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Murillo v. A Better Way Wholesale Autos, Inc.

United States District Court, D. Connecticut

July 15, 2019




         On November 9, 2017, Plaintiff Rebecca Murillo filed a Complaint against Defendants A Better Way Wholesale Autos, Inc. (“ABW”) and Westlake Services, LLC (“Westlake”) alleging violations of the Truth in Lending Act, 15 U.S.C. § 1601 et seq. (“TILA”), the Connecticut Unfair Trade Practices Act, Conn. Gen. Stat. § 42-110a et seq. (“CUTPA”), the Connecticut Retail Installment Sales Financing Act, Conn. Gen. Stat. § 36a-785 et seq. (“RISFA”), and the Uniform Commercial Code (“UCC”). See generally [Dkt. 1 (Compl.)]. Plaintiff's allegations stem from her purchase and finance agreement through ABW and with Westlake for a 2008 Lexus IS250 (the “Vehicle”) in February 2017. Id. The Retail Purchase Order, governing Plaintiff's dispute with ABW, and the Retail Installment Contract, relating to Plaintiff's dispute with Westlake, each included arbitration provisions. Defendants sought to compel arbitration pursuant to those provisions and Plaintiff agreed. See [Dkt. 33 (ABW Stay & Compel Arbitration Mot.); Dkt. 34 (Plf. Resp. ABW Arbitration Mot.); Dkt. 37 (Westlake Stay Mot.); Dkt. 38 (Plf. Resp. Westlake Stay Mot.)]. On May 15, 2018, the Court granted ABW's motion to stay and arbitrate, [Dkt. 35 (5/15/18 Order)], and on August 30, 2018 the Court granted Westlake's motion to stay and arbitrate and closed the case without prejudice to any party moving to reopen after the conclusion of the arbitration process, [Dkt. 39 (8/30/18 Order)].

         The parties agreed to arbitrate their disputes before the American Dispute Resolution Center (“ADR”) as a desk arbitration and under the American Arbitration Association (“AAA”) rules. See [Dkt. 44 at 1-2]. Both sides made submissions to the arbitrator, following multiple missed deadlines by Defendants, and the arbitrator considered the claims on the merits. See Id. at 1-2.

         Before the Court now are Plaintiff's Motion to Confirm the Arbitration Award pursuant to § 9 of the Federal Arbitration Act, 9 U.S.C. § 9 (“FAA”), [Dkt. 40], and Defendants' Motion to Vacate the Arbitration Award pursuant to § 10(a)(4) of the FAA, [Dkt. 43]. The Court also considers in this decision Defendants' Motion to Exclude [Dkt. 51] and Plaintiff's Motion to Strike [Dkt. 56], which arise out of the motions to confirm and vacate the arbitration award.

         I. Discussion

         A. ABW's Motion to Exclude & Plaintiff's Motion to Strike

         1. Motion to Exclude

         Defendant ABW moved to exclude from the Court's consideration certain facts asserted by Plaintiff in her submissions to the arbitrator and her filings with the Court because they are inaccurate. [Dkt. 51 (Mot. to Exclude)]. Specifically, ABW seeks to exclude Plaintiff's assertions that she provided ABW her W-2 on February 7, 2018; that the second deal offered to Plaintiff was not as good as the first deal; that any of the financing was conditional; and that Plaintiff was unaware that she was purchasing an oil change contract, a tire and wheel contract, or a service contract. Id. at 1-2. ABW contends that Plaintiff included these assertions in her September 27, 2018 Statement and October 1, 2019 Supplemental Statement provided to the arbitrator and now in her submissions to this Court and that they formed the basis of the arbitrator's decision. Id. at 2. ABW argues that the statements are inaccurate and that the Court should not rely on them. Id.

         As the discussion infra regarding review of an arbitration decision makes clear, a court may not question the factual findings of an arbitrator or otherwise weigh the evidence the arbitrator evaluated in coming to his/her conclusions. Westerbeke, 304 F.3d at 214. Despite this, ABW now, and in its Motion to Vacate, makes arguments regarding interpretation of the facts and weighing of the evidence in the hope that this Court might find differently than the arbitrator. ABW's motion to exclude is essentially another attempt by ABW to present factual arguments and contest those made by Plaintiff in her submissions to the arbitrator. This is not the role of a court in reviewing an arbitration award, as discussed below.

         ABW's motion does not provide a standard governing a “motion to exclude.” Motions to exclude or suppress evidence are pre-trial motions requesting the court exclude a piece of evidence from an upcoming trial on admissibility or other evidentiary grounds. Alternatively, Federal Rule of Civil Procedure 12(f) provides for motions to strike “from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.”

