United States District Court, D. Hawaii
ORDER DENYING PLAINTIFF'S MOTION TO VACATE OR
MODIFY ARBITRATION AWARD AND GRANTING DEFENDANTS'
COUNTERMOTION TO CONFIRM ARBITRATION AWARD
Oki Mollway, United States District Judge.
2016, this court referred to arbitration all claims arising
under the Services Agreement and Non-Circumvention Agreement,
reserving for later adjudication which parties had to
arbitrate the claims at issue. The parties subsequently
stipulated to stay this proceeding pending arbitration and to
refer all claims against all Defendants to arbitration. In
November 2018, the arbitrator awarded $273, 930.14 to
Defendants. The stay of this case has been lifted, and
Plaintiff Streamline Consulting Group now moves to vacate or
modify that award. Defendants have filed a countermotion to
confirm the award. The court denies Plaintiff's motion
and grants Defendants' motion to confirm the arbitration
award without a hearing pursuant to Local Rule 7.2(d).
factual background for this case was set forth in this
court's order of January 27, 2016. See ECF No.
36. That background is incorporated herein by reference. In
the order, this court determined that all claims arising
under the Servicing Agreement and Non-Circumvention Agreement
had to be arbitrated, but left for further determination
which Defendants had to participate in arbitration. See
Id. After this court declined to reconsider that order,
the parties stipulated to having all claims against all
parties arbitrated. See ECF No. 59.
beginning of 2018, the parties signed an Agreement to
Participate in Binding Arbitration with Jerry Hiatt as the
arbitrator. See ECF No. 73-1, PageID #s 722-24. The
Unless the parties' agreement provides otherwise, the
Arbitrator shall determine all issues submitted to
arbitration by the parties and may grant any and all remedies
that the Arbitrator determines to be just and appropriate
under the law. In the Award of the Arbitrator, the Arbitrator
shall issue a determination on the issue of all
arbitration-related fees and costs, including:
Arbitrator's compensation and expenses; [Dispute
Prevention & Resolution, Inc.'s] fees and expenses;
and, if provided for in the parties' agreement, the
Submission to Arbitration, or applicable laws or statutes,
attorney's fees and costs.
Id., PageID # 722, 723.
to the Pre-Hearing Stipulation and Order Number 2, the
arbitration was to be “governed by the Federal
Arbitration Act, 9 U.S.C. § 1 et seq.”
ECF No. 73-1, PageID # 729.
asserted five claims against all Defendants in the
arbitration proceeding: Breach of the Services Agreement
(Count I); Breach of the Non-Circumvention Agreement (Count
II); Use of Photograph Without Giving Credit (Count III);
Breach of Implied Covenant of Good Faith and Fair Dealing
(Count IV); Misappropriation of Name and Likeness (Count V);
Intentional Interference with Economic Advantage (Count VI);
and Unjust Enrichment (Count VII). See ECF No. 76-6.
Apparently, Legacy Carbon filed contract and tort
counterclaims against Streamline for allegedly deficient
services. See ECF No. 76-3, PageID #s 1000-01 (Final
Award of Arbitrator discussing counterclaims).
arbitration hearing on October 9, 2018, all parties agreed
that the arbitrator was to award attorneys' fees to
prevailing parties with respect to contract claims and that
such attorneys' fees were awardable under Hawaii's
assumpsit statute. See ECF No. 73-1, PageID # 779.
At the arbitration hearing on October 12, 2018, the
arbitrator confirmed with the parties that, unless a
different amount was provided for in the parties'
contracts, attorneys' fees would be awarded under
Hawaii's assumpsit statute, which he said was limited to
25% of the amount in controversy. ECF No. 73-1, PageID # 742.
Counsel for Defendants corrected him, stating that the amount
should be “25 percent of the judgment awarded or 25
percent of the claim you successfully defend.”
Id. The arbitrator responded, “Yes, I think we
have a common basic understanding.”
about October 22, 2018, Streamline argued in arbitration its
entitlement to an award of attorneys' fees under
Hawaii's assumpsit statute, section 607-14 of Hawaii
Revised Statutes. See ECF No. 73-3, PageID # 897.
The same day, Defendants argued that they were the parties
entitled to attorneys' fees under section 607-14 of
Hawaii Revised Statutes. See ECF No. 73-2, PageID #
791. Given these circumstances, the parties agreed that the
arbitrator should award attorneys' fees pursuant to
Hawaii's assumpsit statute, section 607-14.
about November 28, 2018, the arbitrator issued his Final
Award of Arbitrator. See ECF No. 76-3. The
arbitrator determined that $263, 000 represented a total
reasonable amount of attorneys' fees for each side.
See ECF No. 76-3, PageID # 1001. The arbitrator
determined that each side incurred at least $10, 930.14 in
respect to the portion of Count I asserting “Breach of
the Services Agreement--failure to pay invoice, ” the
arbitrator ruled that Legacy Carbon had breached the
agreement by failing to pay invoices. The arbitrator awarded
to Streamline from Legacy Carbon $47, 387.43 in damages and,
pursuant to section 607-14 of Hawaii Revised Statutes,
awarded 25% of that amount ($11, 846.86) for attorneys'
fees. The arbitrator also awarded to Streamline from Legacy
Carbon $10, 930.14 in costs. See ECF No. 76-3,
PageID # 1007. However, the arbitrator determined that the
remaining five Defendants had not breached the Services
Agreement and awarded each of them 25% of the award ($11,
846.86) plus 1/6 of the total costs of $10, 930.14 ($1,
821.69), for a total of $13, 668.55 in ...