CO Code § 13-22-223 (2021)
2021 Colorado Code|Title 13 - Courts and Court Procedure|Article 22 - Age of Competence - Arbitration - Mediation|Part 2 - Uniform Arbitration Act|§ 13-22-223. Vacating Award

  Upon motion to the court by a party to an arbitration proceeding, the court shall vacate an award made in the arbitration proceeding if the court finds that:   The award was procured by corruption, fraud, or other undue means;    There was:   Evident partiality by an arbitrator appointed as a neutral arbitrator;    Corruption by an arbitrator; or    Misconduct by an arbitrator prejudicing the rights of a party to the arbitration proceeding;       An arbitrator refused to postpone the hearing upon showing of sufficient cause for postponement, refused to consider evidence material to the controversy, or otherwise conducted the hearing contrary to section 13-22-215, so as to prejudice substantially the rights of a party to the arbitration proceeding;    An arbitrator exceeded the arbitrator's powers;    There was no agreement to arbitrate, unless the person participated in the arbitration proceeding without raising the objection under section 13-22-215 (3) not later than the beginning of the arbitration hearing; or    The arbitration was conducted without proper notice of the initiation of an arbitration as required in section 13-22-209 so as to substantially prejudice the rights of a party to the arbitration proceeding. (1.5) Notwithstanding the provisions of subsection (1) of this section, the fact that the relief was such that it could not or would not be granted by a court of law or equity is not grounds for vacating or refusing to confirm the award.       A motion made under this section shall be filed within ninety-one days after the movant receives notice of the award pursuant to section 13-22-219 or within ninety-one days after the movant receives notice of a modified or corrected award pursuant to section 13-22-220, unless the movant alleges that the award was procured by corruption, fraud, or other 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.    If the court vacates an award on a ground other than that set forth in paragraph (e) of subsection (1) of this section, it may order a rehearing. If the award is vacated on a ground stated in paragraph   or (b) of subsection (1) of this section, the rehearing shall be held before a new arbitrator. If the award is vacated on a ground stated in paragraph (c), (d), or (f) of subsection (1) of this section, the rehearing may be held before the arbitrator who made the award or the arbitrator's successor. The arbitrator must render the decision in the rehearing within the same time as that provided in section 13-22-219 (2) for an award.       If the court denies a motion to vacate an award, it shall confirm the award unless a motion to modify or correct the award is pending.     History. Source: L. 2004: Entire part R&RE, p. 1728, § 1, effective August 4. L. 2005: (1.5) added, p. 764, § 21, effective June 1. L. 2012: (2) amended,(SB 12-175), ch. 208, p. 824, § 7, effective July 1.    Editor's note:   This section is similar to former § 13-22-214 as it existed prior to 2004.   ANNOTATION   Annotator's note. Since § 13-22-223 is similar to § 13-22-214 as it existed prior to the 2004 repeal and reenactment of this part 2, relevant cases construing that provision have been included in the annotations to this section.   Generally, arbitrators are not bound by either substantive or procedural rules of law, except as required under the terms of the arbitration agreement. Cabus v. Dairyland Ins. Co., 656 P.2d 54 (Colo. App. 1982); Byerly v. Kirkpatrick Pettis Smith Polian, Inc., 996 P.2d 771 (Colo. App. 2000).   The arbitrators do not exceed their authority by rendering a decision that is contrary to the rules of law that would have been applied by a court. Byerly v. Kirkpatrick Pettis Smith Polian, Inc., 996 P.2d 771 (Colo. App. 2000).   An arbitrator's manifest disregard of the law is not a ground for vacating an arbitration award as exceeding the arbitrator's power under former § 13-22-214 (1)(a)(III) or as a nonstatutory common law ground. An arbitrator does not necessarily exceed his power when he does not properly apply the law. Coors Brewing Co. v. Cabo, 114 P.3d 60 (Colo. App. 2004) (decided under former law).   Failure to take oath does not invalidate proceedings. Failure of the arbitrators to take an oath does not invalidate proceedings which comply with the requirement of both the uniform act and the arbitration agreement. In re Salter v. Farner, 653 P.2d 413 (Colo. App. 1982).   Rule's inconsistency with section overridden. To the extent C.R.C.P. 109 is inconsistent with this section, it would appear to be overridden. Copper Mt., Inc. v. Project Oneco, Inc., 3 B.R. 284 (Bankr. D. Colo. 1980 ).   