Sanluis Developments v. Ccp Sanluis, L.L.C.

Page 329

556 F.Supp.2d 329

SANLUIS DEVELOPMENTS, L.L.C., Sanluis Investments, L.L.C., and Sanluis Corporación, S.A. de C.V., Petitioners, v. CCP SANLUIS, L.L.C. and AIP-Sanluis, L.L.C., Respondents.

No. 06 Civ. 11531 (RJH).

United States District Court, S.D. New York.

June 3, 2008.

Evan A. Davis, Cleary Gottlieb Steen & Hamilton, LLP, New York, NY, for Petitioners.

Joel Avi Hankin, John Morgan Callagy, Kelley Drye & Warren, LLP, New York, NY, for Respondents.

MEMORANDUM OPINION AND ORDER

RICHARD J. HOLWELL, District Judge.

Petitioners Sanluis Developments, L.L.C. (the "Company"), Sanluis Investments, L.L.C. ("Sanluis Investments"), and Sanluis Corporation, S.A. de C.V. ("Sanluis Corporation"), filed a petition in state court to vacate an interim arbitration award rendered on July 16, 2006 and a final award dated September 21, 2006, which included the addition of costs and attorneys' fees. Respondents CCP Sanluis, L.L.C. ("CCP Sanluis"), and AIP-Sanluis, L.L.C. ("AlP-Sanluis"), removed the action to federal court pursuant to 9 U.S.C. § 205 and 28 U.S.C. § 1441(a). Respondents moved to dismiss the petition to vacate the arbitration award. In an Opinion and Order dated August 2, 2007, 498 F.Supp.2d 699, the Court granted respondents' motion to dismiss the petition to vacate. On August 3, 2007, the Clerk of Court entered judgment accordingly. On August 17, 2007, respondents moved the Court to modify the judgment and confirm the arbitration award, or in the alternative, to issue a new order and judgment confirming the award. On August 31, 2007, petitioners filed a cross-motion styled as a "motion to dismiss respondents' motion to confirm." Petitioners argue that this Court should not grant respondents the relief they seek for five reasons: (1) the respondents' motion to modify the judgment does not meet the standards of Federal Rule of Civil Procedure 59(e); (2) the respondents' opposition to the motion to vacate an arbitration award should not be treated as a motion to confirm; (3) treating respondents' opposition as a motion to confirm is inconsistent with the Inter-American Convention on International Arbitration; (4) the respondents' motion to confirm is untimely; (5) and the respondents failed to effect proper service of process. (See Pets.' Mem. of Law in Opp'n to Resps.' Mot. at 1 ("Pets.' Mem."); Pets.' Reply Mem. of Law at 4-6 ("Pets.' Reply").)

For the reasons that follow, respondents' motion [15] is granted and petitioner's cross-motion [17] is denied.

DISCUSSION

I. Motion to Alter or Amend the Judgment

"Rule 59(e) does not prescribe specific grounds for granting a motion to alter or amend an otherwise final judgment. ..." Munafo v. Metro. Transp. Auth., 381 F.3d 99, 105 (2d Cir.2004). Courts in this Circuit have held that to prevail on such a motion, "the movant must [either] present factual matters or controlling decisions the court overlooked that might materially have influenced its earlier decision ... [or] demonstrate the need to correct a clear error or prevent manifest injustice." Griffin Indus, v. Petrojam, Ltd., 72 F.Supp.2d 365, 368 (S.D.N.Y.1999) (internal citations omitted); see also Munafo, 381 F.3d at 105 (holding that district courts "may alter or amend judgment to correct a clear error of law or prevent manifest injustice"); Kingdom 5-KR-41 v. Star Cruises PLC, No. 01 Civ. 2946(DLC), 2005 WL 110434, at *1-*2, 2005 U.S. Dist. LEXIS 762, at *7 (S.D.N.Y. Jan. 20, 2005) (noting that the Supreme Court has held that Rule 59(e) was meant to allow courts to "rectify their own mistakes in the period immediately following entry of judgment" and vacating judgment on the grounds that the court had overlooked certain claims by the movant); see also Weiss v. Union Cent. Life Ins. Co., 65 Fed.Appx. 347, 350 (2d Cir. 2003) ("A motion to amend a final judgment pursuant to Fed.R.Civ.P. 59(e) must be filed within ten days of entry and will generally not be granted unless the moving party can point to facts or controlling decisions overlooked by the court."). "New facts, issues or arguments not previously presented to the court may not be presented" on a motion under Rule 59(e). Harrison v. Harlem Hosp., No. 05 Civ. 8271(WHP), 2008 U.S. Dist. LEXIS 25139 (S.D.N.Y. Feb. 28, 2008). Likewise, a motion to amend the judgment "may not treat the court's initial decision as the opening of a dialogue in which that party may then use such a motion to advance new theories or adduce new evidence in response to the court's rulings." Seinfeld v. WorldCom, Inc., No. 06 Civ. 13274(DLC), 2007 WL 1573870, at *1, 2007 U.S. Dist. LEXIS 39164, at *3-*4 (S.D.N.Y. May 31, 2007). The decision to grant or deny a motion under Rule 59(e) is entrusted to the sound discretion of the district court. See Devlin v. Transp. Communs. Int'l Union, 175 F.3d 121,132 (2d Cir.1999).

