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Triomphe v. Realogy Corporation

August 15, 2011


The opinion of the court was delivered by: P. Kevin Castel, District Judge:


Petitioners Triomphe Partners, Inc., Triomphe Partners, LLC, and Triomphe

Luxembourg, S.a.r.l. (collectively, "petitioner" or "Triomphe") move under the Federal Arbitration Act ("FAA") to vacate an arbitration award rendered in favor of respondent Realogy Corporation, alleging that the arbitrators refused to hear evidence pertinent and material to the controversy. Realogy argues that the petition should be dismissed as untimely or, alternatively, that the petition be denied because the arbitrators acted properly under the American Arbitration Association's Commercial Arbitration Rules ("AAA Rules") in ruling that the proffered evidence was inadmissible.


This action arises out of two agreements between the parties dated November 5, 1999 and July 24, 2000, under which Triomphe was granted exclusive license to develop and sublicense Coldwell Banker franchised businesses in certain areas of Europe. The agreements required Triomphe to meet a minimum quota of new franchise locations within specified time periods. In 2007, relations between the parties broke down over Triomphe's alleged inability to meet the quota, and the failure to cure that breach. Realogy terminated the agreements on December 4, 2007, and filed a Demand for Arbitration with the American Arbitration Association in February 2008. The arbitration was administered by a panel of arbitrators from the International Center for Dispute Resolution, under the AAA Rules.

In the arbitration, Realogy sought a declaration that its termination of the agreements was proper, based primarily upon Triomphe's failure to meet the minimum quota. Triomphe defended and asserted a counterclaim. Its principal argument was that the agreements did not allow Realogy to terminate so long as Triomphe was in the process of curing the breach. Wayne Vandenburg, Triomphe's Chief Executive Officer, testified that in 2007 Triomphe had been diligently working to cure the breach, stating that he had entered into negotiations with numerous individuals in various countries in order to open Coldwell Banker branches. However, the arbitrators questioned the lack of documents supporting this testimony, such as travel records, hotel bills, or email contacts discussing the negotiations. (Tr. 2521-22, 4096-97.) The tribunal asked Triomphe to produce any such evidence, but Triomphe was unable to do so. (Award at 4.) Triomphe instead offered eleven declarations, purportedly from European nationals who had been in discussions or contemplating a transaction with Triomphe, as corroboration for Mr. Vandenburg's testimony. (Tr. p. 4123-- 24.) The declarations each recited that the declarant had been "in discussions" or "contemplating" a transaction with Triomphe as of July 2007, but that in most cases the transaction "was never completed" or "did not proceed." (Gardner Decl., Ex. 5.) Realogy objected to the admission of these declarations on two grounds: first, that they were unsworn; and second, that they constituted unfair surprise because the declarations had not been listed as exhibits or exchanged in discovery, nor had the declarants been included on the witness list or named in discovery responses. (Tr. 4123--43.) Each declaration was signed "under penalty of perjury," but did not specify where it was signed or what country's perjury laws would apply. None of the declarations were sworn to before a notary public or a consular or other official. (Id.) The panel sustained Realogy's objection to the declarations, and refused to admit them into evidence.

On August 4, 2010, the panel rendered an award, which was delivered to counsel for the parties by electronic mail the same day in accordance with the parties' agreement. The panel determined that Triomphe had breached the agreements by failing to meet the quota and failing to cure, and therefore Realogy's termination was proper. Triomphe filed a petition to vacate the award on November 1, 2010, and served Realogy on November 5, 2011. (Docket No. 4.) This Court has jurisdiction under 28 U.S.C. § 1332(a), diversity of citizenship.


The FAA provides a "streamlined treatment" for a party seeking "a judicial decree confirming an award, an order vacating it, or an order modifying or correcting it." Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576, 582 (2008). Section 10(a) of the FAA sets forth four circumstances in which a court may enter an order vacating an arbitration award:

(1) where the award was procured by corruption, fraud, or undue 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 was not made.

9 U.S.C. § 10(a). The party moving to vacate an arbitration award bears the burden of proof and "the showing required to avoid confirmation is very high." D.H. Blair & Co., Inc. v. Gottdiener, 462 F.3d 95, 110 (2d Cir. 2006) (citing Willemijn ...

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