Title: Katz, Nannis & Solomon, P.C. v. Levine

State: massachusetts

Issuer: Massachusetts Supreme Court

Document:

NOTICE:  All slip opinions and orders are subject to formal 
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SJC-11902 
 
KATZ, NANNIS & SOLOMON, P.C., & others1  vs.  
BRUCE C. LEVINE & another.2 
 
 
 
Norfolk.     December 10, 2015. - March 9, 2016. 
 
Present:  Gants, C.J., Spina, Cordy, Botsford, Duffly, Lenk, 
& Hines, JJ. 
 
 
 
Massachusetts Arbitration Act.  Arbitration, Judicial review, 
Scope of arbitration, Confirmation of award, Authority of 
arbitrator, Damages, Attorney's fees.  Contract, 
Arbitration.  Practice, Civil, Attorney's fees, Costs.  
Damages, Attorney's fees. 
 
 
 
 
Civil action commenced in the Superior Court Department on 
February 27, 2013.  
 
 
A motion to confirm an arbitration award was heard by 
Patrick F. Brady, J.; a motion for attorney's fees and costs was 
heard by him; and entry of separate and final judgments was 
ordered by him. 
 
 
The Supreme Judicial Court granted an application for 
direct appellate review.  
 
 
                     
 
1 Allen G. Katz, Lawrence S. Nannis, and Jeffrey D. Solomon.   
 
 
2 Levine, Caufield, Martin & Goldberg, P.C. (LCMG).   
2 
 
 
Thomas J. Carey, Jr. (Daniel J. Cloherty & Victoria L. 
Steinberg with him) for Bruce C. Levine. 
 
Warren D. Hutchison (Nancy M. Reimer with him) for the 
plaintiffs. 
 
Joseph S.U. Bodoff, for Levine, Caufield, Martin & 
Goldberg, P.C., was present but did not argue. 
 
 
 
BOTSFORD, J.  The central question presented in this appeal 
is whether parties to a commercial arbitration agreement may 
alter by contract the scope or grounds of judicial review of an 
arbitration award that are set out in the Massachusetts Uniform 
Arbitration Act for Commercial Disputes (MAA), G. L. c. 251.  We 
decide that the grounds of judicial review are limited to those 
delineated in G. L. c. 251, §§ 12 and 13.   
 
Background.  The defendant Bruce C. Levine and the 
plaintiffs Allen G. Katz, Lawrence S. Nannis, and Jeffery D. 
Solomon were members of an accounting firm known as Levine, 
Katz, Nannis & Solomon, P.C. (LKNS or firm).  They were each a 
shareholder in the firm, and a party to a stockholder agreement 
dated October 1, 1998 (agreement), that governed their 
professional association and relationship.3  In 2011, Katz, 
Nannis, and Solomon, purporting to act pursuant to the 
agreement, voted to require the withdrawal of Levine as a 
director and stockholder in LKNS; Levine disagreed that the 
termination of his stockholder interest and position was in 
                     
 
3 At all times relevant to this case, Levine, Katz, Nannis, 
and Solomon were the sole stockholders of the former accounting 
firm Levine, Katz, Nannis & Solomon, P.C. (LKNS or firm).   
3 
 
accordance with the agreement's terms, and the arbitration at 
issue in this case concerned that dispute.  We summarize the 
relevant provisions of the agreement, the parties' dispute 
leading to arbitration, and the arbitration award, followed by a 
summary of the proceedings in the Superior Court that led to 
this appeal.   
 
The agreement.  The agreement provides that a stockholder 
may withdraw voluntarily or be required to withdraw 
involuntarily.  Two provisions in the agreement relate to 
involuntary withdrawal:   
"4(e)  Involuntary Withdrawal.  A Stockholder may be 
required to withdraw from the Corporation, for any reason, 
upon the affirmative vote of the holders of at least 75% of 
the issued and outstanding Shares, excluding the Shares of 
the subject Stockholder.   
 
