA's arbitration...