May 2, 2015. Raleigh, North Carolina. IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NORTH CAROLINA WESTERN DIVISION.Today, Judge Terrance Boyle DENIED Eyelation’s motion to dismiss the Federal lawsuit that Cyber Imaging Systems, Inc. (CyberImaging) filed against Eyelation for non-payment of damages an arbitrator awarded CyberImaging in a 2014 binding arbitration.
Eyelation’s motion was based on two primary points. First, Eyelation claimed that the original contract and Arbitration Award did not include the word ‘Systems’ in the case caption, and therefore the award should be completely dismissed. The Court held otherwise, stating that “the Court is satisfied that Cyber Imaging Systems, Inc. and Cyber Imaging, Inc. are the same party and that CyberImaging has standing to enforce the arbitration award. Accordingly, Eyelation's motion to dismiss pursuant to Rule 12(b )( 1) of the Federal Rules of Civil Procedure is denied.”
In its second argument, Eyelation, in admitting that CyberImaging was the prevailing party in the Arbitration, contended that arbitration awards cannot be enforced unless the prevailing party files and records the Award with a state or federal court within one year after the award. Judge Boyle rejected this argument, stating “While this is outside the one year period provided by the FAA, this Court is bound by the Sverdrup decision, which has not yet been reconsidered by the Fourth Circuit in light of the Supreme Court opinion in Cortez and must deny Eyelation's motion to dismiss on this ground.
CyberImaging is seeking enforcement against Eyelation to collect the Arbitration Award that is estimated to have a value of at least $4.5 Million to $7.0 Million depending on the actual sales generated over the 10-year term. CyberImaging also has the right to conduct a complete and thorough annual examination of Eyelation’s financial documents, sales records and all other documentation that would allow the independent confirmation of the Eyelation sales reports. In addition to the royalty payments and complete access to Eyelation’s financial records, CyberImaging is seeking significant punitive damages and payment of all legal fees.