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Bowers v. Northern Two Cayes Company Limited

United States District Court, W.D. North Carolina, Asheville Division

September 27, 2017

RAYMOND V. BOWERS, Plaintiff,
v.
NORTHERN TWO CAYES COMPANY LIMITED and LIGHTHOUSE REEF RESORT LTD., Defendants.

          ORDER

          Martin Reidinger, United States District Judge

          THIS MATTER is before the Court on the Plaintiff's “Motion for Confirmation of Arbitrator's Award and for Remand to Arbitrator for Clarification of Remaining Ambiguities” [Doc. 43] and the Plaintiff's “Motion for Consideration of New Facts and Need for Making Judgment” [Doc. 46]. The Defendants have responded to Plaintiff's Motions [Docs. 44, 47], and the Plaintiff has replied thereto [Docs. 45, 48].

         I. PROCEDURAL AND FACTUAL BACKGROUND

         Much of the procedural and factual background relevant to the disposition of these motions has been previously outlined by the Court. [Docs. 29, 36, 42]. Briefly, for ease of reference, the Court sets forth the following recitation of facts. The Defendants, Northern Two Cayes (“NTC”) and Lighthouse Reef Resort Ltd., “LRRL”) (collectively “Defendants” or “Sellers”) undertook to market two islands (the “Property”) they owned off the coast of Belize. [Doc. 1 at ¶¶ 18-22]. In October of 2010, the Defendants executed a Listing Contract with Peaks Real Estate Sothebys International Realty (“Peaks”) to market and sell the Property. [Id. at ¶ 39]. The Listing Contract listed the Plaintiff, Raymond V. Bowers, as “Broker”; “Peaks” as “Brokerage Firm”; and the Defendants as “Sellers.” [Id.; Doc. 1-5 at ¶¶ 3.1-3.3]. For reasons previously identified by the Court, the Plaintiff is an intended direct beneficiary of the Listing Contract and may enforce the provisions therein.[1] [Doc. 29 at 3, 6-8].

         On March 22, 2013, the Defendants entered into an agreement with Puerto Azul Belize Ltd. (“PABL”) to sell the Property for twenty million dollars ($20, 000, 000.00). [Doc. 1 at ¶¶ 92, 135]. On the Plaintiff's inquiry regarding the payment of his commission, the Defendants asserted the position that no commission was owed. [Id. at ¶¶ 136-37]. A dispute also arose regarding whether the Defendants breached the Listing Contract by failing to disclose legal matters and court actions concerning the Property. [Id. at ¶¶ 25-38, 43; Doc. 1-5 at ¶ 27.6]. On July 7, 2014, as a result of these disputes, the parties engaged in a mediation pursuant to the Listing Contract. [Doc. 1 at ¶ 152]. No settlement was reached. [Id.].

         On January 20, 2015, the Plaintiff demanded arbitration pursuant to Section 27.2 of the Listing Contract. [Id. at ¶¶ 160-61]. Section 27.2 of the Listing Contract provides, in full:

27.2: JURISDICTION: Jurisdiction for this Listing Contract shall be in the state of North Carolina in case of any dispute concerning this listing contract. Mediation and arbitration shall be attempted in good faith before any court action is ever attempted due to a dispute.

[Doc. 1-5 at ¶ 27.2]. The Defendants did not respond to this demand for arbitration. [Doc. 1 at ¶ 161]. On February 12, 2015, the Plaintiff filed the instant action. [See Doc. 1]. Before the Defendants made an appearance in the case, Plaintiff made a motion to compel arbitration, which the Court denied as premature. [Docs. 9, 10]. Once the Defendants appeared, the Plaintiff timely renewed his motion to compel arbitration. [Doc. 17]. The Court then stayed the proceedings and compelled the parties to arbitrate in accordance with the terms of the Listing Contract. [Doc. 29]. In the Order compelling arbitration, the Court noted, “[t]he parties also dispute whether any such arbitration is binding. The presentation of this issue is premature. There is no arbitration award, and there is no pending motion regarding the confirmation of such award.” [Id. at 9].

         Thereafter, the parties selected Gary S. Hemric (“Arbitrator”) to be the arbitrator in this matter. The Arbitrator conducted a three-day arbitration hearing from September 14 through 16, 2016. [Docs. 37 at 1, 40 at 2]. In proceeding to arbitration, the parties agreed to submit the dispute for administration by the Arbitrator pursuant to the AAA Commercial Rules. [See Doc. 43-6 at 2].

