Dish Network v. Ghosh ( 2018 )

FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT October 11, 2018
_________________________________
Elisabeth A. Shumaker
Clerk of Court
DISH NETWORK, LLC, a Colorado
limited liability company,
Plaintiff - Appellee,
v. No. 18-1131
(D.C. No. 1:16-CV-02083-LTB)
SUJIT GHOSH, an individual resident of (D. Colo.)
New York,
Defendant - Appellant,
and
OPEN ORBIT CORPORATION,
a New York company,
Defendant.
_________________________________
ORDER AND JUDGMENT*
_________________________________
Before TYMKOVICH, Chief Judge, McKAY and MATHESON, Circuit Judges.
_________________________________
Mr. Sujit Ghosh, appearing pro se, appeals the district court’s judgment
granting DISH Network, LLC’s amended motion to confirm an arbitration award
*
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist in the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral
estoppel. It may be cited, however, for its persuasive value consistent with
Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
against him based on his personal guaranty of defendant Open Orbit Corporation’s
performance under an agreement with DISH, even though he was not a party to the
arbitration. Our jurisdiction arises under 28 U.S.C. § 1291, and we affirm.
BACKGROUND
On March 12, 2012, Mr. Ghosh, then President of Open Orbit, agreed to the
terms of a Personal Guaranty whose purpose was “to induce DISH . . . to enter into
the DISH Network Retailer Agreement” with Open Orbit. R., Vol. 2 at 195. The
Personal Guaranty provided that Mr. Ghosh “personally, unconditionally and
irrevocably guarantee[d] the full and timely performance of and by [Open Orbit] for
all purposes under the Retailer Agreement.” Id. DISH and Open Orbit entered into a
Retailer Agreement effective January 1, 2013, which authorized Open Orbit to
market, promote, and solicit orders for DISH subscription satellite television
programming. Id. at 188. The Personal Guaranty provided that “[a]ny and all
disputes, controversies or claims arising out of or in connection with this Personal
Guaranty shall be resolved by arbitration . . . in accordance with both the substantive
and procedural laws of Title 9 of the U.S. Code (‘Federal Arbitration Act’) and the
Commercial Arbitration Association,” and that the arbitration would be conducted by
a three-arbitrator panel whose decision would be “final and binding on the parties.”
Id. at 195. The Retailer Agreement contained materially identical arbitration
provisions. See id. at 190.
In 2015, DISH initiated an arbitration proceeding against Open Orbit based on
violations of the Retailer Agreement. Mr. Ghosh was not a party to the arbitration,
2
but in February 2016, he emailed the arbitrator a request to remove his name from the
case and “from all kind[s] of responsibilities.” R., Vol. 1 at 85. He asserted that as
of the effective date of the Retailer Agreement, he was not an Open Orbit officer or
shareholder, that the alleged violations of the Retailer Agreement occurred after he
had parted from the company, and that the company’s current president and sole
owner had issued an indemnity bond that purported to indemnify Mr. Ghosh from
claims against Open Orbit and release him from any personal guarantees as of
January 1, 2013. He reiterated his position a couple of weeks later in a second email.
Because Mr. Ghosh was not a party to the arbitration, the arbitrator treated the
request to remove his name from the case as a request to remove him as a witness and
denied it. The arbitrator also treated the request as seeking nullification of the
Personal Guaranty and denied it because the Personal Guaranty expressly provided
that any changes had to be “‘agreed to and signed by all Parties to [it,]’” and there
was no later agreement between DISH and Mr. Ghosh cancelling the Personal
Guaranty. Id., Vol. 2 at 198 (quoting id. at 195). The arbitrator later denied two
requests by Mr. Ghosh for reconsideration of his request to cancel his Personal
Guaranty. Id. at 199, 200. In denying the second such request, the arbitrator
informed Mr. Ghosh that unless he produced evidence of a written agreement signed
by DISH releasing him from the Personal Guaranty, the arbitrator would not respond
to any more requests from Mr. Ghosh for the same relief.
Ultimately, the arbitrator entered an award in favor of DISH and against Open
Orbit for just over $220,000, plus post-award interest. Id. at 204. In his decision, the
3
arbitrator noted that in response to DISH’s motion for fees and costs, Mr. Ghosh had
submitted a letter “again voicing disagreement with [the] prior order regarding his
Personal Guaranty.” Id. at 203.
DISH then sought confirmation of the arbitration award in federal court,
naming both Open Orbit and Mr. Ghosh as defendants. Open Orbit did not appear,
and DISH sought a default judgment against it. A magistrate judge recommended
granting default judgment against Open Orbit in the full amount of the award.
Mr. Ghosh filed a motion for relief from the award, arguing, among other things, that
he was not a party to the arbitration. The magistrate judge recommended granting
Mr. Ghosh’s motion for relief in part and dismissing him from the case without
prejudice to DISH’s ability to file either a separate action against Mr. Ghosh or an
amended application to confirm the arbitration award against him in accordance with
caselaw allowing confirmation against nonparties under certain circumstances.
