Health Carousel LLC v. Ceesay & Assocs.

• Decision Date: 13 June 2022
• Docket Number: 1:20cv665
• Court: U.S. District Court — Southern District of Ohio
• Parties: Health Carousel, LLC, Plaintiff, v. Ceesay & Associates Inc., Defendant,

Health Carousel, LLC, Plaintiff,
v.
Ceesay & Associates Inc., Defendant,

No. 1:20cv665

United States District Court, S.D. Ohio, Western Division

June 13, 2022

OPINION & ORDER

MICHAEL R. BARRETT JUDGE

This matter is before the Court upon Plaintiff Health Carousel LLC's Motion to Vacate or Modify Arbitration Award. (Doc. 12). Defendant Ceesay & Associates Inc. has filed a Response (Doc. 33) and Plaintiff Health Carousel has filed a Reply (Doc. 36).

I. BACKGROUND

Plaintiff Health Carousel, LLC “facilitates the immigration of foreign healthcare workers by sponsoring them in the visa application process and upon issuance of a visa, either employs them for placement with healthcare organizations in the United States or arranges for direct placement as employees of those organizations.” (Doc. 30-2, PAGEID 1061-1062). Defendant Ceesay & Associates, Inc. is operated by Morro Ceesay, who is an immigration attorney. (Doc. 30-2, PAGEID 1061). In 2014, Ceesay began working with nurses in Africa who were interested in obtaining a visa in order to immigrate to the United States and work in the healthcare industry. (Doc. 30-2, PAGEID 1061).

On June 23, 2017, Health Carousel and Ceesay entered into a Recruitment Agreement. (Doc. 30-2, PAGEID 1062). Under the Recruitment Agreement, Ceesay was to recruit prospective employee nurses; and Health Carousel was to serve as an

1

employee-sponsor as part of the extensive process necessary for the nurses to obtain a visa. (Doc. 30-2, PAGEID 1062).

The Recruitment Agreement contained a provision that “[a]ny dispute, controversy or claim arising out of or relating to this contract, including the formation, interpretation, breach of termination thereof, including whether the claims asserted are arbitrable, will be referred to and finally determined by arbitration in accordance with the JAMS International Arbitration Rules.” (Doc. 30-2, PAGEID 1059). Following a disagreement over reimbursement of costs and the processing of visa applications, Ceesay filed for arbitration seeking damages based on breach of contract, unjust enrichment, fraudulent misrepresentation, fraudulent concealment and negligent misrepresentation. (Doc. 30-2, PAGEID 1059). Health Carousel counterclaimed for breach of contract, indemnification, tortious interference with business and contract relationship, defamation, as well as declaratory relief. (Doc. 30-2, PAGEID 1059). After hearings on November 19-21, 2019 and January 14-15, 2020, the arbitration panel found in favor of Ceesay and on July 14, 2020, entered a Final Award in the amount of $593, 745.75. (Doc. 10-2, PAGEID 465). This amount included damages, arbitration costs and attorney fees. (Doc. 30-2, PAGEID 1080). The panel awarded nothing to Health Carousel on its counterclaim. (Doc. 30-2, PAGEID 1080).

Health Carousel maintains that this Court should vacate the Final Award because in issuing the Final Award, the arbitrators exceeded their authority, were guilty of misconduct in refusing to postpone the arbitration hearing, and acted with partiality. In the alternative, Health Carousel argues that this Court should modify the Final Award and eliminate any monetary damages for Ceesay, including fees.

2

II. ANALYSIS

The Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1-16, codifies “a national policy favoring arbitration when the parties contract for that mode of dispute resolution.” Preston v. Ferrer, 552 U.S. 346, 349, 128 S.Ct. 978, 169 L.Ed.2d 917 (2008). “In attempting to vacate or modify an arbitration award governed by the Federal Arbitration Act, a disappointed party must look to sections 10 and 11 of Title 9, which ‘provide [the] exclusive regime[ ] for the review provided by the [Federal Arbitration Act].'” 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, 128 S.Ct. 1396, 1406, 170 L.Ed.2d 254 (2008)).

Section 10 of the FAA provides that a court may only vacate an arbitration award in the following instances:

(1) where the award was procured by corruption, fraud, or other 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 which the rights of any party have been prejudiced; or

(4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.