         The Arbitrator issued an Opinion and Award (the “O&A”) on October 13, 2016. In the O&A, the Arbitrator found that the Plaintiff “was a procuring cause” of the initial contact with the representatives of PABL who went under contract with the Defendants for the sale of the Property. [Doc. 43-6 at 6 ¶ 10]. Accordingly, the Arbitrator concluded that the Plaintiff is “entitled to receive a sum of money from [the Defendants] equal to 4% of the total Gross Selling Price” paid by PABL upon the closure of escrow for the sale of the Property. [Id. at ¶ 1]. In the event that PABL did not close on the purchase, the Arbitrator ordered the Defendants to pay “a sum equal to 4% of any dollar amount heretofore paid by PABL to [the Defendants] as a deposit, binder, security for option or other funds intended by those parties to be a portion of the total consideration paid for the sale of the two islands, and which funds will be retained by [the Defendants] notwithstanding failure of the transaction to close.” [Id. at ¶ 2]. The Arbitrator also ordered the Defendants to pay the Plaintiff $80, 346.00 “as reimbursement of costs and expenses including attorneys' and legal fees.” [Id. at 7 ¶ 5].

         On December 16, 2016, Plaintiff filed a “Motion for Remand to Arbitrator for Clarification, Extension of Injunctive Relief, and Ruling that Arbitration Is Binding.” [Doc. 37]. In relevant part, the Court denied Plaintiff's motion to remand because there was no basis on which the Court could order remand without “such award first being served upon the adverse party and presented to the court for confirmation pursuant to section 9 of the FAA.” [Doc. 42 at 4]. The Court also reiterated that it had no opinion regarding “whether the award is binding on the parties such that ‘a judgment of the court shall be entered upon the award made pursuant to the arbitration, '” as the Award was not presently before the Court. [Id. at 4 n.2].

         On February 1, 2017, the Arbitrator issued a Supplemental Opinion and Award (“Supplemental O&A”) in order to address certain requests for clarification made by the Plaintiff. [Doc. 43-6 at 8-9]. In the Supplemental O&A, the Arbitrator made a number of clarifications of the O&A, including the following:

1. The Award of $80, 346.00 in costs and attorney's fees to [the Plaintiff] is completely separate and apart from the payment of any commission or other funds by [the Defendants], incidental to the sales contract with PABL; that amount of $80, 346.00 is payable if the parties agree to accept the terms of the O&A and perform them or when Judge Reidinger confirms the Award and enters judgment upon it, not before.
2. The award of compensation to [the Plaintiff] is intended to be calculated by taking 4% of either the Gross Selling Price, which the arbitrator understands to be $20, 000, 000.00, for a payment of $800, 000.00, payable incidental to and at the time of closing of the transaction of sale and purchase OR that same 4% figure applied to the total amount of any and all sums previously deposited with or paid to [the Defendants] by PABL in connection with the sale of the two islands, and which funds are ultimately retained by [the Defendants], even if the sale transaction does not close. That payment would become due when it is determined finally that PABL will not close the sale transaction and [the Defendants] are entitled to retain any funds heretofore paid by PABL to that point. The arbitrator did not determine and has not ruled that $3, 000, 000.00 has previously been paid by PABL to [the Defendants] to date; however, if that is the case and the sale does not close and there are no further payments by PABL to [the Defendants], then the amount to be paid to [the Plaintiff] ¶ 4% of that $3, 000, 000.00 figure, or $120, 000.00.

[Id.].

         On February 21, 2017, the Plaintiff moved this Court to confirm the Award and also to remand this matter to the Arbitrator for further clarification of the O&A, as supplemented. [Doc. 43]. On July 5, 2017, Plaintiff filed a Motion for “Consideration of New Facts and Need for Making Judgment, ” which purported to “update” the Court with “new facts” that Plaintiff contends are relevant to the Court's consideration of Plaintiff's motion to confirm the arbitration award. [Doc. 46].

         Having been fully briefed by the parties, these matters are now ripe for disposition.

         II. ANALYSIS

         Before the Court can address the Plaintiff's motion for confirmation, the Court must first determine whether the ...


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