Supreme Court

No. 2011-280-Appeal. 

(PC 05-3715)

Drago Custom Interiors, LLC :

v. :

Carlisle Building Systems, Inc., et al. :

NOTICE: This opinion is subject to formal revision before 

publication in the Rhode Island Reporter. Readers are requested to 

notify the Opinion Analyst, Supreme Court of Rhode Island, 

250 Benefit Street, Providence, Rhode Island 02903, at Telephone 

222-3258 of any typographical or other formal errors in order that 

corrections may be made before the opinion is published.
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Supreme Court

No. 2011-280-Appeal.

(PC 05-3715)

Drago Custom Interiors, LLC :

v. :

Carlisle Building Systems, Inc., et al. :

Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.

O P I N I O N

Justice Goldberg, for the Court. This case came before the Supreme Court on 

October 25, 2012, pursuant to an order directing the parties to appear and show cause why the 

issues raised in this appeal should not summarily be decided. The defendant, International 

Fidelity Insurance Company (IFIC or defendant), appeals from a Superior Court judgment in 

favor of the plaintiff, Drago Custom Interiors, LLC (Drago or plaintiff). The defendant contends 

that the Superior Court was without authority either to remand the case back to the arbitrator for 

clarification of the record or to modify the arbitration award. After considering the memoranda 

submitted by the parties and the arguments of counsel, we are satisfied that cause has not been 

shown and that the appeal may be decided at this time. We affirm the judgment.

In April 2003, Carlisle Building Systems, Inc. (Carlisle), the general contractor for a 

construction project (project) at the Charlestown Fire Station at Routes 2 and 112, contracted 

with Drago to perform carpentry work for the project. In accordance with the contract between 

Carlisle and the Charlestown Fire District (fire district), a Labor and Material Payment Bond

(bond) was issued for the project; Carlisle was principal on the bond, and IFIC was the surety. 

Drago alleges that the bond guaranteed payment, from either Carlisle or IFIC, to any entity 
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supplying labor or material to the project and that Drago performed work on the project for 

which it had not been paid. Accordingly, on July 20, 2005, Drago filed suit against Carlisle and 

IFIC, seeking to recover payment for the work that it had performed.

In its answer, IFIC admitted that it was the surety on the bond. However, because the 

project fell under the purview of the Public Works Arbitration Act (PWAA or act), G.L. 1956 

chapter 16 of title 37, and the contract between Carlisle and the fire district contained an 

arbitration provision, IFIC and Carlisle moved to stay the Superior Court proceedings pending 

arbitration of Drago‟s claims. See §§ 37-16-4 and 37-16-5. Notwithstanding Drago‟s objection, 

the case began a long sojourn through arbitration.

After two days of hearings, the arbitrator issued his first award on March 26, 2008, 

finding Carlisle liable to Drago for $43,543.02, plus interest. However, because there was no 

evidence introduced that IFIC issued any bonds relative to the project or was responsible for any 

damages claimed by Drago, the arbitrator determined that IFIC was not liable to Drago. Because 

Drago was unaware that IFIC was contesting its responsibility for Carlisle‟s liability to Drago for 

payment—IFIC having admitted in its answer that it was the surety—it requested that the 

arbitrator reopen the proceedings so that the bond could be received into evidence. 

Instead, the arbitrator issued two amended awards. The arbitrator first amended his

findings of fact by repeating his earlier finding that no evidence had been presented that IFIC had 

issued any bonds relative to the project, but adding that “[t]he issue of IFIC‟s liability was not 

asserted or denied during the arbitration hearings.” Nonetheless, the arbitrator concluded that 

IFIC was not liable to Drago but that the arbitration award was “without prejudice to any rights 

of Drago as asserted in any pending litigation involving Drago and IFIC.” In his second 

amended award, the arbitrator deleted the finding that the issue of IFIC‟s liability was neither
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asserted nor denied during the arbitration hearings, but once again declared that his finding that 

IFIC was not liable to Drago was “without prejudice to any rights of Drago as asserted in any 

pending litigation involving Drago and IFIC.”

Drago then returned to Superior Court and moved to confirm the second amended award 

concerning Carlisle‟s liability and to modify it as to IFIC so that IFIC would be liable if Carlisle

did not pay.

