Dodson Int'l Parts, Inc. v. Williams Int'l Co.

Decision Date15 June 2020
Docket NumberCase No. 2:16-CV-02212-JAR-ADM
PartiesDODSON INTERNATIONAL PARTS, INC., Plaintiff, v. WILLIAMS INTERNATIONAL CO., LLC, d/b/a WILLIAMS INTERNATIONAL, Defendant.
CourtU.S. District Court — District of Kansas
MEMORANDUM AND ORDER

Dodson International Parts, Inc. ("Dodson") filed case this in 2016, bringing state-law and federal claims against Williams International Co., LLC, d/b/a Williams International ("Williams"), arising from Dodson's purchase of two aircraft engines manufactured by Williams and a subsequent contract between the parties for Williams to inspect and repair the engines. This Court granted Williams's motion to compel arbitration and stay the case in January 2017, and the arbitrator issued her final award in September 2019.

This matter is now before the Court on the following motions: (1) Dodson's Motion to Reconsider the January 31, 2017 Order Transferring the Case to Arbitration (Doc. 63); (2) Williams's Motion to Dismiss (Doc. 52); (3) Dodson's Motion to Vacate/Modify the Arbitrator's Findings of Fact and Conclusions of Law (Doc. 54); and (4) Williams's Renewed Motion for Leave to File Sur-Reply regarding Dodson's motion to vacate or modify (Doc. 62). Dodson requests an evidentiary hearing on its motion to vacate or modify. The motions are fully briefed, and the Court is prepared to rule.1

For the reasons set forth below, Dodson's motion for reconsideration is denied. The Court construes Williams's opposition to Dodson's motion to vacate or modify as a request to confirm the arbitral award and, finding no basis for vacatur or modification, denies Dodson's motion to vacate or modify and confirms the award. Williams's motion to dismiss is denied under Fed. R. Civ. P. Rule 12(b)(3) and denied as moot under Rule Fed. R. Civ. P. 12(b)(6). Finally, Williams's motion for leave to file a sur-reply regarding Dodson's motion to vacate or modify is denied and Dodson's request for an evidentiary hearing is denied.

I. Factual and Procedural History

More than three years have passed since this Court's Order granting Williams's motion to compel arbitration.2 For the sake of clarity, the Court repeats here the pertinent factual history set forth in that Order and the procedural history of this case since that time.

Dodson is engaged in the business of purchasing airworthy or unairworthy aircraft, aircraft engines, and parts for operation, restoration, repairs, disassembly, inspection, and resale. Williams manufactures and sells FJ44 engines, and maintains Federal Aviation Administration ("FAA")-approved maintenance, repair, and overhaul manuals for the several series of FJ44 engines.

In October 2013, Dodson purchased a Cessna jet with two engines manufactured by Williams after the jet had been through a landing accident in Brazil. Dodson intended to sell the jet once repaired. In February 2014, Dodson contacted Williams to request a determination of airworthiness for the two engines and an estimate of the cost of returning the engines to service. Dodson contacted Williams only because Williams's FAA Certified Part 145 Repair Station ("Repair Station") was the only repair facility with Williams-supplied technical informationnecessary to perform the engine testing, disassembly, parts inspection, and reassembly. Williams quoted Dodson $9,525 per engine for inspection and to provide an estimate of repair costs to return them to an airworthy condition.

Dodson signed two contracts authorizing the evaluation and repair estimates on the engines on March 7, 2014. Both contracts contained identical arbitration and venue provisions. The clauses read:

All disputes arising from or in connection with maintenance performed by Williams International shall be submitted to binding arbitration held in the County of Oakland, State of Michigan, U.S.A., in the English language in accordance with the rules of the American Arbitration Association. Williams International will designate the arbitration site.3

On April 3, 2014, Williams completed the evaluation and repair estimates for each engine. It estimated the combined repair cost for both engines at about $640,000. Williams emailed Dodson the estimate for each engine. Dodson elected not to have Williams perform work on either engine per the estimate, and Dodson directed Williams to return the engines in a disassembled state. Williams stated that it would not return the engines in a disassembled state, and that it would only return them after they were reassembled as unairworthy to ensure that the parts were never installed on an aircraft.

During August 2014, Dodson advised Williams that it was reconsidering the repair and return to service of the engines pursuant to the April 2014 estimate. Dodson inquired about using serviceable parts from one engine to repair the other. Williams told Dodson that it would be possible to do so and, in January 2015, provided a new estimate of $248,805.99 for repairing one engine using parts from the other.