"4(f)  For Cause Withdrawal.  A Stockholder may be required 
to withdraw from the Corporation for 'Cause.'  'Cause' 
shall be deemed to exist upon the occurrence of any of the 
following:   
 
"(i)  Commission of an act of fraud, dishonesty or the 
like involving the Corporation or any of its clients."4   
 
Under section 5(a)(i) of the agreement a voluntarily withdrawing 
stockholder is entitled to the redemption of his shares at "an 
amount equal to the accrual basis book value of the [firm]" 
                     
4 Section 4(f) of the agreement delineates three other 
"occurrence[s]" that fit within the definition of "[c]ause":  
conviction of a crime involving fraud, dishonesty or moral 
turpitude; loss of license to practice public accountancy; and 
sexual harassment of any employee.  None of these has relevance 
to this case.   
4 
 
multiplied by the percentage of shares issued and outstanding 
held by the withdrawing stockholder.  Section 5(a)(i) also 
provides that a stockholder subject to an involuntary 
withdrawal, but not "for cause," is also generally entitled to 
redemption.  However, section 5(a)(iii) provides:   
"If the withdrawal is for Cause (as defined in Section 
4[f]) or as described in Section 8(a)(iii) [i.e., where 
there is involuntary withdrawal and stockholder competes 
with the firm], the subject Stockholder shall forfeit his 
Shares . . . and the Redemption Price shall be $zero."   
 
 
In addition to the redemption of shares, under section 
8(a)(i), in certain circumstances, a withdrawing stockholder is 
entitled to the payment of deferred compensation.  However, 
under section 8(a)(v), a stockholder whose withdrawal is for 
cause receives no deferred compensation.  In addition, under 
section 8(a)(iii), if a stockholder's withdrawal is an 
"involuntary withdrawal pursuant to Section 4(e)" and the 
stockholder competes with the firm within three years after his 
withdrawal, he receives no deferred compensation and must 
compensate the firm pursuant to a stipulated formula.  A 
stockholder who withdraws and within three months employs an 
employee of the firm also must pay liquidated damages to the 
firm, under section 8(a)(vii).   
 
Section 13(i) provides that the agreement is to "be subject 
to and governed by the laws of the Commonwealth of Massachusetts 
pertaining to agreements executed in and to be performed in the 
5 
 
Commonwealth of Massachusetts."  Section 13(j) contains an 
arbitration clause that provides in relevant part:   
"Binding Arbitration.  In the event of any dispute 
concerning any aspect of this Agreement, the parties agree 
to submit the matter to binding arbitration before a single 
arbitrator appointed by the American Arbitration 
Association . . . .  The decision of the arbitrator shall 
be final; provided, however, solely in the event of a 
material, gross and flagrant error by the arbitrator, such 
decision shall be subject to review in court. . . .  [T]he 
party against which final, adverse judgment is entered 
[shall be] responsible for (in addition to its own) the 
other party's(ies') costs and expenses, including 
reasonable attorneys' fees."   
 
 
The dispute.  The arbitration at issue here arose out of a 
dispute between Levine and the other three shareholders of LKNS, 
relating to work Levine had performed for a firm client, 
Levine's cousin Linda Sallop and her company (collectively, 
Sallop).  Sallop sustained tax losses in the amount of $750,000 
when the Internal Revenue Service (IRS) refused to grant capital 
gains treatment for an employee stock ownership plan in 2002 
because the IRS did not receive the necessary documentation.  In 
2004, Levine knew that these events created "problems with 
Sallop's [2002] tax return."  In April, 2007, Sallop threatened 
to sue Levine and LKNS.  Five months later, Levine submitted a 
professional liability insurance renewal application on behalf 
of the firm that did not mention the lawsuit threatened by 
Sallop.  Sallop sued Levine and LKNS in September, 2008, and 
Levine retained counsel to represent himself and LKNS in 
6 
 
defending against the suit and the threatened attachment of 
LKNS's assets.  Levine did not inform Katz, Nannis, or Solomon 
of the lawsuit, of Levine's retention of legal counsel on behalf 
of the firm, or of Sallop's motion to attach LKNS's assets at 
the time that the lawsuit and motion were filed.  Instead, he 
did so for the first time during a stockholder meeting in 
February, 2009, just before his deposition in the case.  In 
March, 2010, Levine informed the three that LKNS's insurance 
coverage was rescinded because Levine had failed to disclose 
Sallop's threatened lawsuit in a renewal application.   
 
At a special meeting held August 10, 2011, Katz, Nannis, 
and Solomon voted to terminate Levine's employment and to remove 
him as an officer and director of the firm, which then changed 
its name to Katz, Nannis & Solomon, P.C. (KNS).  Soon after his 
termination, Levine opened his own accounting firm, Levine, 
Caufield, Martin & Goldberg, P.C. (LCMG), and a number of 
employees of LKNS left that firm and joined Levine at LCMG.  The 
nature and terms of Levine's withdrawal from the firm and his 
subsequent competition with KNS were the bases of the dispute 
between Levine and the other LKNS stockholders, and became the 
subject of the arbitration proceeding at issue here.   
 
