Sungard Energy Systems Inc. v. Gas Transmission Northwest Corp.

551 F. Supp. 2d 608, 2008 U.S. Dist. LEXIS 15690, 2008 WL 577383
CourtDistrict Court, S.D. Texas
DecidedFebruary 29, 2008
DocketCivil Action H-07-2205
StatusPublished
Cited by6 cases

This text of 551 F. Supp. 2d 608 (Sungard Energy Systems Inc. v. Gas Transmission Northwest Corp.) is published on Counsel Stack Legal Research, covering District Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sungard Energy Systems Inc. v. Gas Transmission Northwest Corp., 551 F. Supp. 2d 608, 2008 U.S. Dist. LEXIS 15690, 2008 WL 577383 (S.D. Tex. 2008).

Opinion

MEMORANDUM OPINION AND ORDER

SIM LAKE, District Judge.

Pending before the court is complainant SunGard Energy System Inc.’s (“Sun-Gard”) Motion to Vacate Final Arbitration Award (Docket Entry No. 28) and respondent Gas Transmission Northwest Corporation’s (“GTN”) Motion to Confirm Final Arbitration Award and for Entry of Judgment (Docket Entry No. 26). The following motions are also pending: GTN’s Response to SunGard’s Motion to Vacate Final Arbitration Award (Docket Entry No. 32), wherein GTN requested that the court award GTN the attorney’s fees it incurred defending against Sun-Gard’s motion; GTN’s Motion to Strike Affidavits of James T. Smith and Daniel Rhynhart (Docket Entry No. 33); and SunGard’s Motion for Leave to File Reply to GTN’s Response to SunGard’s Motion to Vacate Final Arbitration Award (Docket Entry No. 35). For the reasons stated below, the court will grant GTN’s motion to confirm, deny SunGard’s motion to vacate, deny GTN’s request for attorney’s fees, deny GTN’s motion to strike, and grant SunGard’s motion for leave to file a reply.

I. Factual and Procedural Background

This case stems from an often contentious arbitration that arose out of a contractual dispute between SunGard and GTN. SunGard creates computer software designed to assist natural gas pipeline companies in managing their pipeline business. GTN is a natural gas pipeline company that maintains and operates natural gas pipeline systems in North America. After extensive negotiations between the parties, GTN agreed to purchase an initial license for SunGard’s then-current software for use with one of GTN’s pipelines; and SunGard agreed that it would produce a customized version of its then-current software, and a customized “next generation” version of the software a few years later, for GTN’s use with its other pipeline systems. 1

*611 The parties’ relationship was turbulent. Neither party could agree on the scope of the parties’ agreement. In an attempt to resolve this issue, the parties engaged in additional negotiations and made several changes and additions to their original agreement through addenda and work orders. However, the parties remained at odds. Finally, three years after the parties had entered the original agreement, SunGard advised GTN that it could not provide GTN with either the current or “next generation” software that GTN needed. In response, GTN notified Sun-Gard that GTN considered SunGard in material breach of the agreement, that GTN was terminating the contract, and that GTN intended to file for arbitration as provided in the parties’ agreement, an action which GTN ultimately took in February of 2005. 2

At arbitration GTN alleged claims of breach of contract, breach of warranty, fraudulent inducement, and fraud; Sun-Gard raised counterclaims for breach of contract, promissory estoppel, and unjust enrichment. 3 After conducting discovery and selecting a three-member arbitration panel (“the panel”) the parties participated in a ten-day arbitration hearing in March of 2007. At the hearing, both parties were given the opportunity to submit evidence, present testimony, and submit post-hearing briefs in support of their respective claims and defenses. 4

Based on the evidence submitted by the parties the panel awarded GTN damages on its breach of contract claim, but ruled against GTN as to all other claims. GTN was also ultimately awarded prejudgment interest, attorney’s fees, and costs. Sun-Gard was not awarded damages on any of its claims. 5

Before the panel had issued its Final Arbitration Award, SunGard filed a complaint in this court, and moved to have the panel’s Interim Award vacated. 6 The court stayed SunGard’s motion pending the panel’s final award. 7 After the panel issued its Final Arbitration Award on November 1, 2007, GTN moved to have the award confirmed and judgment entered, while SunGard again moved to have the award vacated.

II. Standard of Review

Section 9 of the Federal Arbitration Act (FAA) requires this court to confirm the panel’s arbitration award unless there is a basis for vacating the award. See 9 U.S.C. § 9; see also Int’l Thunderbird Gaming v. United Mexican States, 473 F.Supp.2d 80, 83 (D.D.C.2007) (“[I]n the absence of a legal basis to vacate, this court has no discretion but to confirm the award.” (construing 9 U.S.C. § 9)); Denver & Rio Grande W.R.R. Co. v. Union Pac. R.R. Co., 868 F.Supp. 1244, 1252 (D.Kan.1994) (“If an arbitration award cannot be vacated ... it must be confirmed pursuant to 9 U.S.C. § 9.”); P.R. Mar. Shipping Auth. v. Star Lines, 496 F.Supp. 14, 15 (S.D.N.Y.1979) (“Under 9 U.S.C. § 9, this court must grant an order confirming the arbitration award unless the award is vacated!.]”). SunGard bears the burden of proving that vacatur is warranted. Karaha Bodas Co. v. Perusahaan *612 Pertambangan Minyak, 364 F.3d 274, 288 (5th Cir.2004).

III. SunGard’s Motion to Vacate the Final Arbitration Award

Vacatur of an arbitration award is a “draconian remedy,” Positive Software Solutions v. New Century Mortg., 476 F.3d 278, 286 (5th Cir.2007), available only under limited statutory or common-law exceptions, Kergosien v. Ocean Energy Inc., 390 F.3d 346, 353 (5th Cir.2004). Under § 10 of the FAA there are four statutory bases for vacatur:

(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 the parties 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.

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551 F. Supp. 2d 608, 2008 U.S. Dist. LEXIS 15690, 2008 WL 577383, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sungard-energy-systems-inc-v-gas-transmission-northwest-corp-txsd-2008.