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Visteon Corp. v. Leuliette

United States District Court, E.D. Michigan, Southern Division

January 30, 2018

VISTEON CORPORATION, Plaintiff,
v.
TIMOTHY LEULIETTE, Defendant.

         OPINION AND ORDER: (1) GRANTING DEFENDANT'S MOTION FOR ENTRY OF JUDGMENT CONFIRMING ARBITRATION AWARD (DKT. 45); (2) DENYING PLAINTIFF'S MOTION TO CONFIRM IN PART AND VACATE IN PART ARBITRATION AWARD (DKT. 53); (3) GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION TO SEAL (DKT. 46); AND (4) GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO UNSEAL (DKT. 49)

          TERRENCE G. BERG, UNITED STATES DISTRICT JUDGE

         This case arises from a dispute between Plaintiff Visteon and Defendant Timothy Leuliette, who was terminated as Visteon's President and CEO in June of 2015. Leuliette believed he was entitled to a number of benefits after being terminated, and Visteon-which had found evidence of improper conduct by Leuliette after he was let go-took the position that he was not entitled to as many benefits because they could have fired him “for cause.” Leuliette demanded that the matter be settled by binding arbitration, as was his right under his written Employment Agreement; Visteon preferred to litigate the matter in federal court and filed this action seeking to stay the arbitration. This Court denied the stay and ordered the parties to arbitration on August 5, 2016 (Dkt. 42).

         The parties have now completed the arbitration process and on October 31, 2017, the Arbitrator awarded some of the benefits to Leuliette (but nowhere near as much as he had requested).[1]

         Leuliette now comes before the Court, seeking judgment confirming the arbitration award (Dkt. 45) and asking that the Court keep the award under seal (Dkt. 46) - that is, keep it secret. Visteon meanwhile is asking that part of the Arbitrator's award be confirmed, but that the bulk of the award of benefits be vacated (Dkt. 54). Visteon also wants the award, and all of the other pleadings and exhibits it has filed in this civil action to be unsealed (Dkt. 50). The Court heard oral argument on these motions on January 24, 2018. For the reasons set forth below, Leuliette's motion to confirm the arbitration award (Dkt. 45) is hereby GRANTED, and Visteon's motion to confirm the award in part and vacate it in part (Dkt. 54) is hereby DENIED. Furthermore, Visteon's motion to unseal (Dkt. 50) is GRANTED IN PART and DENIED IN PART and Leuliette's motion to seal (Dkt. 46) is GRANTED IN PART and DENIED IN PART.

         BACKGROUND

         On February 19, 2016, Leuliette initiated arbitration proceedings through the American Arbitration Association (AAA) against Visteon, alleging breaches of his Employment Agreement, and seeking to recover severance benefits. Visteon filed this lawsuit on March 31, 2016, seeking to stay the arbitration proceedings and instead litigate the matter before this Court. On August 5, 2016, this Court denied Visteon's motion to stay the arbitration proceedings, and ordered the parties to continue the arbitration process (Dkt. 42).

         On October 31, 2017, Arbitrator Martin Weisman issued his Final Arbitration Award. He ruled that, under the terms of an Employment Agreement, Visteon must pay Mr. Leuliette $15, 577, 110, plus $1, 172, 271.62 in interest (as of Oct. 2, 2017), and interest of $2, 139.86 per day until the award is paid in full. The Arbitrator also ruled that that Visteon is obligated to pay the AAA's and the Arbitrator's fees and costs.

         ANALYSIS

         A. Motions to Confirm or Vacate Arbitration Award

         The Court first considers the parties' cross-motions to confirm the Arbitration Award, either in whole or in part. These motions are governed by the Federal Arbitration Act [FAA] - 9 U.S.C. §§ 1, et seq. Section 9 of the FAA authorizes the Court to confirm an arbitration award upon the request of the parties, and enter judgment upon it. Leuliette's motion is brought under this section, as he seeks an order confirming the Award and reducing it to a Judgment.

         Visteon wants the Award confirmed in part, and vacated in part. Specifically, Visteon urges the Court to confirm the portion of the Award which it believes found that that Leuliette was ultimately terminated for “Cause, ” but vacate the portion of the Award that granted Leuliette certain stock dividend payments identified as “Accrued Benefits” under the Employment Agreement. To vacate or modify an arbitration award governed by the FAA, one must follow the procedures set out in Sections 10 and 11 of that statute, which “provide [the] exclusive regime[ ] for the review provided by the [FAA].” Grain v. Trinity Health, Mercy Health Servs. Inc., 551 F.3d 374, 378 (6th Cir. 2008) quoting Hall St. Assocs. v. Mattel, Inc., 552 U.S. 576 (2008).

         Section 10 of the FAA authorizes the Court to “make an order vacating the award” in four situations:

(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 ...

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