The arbitration and award.  Pursuant to the terms of the 
agreement's arbitration clause, the dispute was submitted to 
binding arbitration before a single arbitrator appointed by the 
7 
 
American Arbitration Association.  The arbitrator heard from 
eleven witnesses over nine days.  On December 19, 2012, the 
arbitrator issued a partial final award in which he concluded 
that Levine had been validly terminated or "withdraw[n]" 
involuntarily as a stockholder in accordance with the agreement, 
that there was sufficient evidence to require Levine's 
withdrawal "for cause," and that he had been terminated for 
cause.  The arbitrator concluded, however, that it did not make 
any difference whether Levine's involuntary withdrawal or 
termination was "for cause" pursuant to section 4(f) of the 
agreement or "for any reason" pursuant to section 4(e), because, 
following his termination, Levine competed with KNS.  The 
arbitrator further found that because Levine was terminated for 
cause, he forfeited his shares and was not entitled to receive 
deferred compensation.  With respect to damages, the arbitrator 
determined that Levine would be liable to KNS for, among other 
things, amounts paid by former clients of LKNS to Levine after 
his termination for work performed before his termination, 
liquidated damages for competing with KNS following his 
termination, as well as liquidated damages on account of 
employees who left KNS to join Levine.  The arbitrator denied 
both parties' requests for attorney's fees.  After a hearing on 
8 
 
damages, the arbitrator issued the final award, ruling that KNS 
was to receive $1,749,293.20,5 plus statutory interest.   
 
Confirmation of the arbitration award.  On February, 2013, 
KNS filed the present action in the Superior Court seeking 
confirmation of the arbitration award and also asserting claims 
to ensure payment of the arbitration award and prevent Levine 
from diverting money to LCMG.6  Levine filed an answer, an 
opposition to KNS's motion to confirm the award, and a cross 
motion to vacate or modify the arbitration award.  A Superior 
Court judge (motion judge) allowed KNS's motion to confirm the 
award and denied Levine's cross motion to vacate or modify it.  
KNS moved for an award of attorney's fees, and the judge allowed 
the motion.  With a stipulation by the parties in place that 
secured any judgment that would enter against Levine, KNS moved 
to dismiss the remaining claims against Levine and all claims 
                     
 
5 The arbitrator stated that the final award consisted of 
$480,412 for Levine's competing with Katz, Nannis & Solomon, 
P.C. (KNS), $200,477.52 as liquidated damages for the employees 
of the firm (LKNS) hired by his new firm, and $1,068,403.70 for 
amounts owed on account of the accounts receivable and work in 
progress related to work that Levine had performed for clients 
of LKNS before he was terminated but for which he had received 
payment at his new firm.   
 
 
6 The complaint included counts against Levine to enjoin his 
encumbering or transferring assets, and to secure a judgment 
directing Levine to satisfy the award; and counts against 
Levine, Caufield, Martin & Goldberg, P.C. (LCMG), for injunctive 
relief preventing it from encumbering or transferring assets as 
well as for conversion, money had and received, and creation of 
a constructive trust.   
9 
 
against LCMG.  In February, 2014, judgment entered confirming 
the arbitration award, dismissing the remaining claims, and 
granting KNS attorney's fees and costs.  Levine thereafter filed 
a motion for a new trial, to amend or alter the judgment, or for 
relief from judgment, which the motion judge denied.  Levine 
filed a timely appeal from both the judgment and the denial of 
his postjudgment motion.  We granted the defendants' application 
for direct appellate review.   
 
Discussion.  1.  Scope of judicial review of arbitrator's 
decision.  The parties' agreement to arbitrate is governed by 
the MAA, G. L. c. 251.  See G. L. c. 251, § 1.7  The role of 
courts with respect to confirming, vacating, and modifying an 
arbitration award is outlined in §§ 11 through 13 of the MAA.  
Section 11 provides that "[u]pon application of a party, the 
court shall confirm" an arbitration award unless "grounds are 
urged for vacating or modifying or correcting the award" as 
provided in §§ 12 and 13.  G. L. c. 251, § 11.  Section 12 sets 
                     
 
7 Massachusetts adopted the Massachusetts Uniform 
Arbitration Act for Commercial Disputes (MAA) in 1960.  See 
St. 1960, c. 374.  The MAA superseded a 1925 statute that was 
modeled after the New York arbitration statute.  See Report of 
the Commission on Uniform State Laws, 1960 House Doc. No. 84, at 
7.  New York's arbitration statute also served as a model for 
the Uniform Arbitration Act (UAA) promulgated in 1955.  P.A. 
Finn, B.J. Mone, & J.S. Kelly, Mediation and Arbitration 121 
(2015-2016).   
 