In this case, respondents timely filed a motion to alter the judgment on the basis that the Court overlooked the question of the effect of a dismissal of the petition to vacate. The issue was raised by the parties in their respective reply papers. Petitioners noted that the action was styled a petition to vacate because it was originally filed in state court. (Pets.' Reply 1, n.1, Dec. 15, 2006.) As a result, they requested that the Court construe their petition as a motion to vacate under 9 U.S.C. § 10. (Id.) Respondents replied that they accepted this treatment of the petition on the understanding that a dismissal of the petition to vacate would be treated as a decision on a motion to confirm. (Resps.' Reply 1, n.1, Dec. 22, 2006.) However, the Court's August 2, 2007 Opinion and Order did not address the question raised by the parties' papers regarding the effect of a dismissal of the petitioner. Indeed, the Court simply overlooked respondents' unexceptional request. Accordingly the Court exercises its discretion to reconsider its Opinion and Order, and for the reasons that follow, grants respondents' motion to alter the judgment to reflect the confirmation of the September 21, 2006 Arbitration Award.

II. Respondents' Motion to Dismiss Petitioners' Motion to Vacate the Arbitration Award was a Motion to Confirm the Arbitration Award

When a party moves to dismiss a motion to vacate an arbitration award, the court may, sua sponte, treat the motion to dismiss as a motion to confirm the award. Thyssen, Inc. v. M/V Markos N, 97 Civ. 6181(MBM), 2001 WL 902564, at *1, 2001 U.S. Dist. LEXIS 11560, at *2 (S.D.N.Y. 2001) ("Although defendants frame their motion as one to dismiss, I will treat it as a motion to confirm the arbitration award."); Maidman v. O'Brien, 473 F.Supp. 25, 27 (S.D.N.Y.1979)¹ ("[A]lthough Evans has not sought to have the arbitration decision confirmed pursuant to 9 U.S.C. § 9, there is authority for treating such motions to dismiss as implicitly seeking that confirmation. ..."); GE v. Anson Stamping Co., 426 F.Supp.2d 579, 591 (W.D.Ky.2006) ("Anson's motion to dismiss GE's motion to vacate is in all respects the practical equivalent of a motion to confirm. ..."). See also Brown v. Bridgeport Rolling Mills Co., 245 F.Supp. 41, 45 (D.Conn. 1965) ("[T]his Court's judgment in the prior proceeding denying the Company's motion to vacate the award and granting the motion by Brown and the Union for judgment on the record and pleadings was in effect a judgment confirming the award. ..."). Cf. Andrea Doreen, Ltd. v. Bldg. Material Local Union 282, 250 F.Supp.2d 107, 111 (E.D.N.Y.2003) (holding that a "summary judgment motion can be viewed as an implicit request for confirmation of that award"); Markowski v. Atzmon, 92 Civ. 2865(LFO), 1994 WL 162407, at *1, 1994 U.S. Dist. LEXIS 4998, at *2 (D.D.C.1994) (granting untimely motion to confirm because the court previously granted a motion to dismiss a petition to vacate the award).

This is logical. The motion to confirm an arbitration award under § 9 of the FAA and the motion to vacate under § 12 of the FAA are related. The two motions submit identical issues for judicial determination. See e.g., Markowski, 1994 WL 162407, at *1, 1994 U.S. Dist. LEXIS 4998, at *2 ("A motion for confirmation involves the same substantive consideration as a motion to vacate."). Accordingly, when a court denies a motion to vacate an arbitration award, the court's judgment has the effect of collateral estoppel; the parties cannot relitigate the validity of the award. See Brown, 245 F.Supp. at 45 (in a proceeding to vacate an arbitration award, the "opposing parties [are] required to object upon all grounds which might be urged in support of a proceeding to confirm the award"). It is therefore sensible for the court to treat a party's opposition to a motion to vacate as a request to confirm the award.

Of course, in this case, respondents specifically requested that the Court treat their motion to dismiss the petition as having the effect of a motion to confirm. Because it would have been appropriate for the Court sua sponte to treat the motion to dismiss as a motion to confirm, the Court finds that respondents' request for such treatment should be granted. Thus, respondents' November 22, 2006 motion to dismiss the petition to vacate should be treated as a motion to confirm the arbitration award.

III. Inter-American Convention on International Arbitration ("the Inter-American Convention")

Nevertheless, petitioners claim that a court should not treat the denial of a motion to vacate as a motion to confirm if the arbitration was conducted pursuant to the Inter-American Convention. Petitioners offer two reasons why distinctions between a motion to vacate and a motion to confirm "have particular force in an international arbitration like this one conducted pursuant to the [Inter-American Convention]." (Pets.' Reply at 5.) First, plaintiffs claim that while international criteria govern a motion to confirm an award subject to the Inter-American Convention, domestic law governs a motion to vacate such an award. Second, while...