Among the circumstances the magistrate judge identified is where “the person
seeking confirmation pleads a claim in the confirmation proceeding to extend
liability without involving extensive factual issues.” R., Vol. 2 at 60 (citing Orion
Shipping & Trading Co. v. E. States Petrol. Corp., 312 F.2d 299, 301 (2d Cir. 1963)).
The district judge accepted the magistrate judge’s recommendations. DISH
then filed an amended confirmation application asserting that the court could confirm
the arbitration award against Mr. Ghosh without extensive factfinding and based on
the Personal Guaranty, the validity of which Mr. Ghosh could not deny because the
4
arbitrator, at Mr. Ghosh’s request, had determined that there was no later agreement
between DISH and Mr. Ghosh cancelling the Personal Guaranty.
Based on Mr. Ghosh’s argument that he could not be compelled to pay the
award against Open Orbit unless there was a specific award entered against him
pursuant to the arbitration clause in the Personal Guaranty, the court ordered DISH to
show cause why it should not compel the two parties to arbitrate their dispute. DISH
responded that the court could determine Mr. Ghosh’s liability under the Personal
Guaranty based on documents and admissions already before the court and without
extensive factfinding, and therefore DISH should not have to go through another
arbitration. DISH observed that Mr. Ghosh had purposefully availed himself of the
arbitrator’s authority and jurisdiction when he repeatedly asked the arbitrator to
cancel the Personal Guaranty with the understanding that the arbitrator’s decision
would be “final and binding on the parties,” id., Vol. 3 at 50, and Mr. Ghosh had
expressed “full confidence in [the arbitrator’s] judgment,” id., at 51, and admitted he
had provided “all the required documents and evidences [sic] in support of [his]
claim,” id. at 55.
The district court concluded that even though Mr. Ghosh was not a party to the
arbitration, the award should be confirmed against him because he had notice of the
arbitration and participated in it, the arbitrator decided the issue against Mr. Ghosh,
and issue preclusion barred Mr. Ghosh from relitigating the issue before another
arbitrator. The court therefore granted the amended application to confirm the
arbitration award against Mr. Ghosh, who now appeals.
5
DISCUSSION
“Judicial review of arbitration . . . decisions is extremely limited” and “among
the narrowest known to law.” Dominion Video Satellite, Inc. v. Echostar Satellite
L.L.C., 430 F.3d 1269, 1275 (10th Cir. 2005) (internal quotation marks omitted).
That said, we are not called on in this appeal to review the arbitrator’s denial of
Mr. Ghosh’s request to nullify the Personal Guaranty. Instead, Mr. Ghosh challenges
the district court’s decision to confirm the arbitration award against him even though
he was not a party to the arbitration. In considering that challenge, we examine the
“district court’s factual findings in confirming the award for clear error and its legal
conclusions de novo.” Id. And because Mr. Ghosh is pro se, we construe his filings
liberally but do not act as his advocate. Yang v. Archuleta, 525 F.3d 925, 927 n.1
(10th Cir. 2008).
Mr. Ghosh’s primary arguments focus on the fact that he was not a party to the
arbitration and that the Personal Guaranty contains its own mandatory arbitration
provision. He first contends that an award could not be confirmed against him unless
there was an arbitration in accordance with the procedure outlined in the Personal
Guaranty—one where he receives written notice of the arbitration, the arbitration is
conducted by a panel of three arbitrators, and an arbitration award is entered
specifically against him. We disagree.
Although it is undisputed that Mr. Ghosh was not a party to the arbitration, he
had notice of it and requested specific relief from the arbitrator—nullification of the
Personal Guaranty because the Retailer Agreement was executed after Mr. Ghosh
6
was no longer an Open Orbit officer or shareholder and because the company’s
current owner had indemnified Mr. Ghosh from any liability arising from the
Personal Guaranty. The arbitrator concluded that only the parties could alter the
terms of the Personal Guaranty by a written, signed agreement, and there was no
evidence that had occurred. Mr. Ghosh has not challenged that conclusion. And
rather than initiating an arbitration to dispute liability under the Personal Guaranty,
Mr. Ghosh elected to appear in the existing arbitration, where he professed faith in
the arbitrator, claimed to have provided all the evidence relevant to his request to
nullify or cancel his liability under the Personal Guaranty, and acknowledged that the
arbitrator’s decision would be final and binding. Moreover, before the district court,
Mr. Ghosh stated that “there is no allegation of any wrong doing by the Arbitrator
nor any procedure was flawed.” R., Vol. 2 at 221. For these reasons, Mr. Ghosh
cannot now be heard to argue that he should have been afforded the opportunity to
separately arbitrate his liability under the Personal Guaranty before a three-member
panel of arbitrators.1
Next, Mr. Ghosh attempts to distinguish two cases the district court relied on,
United States ex rel. Skip Kirchdorfer, Inc. v. M.J. Kelley Corp., 995 F.2d 656
(6th Cir. 1993), and United States ex rel. Aurora Painting, Inc. v. Fireman’s Fund
Insurance Co., 832 F.2d 1150 (9th Cir. 1987). Mr. Ghosh observes that there is no
1
The parties have not explained, nor does the record reflect, why the
arbitration between DISH and Open Orbit was decided by only one arbitrator rather
than a panel of three arbitrators, as specified in the Retailer Agreement.