In February 2015, however, Williams informed Dodson that the full authority digital engine controls ("FADECs") were exposed to unknown forces during the crash and were not repairable. The required additional hardware to make the engine airworthy added cost of more than $500,000. And in March 2015, Williams determined the engines were not flightworthy and could not be returned to service at any cost. Williams told Dodson that it would red tag the parts as unairworthy and return them to Dodson.

Dodson sold and Williams shipped one of the engines to a third party. Dodson allegedly failed to pay $3,000 to Williams for storage fees, so the other engine remained at Williams's facility in Michigan. At the time of this Court's Order compelling arbitration, Williams still had the FADECs from both engines and had not produced any parts evaluation criteria or reports concerning the precise condition that it claimed rendered the parts for the engine unserviceable. Williams claimed that it possessed the Instructions for Continued Airworthiness ("ICA"), but it had not made that information available to Dodson.

Dodson filed this action on April 4, 2016, bringing state-law claims against Williams for intentional misrepresentation, breach of bailment and conversion, tortious interference with prospective economic advantage, and tortious interference with contract, and federal claims for unlawful tying arrangements under the Sherman and Clayton Acts, 15 U.S.C. § 1, et seq., as well as for declaratory judgment pursuant to 28 U.S.C. § 2201 concerning Williams's obligation under 14 C.F.R. § 21.50 to provide a complete set of ICA to the initial owner of the engines in question.4

On January 31, 2017, this Court granted Williams's motion to stay litigation and compel arbitration under the Federal Arbitration Act ("FAA"), finding that: (1) the Court, not thearbitrator, must decide the gateway issue of arbitrability; (2) Dodson's objection to arbitration on the basis of fraud-in-the-inducement went to the validity of the entire contract and should be decided by the arbitrator; (3) the arbitration clause was not unconscionable under Kansas law; and (4) the contract's broad arbitration clause encompassed all counts alleged in the Complaint, including fraud-in-the-inducement.5 The Court ordered the parties to proceed to arbitration in accordance with the provisions of the arbitration clause and stayed the case pending arbitration.

Dodson filed its arbitration claim in March 2017 and the arbitrator, Barbara Mandell ("Arbitrator"), was appointed and accepted her oath in April 2017. The arbitration hearing was set to begin in June 2018. However, after encountering difficulty obtaining the discovery it sought, Dodson moved in February 2018 to modify this Court's stay order to allow subpoenas to issue out of the District of Kansas to compel third-party witnesses to attend depositions and produce documents. On March 19, 2018, this Court denied Dodson's motion, noting that by agreeing to arbitrate, Dodson had also agreed to the more limited discovery mechanisms available in arbitration.6 The Court's order also noted that if Dodson wished to compel compliance with the Arbitrator's subpoenas, it was required to petition the United States District Court for the Eastern District of Michigan, which is the district court for the district in which the Arbitrator sits.7 Dodson did so, apparently with limited success.

After much wrangling over discovery and partially dispositive rulings on motions, the Arbitrator finally heard evidence on Dodson's remaining claims over fifteen days during the weeks of April 8, April 22, and June 3, 2019. The Arbitrator heard evidence from non-party witnesses on March 11 and April 15, and then allowed Dodson to present rebuttal evidence onJuly 30, 2019. Although Dodson had moved in the Eastern District of Michigan to compel certain non-party witnesses to appear before the Arbitrator—and Dodson's objections to a magistrate judge's recommendation that the requested relief be denied were still pending at the time—the Arbitrator decided to proceed without those witnesses' testimony. The parties submitted their proposed findings of fact and conclusions of law to the Arbitrator on September 4, 2019, and on September 24, the Arbitrator served her 95-page Findings of Fact and Conclusions of Law and Final Award of Arbitrator ("Award"), resolving all of Dodson's claims in favor of Williams.8 The Arbitrator did not find for Williams on its counterclaim for alleged accrued engine storage and reassembly fees and denied its request for attorneys' fees. Thus, the amount of the award at issue here is zero.

On September 26, 2019, two days after the Arbitrator issued her Award, Williams filed a Motion to Dismiss or, Alternatively, Motion to Transfer Venue in this Court.9 Williams argued that because the Award resolved all claims, the Court should dismiss this action under Rule 12(b)(6) on the basis of res judicata. Alternatively, Williams sought dismissal...

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