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

• Citation: 12 F.4th 1212
• Decision Date: 13 September 2021
• Docket Number: No. 20-3193,20-3193
• Parties: DODSON INTERNATIONAL PARTS, INC., Plaintiff - Appellant, v. WILLIAMS INTERNATIONAL COMPANY LLC, d/b/a Williams International, Defendant - Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

12 F.4th 1212

DODSON INTERNATIONAL PARTS, INC., Plaintiff - Appellant,

v.WILLIAMS INTERNATIONAL COMPANY LLC, d/b/a Williams International, Defendant - Appellee.

No. 20-3193

United States Court of Appeals, Tenth Circuit.

FILED September 13, 2021

Edward A. McConwell (Laura L. McConwell, with him on the briefs), McConwell Law Offices, Mission, Kansas, for Appellant.

Alastair J. Warr (Paul J. Beard, II, FisherBroyles, LLP, Los Angeles, California, with him on the brief), FisherBroyles, LLP, Chicago, Illinois, for Appellee.

Before HARTZ, MORITZ, and EID, Circuit Judges.

HARTZ, Circuit Judge.

Williams International Company LLC designs, manufactures, and services small jet engines. Dodson International Parts, Inc., sells new and used aircraft and aircraft parts. After purchasing two used jet engines that had been manufactured by Williams, Dodson contracted with Williams to inspect the engines and prepare an estimate of repair costs, intending to resell the repaired engines. Williams determined that the engines were so badly damaged that they could not be rendered fit for flying, but it refused to return one of the engines because Dodson had not paid its bill in full.

Dodson sued Williams in federal court alleging federal antitrust and state-law tort claims. Williams moved to compel arbitration under the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1 – 16, relying on an arbitration clause on the original invoices stating that "[a]ll disputes arising from or in connection with maintenance performed by Williams International shall be submitted to binding arbitration." Aplt. App. at 40, 42. The district court granted the motion, and the arbitrator resolved all of Dodson's claims in favor of Williams. Dodson then moved to reconsider the order compelling arbitration and to vacate the arbitrator's award. The court denied both motions and, construing Williams's opposition to the motion for vacatur as a request to confirm the award, confirmed the award. Dodson appeals, challenging the district court's order compelling arbitration and its order confirming the award and denying the motions for reconsideration and vacatur.

Exercising jurisdiction under 9 U.S.C. § 16 and 28 U.S.C. § 1291, we affirm. We hold that the claims in Dodson's federal-court complaint are encompassed by the arbitration clause; that the district court did not abuse its discretion in denying Dodson's untimely motion to reconsider; and that Dodson has failed to establish any grounds for vacatur of the arbitrator's award or for denial of confirmation of the award.

I. BACKGROUND

A. Factual Background

In 2013 a Cessna aircraft bearing two Williams FJ44 jet engines crashed in Brazil. Dodson purchased the damaged plane, intending to resell the engines.

To prepare the engines for resale, Dodson contacted Williams in February 2014 to obtain an inspection and evaluation of the two engines. In response to Dodson's inquiry, Williams sent Dodson quotations for the cost of evaluating the engines and preparing a repair estimate. Dodson signed the quotations on March 7 and sent an accompanying repair order to Williams. The signed quotations contained the following arbitration clause:

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.

Aplt. App. at 40, 42 (emphasis added). After signing the quotations, Dodson directed Williams to pause work after the evaluation and await Dodson's approval before beginning repair.

On April 9 Williams sent Dodson estimates exceeding $300,000 for repairing each engine, and Dodson elected not to have Williams undertake the repairs. In May Dodson directed Williams to return the engines, which Williams agreed to do after reassembling them (so that unrepairable parts could not be reused or resold).

Apparently Williams did not return the engines to Dodson because in August 2014 Dodson advised Williams that it was reconsidering having Williams repair the two engines in accordance with the earlier repair estimates. After further discussion Williams advised Dodson in December 2014 that it could potentially use parts from one engine to repair the other. On January 9, 2015, Williams gave Dodson an updated estimate of about $248,000 for repairing one engine using parts from the other. On February 9 Williams again updated its estimate, raising the price after determining that certain components of both engines were irreparable. Meanwhile, Dodson was discussing the sale of the engines with the Skyway Group of San Antonio, Texas, eventually signing a deal in early February.

