The Franchise Memorandum

The United States Court of Appeals for the Eleventh Circuit denied a franchisee’s appeal of a district court’s confirmation of an arbitration award in Careminders Home Care, Inc. v. Kianka, 2016 WL 7228808 (11th Cir. Dec. 14, 2016). In arbitration, Compassionate Care, a former franchisee of CareMinders Home Care, claimed that the franchisor had breached the franchise agreement and committed fraud as to the parties’ business relationship. After the arbitrator found in favor of CareMinders, the franchisor petitioned the district court to confirm the arbitration award. Compassionate Care responded by filing an answer generally stating that the award should be vacated on the grounds that the arbitrator refused to grant a few continuances, among other things, and stated that it would file a formal motion to vacate the award. Compassionate Care, however, never filed its motion within the 90-day deadline, as required by the Federal Arbitration Act (“FAA”). When the district court entered an order confirming the arbitration award, Compassionate Care filed a motion for reconsideration, but that was denied.

On appeal, Compassionate Care argued that the district court should have considered its answer as a motion to vacate. The appellate court disagreed and explained that the FAA imposes a heavy presumption in favor of confirming arbitration awards. Compassionate Care was aware of its responsibility to file a motion to vacate the award, but failed to do so within the FAA’s strict 90-day deadline. Additionally, the court held that because Compassionate Care failed to identify any newly discovered evidence, a change in law, or a need to correct a clear error of law or fact, the district court was correct in denying Compassionate Care’s motion for reconsideration. The appellate court affirmed the district court’s ruling to confirm the arbitration award in favor of the franchisor.