Dental Village Limited v. Rodriguez

1 WO [5] 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA [8] 9 Dental Village Limited, No. CV-17-00505-TUC-CKJ (EJM) 10 Petitioner, ORDER 11 v. 12 Robert A. Rodriguez, 13 Respondent. [14] 15 Pending before the Court is Petitioner Dental Village’s: Petition to Confirm 16 Arbitration Award (Doc. 1) and Motion to Confirm Arbitration Award Following Default 17 (Doc. 17). Although this matter is currently referred to Magistrate Judge Eric J. 18 Markovich, the Court finds that a withdrawal of the reference (Doc. 12) is appropriate. 19 1. Factual and Procedural Background 20 Respondent Robert A. Rodriguez (“Rodriguez”) was hired by Petitioner Dental 21 Village Limited (“Dental Village”) in September 2013, to serve as a “Senior Executive.” 22 Rodriguez represented to Dental Village that he had a Master’s level degree in Business 23 or Finance from Florida Atlantic University and that he also had more than ten years of 24 senior management experience. In the summer of 2014, Dental Village suspected that 25 Rodriguez was untruthful about his educational and professional experience and 26 terminated Rodriguez on August 11, 2014. 27 In connection with that termination, Dental Village and Rodriguez entered into a 28 Separation Agreement whereby Dental Village would pay Rodriguez approximately 1 $35,000.00 between August and October 2014 provided Rodriguez returned Dental 2 Village’s confidential business records and information. Shortly after his termination, 3 Rodriguez began disclosing confidential information pertaining to an upcoming 4 acquisition involving Dental Village. On November 3, 2014, Dental Village filed a 5 Demand for Arbitration against Rodriguez. Bruce E. Meyerson (“Mr. Meyerson”) was 6 selected to arbitrate the dispute. Mr. Meyerson held a series of management conferences 7 in 2015 and 2016. Rodriguez was given notice of the management conferences but failed 8 to participate. Mr. Meyerson issued subpoenas to Pace University and Florida Atlantic 9 University, where Rodriguez allegedly obtained degrees. Mr. Meyerson also issued 10 subpoenas to three of Rodriguez’s alleged former employers to verify his employment 11 history. 12 An evidentiary hearing was held on July 15, 2016. Like the prior conferences, 13 Rodriguez was given notice of the hearing but failed to appear. At the hearing, Dental 14 Village demonstrated that Rodriguez’s representations regarding both his education and 15 employment history were fabricated. Dental Village presented evidence that Rodriguez 16 never attended Pace University or Florida Atlantic University. Dental Village also 17 presented documentation from Rodriguez’s former employers that he misrepresented his 18 job titles and duties. Mr. Meyerson determined that Rodriguez’s misrepresentations were 19 material and caused Dental Village to grossly overcompensate Rodriguez based upon his 20 fabricated experience and education. Mr. Meyerson also determined that Rodriguez 21 improperly obtained and disseminated Dental Village’s confidential business records and 22 information, breaching his fiduciary duties. Mr. Meyerson entered a final award on 23 October 10, 2016. (Doc. 1, pg. 25-26). 24 Subsequently, Dental Village filed the pending Petition to Confirm Arbitration 25 Award on October 9, 2017. (Doc. 1). Rodriguez was served on December 6, 2017. (Doc. 26 14). To date, Rodriguez has failed to file a responsive pleading. The parties’ Separation 27 Agreement provides that “the award rendered by the arbitrator(s) may be entered in any 28 court having jurisdiction.” (Doc. 1, pg. 8). 1 Furthermore, § 9 of the Federal Arbitration Act provides, in pertinent part: [2] If the parties in their agreement have agreed that a judgment of the court 3 shall be entered upon the award made pursuant to the arbitration, and shall specify the court, then at any time within one year after the award is made [4] any party to the arbitration may apply to the court so specified for an order 5 confirming the award, and thereupon the court must grant such an order unless the award is vacated, modified, or corrected as prescribed in sections [6] 10 and 11 of this title. If no court is specified in the agreement of the 7 parties, then such application may be made to the United States court in and for the district within which such award was made. [8] 9 Since the parties’ Separation Agreement permits the award rendered by Meyerson 10 to be entered in any court having jurisdiction pursuant to the Federal Arbitration Act, the 11 only remaining inquiry is whether this Court has jurisdiction. It should be noted that § 9 12 of the Federal Arbitration Act is not an independent basis for the Court’s jurisdiction. See 13 Gen. Atomic Co. v. United Nuclear Corp., 655 F.2d 968, 969 (9th Cir. 1981) (“We hold 14 that applicants who, in federal district court, seek confirmation of an arbitration award 15 under 9 U.S.C. s 9 , must demonstrate independent grounds of federal subject matter 16 jurisdiction. The provisions of 9 U.S.C. s 9 do not in themselves confer subject matter 17 jurisdiction on a federal district court”). 18 In its Petition to Confirm Arbitration Award (Doc. 1), Dental Village asserts that 19 this Court has jurisdiction over the parties pursuant to 28 U.S.C. § 1332 (a)(1). It appears 20 to be established that Dental Village is an Arizona corporation with its principal place of 21 business in Arizona and Rodriguez is domiciled in Florida. As a result, the parties are 22 diverse. However, it is unclear whether the amount in controversy is sufficient. Although 23 Dental Village states that “the amount in controversy exceeds $75,000.00,” it provides no 24 evidentiary support for that assertion. (Doc. 1, pg. 2). In this case, the relevant amount in 25 controversy is “the amount at stake in the underlying litigation, not the amount of the 26 arbitration award [that] is the amount in controversy for purposes of diversity 27 jurisdiction.” Theis Research, Inc. v. Brown & Bain, 386 F.3d 1180, 1181 (9th Cir. 2004). 28 Although the final award amount was in excess of $75,000.00, the relevant 1 || amount for jurisdictional purposes is the amount at stake in the underlying litigation. In 2|| Mr. Meyerson’s Interim Award, he writes: “In its demand, Dental Village alleged that Mr. Rodriguez had materially misrepresented his educational and employment history 4|| when seeking employment with Dental Village . .. Among other relief, Dental Village 5 || sought compensatory and punitive damages...” (Doc. 1, pg. 13-14). Before the Court can □□ take further action, it must ensure that it properly has jurisdiction over the case and will direct Dental Village to furnish a copy of its demand provided to Mr. Meyerson. The 8 || Court further notes that although Dental Village’s Civil Cover Sheet (Doc. 1-1, pg. 1-2) 9|| states that the dollar demand is $84,288.51, that figure represents the amount awarded by □□ Mr. Meyerson in the Final Arbitration Award and 1s insufficient to satisfy the amount in 11 || controversy. 12 Accordingly, IT IS ORDERED: 13 1. The referral to Magistrate Judge Eric J. Markovich is withdrawn. 14 2. Petitioner Dental Village Ltd. is directed to supplement its pending motion by 15 providing the Court with a copy of its initial demand letter submitted during 16 the arbitration process within seven (7) days of the date of this Order. 17 Dated this 10th day of September, 2019. I cial Drea 19 Honorable Cindf'K. J6fgenson United States District Judge [28] -4-