10 
 
forth the available grounds for vacating an arbitration award.8  
As is relevant here, under § 12, the court shall vacate an award 
if it "was procured by corruption, fraud or other undue means," 
or "the arbitrators exceeded their powers."  G. L. c. 251, 
§ 12 (a) (1), (3).9  Otherwise, a court is "strictly bound by an 
arbitrator's findings and legal conclusions, even if they appear 
erroneous, inconsistent, or unsupported by the record at the 
arbitration hearing."  Lynn v. Thompson, 435 Mass. 54, 61 
                     
 
8 Section 12 of the MAA provides in relevant part: 
   
"(a)  Upon application of a party, the court shall vacate 
an award if: -- 
 
"(1)  the award was procured by corruption, fraud or other 
undue means;  
 
"(2)  there was evident partiality by an arbitrator 
appointed as a neutral, or corruption in any of the 
arbitrators, or misconduct prejudicing the rights of any 
party;   
 
"(3)  the arbitrators exceeded their powers;   
 
"(4)  the arbitrators refused to postpone the hearing upon 
sufficient cause being shown therefor or refused to hear 
evidence material to the controversy or otherwise so 
conducted the hearing . . . as to prejudice substantially 
the rights of a party; or   
 
"(5)  there was no arbitration agreement and the issue was 
not adversely determined in proceedings under [§ 2] 
. . . ."   
 
G. L. c. 251, § 12.   
 
 
9 Section 13 of the MAA allows a court to modify or correct 
an award in certain ways that do not affect the merits of the 
decision or the controversy.  G. L. c. 251, § 13.   
11 
 
(2001), cert. denied, 534 U.S. 1131 (2002).  An error of law or 
fact will not be reviewed by a court unless there is fraud; even 
a grossly erroneous decision is binding in the absence of fraud.  
Trustees of the Boston & Me. Corp. v. Massachusetts Bay Transp. 
Auth., 363 Mass. 386, 390 (1973).   
 
At the core of Levine's challenge to the arbitrator's award 
-- and to the motion judge's confirmation of the award -- is the 
claim that the arbitrator fundamentally misinterpreted the 
agreement.  Contrary to that interpretation, Levine argues that 
an involuntary withdrawal under section 4(e) of the agreement is 
a wholly separate and distinct type of withdrawal from a 
withdrawal for cause under section 4(f), and that, insofar as 
the arbitrator found that Levine's withdrawal was "for cause" 
under section 4(f), Levine cannot be made subject to any 
prohibition against competition, because, in his view, the 
penalty for competing with the firm only applies if the 
shareholder is terminated "involuntarily" under section 4(e).  
Levine acknowledges that the arbitration agreement is governed 
by G. L. c. 251.  He argues, however, that to the extent his 
objection to the award is a claim that the arbitrator committed 
an error of law, Levine is entitled to have a court consider the 
merits of his claim because in the arbitration clause of the 
agreement, the parties specifically provided for judicial review 
of an award to determine whether there was a "material, gross 
12 
 
and flagrant error" by the arbitrator.10  He reasons that 
arbitration is strictly a creature of contract, that the aim of 
the MAA is to enforce the parties' contractual agreement to 
arbitrate, and that, therefore, the parties' agreed-upon 
standard of judicial review should be enforced.   
 
Although arbitration is a matter of contract, Commonwealth 
v. Philip Morris Inc., 448 Mass. 836, 843 (2007), we disagree 
that parties, through contract, may modify the scope of judicial 
review that is set out in §§ 12 and 13 of the MAA.  As 
previously stated, the directive of G. L. c. 251, § 11, is that 
a court "shall confirm" an award unless grounds for vacating it 
pursuant to §§ 12 and 13 are shown; this statutory language 
"carries no hint of flexibility."  See Hall St. Assocs., L.L.C. 
v. Matell, Inc., 552 U.S. 576, 587 (2008) (Hall St.).   
 