7
indication that the nonparty in either of those cases had a separate guaranty in favor
of the party seeking confirmation that contained a mandatory arbitration provision.
We agree with his reading of those cases, but the district court relied on them only
for the general “proposition that a non-party surety can be bound by the outcome of
arbitration proceedings,” R., Vol. 3 at 85 (emphasis added). The court then examined
whether the circumstances of Mr. Ghosh’s case warranted enforcing the arbitration
award against him and concluded that they did because, despite not being a party to
the arbitration, he “had notice of it and participated in it” and “specifically and
repeatedly asked the arbitrator to address the validity of the personal guaranty he
signed.” Id. We therefore conclude that the district court did not improperly rely on
the two cases.
Mr. Ghosh further argues that because he was not a party to the arbitration,
one of the four elements of issue preclusion is not present—that “the party against
whom the doctrine is invoked was a party, or in privity with a party, to the prior
adjudication,” Park Lake Res. Ltd. Liab. Co. v. U.S. Dep’t of Agric., 378 F.3d 1132,
1136 (10th Cir. 2004) (internal quotation marks omitted).2 The district court
concluded that this element was met because Mr. Ghosh “raised and actually litigated
2
The other three elements are “the issue previously decided is identical with
the one presented in the action in question,” “the prior action has been finally
adjudicated on the merits,” and “the party against whom the doctrine is raised had a
full and fair opportunity to litigate the issue in the prior action.” Park Lake Res. Ltd.
Liab. Co., 378 F.3d at 1136 (internal quotation marks omitted). Mr. Ghosh has not
challenged the district court’s conclusion that these elements were met.
8
the validity of his personal guaranty in the arbitration” even though he “was not a
party to the arbitration itself.” R., Vol. 3 at 86. We see no error.
In limited circumstances, “the rule against nonparty preclusion is subject to
exceptions.” Taylor v. Sturgell, 553 U.S. 880, 893 (2008). Two are relevant here.
First, “‘a person who agrees to be bound by the determination of issues in an action
between others is bound in accordance with the terms of his agreement.’” Id.
(brackets omitted) (quoting 1 Restatement (Second) of Judgments § 40 (1980)). As
noted, Mr. Ghosh acknowledged that the arbitrator’s decision regarding nullification
of the Personal Guaranty would be “final and binding on the parties.” R., Vol. 3
at 50. Second, “a nonparty is bound by a judgment if [he] ‘assumed control’ over the
litigation in which that judgment was rendered,” Taylor, 553 U.S. at 895 (brackets
omitted) (quoting Montana v. United States, 440 U.S. 147, 154 (1979)). “Because
such a person has had ‘the opportunity to present proofs and argument,’ he has
already ‘had his day in court’ even though he was not a formal party to the
litigation.” Id. at 895 (quoting Restatement (Second) Judgments § 39, cmt. a (1980)).
Although Mr. Ghosh did not assume control over the arbitration on behalf of Open
Orbit, he did so on his own behalf by affirmatively and repeatedly asking the
arbitrator to nullify the Personal Guaranty, and he made multiple efforts to present
proofs and argument.
Either of these exceptions is sufficient to support the district court’s
determination that the party/privity element of issue preclusion was met. We
therefore conclude that the district court properly considered the role of issue
9
preclusion in deciding that Mr. Ghosh was “bound by the arbitrator’s decision that
the guaranty was valid,” that there “were no factual or legal issues regarding [his]
liability for Open Orbit’s obligations to DISH,” and that the only thing remaining
was for the “court to enforce the arbitration award against [him].” R., Vol. 3 at 86.
Cf. Orion Shipping & Trading Co., 312 F.2d at 301 (declining to extend confirmation
of award to nonparty because whether nonparty was alter ego of party to arbitration
or had consented to arbitration was too complex to hear in a confirmation action).
Further, because Mr. Ghosh elected to present his proofs and argument in the
arbitration between DISH and Open Orbit, we will not now consider his challenges to
the validity of the Retailer Agreement and its relation to the Personal Guaranty, none
of which he raised in the arbitration.3
Finally, Mr. Ghosh alleges that Open Orbit’s owner had settlement discussions
with DISH, and Open Orbit has liability insurance to cover the award. These alleged
facts, unsupported by any record citation, are irrelevant to the issue on appeal.
3
Those challenges are: (a) he never signed the Retailer Agreement (he in fact
told the arbitrator he had signed it, see R., Vol. 3 at 48); (b) DISH doctored the
Retailer Agreement by manually entering the effective date without knowledge or
consent of the other parties; (c) he never consented to linking the Retailer Agreement
with the Personal Guaranty; and (d) a retailer number that appears on the Retailer
Agreement had to be mentioned in the Personal Guaranty to show that the Retailer
Agreement was part of the Personal Guaranty.
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CONCLUSION
The district court’s judgment is affirmed.
Entered for the Court
Monroe G. McKay
Circuit Judge
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