SUMMARY

November 5, 2020

2020COA155

No. 19CA0608, Peak Billing v. Mountain Sleep Diagnostics —

ADR – Arbitration – Colorado Uniform Arbitration Act –

Vacating Award

A division of the court of appeals considers when an 

arbitration award should be vacated because it was procured by 

fraud, corruption, or undue means, per section 13–22–223(1)(a), 

C.R.S. 2020, of the Colorado Revised Uniform Arbitration Act. The 

division adopts a three-part test widely used in federal and other 

state courts to determine when such an award should be vacated 

and holds that in this case the award should stand. 

The summaries of the Colorado Court of Appeals published opinions 

constitute no part of the opinion of the division but have been prepared by 

the division for the convenience of the reader. The summaries may not be 

cited or relied upon as they are not the official language of the division. 

Any discrepancy between the language in the summary and in the opinion 

should be resolved in favor of the language in the opinion.
COLORADO COURT OF APPEALS 2020COA155

Court of Appeals No. 19CA0608

Adams County District Court No. 18CV30091

Honorable Edward C. Moss, Judge

Tara Price, d/b/a Peak Billing,

Plaintiff-Appellee,

v.

Mountain Sleep Diagnostics, Inc.,

Defendant-Appellant.

JUDGMENT AFFIRMED

Division III

Opinion by JUDGE GROVE

Furman and Berger, JJ., concur

Announced November 5, 2020

Messner Reeves LLP, Kendra Beckwith, Darren D. Alberti, Denver, Colorado,

for Plaintiff-Appellee

Fairfield and Woods, P.C., Cecil E. Morris Jr., Denver, Colorado, for DefendantAppellant
1

¶ 1 Mountain Sleep Diagnostics, Inc. (MSD), appeals the trial 

court’s judgment confirming an arbitration award against it and in 

favor of Tara Price doing business as Peak Billing (Price). Applying 

section 13–22–223(1)(a), C.R.S. 2020, of the Colorado Revised 

Uniform Arbitration Act (CRUAA), which allows a court to vacate an 

arbitration award procured by fraud, corruption, or undue means, 

we adopt the test developed by federal courts under an analogous 

provision of the Federal Arbitration Act (FAA) and conclude that 

MSD’s motion failed to make an adequate showing that MSD was 

entitled to relief. Because the district court correctly denied MSD’s 

motion without holding a hearing, we affirm its judgment. 

I. Background

¶ 2 Price contracted with MSD to provide billing services for MSD

and its patients. The contract automatically renewed every year 

unless one party notified the other of its intent to terminate at least

ninety days before the renewal date. Disputes under the contract 

— including any involving inadequate notice of the contract’s 

termination — were subject to binding arbitration. The arbitration 

clause also provided that the prevailing party in any arbitrated 

dispute was entitled to an award of attorney fees. 
2

¶ 3 After MSD terminated the contract less than ninety days 

before the renewal date, Price, asserting that the untimely notice 

was a breach, filed a motion to compel arbitration in the district 

court. The court granted the motion, and the parties reached a 

stipulation and agreement to arbitrate. 

¶ 4 After a two-day arbitration hearing, the arbitrator awarded

Price $124,224 for MSD’s breach of the contract plus $24,600 in 

attorney fees. Price then filed a motion in district court to confirm 

the award. MSD moved to vacate the award, alleging that, while 

performing billing services for MSD, Price had committed fraud by

misappropriating more than $60,000 in payments meant for MSD. 

The trial court issued an order denying MSD’s motion to vacate and 

granting Price’s motion to confirm. 

¶ 5 MSD now appeals that order, arguing that the arbitrator’s 

award should be vacated because discoveries it made after the 

arbitration was complete establish by clear and convincing evidence 

that Price procured the arbitration award through fraud.1

 1 MSD first argues that the trial court erred by denying its motion to 

vacate as untimely. But the trial court denied MSD’s motion on the 

merits; it did not question its timeliness. We therefore do not 

address this argument. 
3

II. Analysis

A. Standard of Review

¶ 6 We review de novo a district court’s legal conclusions on a 

motion to confirm or vacate an arbitration award. Pacitto v. 

