Vernon-Hunt v. Guzman

Background

James David Vernon-Hunt, appearing without a lawyer, asked the court to confirm an arbitration award issued through the Financial Industry Regulatory Authority’s dispute-resolution services. The dispute arose from Vernon-Hunt’s allegation that Carlos Guzman falsely represented that he would open a bank account so Vernon-Hunt could purchase repossessed properties. Vernon-Hunt alleged that the representation caused him to transfer substantial funds.

Vernon-Hunt filed an arbitration claim against Guzman and U.S. Bancorp Investments, Inc. The arbitration panel dismissed the claim against U.S. Bancorp Investments for lack of jurisdiction. Guzman did not respond to the arbitration claim. After an earlier round of this case in federal court, the arbitration was reopened as to Guzman. Guzman again did not respond.

On January 19, 2022, the arbitrator issued a final award granting Vernon-Hunt $423,833 in compensatory damages, plus interest at 9% per year from August 30, 2013, until the award was paid. Guzman did not ask the court to vacate the award. He also did not appear or respond to Vernon-Hunt’s federal petition to confirm it.

Legal standard

Under the Federal Arbitration Act, a court generally must confirm an arbitration award unless a legally recognized ground exists to vacate, modify, or correct it. The court explained that an unanswered petition to confirm an arbitration award is treated as an unopposed motion for summary judgment, not automatically as a default judgment. Summary judgment is proper when there is no genuine dispute about a material fact and the moving party is entitled to judgment under the law.

The court also considered whether the award showed grounds for vacatur, including fraud, dishonesty, arbitrator misconduct, or action outside the arbitrator’s authority. Such grounds are narrowly interpreted.

Court’s analysis and ruling

The court reviewed the petition and the arbitration award. It found no genuine issue of material fact and no indication that the award resulted from fraud or dishonesty or that the arbitrator acted outside her authority. The court stated that the record showed the arbitrator based the award on undisputed evidence submitted by Vernon-Hunt.

Judge Vernon S. Broderick granted Vernon-Hunt’s motion and confirmed the award. The clerk was directed to enter judgment for Vernon-Hunt against Guzman for $423,833 in compensatory damages, plus 9% annual interest from August 30, 2013, until payment in full. The clerk was also directed to close the case.