In Hall St., the United States Supreme Court considered 
whether the grounds stated in the Federal Arbitration Act (FAA), 
9 U.S.C. §§ 1 et seq. (2012), for vacating or modifying an 
arbitration award were the exclusive grounds, or whether parties 
could expand the grounds -- and thereby expand the scope of 
judicial review -- by the terms of their agreement.  See 552 
                     
 
10 The language in section 13(j) of the agreement that 
Levine points to is the following:  "The decision of the 
arbitrator shall be final; provided, however, solely in the 
event of a material, gross and flagrant error by the arbitrator, 
such decision shall be subject to review in court" (emphasis 
added; emphasis in original omitted).   
13 
 
U.S. at 578, 586.  The Court held that under the FAA the 
statutory grounds are the exclusive grounds for judicial review 
and parties are unable to contract otherwise.  Id. at 586.  
However, the Court also made clear that States are free to reach 
a different result on grounds of State statutory law or common 
law.  Id. at 590 ("The FAA is not the only way into court for 
parties wanting review of arbitration awards:  they may 
contemplate enforcement under state statutory or common law, for 
example, where judicial review of different scope is 
arguable").11  Nonetheless, the Court's analysis of the FAA in 
Hall St. remains instructive and we reach the same result in 
relation to the MAA.   
 
The provisions of the MAA governing judicial review of an 
arbitration award are substantively (and often linguistically) 
identical to the analogous provisions in the FAA.12  The Court in 
                     
 
11 Some States have construed their arbitration statutes to 
permit parties to modify by contract the scope of judicial 
review of an arbitration award.  See Raymond James Fin. Servs., 
Inc. v. Honea, 55 So. 3d 1161, 1163, 1169 (Ala. 2010); Cable 
Connection, Inc. v. DIRECTV, Inc., 44 Cal. 4th 1334, 1340 
(2008); Tretina Printing, Inc. v. Fitzpatrick & Assocs., Inc., 
135 N.J. 349, 358 (1994); Nafta Traders, Inc. v. Quinn, 339 
S.W.3d 84, 87 (Tex. 2011), cert. denied, 132 S. Ct. 455 (2011).  
See also HH E. Parcel, LLC v. Handy & Harman, Inc., 287 Conn. 
189, 204 n.16 (2008).   
 
 
12 The judicial review provisions in the Federal Arbitration 
Act (FAA), 9 U.S.C. §§ 1 et seq. (2012), provide that if a party 
applies to a court for an order confirming an arbitration award, 
"the court must grant such an order unless the award is vacated, 
modified, or corrected as prescribed in [§§] 10 and 11 of this 
14 
 
Hall St. ruled that "the statutory text gives [the Court] no 
business to expand the statutory ground."  Id. at 589.  We are 
not persuaded that there is any reason to read the corresponding 
provisions of the MAA differently.  See Warfield v. Beth Israel 
Deaconess Med. Ctr., Inc., 454 Mass. 390, 394 (2009) ("the 
language of the FAA and the MAA providing for enforcement of 
arbitration provisions are similar, and we have interpreted the 
cognate provisions in the same manner").   
 
As the Court in Hall St., 552 U.S. at 586, recognized with 
respect to the FAA, the legislative intent behind the MAA 
becomes more clear when the language of its provisions governing 
judicial review is compared to other provisions in which the 
Legislature explicitly endorsed the parties' right to contract.  
                                                                  
title."  9 U.S.C. § 9.  The grounds for vacatur are listed in 
§ 10(a) of the FAA, and include the following:   
 
"(1)  where the award was procured by corruption, fraud, or 
undue means;   
 
"(2)  where there was evident partiality or corruption in 
the arbitrators . . . ;   
 
"(3)  where the arbitrators were guilty of misconduct in 
refusing to postpone the hearing . . . or of any other 
misbehavior by which the rights of any party 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."   
 
9 U.S.C. § 10(a).  Compare G. L. c. 251, § 12 (a) (1)–(4), 
quoted in note 8, supra.   
15 
 
For example, G. L. c. 251, § 3, directs that the parties' 
contractual provisions for appointing an arbitrator are to be 
followed in the first instance, and sets up a default method of 
appointment if a contractually defined method is not available:   
"If the arbitration agreement provides a method of 
appointment of arbitrators, such method shall be followed.  
In the absence thereof, or if the agreed method fails or 
for any reason cannot be followed, or if an arbitrator 
appointed fails or is unable to act and his successor has 
not been duly appointed, the court on application of a 
party shall appoint an arbitrator."   
 
