United States District Court, M.D. Tennessee, Nashville Division
H. SHARP UNITED STATES DISTRICT JUDGE
action that was removed from the Davidson County, Tennessee
Circuit Court, the parties have filed several motions. After
setting forth a very brief background, the Court will
consider the Motions in the order filed.
case arises out of a two-vehicle crash that occurred on
Interstate 65 in Nashville, Tennessee on July 5, 2015.
According to the Complaint, Plaintiff Veronica Thomas was
driving a 2012 Dodge Journey and Plaintiff Richard Thomas was
a passenger in that vehicle when it was struck by another
vehicle operated by Defendant Ryan Jenkins. Plaintiffs allege
that either Defendant Ford Motor Company or Defendant Ford
Motor Credit Company (collectively “Ford”) owned
the vehicle driven by Mr. Jenkins, and that he was operating
the vehicle in the course of business for Ford.
time of the collision, Ford was insured under a policy
written by American Road Insurance Company (the
“Policy”), while Ms. Thomas's vehicle was
insured by Allstate. After the crash, Allstate paid $14,
405.70 to Ms. Thomas for property damage to the vehicle.
Allstate sought reimbursement, but American Road refused to
pay, prompting Allstate to initiate an arbitration proceeding
against American Road. Allstate procured an arbitration award
against American Road for the amount requested.
Motion to Vacate Arbitration Award (Docket No. 22)
Motion to Vacate is premised on the theory that “the
arbitrator exceeded her authority in entering an arbitration
award that Ford must pay[.]” This is because, according
to Ford, the policy it had with American Road provided for a
$3 million dollar deductible which was not exceeded by
Allstate's claim (effectively making Ford self-insured)
and it did not consent to American Road arbitrating the
claim. Ford's arguments fail.
the validity of an arbitration agreement is governed by the
Federal Arbitration Act, 9 U.S.C. § 1 et seq.
In fact, Ford moves to vacate the award pursuant to 9 U.S.C.
§ 10(a)(4), which allows a district court to vacate an
arbitration award “where the arbitrators exceeded their
powers[.]” In doing so, however, Ford neglects to
consider the preferatory language to that subsection, which
states that the “court in and for the district wherein
the award was made may make an order vacating the award
upon the application of any party to the
arbitration.” 9 U.S.C. § 10(a) (emphasis
added). That is, “‘by the express terms of the
statute, a nonparty to the arbitration generally has no
standing to challenge the award.'” Marshall v.
Wells Fargo Advisors, LLC, 2016 WL 4750194, at *1 (11th
Cir. Sept. 13, 2016) (citation omitted) (collecting cases).
Because “‘[a] federal court may set aside an
arbitration award under the FAA only upon a finding that
certain statutory or judicial grounds are present,
”' Uhl v. Komatsu Forklift Co., 512 F.3d
294, 305 (6th Cir. 2008) (citation omitted), and
Ford has not shown those grounds to exist, its Motion to
Vacate is subject to denial on this basis alone.
Court recognizes that “[s]ome circuits have
specifically held that arbitrators exceed their powers when
they determine rights and obligations of individuals who are
not parties to the arbitration proceedings, ” NCR
Corp. v. Sac-Co., 43 F.3d 1076, 1080 (6th
Cir. 1995), but that has not been shown to be the case here.
The arbitrator's “Automobile Decision”
(Docket No. 22-3 at 1) by its very language bound American
Road, not Ford.
also points to an “Automobile Arbitration Subrogation
Agreement” which provides that “[n]o company
shall be required, without its written consent, to arbitrate
any claim or suit if: (a) it is not a signatory company nor
has given written consent . . . or (g) under the insurance
policy, settlement can be made only with the insured's
consent.” (Docket No. 22-4 at 3). This document,
however, is unsigned and the Court has know way of knowing
who the signatories to the agreement were, let alone whether
it was controlling. And if, as “Ford understands . . .
American Road and Allstate are parties to the Arbitration
Agreement, ” (Docket No. 23 at 3), the Court simply
does not know whether consent to settle was required under
the insurance agreement or given.
Motion to Vacate will be denied.
Motions to Strike (Docket Nos. 26, 27 & 28)
have filed a separate Motion to Strike certain defenses in
the Answers filed by each Defendant. Defendant Ford Motor
Credit Company (“FMCC”) has filed a memorandum in
opposition in which the others join.
to strike are governed by Rule 12(f) of the Federal Rules of
Civil Procedure which specifically contemplates striking
“an insufficient defense or any redundant, immaterial,
impertinent, or scandalous matter” from pleadings.
Fed.R.Civ.P. 12(f). “Motions to strike are viewed with
disfavor and are not frequently granted.” Operating
Engineers Local 324 Health Care Plan v. G & W Const.
Co., 783 F.3d 1045, 1050 (6th Cir. 2015);
(quoting Brown & Williamson Tobacco Corp. v. United
States, 201 F.2d 819, 822 (6th Cir.1953)). Thus, a
motion to strike a defense will be granted only if “it
appears to a certainty that plaintiffs would succeed despite
any state of the facts which could be proved in support of
the defense and are inferable from the pleadings.”
Id. Furthermore, “an affirmative defense
‘may be pleaded in general terms and will be held to be
sufficient, and therefore invulnerable to a motion to ...