Prignano, 2017 COA 101, ¶ 7. In the absence of statutory grounds 

to vacate an arbitration award, we must affirm the award without 

reviewing its merits. PFW, Inc. v. Residences at Little Nell Dev., LLC, 

2012 COA 137, ¶ 37. 

B. Applicable Law

¶ 7 Under the CRUAA, courts can reject arbitration awards “only 

in limited circumstances.” Barrett v. Inv. Mgmt. Consultants, Ltd., 

190 P.3d 800, 802 (Colo. App. 2008). These limited circumstances, 

listed in section 13–22–223(1), involve “specific instances of 

outrageous [arbitral] conduct” and “egregious departures from the 

parties’ agreed-upon arbitration.” Treadwell v. Vill. Homes of Colo., 

Inc., 222 P.3d 398, 401 (Colo. App. 2009) (quoting Hall St. Assocs., 

L.L.C. v. Mattel, Inc., 552 U.S. 576, 586 (2008)). 

¶ 8 Though the merits of an arbitration award are generally 

unreviewable, a court “shall” vacate an arbitration award if, as 

relevant here, it was “procured by corruption, fraud, or other undue 
4

means.” § 13–22–223(1)(a). What exactly constitutes corruption, 

fraud, or undue means, however, is largely unsettled in Colorado.

C. MSD’s Motion to Vacate

¶ 9 Affidavits attached to MSD’s motion to vacate the arbitration 

award alleged that after the arbitration was complete, MSD’s Chief 

Operating Officer discovered suspicious activity in MSD’s billing 

software system, and that further examination of that system 

revealed more than $60,000 in misappropriated payments. MSD 

argues that by “concealing and failing to disclose that she had been 

misappropriating funds” — and “by testifying falsely on several 

related issues” — Price procured the arbitration award by fraud.2 

¶ 10 The district court did not decide whether Price in fact 

misappropriated the funds in question. Instead, it ruled that MSD’s

motion failed to establish that MSD could not have discovered the 

alleged misappropriation sooner. The undisputed facts showed that 

MSD had “locked out” Price’s access to the billing software system 

on the same day that it terminated the contract, and that a full

fourteen months elapsed between that termination and the date of 

 2 MSD did not allege any impropriety on the part of the arbitrator or 

corruption in the arbitration process. 
5

the arbitration award. Yet, despite having ample time to review its 

books, MSD never raised the issue in the arbitration even though it 

had asserted the defense of unclean hands. Because “[w]rongful 

conduct by [Price] was part of [MSD’s] case,” and because 

“[i]nformation concerning [Price’s] wrongful conduct was in [MSD’s] 

possession prior to the arbitration hearing,” the district court ruled 

that it was too late for MSD to assert Price’s alleged 

misappropriation as a basis for vacating the award. 

D. Colorado Appellate Decisions

¶ 11 Only a handful of Colorado appellate cases have considered

motions to vacate arbitration awards due to fraud under the 

CRUAA, and none has addressed the specific situation here. In the 

absence of binding precedent, the district court looked in large part 

to cases interpreting the FAA. While analogous federal law can be 

persuasive, see Ingold v. AIMCO/Bluffs, L.L.C. Apartments, 159 P.3d 

116, 120 (Colo. 2007), we first discuss the potentially relevant 

Colorado cases to determine if they provide us with a useful 

decisional framework. 

