United States District Court, W.D. North Carolina, Statesville Division
Cogburn, Jr. Judge
MATTER is before the Court on review of a Memorandum
and Recommendation issued in this matter. In the Memorandum
and Recommendation, the magistrate judge advised the parties
of the right to file objections within 14 days all in
accordance with 28 U.S.C. § 636(b)(1)(c). Objections
have been filed within the time allowed.
Federal Magistrates Act of 1979, as amended,
provides that “a district court shall make a de
novo determination of those portions of the report or
specific proposed findings or recommendations to which
objection is made.” 28 U.S.C. § 636(b)(1);
Camby v. Davis, 718 F.2d 198, 200 (4th Cir.1983).
However, “when objections to strictly legal issues are
raised and no factual issues are challenged, de novo
review of the record may be dispensed with.”
Orpiano v. Johnson, 687 F.2d 44, 47 (4th Cir.1982).
Similarly, de novo review is not required by the
statute “when a party makes general or conclusory
objections that do not direct the court to a specific error
in the magistrate judge's proposed findings and
recommendations.” Id. Moreover, the statute
does not on its face require any review at all of issues that
are not the subject of an objection. Thomas v. Arn,
474 U.S. 140, 149 (1985); Camby v. Davis, 718 F.2d
at 200. Nonetheless, a district judge is responsible for the
final determination and outcome of the case, and accordingly
the Court has conducted a careful review of the magistrate
Court has given careful consideration to each Objection and
conducted a de novo review as warranted. Defendants
Roger J. Leon and Keith Piercy have filed “Objections
to Memorandum and Recommendation and Order” (#47).
Plaintiff and certain third-party defendants have filed a
“Response to Defendant Roger J. Leon and Keith
Piercy's Objections to Memorandum and Recommendation and
Order” (#48). The court will consider defendants'
Objection to the Applicable Standard
the court will consider defendants' objection to the
standard applied in the Memorandum and Recommendation.
Relevant factual disputes concerning a motion to compel
arbitration generally should be evaluated similarly to a
motion for summary judgment. Chorley v. Enters., Inc. v.
Dickey's Barbecue Rests., Inc., 807 F.3d 553, 564
(4th Cir. 2015). Thus, a motion to compel arbitration should
be granted “if the movant shows that there is no
genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Forshaw
Indus., Inc. v. Insurco, Ltd., 2 F.Supp.3d 772, 785
(W.D. N.C. 2014) (quoting Fed.R.Civ.P. 56(a)).
to defendants' objections, defendants first contend that
the magistrate judge applied the wrong standard to the
factual findings. Defendants argue that since the formation
and validity of the arbitration agreement are disputed, and
the parties have introduced documents outside the pleadings,
there is a genuine issue of whether there is a valid
agreement to arbitrate in this case. However, no genuine
dispute of fact exists merely because parties introduced
documents outside the pleadings. After reviewing the
documents and the evidence, Judge Cayer found no genuine
disputes as to any material fact concerning Leon's assent
to the Substitute Agreements and their terms. Nothing
suggests that Judge Cayer failed to use the appropriate
standard of review to evaluate the Motion to Compel. As such,
this objection is overruled.
Objections to Factual Findings
Further, defendants attempt to create disputed facts to
support their previous objection regarding the applicable
standard. Specifically, defendants contend, contrary to Judge
Cayer's findings, that Leon (1) did not have the benefit
of Chinese counsel when he signed the Substitute Agreements,
(2) did not have the benefit of an honest interpreter, (3)
was too sick to respond to the arbitration proceedings, and
(4) did not have financial means for Chinese arbitration. The
court will consider these objections below.
first factual argument is that, contrary to the Memorandum
and Recommendation, Leon did not have the benefit of Chinese
counsel when he signed the Substitute Agreements. However,
Leon admits to hiring Chinese counsel to make demands to Rato
Manufacturing “based on the contents of the Substitute
Agreements.” 4th Leon Aff. ¶ 3 (D.E. 20-17).
Leon's Chinese counsel sent a demand letter to Rato
Manufacturing acknowledging that “Leon entered into an
equity transfer agreement and an equity joint venture contact
with the then shareholders of [Rato Manufacturing] …
in November 2012.” 2nd Zhu. Aff. ¶ 8 & Ex. A
(D.E. 21-9). Hence, Defendants are simply wrong as to the
first factual contention.
defendants argue that Leon in fact did not have the benefit
of an honest interpreter. Defendants never argue that Leon
did not have an interpreter. Rather, they stress the
characterization of whether the interpreter was
“honest.” Defendants state “no translator
ever accurately explained the Chinese documents to
[Leon].” 1st Leon Aff. ¶ 58 (D.E. 20-11) (emphasis
added). There is nothing in the record to explain why
defendants think - many years later - that the translator may
not have been honest. Additionally, multiple parties have
attested that “Leon was provided explanations of the
Substitute Agreements and their provisions through the
assistance of an interpreter.” 1st Zhu Aff. ¶ 23
(D.E. 20-1); 1st Wang Aff. ¶ 17 (D.E. 20-5). This
factual objection is overruled.
defendants argue Leon was too sick to respond to the
arbitration proceedings because he was “close to
dead.” The doctors' letters that defendants have
relied on to support this contention advised only that
litigation deadlines be extended to mid-July 2016 because of
Leon's recovery. Def. Resp. Br. at Ex. C (D.E. 34).
Defendants filed numerous responses to Rato Parties'