9 U.S.C. § 10(a). Health Carousel moves to vacate the Final Award based on subsections (2), (3) and (4).^[1]

3

However, “[i]t is well established that courts should play only a limited role in reviewing the decisions of arbitrators.” Shelby County Health Care Corp. v. A.F.S.C.M.E., Local 1733, 967 F.2d 1091, 1094 (6th Cir.1992). “[C]ourts may vacate an arbitrator's decision ‘only in very unusual circumstances.'” Oxford Health Plans LLC v. Sutter, 569 U.S. 564, 568, 133 S.Ct. 2064, 2068, 186 L.Ed.2d 113 (2013) (quoting First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 942, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995)). Under the FAA, “[t]hinly veiled attempts to obtain appellate review of an arbitrator's decision” are not permitted. Gingiss International Inc. v. Bormet, 58 F.3d 328, 333 (7th Cir.1995). “If parties could take ‘full-bore legal and evidentiary appeals,' arbitration would become ‘merely a prelude to a more cumbersome and time-consuming judicial review process.'” Oxford Health Plans, 569 U.S. at 568-69 (quoting Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576, 588, 128 S.Ct. 1396, 170 L.Ed.2d 254 (2008)).

Unfortunately, this case has turned into exactly that: a cumbersome and timeconsuming judicial review process. The Court now turns to Health Carousel's proposed basis for vacating the Final Award.

A. Arbitrators' authority

Health Carousel first argues that the Final Award should be vacated under 9 U.S.C. § 10(a)(4) because the arbitrators exceeded their authority. As the Supreme Court has explained, a party seeking to set aside an arbitral award under § 10(a)(4) of the Act bears a heavy burden:

“It is not enough ... to show that the [arbitrator] committed an error-or even a serious error.” Stolt-Nielsen, 559 U.S., at 671, 130 S.Ct. 1758. Because the parties “bargained for the arbitrator's construction of their agreement, ” an arbitral decision “even arguably construing or applying the contract” must stand, regardless of a court's view of its (de)merits. Eastern Associated Coal Corp. v. Mine Workers, 531 U.S. 57, 62, 121 S.Ct. 462, 148 L.Ed.2d 354 (2000)

4

(quoting Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 599, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960); Paperworkers v. Misco, Inc., 484 U.S. 29, 38, 108 S.Ct. 364, 98 L.Ed.2d 286 (1987); internal quotation marks omitted). Only if “the arbitrator act[s] outside the scope of his contractually delegated authority”-issuing an award that “simply reflect[s] [his] own notions of [economic] justice” rather than “draw[ing] its essence from the contract”-may a court overturn his determination. Eastern Associated Coal, 531 U.S., at 62, 121 S.Ct. 462 (quoting Misco, 484 U.S., at 38, 108 S.Ct. 364).

Oxford Health Plans, 569 U.S. at 569. Therefore, the sole question for this Court “is whether the arbitrator (even arguably) interpreted the parties' contract, not whether he got its meaning right or wrong.” Id.

However, Health Carousel makes several arguments which amount to nothing more than arguments that the arbitrators got the meaning of the parties' contract wrong. First, Health Carousel argues that the arbitrators were confused regarding modifications to Exhibit B to the Recruitment Agreement-which Health Carousel concedes were properly made-and amendments to Recruitment Agreement itself-which Health Carousel maintains were not permitted under the terms of the Recruitment Agreement. In addition, Health Carousel argues that the arbitrators' finding of indefinite waiver contradicted the plain language of the Recruitment Agreement.

While it could be argued that the arbitrators did not strictly adhere to the express language of the Recruitment Agreement, that was only because the arbitrators found that the parties had amended the Recruitment Agreement. The arbitrators also found that Health Carousel had waived the requirement in the Recruitment Agreement that any amendment to the Recruitment Agreement be in writing and signed by the parties. The Court cites to the arbitrators' decision at length here so there is no room for misinterpretation of their decision:

5

Ceesay seeks damages for non-payment of the SAP Expenses for each SAP nurse under contract with HC. HC argues in response that it is not liable for these expenses because any amendment to the RA must be in writing and signed by the parties (§ 11.7), While there are e-mails that express agreement on these terms, they are not signed.

Ohio, however, does not favor such provisions in contracts, particularly where the parties waived the provision by their conduct. “‘[W]aiver by estoppel' exists when the acts and conduct of a party are inconsistent with an intent to claim a right and have been such as to mislead the other party to his prejudice and thereby estop the party having the right from insisting upon it." (Emphasis omitted.) Lewis & Michael Moving & Storage, Inc. v. Stofcheck Ambulance Serv., Inc., 10th Dist. No. 05AP-662, 2006 Ohio 3810, ¶29, quoting Natl. City Bank v. Rini, 162 Ohio App.3d 662, 2005 Ohio 4041, ¶24, quoting Mark-It Place Foods at ¶57. Whether a party's inconsistent conduct amounts to waiver involves a factual determination within the province of the

...