¶ 12 In Nasca v. State Farm Mutual Automobile Insurance Co., 12 

P.3d 346, 348 (Colo. App. 2000), the plaintiff, Nasca, moved to 
6

vacate an arbitration award after discovering that one of the three 

assigned arbitrators had been on State Farm’s payroll as an expert 

in an unrelated matter while his arbitration was pending, and that 

the arbitrator’s law partner had been a paid expert witness for State 

Farm on at least ten other occasions. Because it did not disclose 

this relationship, Nasca argued, State Farm procured the outcome 

of the arbitration by undue means. A division of this court agreed 

that the phrase “undue means” was broad enough to encompass 

the “type of impropriety in the arbitration process” that Nasca 

alleged, and that, as a consequence, State Farm should have 

disclosed the nature of its relationship with the arbitrator. Id. at 

350. But the division nonetheless affirmed the district court’s order 

denying the motion to vacate because Nasca failed to carry his 

burden of establishing “a causal relation between the improper 

conduct and the arbitration award.” Id. at 349.

¶ 13 Superior Construction Company, Inc. v. Bentley, 104 P.3d 331

(Colo. App. 2004), involved a dispute between a homeowner and a 

remodeling contractor. After prevailing in the arbitration, the 

contractor moved for confirmation of the arbitration award in the 

district court. Id. at 332. In response, the homeowner filed a 
7

motion to vacate the award, alleging that the contractor “had 

submitted fraudulently altered evidence in the arbitration.” Id. The 

trial court conducted an evidentiary hearing and, after finding that 

the arbitration award had been procured in part through the use of 

fraudulent evidence, reduced it. Id. A division of this court, 

however, concluding that “no discrete part of the award can be 

identified and severed,” vacated the arbitrator’s award in its 

entirety. Id. at 333. 

¶ 14 The parties raised similar arguments in BFN-Greeley, LLC v. 

Adair Group, Inc., 141 P.3d 937 (Colo. App. 2006). There, in 

another construction dispute, Adair’s owner falsely testified that his

company had never been terminated from a contract, when in fact 

that precise issue was being litigated in a separate arbitration. Id. 

at 941. Adair prevailed, but BFN argued that the award should

have been overturned because the owner’s testimony was 

fraudulent. Id. A division of this court affirmed the district court’s

conclusion that the fraudulent testimony did not procure the award 

“because the fact of Adair’s termination on the other project was 

brought to the attention of the arbitrators well before they issued” 

the award. Id. Though the timing of the revelation was at issue in 
8

BFN, the holding suggests that the fraudulent nature of the 

testimony could have, in line with the holding in Bentley, served as 

a basis for vacating the award. 

¶ 15 The most recent Colorado case addressing “corruption, fraud, 

or other undue means” in the arbitration context is PFW, 2012 COA 

137, ¶ 38. In that case, a real estate purchaser arbitrated a 

contract dispute with a developer, resulting in an award in the 

developer’s favor. Id. at ¶ 5. The purchaser moved to vacate the 

award, arguing that the developer had fraudulently concealed its 

failure to register with the Colorado Division of Real Estate when it 

executed the agreement containing the arbitration provision (which

could have made the purchase contract voidable by the purchaser 

and unenforceable by the developer). Id. at ¶ 40. Noting the public 

availability of the information the buyer claimed was fraudulently 

concealed, a division of this court held that it was “incumbent upon 

[the buyer] to raise in the arbitration proceeding any claims to void 

the purchase agreement based on [the developer’s] registration 

status.” Id. at ¶ 42. 

¶ 16 As relevant to the issue central to this appeal, we glean three

concepts from these cases. First, there must be a nexus between 
9

the improper conduct and the arbitration award. Nasca, 12 P.3d at 

349; see also § 13–22–223(1)(a) (contemplating vacatur of an award 

“procured by” fraud). Second, “fraud” as a ground for vacating an 

arbitration award under section 13–22–223(1)(a) is not limited to 

process fouls (such as State Farm’s failure, in Nasca, to disclose 

that it had selected an arbitrator who was on its payroll), but can

also — so long as it relates to a material issue in the case —

encompass perjury or the presentation of false evidence by a party 

during the arbitration itself. BFN, 141 P.3d at 941; Bentley, 104 

P.3d at 332. And third, when it comes to unearthing and alleging 

fraud, both timing and diligence matter. A party who knows or 

should know of fraudulent conduct should promptly bring it to the 

arbitrator’s attention, rather than trying to unwind the award by 

raising the issue for the first time via a motion to vacate filed in the 

district court. PFW, ¶ 42.