1

 IFIC objected to the proposed modification, contending that none of the statutory

grounds for modification of an arbitration award applied in this case. IFIC also moved to 

confirm the original award, asserting that the arbitrator had no authority to issue amended 

awards. 

A hearing eventually was held on the parties‟ competing motions on February 11, 2011. 

The trial justice determined that, because IFIC failed to file a pre-arbitration statement and, in its 

answer to Drago‟s complaint, had admitted that it was on the bond, the issue of whether IFIC 

ever had disputed liability under the bond was “unclear.” The trial justice found that the 

arbitration hearings focused entirely on Carlisle‟s liability to Drago and that there was nothing to 

suggest that IFIC disputed its liability under the bond during the arbitration proceedings. The 

trial justice also pointed to two features of the arbitration awards that caused further uncertainty: 

(1) in his first amended award, the arbitrator had stated that the issue of IFIC‟s liability was 

neither asserted nor denied during the proceedings, only to delete that finding in his second 

amended award; and (2) despite changing that finding in the second amended award, the 

arbitrator‟s order declared that the award was “without prejudice to any rights of Drago as 

asserted in any pending litigation involving Drago and IFIC.” Confronted with the uncertainty 

of whether IFIC ever had disputed that it was on the bond, the trial justice, relying on our 

 

1 Apparently, Carlisle was unable to satisfy the award.
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decision in Pier House Inn, Inc. v. 421 Corp., 812 A.2d 799 (R.I. 2002), concluded that the 

Superior Court possessed the inherent authority to remand the case back to the arbitrator for 

clarification. In accordance with this inherent authority, the trial justice remanded the matter 

back to the arbitrator yet again for determination of whether the issue of IFIC‟s liability under 

the bond was raised in the arbitration and for clarification of the phrase “without prejudice to any 

rights of Drago as asserted in any pending litigation involving Drago and IFIC.”

Upon remand, the arbitrator issued a new award in which he found that, although there 

was no evidence presented at the initial arbitration hearings that IFIC issued a bond for the 

project, the issue of IFIC‟s liability was not raised in the initial proceedings and IFIC did not 

dispute either the existence of the bond or that it covered Drago‟s claims.

2

 The arbitrator 

concluded that both Carlisle and IFIC were liable to Drago for $43,543.02, plus interest, and the

post-remand award reflected this conclusion.

Drago then moved to confirm the arbitrator‟s latest award. IFIC objected and moved to 

vacate that award and to confirm the original award. The trial justice expressed her concerns that 

IFIC contributed to this case‟s tortured travel, having admitted that it was the surety in its 

answer―thereby inducing Drago to refrain from introducing the bond at the arbitration 

proceedings―and then attempting to capitalize on this omission after the proceedings were 

closed. The trial justice accordingly granted Drago‟s motion to confirm the post-remand 

arbitration award. Additionally, the trial justice noted that, even if she was without authority to 

order the remand, she would have granted Drago‟s motion to modify the second amended award 

because IFIC never had disputed the existence of the bond or its liability thereunder. Before this 

Court, IFIC contends that the trial justice was without authority to remand this case back to 

 

2

The arbitrator did find, however, that IFIC denied that it was liable to Drago based on Carlisle‟s 

defenses to Drago‟s claims.
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arbitration or to modify the second amended award as requested by Drago. Nine years after 

commencement of the project, this dispute is before us.

It is well settled that, in the typical case, the judiciary‟s role in the arbitration process is 

limited. Metropolitan Property & Casualty Insurance Co. v. Barry, 892 A.2d 915, 918 (R.I. 

2006) (citing Aponik v. Lauricella, 844 A.2d 698, 703 (R.I. 2004)); State v. Rhode Island 

Employment Security Alliance, Local 401, SEIU, AFL-CIO, 840 A.2d 1093, 1096 (R.I. 2003). 

When, as here, an arbitration provision is contained in a “contract for the construction, alteration, 

repair, painting, or demolition of any public building * * * one party to which is the state, a city, 

a town, or an authority, a board, a public corporation, or any similar body created by statute or 

ordinance * * *,” § 37-16-2(b)(1), the PWAA defines the contours of the judiciary‟s role. 

