In Choice Hotels International Inc. v. Gresham Hotel LLC, the U.S. District Court for the District of Maryland addressed an application filed by plaintiff Choice Hotels International to confirm an arbitration award against defendants Gresham Hotel and Hardeep Samra, along with a motion for default judgment against the defendants based on their failure to respond to the application or any other filings in the case.
The underlying arbitration involved an alleged breach of a franchise agreement between Choice Hotels and the defendants, including claims that the defendants failed to pay required franchise fees. The franchise agreement included an arbitration clause that “any controversy or claim arising out of or relating to this Agreement … or the breach of this Agreement … will be sent to final and binding arbitration.” Choice Hotels filed an arbitration and was awarded approximately $240,000, including franchise fees, liquidated damages, interest, and arbitration expenses. Although the defendants were notified of the arbitration, they did not participate or present any evidence during the proceeding. Choice Hotels then filed an application in the district court to confirm the award. When the defendants failed to respond to the application, Choice Hotels filed a motion for clerk’s entry of default and a motion for default judgment. The defendants failed to respond to the motions.
The court first noted that Choice Hotels filed its application “within one year of the arbitrator’s decision,” as required under section 9 of the Federal Arbitration Act (FAA), and that the court had subject matter jurisdiction over the case pursuant to 28 U.S.C. § 1332. The court then observed that although the franchise agreement provided that “any arbitration will be conducted at [Choice Hotels’] headquarters office in Maryland,” the arbitration was not conducted in Maryland. Although the court stated that this issue “raises a legitimate question about the validity of the arbitration proceeding,” it noted that the arbitrator gave the parties “the opportunity to submit evidence and testimony via document submission” rather than at a hearing and that Choice Hotels established that the defendants “were given specific notice that they could have an in-person arbitration proceeding in Maryland, but did not request such a proceeding.” The court found that under these circumstances the requirements of the FAA had been met, granted the motion for default judgment, and confirmed the arbitration award in favor of Choice Hotels.
Choice Hotels International Inc. v. Gresham Hotel LLC, No. 8:25-cv-01734 (D. Md. Jan. 7, 2026).