On March 3, however, Williams advised Dodson that the engines were irreparably damaged and could not lawfully be reused. That July Dodson repurchased one of the engines from Skyway. Williams shipped the other engine to Skyway but never returned the second engine to Dodson because Dodson did not pay the requisite fees.

B. Procedural History

In April 2016 Dodson filed suit against Williams in the United States District Court for the District of Kansas. Its complaint asserted seven claims against Williams. Count I, for intentional misrepresentation, alleged that in the course of negotiating the engine evaluation with Dodson, Williams made representations regarding the extent of the evaluation work it would perform, the information it would provide to Dodson about the condition of the engines, and the cost estimates it would provide after evaluating the engines. Williams also allegedly represented that in the event the cost of repair was too high, it would return the disassembled engines to Dodson. According to Dodson, these representations were false: Williams "did not proceed with a good faith evaluation of the engines, their component parts and/or accessories to determine a bona fide cost of repair," and later declined to return the engines in a disassembled state. Id. at 22.

Count II, for breach of bailment and conversion, alleged that Williams violated its duty as a bailee "to return the component parts of the two engines ... in as good of condition as received," when, after Dodson declined to go ahead with the repair of the engines, Williams sent the engine Dodson had sold to Skyway reassembled and in "a non airworthy condition," and failed to return the other engine to Dodson altogether. Id. at 23.

Count III alleged that Williams had initiated a tying arrangement in violation of the Sherman Act, 15 U.S.C. § 1, and the Clayton Act, 15 U.S.C. § 3. It said that Williams had failed to provide owners with complete instruction manuals for its engines, failed to provide training on its engines for mechanics, and issued misleading service information about its engines, all to require owners of its engines to use Williams for all their repair and maintenance needs, rather than choosing a provider of that service "on the basis of quality, price or service." Id. at 25. It alleged that this antitrust violation allowed Williams to "substantially overcharge[ ]" Dodson for its services and prevented Dodson and others from providing such services themselves. Id. at 32.

Count IV alleged an abuse of monopoly power by Williams, in violation of the Sherman Act, 15 U.S.C. §§ 1 – 2. According to the complaint, Williams and several other aircraft manufacturers reduced or eliminated competition in the market for repair and maintenance of Williams engines, as well as in the second-hand parts market for those engines, by failing to provide instruction manuals for its engines, failing to provide training schools for maintenance of its engines, requiring its approval before secondhand parts could be installed in its engines, and falsely representing that its repair services were cheaper and more reliable than those available elsewhere. As a result, Dodson allegedly had to overpay for Williams's services, and could not fairly compete in reselling Williams engines and parts.

Count V, tortious interference with prospective economic advantage, allegedly arose when Williams, after becoming aware in June 2014 that Skyway wanted to purchase the engines from Dodson, "intentionally continued to refuse to return the component parts" of Dodson's engines, thereby interfering with Dodson's potential deal with Skyway. Id. at 29.

Count VI, tortious interference with contract, alleged that Williams, after having known by February 9, 2015, that Skyway had agreed to purchase the engines from Dodson based on Williams's estimate for using the parts of one engine to repair the second, increased the repair estimate by $500,000, thereby interfering with Dodson's contract with Skyway.

Count VII sought a declaratory judgment under 28 U.S.C. § 2201 that Williams had an obligation to provide a complete set of engine-overhaul instructions to owners of its engines, which would inform Dodson how to disassemble, evaluate, repair, and reassemble Williams engines on its own. Dodson alleged that "[a]n actual controversy exists ... over the rights of [Dodson] and [Federal Aviation Administration] certified mechanics it selects to perform maintenance and repairs on its ... engine[s]." Id. at 32.

Williams moved to stay the case and compel arbitration under §§ 3 and 4 of the FAA, 9 U.S.C. §§ 3 and 4. In January 2017 the district court granted the motion, staying the case and ordering arbitration. In March Dodson initiated arbitration through the American Arbitration Association.

The parties conducted discovery under the auspices of the arbitrator. On February 20, 2018, Dodson filed a motion in the district court asking the court to modify its stay order to permit it to issue subpoenas to former employees, vendors, and customers of Williams—from whom Dodson wished to compel discovery. The arbitrator had issued subpoenas to witnesses who had refused to comply. The district court...