United States District Court, W.D. Washington, Seattle
Honorable Richard A. Jones United States District Judge
matter comes before the court on Defendant Advanced Fresh
Concepts Franchise Corporation's motion to confirm an
arbitration award. Dkt. # 151. For the reasons that follow,
the Court GRANTS the motion.
Pilrang Bae Owa was the sole member and operator of Sakura
Foods Everett, L.L.C., a limited liability company engaged in
the production and sale of sushi and other raw fish products.
See Dkt. # 92-1 at 17-20. On December 20, 2012,
Plaintiff, in her individual capacity, entered into a
franchise agreement with Defendant. Dkt. # 34-2 at 2. The
franchise agreement permitted Plaintiff to operate a
full-time food service counter selling sushi inside of a Fred
Meyer grocery store in Everett, Washington. Id. at
34. The franchise agreement also included an agreement
between Plaintiff and Defendant to arbitrate “any
dispute that arises out of or relates directly or indirectly
to this Agreement or the relationship of the parties
hereto.” Id. at 28. On January 23, 2013-a
month after signing the franchise agreement in her personal
capacity-Plaintiff created “Sakura Foods Everett,
L.L.C.” to execute the provisions of the franchise
agreement. Dkt. # 34-3 at 8-11. On February 13, 2013,
Plaintiff obtained a business license for her operation under
the name “Sakura Foods Everett LLC.” Id.
at 13. The Washington Secretary of State administratively
dissolved Plaintiff's limited liability company on May 1,
2014, but Plaintiff continued operating the business until
Defendant terminated the franchise agreement on April 26,
2016. See Dkt. ## 170 at 1, 81-1 at 9.
April 25, 2016-the day before Defendant terminated the
franchise agreement-Plaintiff filed a lawsuit in the Superior
Court for King County, Washington, alleging that Defendant
and Fred Meyer violated state and federal anti-discrimination
laws and committed common-law torts. Dkt. ## 1, 1-2 at 1-26.
Plaintiff first amended her lawsuit on May 5, 2016, and again
on July, 29, 2016. Dkt. # 1 at 2. On July 19, 2016, Defendant
responded to Plaintiff's first amended complaint by
filing an arbitration demand with the American Arbitration
Association (AAA). Dkt. # 32 at 5. Defendant sought an
arbitral declaration that Plaintiff was an independent
business owner, and not an employee, to negate
Plaintiff's ability to make a prima facie case for
employment discrimination. See id. On August 5,
2016, Fred Meyer removed the case to federal court in
accordance with 28 U.S.C. §§ 1332 and 1441.
Id. On August 23, 2016, AAA agreed to arbitrate the
dispute between Plaintiff and Defendant, noting that the
relief sought by Defendant was within the scope of franchise
agreement's arbitration provision. See id.
September 1, 2016, with arbitration pending and the case
removed to federal court, Defendant notified the Court of the
anticipated arbitration. Dkt. # 22. On September 22, 2016,
Defendant petitioned the Court to either 1) compel
arbitration and stay Defendant's participation in the
case until completion of arbitration or 2) dismiss
Plaintiff's complaint against Defendant outright. Dkt. #
32 at 5. On December 15, 2016, the Court granted
Defendant's motion to compel arbitration, agreeing to
stay Defendant's involvement in the case until the
completion of arbitration. Dkt. # 66.
29, 2017, Arbitrator Mary S. Jones issued a partial final
award in favor of Defendant, finding that Plaintiff was not
employed by Defendant. Dkt. # 81-1 at 22. Accordingly, the
arbitrator dismissed Plaintiff's state and federal
employment discrimination claims against Defendant.
Id. at 23. The arbitrator did not rule on
Plaintiff's tort claim in the partial final award;
instead, the arbitrator reserved the disposition of the tort
claim and assignment of liability for attorney's fees
until the comprehensive final award. Id.
November 28, 2017, the arbitrator issued the comprehensive
final award. Dkt. # 92-1. The comprehensive final award
denied Plaintiff relief for her intentional infliction of
emotional distress (IIED) claim. Id. at 8-9. The
final award also awarded fees to Defendant, as the prevailing
party, in accordance with the franchise agreement and
California law. Id. at 9-10; see also Cal.
