Opinion ID: 2564358
Heading Depth: 3
Heading Rank: 3

Heading: UPW's Motion to Modify or Correct the Original Award and the Amended Arbitration Award

Text: Immediately after the entry of the original award, UPW sent a letter, dated March 22, 2004, to the arbitrator, seeking corrections of the amounts awarded based upon an alleged evident mathematical miscalculation. UPW essentially argued that the original award constituted a double payment of fees. [9] The letter apparently was sent pursuant to Rule 31 of the DPR Arbitration Rules (DPRAR), which provides that [p]arties may apply to the [a]rbitrator(s) to modify, correct or clarify an [a]ward, pursuant to the procedures specified in the [Revised Uniform Arbitration Act (RUAA) ], Section 20. Section 20, i.e., HRS § 658A-20 (Supp.2005), [10] allows a party to request the arbitrator to correct evident mathematical miscalculations in an arbitration award. [11] On March 23, 2004, the arbitrator informed both parties that, absent an agreement by both parties to re-open this matter, or unless ordered by the [circuit c]ourt, the [a]rbitrator no longer has jurisdiction in this matter. By letter dated March 30, 2004 to the arbitrator, Dawson object[ed] to any attempt by UPW to reopen the [a]rbitration hearings. Additionally, via a letter dated April 5, 2004 to the arbitrator, Dawson argued that HRS chapter 658 (the old arbitration law) applied because (1) HRS § 658A-3 (Supp.2005) of the new arbitration law provides in relevant part that this chapter governs an agreement to arbitrate made on or after July 1, 2002,  (emphases added) and (2) the Plan Agreement was made on February 24, 2000. Also, under the old arbitration law, specifically, HRS § 658-10 (1993), quoted infra, the courtnot the arbitratoris authorized to modify or correct an arbitration award. UPW, however, maintained that: [T]he old arbitration [law] does not apply to this issue because the parties expressly agreed to abide by [the DPRAR] when signing DPR's Agreement to Participate in Binding Arbitration[,] [ (executed by UPW on August 28, 2003 and by Dawson on January 30, 2004) ]. Rule 31 of [the DPRAR] allows UPW to request that [the arbitrator] modify, correct or clarify the Award pursuant to procedures specified in the new arbitration [law.] On April 8, 2004, DPR, through its president and CEO, Keith W. Hunter, informed the parties that: Pursuant to HRS [chapter] 658 and based on the parties' earlier understanding that this matter was governed under HRS [chapter] 658, the [a]rbitrator in this matter, James Paul, Esq., is functus officio. [ [12] Id. at 207, 830 P.2d at 507 (format altered) (citation omitted).] Absent an order from an appropriate [c]ourt, Mr. Paul lacks authority to act on the request for reconsideration[.] In the meantime, UPW filed a motion with the circuit court to modify or correct the original award, pursuant to HRS §§ 658A-20 or -24(a)(1), or, in the alternative, HRS § 658-10 [hereinafter, UPW's motion to modify] on March 29, 2004. Specifically, UPW requested that the circuit court remand the matter to the arbitrator for a determination as to whether a correction of the original award was warranted based upon an alleged evident mathematical miscalculation. On April 8, 2004, Dawson moved the circuit court to confirm the original award [hereinafter, Dawson's motion to confirm], pursuant to HRS § 658-8 (1993). [13] In addition, Dawson filed its memorandum in opposition to UPW's motion to modify on May 12, 2004, reiterating its position that: (1) HRS chapter 658 was applicable, thereby rendering a remand to the arbitrator inappropriate; and (2) there was no evident miscalculation of figures in the original award. Both motions were scheduled for hearing on May 19, 2004. Prior to commencing the hearing, the circuit court held a chambers conference and asked Dawson whether it was willing to agree to UPW's request to have the arbitrator decide UPW's motion to modify. Dawson objected on grounds that (1) the original award was not ambiguous on its face and (2) the arbitrator had no jurisdiction to decide a motion under HRS § 658-10 because UPW's motion must be decided by the court. The circuit court, therefore, proceeded with the hearing on UPW's motion to modify and Dawson's motion to confirm. During the hearing, UPW argued that: [T]here's no question . . . [that,] in September 2003[,] the old [arbitration law] applied to these proceedings because the proceedings arise out of a contract that contained an arbitration provision that predates the effective date of the statute, the new arbitration [law]. So no question [that,] absent an agreement to the contrary[,] the old [arbitration law] applies. . . . . But circumstances changed in January 2004. January 2004[,] Dawson . . . signed a record, a written agreement to participate in binding arbitration in which they agreed to the DPR rules[,] including Rule 31 which says the arbitrator can modify and correct an arbitration award under the new statute's delineated provisions. So I agree, yes, at one time there was no agreement, but then the parties changed their position and there was an agreement. UPW also asserted that the original award resulted in a double recovery for Dawson. Dawson argued that the old arbitration law applied and pointed to the arbitrator's refusal to consider UPW's March 22, 2004 request for correction unless ordered by the court as evincing the fact that the arbitrator also believed that the old arbitration law applied. Dawson also maintained that there was no mistake in the original award, arguing that: [W]e're not talking about an evident miscalculation. We're talking about a substantive issue that this court ought not deal with when we're talking about an arbitrator's award. The fact is they are in fact challenging those findings of fact and basically complaining that Dawson should not recover damages because the factual findings are wrong. At the conclusion of the hearing, the circuit court stated: I've reviewed the pleadings and considered the arguments of counsel as well as the authorities cited, and the initial issue is whether the court should remand this matter back to the arbitrator to consider the substantive issue of whether the arbitrator's award should be confirmed. The court is persuaded by the argument and the authorities cited by UPW that this matter be remanded to the arbitrator, so the court will remand this matter to the arbitrator for its consideration of UPW['s] application to modify, correct, or clarify the arbitration's award. On June 2, 2004, the circuit court issued its written order, which specifically stated: UPW's request for the [c]ourt to remand/resubmit UPW's request to modify, correct or clarify the [original award to Arbitrator James T. Paul, Esq. for his consideration and decision is granted. Further hearing on this matter is continued until after the [a]rbitrator has issued his decision. On August 30, 2004, the arbitrator issued an amended arbitration award (the amended award), apparently agreeing with UPW regarding the alleged duplicative damage award. As a result, the arbitrator recalculated the award and concluded that Dawson reimburse UPW the amount of $189,924.00 (as opposed to his prior decision that allowed Dawson to retain the balance in the reserve, plus receive an additional $25,074.00 from UPW).