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Thyssenkrupp Presta Danville, LLC v. TFW Industrial Supply & CNC Machine, LLC

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

October 31, 2019

Thyssenkrupp Presta Danville, LLC, Petitioner,
v.
TFW Industrial Supply & CNC Machine, LLC, Respondent.

          OPINION AND ORDER DENYING RESPONDENT'S MOTION TO SET ASIDE JUDGMENT [#8] AND DENYING RESPONDENT'S MOTION TO VACATE ARBITRATION AWARD AND RESPONSE IN OPPOSITION TO PETITION TO CONFIRM ARBITRATION AWARD [#9]

          Hon. Gershwin A. Drain, United States District Court Judge.

         I. Introduction

         Presently before the Court is Respondent's Motion to Set Aside Judgment Based on Excusable Neglect and Respondent's Application to Vacate Arbitration Award. ECF Nos. 8, 9. Petitioner filed responses to each motion on August 30, 2019. ECF Nos. 11, 12. Respondent filed its replies on September 6, 2019. ECF Nos. 14, 15.

         Upon review of the parties' submissions, the Court concludes that oral argument will not aid in the disposition of this matter. Therefore, the Court will resolve the instant motion on the briefs. See E.D. Mich. L.R. § 7.1(f)(2). For the reasons discussed herein, the Court will DENY Respondent's Motion to Set Aside Judgment Based on Excusable Neglect [#8] and DENY Respondent's Application to Vacate Arbitration Award [#9].

         II. Factual Background

         Petitioner Thyssenkrupp Presta Danville (“Presta”) commenced arbitration against Respondent TFW Industrial Supply & CNC Machine (“TFW”) in December 2017. See ECF No. 1-5, PageID.54. Presta sought monetary damages for breach of an automobile equipment supply contract. TFW filed a counter-complaint against Presta with seven claims, including breach of contract and fraud.

         Less than a year after their original contract formation, TFW and Presta began disagreeing about equipment prices as stated in the contract, subsequent negotiations, and email communications. TFW attempted to negotiate a price above the original contract amount, at times “threate[ning] to cease production to Presta absent a price increase.” ECF No. 1-5, PageID.63. As a result, Presta sent TFW multiple notices of breach and demands to cure. Additionally, the sole arbitrator in this matter, Scott A. Wolfson, found that “testimony and documentary evidence also established that TFW was under significant financial strain during the relevant time period . . . .” Id. at PageID.66. This required Presta to pay various vendors and suppliers on behalf of TFW to cover TFW's production shortfalls.

         The arbitrator found that Presta and TFW's contract was “for a fixed price, unambiguous, and integrated” with all terms in writing. ECF No. 1-5, PageID.69. This included clear language that the parties were bound only by the terms of the contract as written, so oral negotiations or agreements could not be considered. Further, the arbitrator determined that Presta demonstrated by a preponderance of the evidence that TFW breached contractual obligations and caused Presta to incur significant costs. The arbitrator also found that TFW failed to carry its burden of proving any of its seven counterclaims. Ultimately, on May 20, 2019, the arbitrator found that Petitioner Presta was entitled to an award totaling $2, 417, 095.98. Id. at PageID.88.

         III. Procedural Background

         Petitioner filed the instant action on June 7, 2019, seeking confirmation of this arbitration award and entry of judgment pursuant to the Federal Arbitration Act (“FAA”). ECF No. 1; 9 U.S.C. §§ 9, 13. Respondent was served on July 10, 2019 but failed to timely file its response. ECF No. 5, PageID.100. The Court therefore presumed that Respondent had no objection to the Petition. Id. On August 7, 2019 the Court entered judgment confirming the award in favor of Petitioner and against Respondent. ECF No. 7.

         IV. Discussion

         A. Motion to Set Aside Judgment Based on Excusable Neglect

         Rule 6 of the Federal Rules of Civil Procedure provides, “[w]hen an act may or must be done within a specified time, the court may, for good cause, extend the time on motion made after the time has expired if the party failed to act because of excusable neglect.” Fed.R.Civ.P. 6(b)(1). Rule 60 further states, “[o]n motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding for . . . excusable neglect.” Fed.R.Civ.P. 60(b)(1). In defining excusable neglect, the Supreme Court has specified four factors for courts to consider: (1) the danger of prejudice to the nonmoving party, (2) the length of the delay and its potential impact on judicial proceedings, (3) the reason for delay, including whether it was within the reasonable control of the movant, and (4) whether the movant acted within good faith. Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P'ship, 507 U.S. 380, 395 (1993). The Sixth Circuit has “considered excusable neglect in different contexts and repeatedly underscored that it is a difficult standard to satisfy.” In re Edwards, 748 Fed.Appx. 695, 698 (6th Cir. 2019) (citing Nicholson v. City of Warren, 467 F.3d 525, 526 (6th Cir. 2006) (“Excusable neglect has been held to be a strict standard which is met only in extraordinary cases.”)).

         Petitioner timely filed to confirm the arbitration award within one year of the award's issuance. Respondent failed to file any response to the Petition to Confirm, this Court's Order, or this Court's Judgments in favor of Petitioner until the present motions. In moving to set aside the Judgments, Respondent argues its delay was the result of excusable neglect. Respondent states that a month and a half before the award was issued, its paralegal's husband died unexpectedly. Respondent explains that this death caused unexpected disruptions in the paralegal and legal assistant's schedules, leading to the Respondent firm's inadvertent failure to meet the award confirmation response ...


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