Specifically, the act directs that upon timely motion for an order confirming an arbitration award, 

“the court must grant the order unless the award is vacated, modified, or corrected, as prescribed 

in §§ 37-16-18 and 37-16-19 or unless the award is unenforceable under the provisions of § 37-

16-13.” Section 37-16-17. 

Before this Court, IFIC contends that the PWAA delimits the universe of options 

available to a trial justice; the arbitration award can be affirmed, vacated, modified or corrected, 

but nothing more. The trial justice disagreed, reading our opinion in Pier House Inn as vesting

her with the inherent authority to remand an arbitration case for clarification of the record. We 

disagree with the trial justice‟s reading of Pier House Inn.

In Pier House Inn, an arbitrator awarded approximately $4,000 in “compensatory 

damages” and $150,000 in what the arbitrator termed “punitive damages” on a commercial 

lessee‟s counterclaim for breach of contract. Pier House Inn, 812 A.2d at 801. The Superior 

Court vacated the punitive damages award and remanded the matter back to arbitration “to 
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determine whether that [portion of the award awarding punitive damages] was in whole or in part 

intended to be compensatory.” Id. at 804. On appeal, this Court affirmed the trial justice‟s 

decision to vacate the punitive damages award, id. at 803, and then tackled the thorny issue of 

the Superior Court‟s authority to remand. See id. at 804-07.

Despite holding that the trial justice erred in relying on G.L. 1956 § 10-3-13 as authority 

to remand the case back to the arbitrator, we upheld the remand on other grounds. Pier House 

Inn, 812 A.2d at 805. This Court explained that the “blatant discrepancy” in the award—

awarding punitive damages to the lessee while, at the same time, finding that the lessee breached 

the lease, compounded by an award of attorneys‟ fees to the lessor—“clearly exemplifies the 

type of award that § 10-3-14 authorizes a judge to modify or correct, in the interest of 

effectuating the intent of the award and promoting justice between the parties.” Pier House Inn, 

812 A.2d at 805. We concluded that the award of punitive damages was an “evident material 

mistake” under § 10-3-14(a)(1). Pier House Inn, 812 A.2d at 805. This Court then determined 

that the remand was proper:

“Although § 10-3-14 requires the reviewing court to modify the 

award as necessary and does not expressly limit the hearing 

justice‟s scope of review, under the circumstances of this case, the 

remand to the arbitrator was appropriate, given the insufficient 

evidence before the * * * hearing justice regarding the rationale for 

the punitive damages award.” Pier House Inn, 812 A.2d at 806.

Elaborating on the paucity of evidence, we noted that there was neither a transcript of the 

arbitration proceeding, nor an explication of the arbitrator‟s reasoning. Id. This Court thus

declared that “[r]ather than rely on defendant‟s representations to modify the punitive damages 

award, the court properly sought a clarification from the arbitrator.” Id.

The precise holding of Pier House Inn, 812 A.2d at 805-06, although perhaps lacking 

pristine clarity, was that § 10-3-14 vested the trial justice with the authority to modify or correct 
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the award, but that the record before the trial justice was insufficient for him to exercise that 

authority. The uncertainty of whether the arbitrator intended the “punitive damages” award to be 

compensatory or punitive necessitated a remand to the arbitrator. Pier House Inn, 812 A.2d at 

805-06. Our holding in Pier House Inn does not stand for the broader proposition that the 

Superior Court possesses the inherent authority, independent of an appropriate statutory basis, to 

remand an arbitration case back to the arbitrator to clarify the record.