E. Other Federal and State Court Decisions

¶ 17 Like section 13–22–223(1)(a) of the CRUAA, the FAA permits a 

reviewing court to vacate an arbitration award “where the award 

was procured by corruption, fraud, or undue means.” 9 U.S.C. 

§ 10(a)(1). When considering a motion to vacate an arbitration 
10

award under this provision, most federal circuit courts require the 

movant to

 establish the fraud;

 show that the fraud was not discoverable by exercising

due diligence prior to or during the arbitration; and 

 demonstrate that the fraud had a material effect on a 

dispositive issue in the arbitration. 

See, e.g., MCI Constructors, LLC v. City of Greensboro, 610 F.3d 849, 

858 (4th Cir. 2010); Int’l Brotherhood of Teamsters, Local 519 v. 

United Parcel Serv., Inc., 335 F.3d 497, 503 (6th Cir. 2003). 

Likening an arbitration award to a judgment or order of a district 

court, which can only be vacated by a party’s motion for relief under 

Fed. R. Civ. P. 60(b), federal courts require a party moving to vacate 

an award under 9 U.S.C. § 10(a)(1) to establish the fraud by clear 

and convincing evidence. See, e.g., MCI Constructors, 610 F.3d at 

858. 

¶ 18 States that have adopted the Uniform Arbitration Act generally

apply the same three-part test and evidentiary standard. See Low

v. Minichino, 267 P.3d 683, 690–91, 691 n.5 (Haw. Ct. App. 2011)

(collecting cases); Health Plan of Nev., Inc. v. Rainbow Med., LLC, 
11

100 P.3d 172, 176 n.4 (Nev. 2004) (collecting cases). “In the 

absence of a prima facie showing with respect to these factors, the 

court is not empowered to assess evidence, much less new evidence 

that was not timely submitted to the arbitrators, in responding to a 

request for vacatur.” Seattle Packaging Corp. v. Barnard, 972 P.2d 

577, 579 (Wash. Ct. App. 1999).

F. The Federal Test

¶ 19 While none of the Colorado cases that we have discussed 

explicitly adopted the federal approach, they have, collectively, 

either explicitly or implicitly applied each of its elements to motions 

filed under section 13–22–223(1)(a). See Nasca, 12 P.3d at 349 

(requiring moving party to establish the improper conduct and show 

nexus); PFW, ¶ 42 (requiring moving party to have exercised 

diligence).3 Thus, the federal test is entirely consistent with existing 

Colorado case law. 

 3 Similarly, the district court focused on whether “failing to disclose 

adverse facts” was enough to vacate the award, and whether it 

could vacate the award when “the information was available prior to 

the arbitration proceeding.” This language tracks closely with each 

of the federal test’s elements. 
12

¶ 20 Likewise, the evidentiary standard that courts apply under the 

FAA — clear and convincing evidence — finds its roots in the 

standard applicable to motions for relief under Fed. R. Civ. P. 60(b). 

MCI Constructors, 610 F.3d at 858. Given the similarities between 

the federal and state versions of Rule 60, and taking into 

consideration the fact that a motion to confirm an arbitration award 

triggers a special statutory proceeding, and is not a “civil action” 

within the meaning of section 13–25–127(1), C.R.S. 2020, see 

Estate of Guido v. Exempla, Inc., 2012 COA 48, ¶ 12, we conclude 

that a party seeking to vacate an arbitration award must satisfy the 

evidentiary standard that applies to a motion for a new trial under 

C.R.C.P. 60(b)(2), see Sharma v. Vigil, 967 P.2d 197, 199 (Colo. App. 

1998) (holding, under C.R.C.P. 60(b)(2), that moving party carries 

the burden of “clear, strong, and satisfactory proof” that it is 

entitled to relief).