If an arbitrator exceeds his authority by going beyond the contract terms and, in effect, enacting new binding terms and conditions of employment, the dissatisfied party may apply to the court to vacate the award. City & County of Denver v. Denver Firefighters Local 858, 663 P.2d 1032 (Colo. 1983).   Applicable statute of limitations for breach of contract/duty of fair representation claim under the federal Railway Labor Act was the six-month period provided by the federal National Labor Relations Act and not the 90-day period in subsection (2). Barnett v. United Airlines, Inc., 738 F.2d 358 (10th Cir.), cert. denied, 469 U.S. 1087, 105 S. Ct. 594, 83 L. Ed. 2d 703 (1984).   Uniform Arbitration Act authorizes party to arbitration agreement to apply to district court for order vacating arbitration award after entry of award. Thomas v. Farmers Ins. Exch., 857 P.2d 532 (Colo. App. 1993).   Failure of a party to title a motion to vacate as a motion. While this section refers to a “motion” to vacate, rather than a “petition”, the substance of the pleading, and not its title, governs. Owners Ins. Co. v. Dakota Station II, 2017 COA 103 , 444 P.3d 784, aff'd in part and rev'd in part on other grounds, 2019 CO 65, 443 P.3d 47.   Failure of a party to move to vacate an arbitration award within the prescribed time period precludes such party from using the grounds as an affirmative defense in a subsequent action by the other party to enforce the award. Elec. Workers Local 969 v. Babcock & Wilcox, 826 F.2d 962 (10th Cir. 1987); UFCW, Local No. 7 v. King Soopers, Inc., 743 F.3d 1310 (10th Cir. 2014).   Failure to bring a motion to vacate, modify, or correct the arbitration award within the prescribed time limit prevents the defendant from raising the contractual policy limits as a defense in a confirmation proceeding held after expiration of the statutory time limit. Kutch v. State Farm Mut. Auto. Ins. Co., 960 P.2d 93 (Colo. 1998).   However, an application to arbitrator pursuant to § 13-22-211 to modify award tolls the 30-day time limit under this section for seeking judicial review. Swan v. Am. Family Mut. Ins. Co., 8 P.3d 546 (Colo. App. 2000).   When a party moves to vacate an award under subsection (1)(f), the court must independently determine the adequacy of the notice and any resulting prejudice. Braata, Inc. v. Oneida Cold Storage Co., 251 P.3d 584 (Colo. App. 2010).   Vacating, modifying, or correcting awards by court permissible only on the basis of the statutory grounds set forth in this section or § 13-22-215 . Foust v. Aetna Cas. & Ins. Co., 786 P.2d 450 (Colo. App. 1989); Sportsman's Quikstop I, Ltd. v. Didonato, 32 P.3d 633 (Colo. App. 2001).   An arbitrator's award is not a “final judgment” reviewable by an appellate court. Upon confirmation of the award by a district court in accordance with § 13-22-213 , and absent a timely motion to vacate, modify, or correct the award, there is no appealable issue. S. Wash. Assoc. v. Flanagan, 859 P.2d 217 (Colo. 1992).   General assembly's authority to determine the jurisdiction of the court of appeals is exclusive. S. Wash. Assoc. v. Flanagan, 859 P.2d 217 (Colo. 1992).   Parties to an arbitration agreement cannot define and prescribe the powers of a court of law. Where a contract term purported to allow an appellate court to conduct a substantive review of the arbitration panel's award, contrary to the controlling statutes, clause was void and unenforceable. S. Wash. Assoc. v. Flanagan, 859 P.2d 217 (Colo. 1992).   Trial court erred in finding arbitrators had the authority to decide whether insureds were entitled to stack uninsured motorist benefits. Arbitration clause in policy was a limited clause and provided only for the arbitration of two stated issues. State Farm Mut. Auto. Ins. Co. v. Stein, 886 P.2d 323 (Colo. App. 1994).   An unfavorable interpretation of a contract is not a basis for setting aside an arbitration award. Container Tech. v. J. Gadsden Pty., 781 P.2d 119 (Colo. App. 1989).   The five enumerated grounds for relief set forth in subsection (1)(a) are exclusive. Byerly v. Kirkpatrick Pettis Smith Polian, Inc., 996 P.2d 771 (Colo. App. 2000).   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 will doom the effort. Price v. Mt. Sleep Diagnostics, Inc., 2020 COA 155 , 479 P.3d 68.   In order to establish that the award was “procured by” undue means, there must be a causal connection between the improper conduct and the arbitration award. Nasca v. State Farm Mut. Auto. Ins. Co., 12 P.3d 346 (Colo. App. 2000); BFN-Greeley, LLC, 141 P.3d 937 (Colo. App. 2006).   Affidavits of the arbitration panel members may be properly considered on the causation issue as long as the purpose is not to establish the thought process of the panel members. Nasca v. State Farm Mut. Auto. Ins. Co., 12 P.3d 346 (Colo. App. 2000).   