In contrast, G. L. c. 251, §§ 11 through 13, are not default 
provisions.  Section 11 commands that "the court shall confirm 
an award" (emphasis added) except in the circumstances described 
in §§ 12 and 13; the language of the statute leaves no room for 
parties to contract otherwise.   
 
Our reading of G. L. c. 251, §§ 11 through 13, to mean that 
a court will review an arbitrator's award to determine only 
whether one of the statutory grounds for vacating, modifying, or 
correcting the award has been met accords with this court's 
interpretation of the MAA since its enactment in 1960.  See 
Beacon Towers Condominium Trust v. Alex, 473 Mass. 472, 474 
(2016) ("[A]n arbitration award is subject to a narrow scope of 
review. . . .  We do not review an arbitration award for errors 
of law or errors of fact" [quotation and citation omitted]); 
Lynn, 435 Mass. at 62 n.13 ("The Legislature has identified the 
extremely limited grounds on which courts may vacate or modify 
16 
 
arbitration awards”); Plymouth-Carver Regional Sch. Dist. v. J. 
Farmer & Co., 407 Mass. 1006, 1007 (1990) (Plymouth-Carver) 
("Courts inquire into an arbitration award only to determine if 
the arbitrator has exceeded the scope of his authority, or 
decided the matter based on 'fraud, arbitrary conduct, or 
procedural irregularity in the hearings'" [citation omitted]); 
Floors, Inc. v. B.G. Danis of New England, Inc., 380 Mass. 91, 
96 (1980) ("[T]he court should not interject itself or its 
practice into arbitrations unless required to do so by statutory 
provision or necessity" [citation omitted]); Trustees of the 
Boston & Me. Corp., 363 Mass. at 390 (judicial review is based 
on grounds stated in G. L. c. 251, §§ 12 and 13); Grobert File 
Co. of Am. v. RTC Sys., Inc., 26 Mass. App. Ct. 132, 135 (1998) 
("Once in the arena of arbitration, the powers of the arbitrator 
concerning the issue are wide and the scope of judicial review 
of the arbitration proceedings is narrow.  Short of fraud, 
arbitrary conduct, or significant procedural irregularity, the 
arbitrator's resolution of matters of fact or law is binding. 
. . .  See also other statutory grounds for vacating an 
arbitration award contained in G. L. c. 251, § 12" [citations 
omitted]).  The pertinent language of §§ 11 through 13 of the 
MAA has not changed since the statute's enactment, and we 
continue to adhere to our longstanding reading of it.13   
                     
13 In concluding here that allowing parties to define 
17 
 
 
In addition to the language of the MAA, there are strong 
policy considerations that support limiting the scope of 
judicial review to the statutorily defined "egregious departures 
from the parties' agreed-upon arbitration," Hall St., 552 U.S. 
at 586, that are listed in G. L. c. 251, §§ 12 and 13.  Allowing 
parties to expand the grounds for judicial review would 
"undermine the predictability, certainty, and effectiveness of 
the arbitral forum that has been voluntarily chosen by the 
parties" (citation omitted).  Plymouth-Carver, 407 Mass. at 
1007.  See Hall St., supra at 588 (purpose of arbitration is to 
provide efficient alternative to parties seeking finality, not 
"a prelude to a more cumbersome and time-consuming judicial 
review process" [citation omitted]).  If parties were able to 
                                                                  
alternative grounds for standards of judicial review of an award 
would contravene the express terms of the MAA, we join with the 
courts that have declined to construe their State arbitration 
statutes to permit contractual expansion or redefinition of the 
scope of judicial review by the parties.  See Brookfield Country 
Club, Inc. v. St. James-Brookfield, LLC, 287 Ga. 408, 413 (2010) 
("the [Georgia] Arbitration Code does not permit contracting 
parties who provide for arbitration of disputes to contractually 
expand the scope of judicial review that is authorized by 
statute" [citation omitted]); HL 1, LLC v. Riverwalk, LLC, 15 
A.3d 725, 727, 736 (Me. 2011) (grounds for vacating arbitration 
award enumerated in Maine Uniform Arbitration Act [UAA] are 
exclusive and do not provide for judicial review of errors of 
law); John T. Jones Constr. Co. v. City of Grand Forks, 665 
N.W.2d 698, 704 (N.D. 2003) ("We agree with the courts that hold 
[that] parties to an arbitration agreement cannot contractually 
expand the scope of judicial review beyond that provided by [the 
North Dakota UAA]"); Pugh's Lawn Landscape Co. v. Jaycon Dev. 
Corp., 320 S.W.3d 252, 260 (Tenn. 2010) (parties cannot expand 
the scope of judicial review beyond scope of review provided by 
Tennessee UAA).   
18 
 