¶ 21 MSD urges us to reject the federal test, arguing that, due to

differences between the CRUAA and the FAA with respect to the 

limitations period for filing a motion to vacate, “federal decisions do 

not provide guidance.” In particular, MSD maintains that there is 

no due diligence requirement under the CRUAA, and that the only 
13

reason the FAA requires a showing that the fraud was not 

discoverable by exercising due diligence prior to or during the

arbitration is because it “does not separately address the time for 

motions to vacate” predicated on that ground. Under section 13–

22–223(2), on the other hand, a party in MSD’s position must seek 

relief 

within ninety-one days after the movant 

receives notice of the award . . . unless the 

movant alleges that the award was procured 

by corruption, fraud, or undue means, in 

which case the motion must be made within 

ninety-one days after either the ground is 

known or by the exercise of reasonable care 

should have been known by the movant. 

¶ 22 As we understand the argument, MSD maintains that this 

provision of the CRUAA relieved it from having to bring Price’s 

alleged fraud to the arbitrator’s attention during the proceedings. 

Rather, MSD’s theory is that, so long as it filed its motion to vacate 

within ninety-days after it received notice of the award, it does not 

matter when it discovered (or should have discovered) the alleged 

fraud that led to that award.

¶ 23 This position runs headlong into the division’s holding in PFW, 

which held unequivocally that it was “incumbent upon” a party who 
14

knew or should have known of corruption, fraud, or undue means 

during the arbitration process to raise those concerns with the 

arbitrator. PFW, ¶ 42. We agree with PFW on this point, and we 

consequently are not persuaded that the limitation on the time to 

challenge an arbitration award on the grounds of corruption, fraud, 

or undue means in section 13–22–223(2) meaningfully 

distinguishes the CRUAA from the FAA.

¶ 24 Accordingly, we agree with Price that the federal cases 

addressing claims of corruption, fraud, or undue means under the 

FAA, as well as similar state cases arising under the Uniform 

Arbitration Act, provide appropriate guidelines for resolving similar 

arguments under section 13–22–223(1)(a). The three-part test laid 

out above engages the court in the appropriate inquiries to resolve 

this issue, and we therefore apply it here. 

III. Application

A. Standard for Hearing

¶ 25 At the threshold, to the extent that MSD contends that the 

district court was required to hold a hearing on its motion to vacate, 

we disagree. 
15

¶ 26 According to section 13–22–205(1), C.R.S. 2020, “an 

application for judicial relief” from an arbitration award “must be 

made by motion to the court and heard in the manner provided by 

law or court rule for making and hearing motions.” Thus, a motion 

to vacate an arbitration award should be treated by the district 

court like a motion in a typical civil case.4 

¶ 27 C.R.C.P. 121, section 1–15(4) governs trial court motions 

practice. The rule encourages the disposition of motions “upon the 

written motion and briefs submitted.” BFN, 141 P.3d at 942. And 

because written motions practice generally affords parties adequate 

notice and a reasonable opportunity to be heard, see Blood v. Qwest 

Servs. Corp., 224 P.3d 301, 318 (Colo. App. 2009), aff’d, 252 P.3d 

1071 (Colo. 2011), hearings need not be granted as a matter of 

course. That is particularly true in the arbitration context because 

“[i]t would defeat the purpose of arbitration if a reviewing court were 

obligated to give the parties all the due process owed under the 

 4 Similarly, a motion to vacate an arbitration award under the FAA, 

9 U.S.C. § 6, is treated procedurally in the manner of motions. See 

Health Servs. Mgmt. Corp. v. Hughes, 975 F.2d 1253, 1258 (7th Cir.

1992); BFN-Greeley, LLC v. Adair Grp., Inc., 141 P.3d 937, 942 

(Colo. App. 2006).
16

rules of civil procedure.” BFN, 141 P.3d at 942; see also Karppinen 

v. Karl Kiefer Mach. Co., 187 F.2d 32, 35 (2d Cir. 1951) (“It is 

unnecessary for us to lay down any general rule as to when or how 

far oral hearings on questions of alleged perjured testimony before 

arbitrators should be allowed. It is enough to say that even if 

perjury be ‘fraud’ within the meaning of the Arbitration Act, such 

hearings should only be granted with reluctance . . . .”); In re 

Marriage of Eggert, 53 P.3d 794, 796 (Colo. App. 2002). 