         Here, ABW asks not that the Court withhold information from a jury or a pleading but that the Court exclude from its consideration information submitted by Plaintiff with her briefing on her motion to affirm and Defendants' motion to vacate the arbitration award. Such a motion is not proper. If a party wishes to argue that an asserted fact is not supported by the evidence, that party may do so in its briefing on the motion. Cf. O'Brien v. Wisniewski, No. 3:1 CV 120 (CSH), 2012 WL 1118076, at *3-4 (D. Conn. Apr. 3, 2012) (explaining that motions to strike are inappropriate in the summary judgment context because the court reviews and relies upon only admissible evidence); Ricci v. Destefano, No. 3:04 CV 1109 (JBA), 2006 WL 2666081, at *2 (D. Conn. Sep. 15, 2006) (explaining that a party should make any arguments that a fact is not supported by evidence or that evidence is not admissible in its summary judgment filings, not in a separate motion). ABW could have done just that in its briefing on Defendants' motion to vacate and Plaintiff's motion to affirm the arbitration award. It does not get another chance to do so via unnecessary additional motions practice. Accordingly, ABW's motion to exclude is DENIED.

         2. Motion to Strike

         In its reply in support of its motion to exclude, ABW suggests, for the first time, that Plaintiff's inaccurate statements “rise to the level of such significance as to warrant vacating the Arbitrator's Award in its entirety on the basis of fraud.” [Dkt. 55 at 2]. Plaintiff moves to strike ABW's reply because it raises new arguments not included in ABW's motion to exclude, not to mention its motion to vacate the arbitration award, or responsive to arguments made by Plaintiff in her opposition to the motion to exclude. [Dkt. 56 (Mot. to Strike) at 1-2].

         As noted above, Rule 12(f) allows a court to strike only pleadings. See Fed. R. Civ. P. 12(f). “[A] reply memorandum is not a pleading.” O'Brien, 2012 WL 1118076, at *3 (quoting Marshall v. Webster Bank, N.A., No. 3:10-cv-908 (JCH), 2011 WL 219693, at *12 (D. Conn. Jan. 12, 2011). Thus, the Court cannot properly strike ABW's reply brief or arguments within it and Plaintiff's motion to strike is DENIED.

         However, it is well established that “[a]rguments may not be made for the first time in a reply brief.” Knipe v. Skinner, 999 F.2d 708, 711 (2d Cir. 1993). “New arguments first raised in reply papers in support of a motion will not be considered.” Domino Media, Inc. v. Kranis, 9 F.Supp.2d 374, 387 (S.D.N.Y. 1998). Accordingly, the Court did not consider arguments made by ABW for the first time in its reply in support of its motion to exclude which are not made in response to Plaintiff's opposition to the motion to exclude.

         B. Motion to Affirm & Motion to Vacate Arbitration Award

         Review of the arbitration award in this case is governed by the FAA. See 9 U.S.C. § I et seq. “It is well-settled that judicial review of an arbitration award is narrowly limited, ” Barbier v. Shearson Lehman Hutton Inc., 948 F.2d 117, 120 (2d Cir. 1991), and a district court “must grant” a motion to confirm an award “unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11, ” 9 U.S.C. § 9; accord D.H. Blair & Co., Inc. v. Gottdiener, 462 F.3d 95, 110 (2d Cir. 2006). Section 10 of the FAA sets limited grounds on which a court may vacate an award, including “(1) where the award was procured by corruption, fraud, or undue means; (2) where there was evident partiality or corruption in the arbitrators, or either of them; (3) where 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) where 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.

         The Second Circuit has emphasized the “extremely limited” role of courts in reviewing arbitration awards, Wall Street Assoc. L.P. v. Becker Paribas, Inc., 27 F.3d 845, 849 (2d Cir. 1994). A court may not supplant its judgment for that of, or second-guess an arbitrator. “[A]n arbitration award should be enforced, despite a court's disagreement with it on the merits, if there is a barely colorable justification for the outcome reached.” Banco de Seguros del Estado v. Mut. Marine Office, Inc., 344 F.3d 255, 260 (2d Cir. 2003) (quoting Landy Michaels Realty Corp. v. Local 32B-32J, Serv. Emps. Int'l Union, AFL-CIO, 954 F.2d 794, 797 (2d Cir. 1992)) (internal brackets and quotation marks omitted). “A party moving to vacate an arbitration award has the burden of proof, and the showing required to avoid confirmation is very high.” Gottdiener, 462 F.3d at 110.

         Defendants move for vacatur arguing that the arbitrator exceeded his powers in that the award is completely irrational, see § 10(a)(4), and that the arbitrator's award is in manifest disregard of the law. [Dkt. 44 at 6]. The Second Circuit has laid out separate standards for assessing vacatur under § 10(a)(4) for exceeding powers versus manifest disregard of the law. In 2008, the Supreme Court “placed the proper scope of the manifest disregard doctrine into some doubt” with its decision in Hall Street Associates, LLC v. Mattel, Inc., 552 U.S. 576 (2008). In Hall Street, the Supreme Court held that the FAA provided the sole statutory grounds for review of arbitration decision. 552 U.S. at 588. The Second Circuit read Hall Street as “reconceptualiz[ing]” manifest disregard “as a judicial gloss on the specific grounds for vacatur” of arbitration awards under 9 U.S.C. § 10. See Stolt-Nielsen SA v. AnimalFeeds Int'l Corp., 548 F.3d 85, 91 (2d Cir. 2008), rev'd and remanded on different grounds, 559 U.S. 662 (2010); see also Schwartz v. Merrill Lynch & Co., 665 F.3d 444, 451-52 (2d Cir. 2011). “So interpreted, [the Second Circuit] concluded that manifest disregard remains a valid ground for vacating arbitration ...

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