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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND : CHOICE HOTELS INTERNATIONAL, INC. v. : : Civil Action No. DKC 2002-3613 : FRANCISCO FELIZARDO, et al. : MEMORANDUM OPINION Presently pending and ready for resolution is the motion of Choice Hotels International, Inc. (Choice) to vacate arbitration award. The issues have been fully briefed and the court now Local Rule 105.6.

rules, no hearing being deemed necessary.

For the following reasons, the motion to vacate will be denied. I. Background This case arises out of a franchise agreement between Choice as franchisor and Francisco Felizardo and Erlinda Felizardo (Defendants) as franchisees. Defendants operated a hotel in

Santa Clara, California under the Econo Lodge marks owned by Choice in exchange for the payment of certain fees and royalties pursuant to the franchise agreement with Choice. The parties'

agreement was effective on July 15, 1997 and Choice terminated the agreement by letter dated April 4, 2000, following the failure of Defendants to comply with their obligations under the contract, including failure to pay timely royalty fees and other

charges due under the franchise agreement, which prompted Choice to send Defendants several formal notices of default. Following termination of the franchise agreement, Choice filed an arbitration proceeding with the American Arbitration Association (AAA) against Defendants in which it sought to recover franchise fees that had accrued during the time the contract was in effect, along with damages due to the premature termination of the contract. Defendants filed a counterclaim

seeking, inter alia, rescission of the franchise agreement and the return of franchise fees paid on the ground that Choice had failed to provide a required disclosure statement and secure a receipt therefor. 2002. The arbitration hearing took place on July 9,

In an award dated September 4, 2002, the arbitrator

entered an award for Defendants in the amount of $33,970.66 and $2,000.00 for costs. On November 5, 2002, Choice filed the

instant action in this court seeking to vacate the arbitration award and remand the case to the AAA for scheduling of a new hearing before a different arbitrator. II. Jurisdiction There are three possible bases for a federal district court's exercise under of a jurisdiction specific over a given case: (2) (1)

jurisdiction

statutory

grant;

federal

question jurisdiction pursuant to 28 U.S.C.

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