¶ 28 Here, because MSD’s motion and supporting affidavits did not 

make a threshold showing that it acted with due diligence to 

discover the misappropriation before the arbitration was over, the 

district court did not deem it necessary to hold a hearing on the 

issues presented. Because, as we discuss in detail below, MSD’s 

submission did not demonstrate due diligence, and because 

motions to confirm and vacate arbitration awards should, if 

possible, be decided only on the written materials submitted, we 

agree that no hearing was required. See Seattle Packaging, 972 

P.2d at 579. We therefore turn next to the merits of the district 

court’s order. 
17

B. Merits

¶ 29 The test that we apply today is framed in the conjunctive, 

meaning that the party seeking to vacate an award on the grounds 

that it was procured by corruption, fraud, or undue means must 

show by clear and convincing evidence that (1) fraud occurred; (2) 

the fraud was not discoverable by exercising due diligence prior to 

or during the arbitration; and (3) the fraud had a material effect on 

a dispositive issue in the arbitration. A failure to establish any of 

these elements at this stage of the proceedings will doom the effort. 

See id. We therefore only briefly consider the first and third prongs 

of the test before turning to the dispositive issue — whether MSD

made an adequate showing that it could not have discovered the 

fraud earlier by exercising due diligence. 

1. Whether the Fraud Occurred

¶ 30 The affidavits that MSD submitted with its motion to vacate

the arbitration award made out a case of fraud in the form of 

perjured testimony from Price concerning, among other things, the 

income that she had realized from her contract with MSD. And as 

we have already noted, “fraud” under section 13–22–223(1)(a) can 
18

encompass a witness’s perjury during the arbitration proceeding. 

BFN, 141 P.3d at 941; Bentley, 104 P.3d at 332. 

2. Nexus

¶ 31 The third prong of the test, which requires the movant to 

establish “a causal relation between the improper conduct and the 

arbitration award,” Nasca, 12 P.3d at 349, presents a closer 

question, but because we reject MSD’s contentions on another 

ground, it is one that we need not reach. On one hand, federal 

courts recognize that “[t]he requisite nexus may exist where fraud 

prevents the [arbitrator] from considering a significant issue to 

which it does not otherwise enjoy access.” Forsythe Int’l, S.A. v. 

Gibbs Oil Co. of Tex., 915 F.2d 1017, 1022 (5th Cir. 1990). And 

Price’s alleged misdeeds, if proven, could have directly related to the 

potentially dispositive question of which party breached the 

contract first. See Coors v. Sec. Life of Denver Ins. Co., 112 P.3d 59, 

64 (Colo. 2005) (“Under contract law, a party to a contract cannot 

claim its benefit where he is the first to violate its terms.”). That is, 

if Price committed fraud, then she breached the contract first. And 

if she breached the contract first and then lied about it on the 
19

stand, then the fact that she did so would likely have been a 

significant issue in the arbitration. 

¶ 32 On the other hand, courts have typically been reluctant to 

vacate arbitration awards in cases where the perjured testimony 

does not bear directly on the issues in the case. See, e.g., Int’l 

Brotherhood of Teamsters, Local 519, 335 F.3d at 503–04

(considering whether the alleged fraud was “clearly connected to an 

issue material to the arbitration”); Newark Stereotypers’ Union No. 