redefine by contract language the scope of what a court was to 
review with respect to every arbitration award, it would spawn 
potentially complex and lengthy case-within-a-case litigation 
devoted to determining what the parties intended by the 
contractual language they chose.  This is fundamentally contrary 
to the intent and purpose of our arbitration statute.  See 
Lawrence v. Falzarano, 380 Mass. 18, 28 (1980) ("The purpose of 
G. L. c. 251 governing arbitration is to provide further speedy 
resolution of disputes by a method which is not subject to delay 
and obstruction in the courts" [quotation and citation 
omitted]).14  The policy of limited judicial review preserves 
arbitration as an expeditious and reliable alternative to 
litigation for commercial disputes.  See Plymouth-Carver, 
supra.15   
                     
 
14 This case is illustrative of the problem.  Further 
litigation likely would be necessary to determine the intended 
meaning of "material, gross and flagrant error by the 
arbitrator" as it stated in the arbitration clause of the 
agreement.  The parties' briefs on appeal before us suggest that 
they do not agree on this point.   
 
 
15 Levine argues that if the judicial scope of review agreed 
to by the parties is rendered invalid, then the entire 
arbitration clause is unenforceable.  This argument was not 
raised by Levine in the Superior Court, and was not raised until 
Levine's reply brief to this court.  An argument raised for the 
first time in a reply brief is not properly before us, and we do 
not consider it here.  See Commissioner of Revenue v. Plymouth 
Home Nat'l Bank, 394 Mass. 66, 67 n.3 (1985).   
 
19 
 
 
2.  Vacatur under G. L. c. 251, § 12.  In recognizing that 
this court may decide that the scope of judicial review is 
restricted to the grounds set out in G. L. c. 251, § 12, Levine 
recasts his challenges to the award to fit within the provisions 
of G. L. c. 251, § 12 (a) (3) (arbitrators exceeded their 
authority), or § 12 (a) (1) (award was procured by fraud).  The 
repackaging effort fails.   
 
Levine contends that the arbitrator exceeded his authority 
in awarding KNS $480,412 in liquidated damages on account of 
Levine's competing with KNS within three years following 
Levine's withdrawal;16 and $1,068,403.70 to compensate for (1) 
amounts allegedly paid to Levine after his termination from the 
firm by former firm clients for work that Levine had earlier 
completed and that had earlier been billed to the clients 
(accounts receivable); and (2) amounts allegedly paid to Levine 
after his termination for work that was still in progress at the 
time Levine left LKNS (work in progress).  An arbitrator exceeds 
his or her authority by granting relief that is beyond the scope 
of the arbitration agreement, beyond that to which the parties 
                     
 
16 Section 8(a)(iii)(1) of the agreement requires a 
stockholder who withdraws involuntarily and violates the 
noncompete provision to pay the firm "14% in the case of Levine 
and Katz, and . . . 18% in the case of any other Stockholder, of 
all gross billings from the withdrawn Stockholder's book of 
business which is lost [by KNS] in the twelve month period 
following the withdrawal."  If the withdrawing stockholder 
sufficiently demonstrates that some business was not lost by 
KNS, this amount will be deducted from the amount owed.   
20 
 
bound themselves, or prohibited by law.  Superadio Ltd. 
Partnership v. Winstar Radio Prods., LLC, 446 Mass. 330, 334 
(2006), quoting Plymouth-Carver, 407 Mass. at 1007.  "If the 
arbitrators in assessing damages commit an error of law or fact, 
but do not overstep the limits of the issues submitted to them, 
a court may not substitute its judgment on the matter."  
Lawrence, 380 Mass. at 28-29.  The issues of whether a 
stockholder's withdrawal or termination pursuant to section 4(e) 
or section 4(f) of the agreement (or both) gives rise to 
damages, and if so, what those damages may be, fall squarely 
within the broad arbitration clause in the agreement:  "In the 
event of any dispute concerning any aspect of this Agreement, 
the parties agree to submit the matter to binding arbitration."  
Levine asks us to substitute our interpretation of the contract 
for that of the arbitrator.17  Interpreting the agreement is the 
role of the arbitrator, not this court.  See Plymouth-Carver, 
407 Mass. at 1007 (reversing Superior Court's judgment vacating 
award where question was one of interpretation of agreement); 
Greene v. Mari & Sons Flooring Co., 362 Mass. 560, 563 (1972) 
("courts have no business overruling [the arbitrator] because 
                     
 
17 In connection with his challenge to the damages awarded, 
Levine again contests the arbitrator's conclusion that a "for 
cause" withdrawal under section 4(f) of the agreement is subject 
to the noncompete provision.   
 