The ordinary meaning of “undue means” suggests some type of impropriety in the arbitration process. The terms are broad enough to include a party-appointed arbitrator's non-disclosure of a substantial business relationship. Thus, if an arbitrator in a law firm with attorneys who have a substantial business relationship with an insurance carrier in the arbitration proceeding, including service as expert witnesses, has a duty to disclose the relationship to the parties in the proceeding. Nasca v. State Farm Mut. Auto. Ins. Co., 12 P.3d 346 (Colo. App. 2000).   Party must demonstrate that he or she was substantially prejudiced by an arbitrator's refusal to consider evidence material to the controversy before a court can vacate an award. Carson v. PaineWebber, Inc., 62 P.3d 996 (Colo. App. 2002).   One of the statutory grounds for vacation of an award is that the arbitrator exceeded the powers granted in the arbitration agreement. It is not sufficient to argue merely that the arbitrator committed an error of law on the merits, but rather, plaintiff must establish that the arbitrator refused to apply or ignored the legal standard agreed upon by the parties for resolution of the dispute. Giraldi by and through Giraldi v. Morrell, 892 P.2d 422 (Colo. App. 1994).   When provision states that arbitrator shall award “fees and expenses (including reasonable attorneys' fees)” to the prevailing party, whether attorney fees should be awarded to the prevailing party was not an arbitrable issue, and the arbitrator exceeded his powers in refusing to award any attorney fees. Magenis v. Bruner, 187 P.3d 1222 (Colo. App. 2008).   Evident partiality is a fact-sensitive standard. It depends on the nature of the conflict between the arbitrator and the party, the issue being arbitrated, and the structure of the arbitration agreement. McNaughton & Rodgers v. Besser, 932 P.2d 819 (Colo. App. 1996).   Arbitrators have a duty to disclose any potential conflict that could constitute evident partiality, which is a relationship that would persuade a reasonable person that the arbitrator is likely to be partial to one side in the dispute. McNaughton & Rodgers v. Besser, 932 P.2d 819 (Colo. App. 1996).   Some facts indicating bias include pecuniary interest, familial relationship, and the existence of an adversarial or sympathetic relationship. McNaughton & Rodgers v. Besser, 932 P.2d 819 (Colo. App. 1996).   Evident partiality was not established in medical malpractice case by mere fact that some of arbitrator's relatives were health care professionals. Giraldi by and through Giraldi v. Morrell, 892 P.2d 422 (Colo. App. 1994).   If a party asserts that the entire contract is illegal, the court must determine this threshold issue first. R.P.T. v. Innovative Commc'ns, 917 P.2d 340 (Colo. App. 1996).   When a party does not seek judicial resolution of the question of whether a contract exists before participating in an arbitration regarding the existence of the contract and the contract's arbitration clause, the party waives any arguments about the existence of the underlying contract on appeal. Holding otherwise would give the party a second bite at the apple, a result that is contrary to the arbitration act's policy of promoting arbitration. Harper Hofer & Assocs. v. Nw. Direct, 2014 COA 153 , 412 P.3d 659.   Colorado law affords an arbitrator great flexibility in fashioning appropriate remedies, including specific performance and conditional assessment of damages. R.P.T. v. Innovative Commc'ns, 917 P.2d 340 (Colo. App. 1996).   To determine if the arbitrator exceeded his or her authority within the meaning of this section, the court must determine the scope of the arbitration clause contained in the contract. Farmers Ins. Exch. v. Taylor, 45 P.3d 759 (Colo. App. 2001).   Award does not exceed arbitrator's power because its explanation was lacking or mistaken, as long as there was a reason that could have justified the award. Treadwell v. Vill. Homes of Colo., Inc., 222 P.3d 398 (Colo. App. 2009).   When an arbitration award is secured by fraud, the court must vacate the whole award unless there is a discrete and severable part of the award that was procured by fraud. Superior Constr. Co. v. Bentley, 104 P.3d 331 (Colo. App. 2004) (decided under former § 13-22-214 prior to 2004 repeal and reenactment).   Fraudulent testimony that was brought to the attention of the arbitrators well before they issued the award could not have “procured” the award. BFN-Greely, LLC v. Adair Group, Inc., 141 P.3d 937 (Colo. App. 2006).   Applied in Judd Constr. Co. v. Evans Joint Venture, 642 P.2d 922 (Colo. 1982); Red Carpet Armory Realty Co. v. Golden W. Realty, 644 P.2d 93 (Colo. App. 1982); S. Conejos Sch. District RE-10 v. Martinez, 709 P.2d 594 (Colo. App. 1985).