18 v. Newark Morning Ledger Co., 397 F.2d 594, 600 (3d Cir. 1968)

(“[E]ven if perjury is proven and constitutes fraud under § 10(a) of 

the [FAA], it will not justify the vacation of an award if it concerns 

an issue remote from the question to be decided.”); Karppinen, 187 

F.2d at 35 (same). In this case, the arbitration was about whether 

MSD timely terminated its contract with Price. No one claimed that 

Price’s alleged misappropriations prompted MSD to terminate the 

contract — or, for that matter, that MSD was even aware of any 

irregularities when it did so. Price’s alleged misconduct, and any 

concealment of that alleged misconduct, were therefore unrelated to 

the disagreement that led to the arbitration. 
20

¶ 33 Whether there is a sufficient nexus between the arbitration 

award and any perjury on Price’s part is thus a thorny question, 

but because the test that we adopt today is framed in the 

conjunctive, we ultimately need not decide it. Instead, as we 

explain next, we affirm the district court’s ruling because it is clear 

from the record that MSD did not exercise due diligence with 

respect to Price’s alleged fraud. 

3. Due Diligence

¶ 34 Requiring due diligence prevents the movant from taking a 

“second bite at the apple” if the fraud could have been discovered 

before the arbitration was over. A.G. Edwards & Sons, Inc. v. 

McCollough, 967 F.2d 1401, 1404 (9th Cir. 1992). If the movant

could have rebutted the adversary’s claims or evidence before the 

arbitrator, the scales will tip in favor of preserving the award’s

finality. Karppinen, 187 F.2d at 35.

¶ 35 MSD contends that it “could not reasonably have discovered”

Price’s misappropriations before the end of the arbitration 

proceedings due to 

the size and complexity of its practice, 

including the large number of patients, 

multiple locations, and sources of payment, 
21

including various insurers; the elaborate 

scheme used by Price/Peak Billing to conceal 

her misappropriations; and her efforts to 

prevent MSD from gaining access to its

practice management software system, called 

Kareo.

¶ 36 Price responds that these hardships are insufficient to prove 

that MSD could not have discovered the alleged fraud earlier. The 

district court likewise ruled that MSD’s argument was conclusory 

and that there was “no evidence to conclude that the 

misappropriation could not have been discovered” before the award 

was entered. 

¶ 37 To be sure, MSD offered some explanation, both in the district 

court and in its briefing before us, as to why it was not easy to 

discover the alleged misappropriations. But what it did not do is 

describe what actions it took, if any, to promptly investigate its 

suspicions about Price’s conduct. We assume that MSD asserted 

its unclean hands defense in good faith, and it seems probable that 

it would have made efforts to bolster that defense by thoroughly 

reviewing Price’s performance under the contract during the 

fourteen months that the two parties were engaged in arbitration 

against one another. Yet despite the fact that MSD gained control 
22

over the billing system shortly after it terminated Price’s contract, 

an affidavit from MSD’s Chief Operations Officer avers that she 

discovered Price’s alleged misconduct after the arbitration hearing 

was over, when she noticed an “anomaly in one of the patient 

records” while performing back billing. This discovery triggered a 

substantial inquiry into Price’s billing practices, but the entire effort 

came after the arbitrator had issued the award. 

¶ 38 To satisfy the due diligence prong, MSD had to do more than 

simply allege that it was difficult to discover Price’s alleged 

misappropriations. MSD also needed to show that it had “follow[ed]

up on possessed or reasonably available information or resources,” 

Owens v. Tergeson, 2015 COA 164, ¶ 45, such as the billing system 

that it assumed control of when it terminated the contract. But 

MSD did not describe what investigative steps it took, if any, before 

or during the arbitration, or how any efforts to investigate Price’s 

alleged misconduct were thwarted. Thus, as the district court 

concluded, the briefing and affidavits that MSD submitted did not 

show that Price’s alleged scheme was not reasonably discoverable

before the arbitration ended, nor did they demonstrate that MSD 
23

acted with due diligence to uncover fraud on Price’s part while the 

arbitration proceedings were ongoing. 

¶ 39 Because MSD did not make an adequate showing that it acted 

with due diligence to discover Price’s alleged misconduct, we 

conclude that the district court appropriately denied its motion to 

vacate the arbitration award. 

IV. Conclusion

¶ 40 The district court’s judgment is affirmed.

JUDGE FURMAN and JUDGE BERGER concur.