21 
 
their interpretation of the contract is different from his" 
[citation omitted]).   
 
Levine also argues that the portion of the damages award 
for payments collected from former KNS clients for accounts 
receivable and work in progress was procured by fraud.  He 
contends that KNS misrepresented the amounts that were collected 
by Levine and his new firm, and the arbitrator erroneously 
relied on conclusory evidence of LKNS's historical rate or 
percentage of collection on billings for Levine's work to 
determine damages related to accounts receivable and work in 
progress while ignoring the evidence that Levine presented.18  We 
agree with the motion judge, who concluded that "the 
arbitrator's approach was reasonable and more than fair to 
                     
 
18 Each party was asked to submit accounting and data 
relating to the categories of damages described in the partial 
final award.  Levine submitted to the arbitrator a brief on 
damages and attached as an exhibit a spreadsheet (referred to by 
the parties as "Exhibit D") that purported to list accounts 
receivable of his new firm, LCMG; Levine argued that the numbers 
illustrated the amounts his new firm collected from former LKNS 
clients.  The arbitrator made clear in the final award, however, 
that Levine "failed to provide the necessary data to more 
accurately determine the sums due [to KNS] by him for accounts 
receivable and work in progress."  KNS's position is that the 
spreadsheet proffered by Levine's counsel is a self-serving 
document that offers little, and that Levine failed to produce 
any evidence showing money paid to LCMG or Levine following 
Levine's withdrawal to determine whether Levine invoiced former 
firm clients for work performed prior to his departure.  Exhibit 
D is in the record before us, and although Levine characterizes 
the numbers as an accurate statement of money received by LCMG 
on account of work Levine performed while still at LKNS, we can 
find no evidentiary substantiation of this proposition in the 
record.   
22 
 
Levine" and the arbitrator was under no obligation to credit 
Levine's testimony.  There is nothing to show that the 
arbitrator reached his conclusion on the basis of fraud or undue 
means, "that is, in an underhanded, conniving, or unlawful 
manner."  Superadio Ltd. Partnership, 446 Mass. at 337.  Levine 
presents nothing more than a dispute over a question of fact 
that is not reviewable by this court.   
 
3.  Remaining claims.  Levine presents two additional 
claims:  (1) the motion judge erred in dismissing the remaining 
counts of KNS's complaint -- that is, the counts that followed 
the first count for confirmation of the arbitration award; and 
(2) the judge also erred in awarding KNS attorney's fees and 
costs associated with the dismissed claims.   
 
These claims lack merit.  First, the motion judge did not 
abuse his discretion in dismissing the remaining counts against 
Levine and his firm.  After the parties stipulated to a form of 
security for any judgment that might enter against Levine, the 
remaining counts of KNS's complaint -- each of which was aimed 
at securing any potential judgment confirming the arbitration 
award -- all became moot, and the judge was warranted in 
allowing KNS's motion to dismiss them.  Second, the judge did 
not err in awarding attorney's fees and costs in connection with 
the dismissed claims.  The agreement provided that "the cost of 
enforcing any judgment entered by the arbitrator (including 
23 
 
reasonable attorney's fees) shall be borne by the party against 
whom such award was made and/or judgment entered."  The claims 
that supplemented KNS's request to confirm the award were within 
the purview of enforcing the judgment and sufficiently 
interconnected to the confirmation of the award.  Fabre v. 
Walton, 441 Mass. 9, 10 (2004), Peckham v. Continental Cas. Ins. 
Co., 895 F.2d 830, 841 (1st Cir. 1990).   
 
Conclusion.  The judgments of the Superior Court confirming 
the arbitrator's award and dismissing the additional claims are 
affirmed, as is the judgment granting attorney's fees and costs.  
The plaintiffs may apply to this court for attorney's fees and 
costs in accordance with the procedure set forth in Fabre, 441 
Mass. at 10-11.   
 
 
 
 
 
 
 
So ordered.