Civ. Code § 1717(a) (fees shall be awarded to the
prevailing party where a contract provides for attorney's
fees). Plaintiff claimed $71, 000 of attorney fees for the
arbitration, and Defendant claimed legal fees totaling $439,
787. Id. at 10. Because of the disparity in
expenditures, the arbitrator indicated that she gave
“careful and serious consideration . . . [evaluating]
the reasonableness of the attorney's fees and costs
incurred by” Defendant. Id. When deciding how
much to award Defendant, the arbitrator cited consideration
1) the numerous causes of action and contrary positions taken
by . . . [Plaintiff] at various times over the course of this
dispute, 2) . . . [Defendant's] need for local Washington
State counsel, and 3) the very different practice,
presentation, preparation and organizational styles of each
Id. The arbitrator also noted that Defendant faced a
claim of $6.8 million in punitive damages, and that Defendant
could not take that potential liability
“lightly.” Id. Ultimately, the
arbitrator awarded Defendant $373, 126.98 in fees, basing her
decision on “the totality of the circumstances in this
case, the reasonableness of the fees . . . and the clear and
unambiguous requirement in the Agreement mandating a fee
[award] . . . to the prevailing party[.]” Id.
November 29, 2017, AAA transmitted the signed comprehensive
final award by e-mail to Plaintiff and Defendant. Dkt. #
152-1 at 86. On December 1, 2017, Defendant filed an
arbitration status report informing the Court of the final
arbitration award. Dkt. #92. On the same day, Plaintiff filed
her own status report, informing the Court of her intention
to move to vacate the arbitration award due to the
arbitrator's partiality, corruption, and manifest
disregard for the law. Dkt. # 94 at 1-2. On December 4, 2017,
Plaintiff filed an additional status report reasserting her
intention to move to vacate the award, claiming the
arbitrator failed to give sufficient weight to
Plaintiff's emotional state when deciding the IIED claim.
Dkt. # 95. In addition to filing status reports with the
Court, Plaintiff also petitioned AAA for a modification of
the final arbitration award. See Dkt. # 152-1 at 80.
On December 12, 2017, the arbitrator declined to modify the
award, noting that “the merits on all the claims
presented in this matter have already been decided.”
Id. AAA transmitted this decision to the parties on
December 13, 2017. Id. at 88.
March 15, 2018, Defendant filed the current motion to confirm
the arbitration award. Dkt. # 151. Defendant argues that the
comprehensive final arbitration award is conclusive on all
issues between Plaintiff and Defendant, and that confirmation
of the award is proper and in accordance with the Federal
Arbitration Act (FAA). Id. at 7-9. Importantly,
Defendant argues that any argument against confirmation of
the award is moot because Plaintiff failed to move to vacate,
modify, or correct the award within statutory guidelines.
Id. at 8.
reply challenges the current motion, arguing that
confirmation of the arbitration award is improper because 1)
judgment against Sakura Foods, L.L.C. cannot be supported
because the corporate entity no longer exists; and 2) the
arbitrator exceeded her powers by granting attorney's
fees on the IIED claim. Dkt. # 160 at 1-2. Plaintiff's
reply also renews the allegations made in her
post-arbitration status report that the arbitrator was
partial, corrupt, and exhibited a manifest disregard for the
law. Id. at 2-6; see also Dkt. # 94 at 1-2.
Plaintiff supports those claims with a detailed declaration
outlining numerous objections to the arbitration proceedings.
See Dkt. # 159-2. Despite these allegations,
Plaintiff notes that she “does not seek award
vacatur” and only asks the Court “to use its
inherent equity powers and on ground of public policy to
vacate an award representing an extreme miscarriage of
justice.” Dkt. # 160 at 2.
response simply asserts that Plaintiff's disagreement
with the arbitrator's findings of facts or conclusions of
law does not prohibit confirmation of the arbitration award.
Dkt. # 162 at 3-5. Defendant also moves to strike several of
Plaintiff's filings as irrelevant, arguing that Plaintiff
waived these arguments because they were not filed in
accordance within the temporal limitations of 9 U.S.C. §
12. Id. at 5-6. Plaintiff's surreply restates
her grievances with the arbitration process, argues that
judgment against Plaintiff's LLC is ...