In Pier House Inn, we cited our decision in Lemoine v. Department of Mental Health, 

Retardation and Hospitals, 113 R.I. 285, 290, 320 A.2d 611, 614 (1974), wherein we held that a 

remand for clarification for the purpose of taking further evidence under the Administrative 

Procedures Act, G.L. 1956 chapter 35 of title 42 (APA), “was part of the reviewing court‟s 

„inherent power * * * to correct deficiencies in the record and thus afford the litigants a 

meaningful review.‟” Pier House Inn, 812 A.2d at 806 (quoting Lemoine, 113 R.I. at 290, 320 

A.2d at 614). However, Lemoine, in contrast to Pier House Inn and this case, involved a remand 

of an agency proceeding in accordance with § 42-35-15(g) of the APA and not an arbitration 

case. See Lemoine, 113 R.I. at 286-87, 290, 320 A.2d at 612-14 (affirming trial justice‟s remand 

of a personnel appeal board decision). Additionally, in Pier House Inn, we were careful to 

ground the trial justice‟s authority to remand within the provisions of § 10-3-14, noting that the 

decision “comports with the statutory mandate that the reviewing justice effectuate the intent of 

the award and „promote justice between the parties.‟ * * * But because of the minimal record, a 

remand was necessary to ascertain the arbitrator‟s intent.” Pier House Inn, 812 A.2d at 806

(quoting § 10-3-14(b)).

In the case before us, although we disagree with the trial justice‟s reading of Pier House 

Inn, we nonetheless affirm the decision on other grounds. See Pier House Inn, 812 A.2d at 805. 
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After carefully reviewing the record, we are convinced that the trial justice had clear grounds to 

vacate the second amended award. Once an award is vacated, the PWAA vests the Superior 

Court with discretion to order a rehearing before the original arbitrator(s) or before a new 

arbitrator or arbitrators. Section 37-16-19.3 We explain briefly.

Section 37-16-18 sets forth three instances when the court must, upon motion by any 

party, vacate the award: 

“(1) When the award was procured by fraud. 

“(2) Where the arbitrator or arbitrators exceeded their powers, or 

so imperfectly executed them, that a mutual, final, and definite 

award upon the subject matter submitted was not made. 

“(3) If there was no valid contract, and the objection has been 

raised under the conditions set forth in § 37-16-13.”

 

In this case, a decision vacating the second amended award clearly was warranted. The 

trial justice properly determined that the arbitrator‟s findings with respect to the existence of the 

bond were indefinite and inconsistent. In his first award, the arbitrator found “that there was no 

evidence presented that IFIC issued any bonds relative to the [p]roject.” Soon after, the 

arbitrator issued his first amended award, which added that “[t]he issue of IFIC‟s liability was 

not asserted or denied during the arbitration hearings.” Just days later, the arbitrator deleted this

additional finding in his second amended award. 

 

3 General Laws 1956 § 37-16-19 provides:

“Where an award is vacated, the court in its discretion may direct a 

rehearing either before the same arbitrator or arbitrators or before a new arbitrator 

or arbitrators to be chosen in the manner provided in the contract for the selection 

of the original arbitrator or arbitrators or as provided for in § 37-16-7 and any 

provision limiting the time in which the arbitrator or arbitrators may make a 

decision shall be deemed applicable to the new arbitration and shall commence 

from the date of the court‟s order.”
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Compounding this inconsistency was the arbitrator‟s treatment of IFIC‟s liability to 

Drago. In the original award, the arbitrator found, without qualification, that IFIC was “not 

liable to Drago for any claims or damages relative to the [p]roject.” This finding stands in stark 

contrast to the first and second amended awards, which provided that IFIC was not liable to 

Drago, but added that “[t]his Order is without prejudice to any rights of Drago as asserted in any 

pending litigation involving Drago and IFIC.” This language defeats the requirement that a 

“mutual, final, and definite award upon the subject matter” be made. Section 37-16-18(2).

The grave uncertainties infecting the second amended award, especially with respect to 

the “without prejudice” language, compel our conclusion that the arbitrator so imperfectly 

executed his powers that a final and definite award with respect to IFIC‟s liability was not made. 

See § 37-16-18(2) (providing that the court must vacate an arbitration award “[w]here the 

arbitrator or arbitrators exceeded their powers, or so imperfectly executed them, that a mutual, 

final, and definite award upon the subject matter submitted was not made.” (Emphasis added.)). 

