Tonya Davis v. Ernest Fenton
2017 U.S. App. LEXIS 9203
| 7th Cir. | 2017Background
- Tonya Davis sued attorney Ernest Fenton (and his firms) in federal court alleging legal malpractice, breach of contract, Fair Housing Act (FHA) and Civil Rights Act claims arising from his representation in a foreclosure that cost her home.
- Fenton moved to stay the federal suit pending arbitration based on a representation agreement; the district court stayed/administratively dismissed the case pending arbitration under the FAA.
- An arbitrator awarded Davis $82,528.10 for malpractice and denied her other claims; Fenton then filed in Illinois state court to vacate or reduce the arbitration award.
- Davis moved the district court to reinstate her federal case, confirm the arbitration award under 9 U.S.C. § 9, and add a new FHA retaliation claim; Fenton failed to appear at the hearing, and the district court entered default judgment reinstating the case, confirming the award, and allowing the new claim.
- Fenton moved to vacate the default judgment and argued the district court lacked jurisdiction because he had filed the state-court challenge to the award first; the district court denied relief, and later dismissed Davis’s retaliation claim.
- Davis appealed the dismissal of the retaliation claim; Fenton appealed the district court’s jurisdiction to confirm the award.
Issues
| Issue | Plaintiff's Argument (Davis) | Defendant's Argument (Fenton) | Held |
|---|---|---|---|
| Did the district court retain subject-matter jurisdiction to confirm the arbitration award after staying the case? | The court retained jurisdiction because the federal suit was filed first and only stayed, not dismissed. | The state-court filing to vacate the award divests the federal court of jurisdiction because the award-review action was first-filed in state court. | The district court retained jurisdiction; a stay/administrative dismissal preserves federal court jurisdiction to confirm/vacate the award. |
| Does the arbitrator’s resolution of federal issues supply independent federal-question jurisdiction to challenge/confirm the award? | (Implied) Federal issues in the arbitration support federal jurisdiction over award review. | (Invoking Magruder) An arbitrator’s decision of a federal issue does not itself confer federal subject-matter jurisdiction to review or enforce an award. | The court distinguished Magruder: because Davis’s federal suit preceded and was stayed, federal jurisdiction existed independent of issues resolved in arbitration. |
| Was Fenton’s state-court suit to vacate the award timely and did it oust the federal court? | N/A (challenge focused on jurisdictional effect of his state filing). | Filing in state court before Davis moved to reopen the federal case meant the state proceeding should decide the award challenge. | Rejected: the district court—having sent the case to arbitration and retained the case—was the proper forum to address the award. |
| Was Davis’s FHA retaliation claim (based on Fenton’s subsequent suit against her counsel and an injunction) actionable? | Davis argued Fenton’s suit and injunction were retaliatory acts prohibited by 42 U.S.C. § 3617. | Fenton argued litigation and seeking an injunction are not actionable retaliation under the FHA. | The court affirmed dismissal: filing a lawsuit or seeking an injunction is not retaliation under the FHA except in extraordinary, absent here, circumstances. |
Key Cases Cited
- Baltimore & Ohio Chicago Terminal R.R. Co. v. Wisconsin Cent. Ltd., 154 F.3d 404 (7th Cir.) (staying a federal case for arbitration while retaining jurisdiction to confirm or vacate an award)
- Magruder v. Fidelity Brokerage Servs. LLC, 818 F.3d 285 (7th Cir.) (an arbitrator’s resolution of a federal issue does not itself create federal-question jurisdiction to review or enforce an award)
- Bloch v. Frischholz, 587 F.3d 771 (7th Cir.) (discussing FEMA and retaliation claims under the Fair Housing Act)
- Fenton v. Dudley, 761 F.3d 770 (7th Cir.) (background on related state-court proceedings and injunction issues)