Additionally, § 37-16-27(a)4commands that, in an arbitration involving a surety, “[t]he 

 

4

Section 37-16-27 provides as follows:

“(a) If a contractor principal on a bond furnished to guarantee performance 

or payment on a construction contract and the claimant are parties to a written 

contract with a provision to submit to arbitration any controversy thereafter 

arising under the contract, or subject to arbitration as provided in § 37-16-2(b), 

the arbitration provisions shall apply to the surety for all disputes involving 

questions of the claimant‟s right of recovery against the surety. Either the 

claimant, the contractor principal, or surety may demand arbitration in accordance 

with the written contract or as provided in § 37-16-2(b) if applicable in one 

arbitration proceeding, provided that the provisions of § 37-16-3 shall be 

applicable to any demand for arbitration. The arbitration award shall decide all 

controversies subject to arbitration between the claimant, on the one hand, and the 

contractor principal and surety on the other hand, including all questions 

involving liability of the contractor principal and surety on the bond, but a 

claimant must file suit for recovery against the surety within the time limits set 
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arbitration award shall decide all controversies subject to arbitration between the claimant, on the 

one hand, and the contractor principal and surety on the other hand, including all questions

involving liability of the contractor principal and surety on the bond * * *.” (Emphases added.) 

The arbitrator‟s decision in this case falls far short of the statutory mandate; an award entered 

“without prejudice to any rights of [the claimant] as asserted in any pending litigation involving 

[the claimant] and [the surety]” cannot, under any interpretation of the language, be considered 

“final” or “definite.”

5

 

For these reasons, we are of the opinion that the second amended award should have been 

vacated under § 37-16-18(2) and that the trial justice was authorized, under § 37-16-19, to

remand the case to the same arbitrator for a rehearing. Because the remand in this case 

accomplished the same result that could have been accomplished under §§ 37-16-18 and 

 

forth in §§ 37-12-2 and 37-12-5. The arbitration shall be in accordance with this 

chapter and the court shall enter judgment thereon as provided therein.

“(b) The arbitrator or arbitrators, if more than one, shall make findings of 

fact as to the compliance with the requirements for recovery against the surety, 

and those findings of fact shall be a part of the award binding on all parties to the 

arbitration.”

5 We pause briefly to stress the unenviable position in which the Superior Court justice found 

herself. IFIC strenuously argued that Drago‟s failure to introduce the bond into evidence at the 

arbitration proceedings compelled the arbitrator‟s conclusion that IFIC was not liable to Drago—

a position IFIC maintains on appeal. The trial justice found this argument to be unpersuasive 

because it overlooked the undeniable fact that IFIC had admitted the existence of the bond in its 

answer to Drago‟s complaint and insisted that the matter proceed to arbitration, thereby 

removing the issue from contention. Faced with a mountain of uncertainty, the options available 

to the trial justice were few, and she concluded that a remand was the proper means of 

addressing this problem. Although we reject the trial justice‟s decision with respect to a court‟s 

inherent authority to remand an arbitration award, we similarly are hard pressed to fault Drago 

for failing to introduce the bond—and to permit IFIC to capitalize on this omission—when IFIC 

conceded that it was on the bond.
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37-16-19, we affirm the judgment below, but do so on grounds other than those relied upon by 

the trial justice.

6

Conclusion

For the reasons articulated above, we affirm the judgment below. The papers in this case

may be remanded to the Superior Court.

 

6 Given our disposition of this appeal, we need not address the trial justice‟s alternative ground 

for her decision: that the award could be modified under § 37-16-20. We accordingly express no 

opinion on whether modification of the second amended award would have been proper. 
RHODE ISLAND SUPREME COURT CLERK’S OFFICE

Clerk’s Office Order/Opinion Cover Sheet 

TITLE OF CASE: Drago Custom Interiors, LLC v. Carlisle Building Systems, Inc., et 

al. 

 

CASE NO: No. 2011-280-Appeal. 

 (PC 05-3715) 

 

COURT: Supreme Court 

DATE OPINION FILED: December 19, 2012 

JUSTICES: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia JJ. 

WRITTEN BY: Associate Justice Maureen McKenna Goldberg 

SOURCE OF APPEAL: Providence County Superior Court 

JUDGE FROM LOWER COURT: 

 Associate Justice Judith C. Savage 

ATTORNEYS ON APPEAL: 

 For Plaintiff: Joseph J. Reale, Jr., Esq. 

For Defendant: Peter L. Kennedy, Esq.