Opinion ID: 2564358
Heading Depth: 3
Heading Rank: 4

Heading: UPW's Motion to Confirm and Dawson's Motion to Vacate the Amended Award

Text: On September 2, 2004, UPW filed with the circuit court a motion for an order confirming the amended award [hereinafter, UPW's motion to confirm], pursuant to HRS § 658A-22, or, alternatively, HRS § 658-8. Thereafter, on September 9, 2004, Dawson moved in the circuit court to vacate, modify, correct or clarify the amended award [hereinafter, Dawson's motion to vacate], pursuant to HRS §§ 658A-23 (Supp.2005), [14] -20(d)(1) through (3), and -24(a)(1), or, alternatively, HRS §§ 658-9 (1993), quoted infra, and -10 (1993). Specifically, Dawson argued, inter alia, that: (1) under HRS chapter 658, the circuit court had no authority to remand the matter to the arbitrator and that the arbitrator exceeded his authority by reopening the hearing; (2) it was error to impose a duty to mitigate; and (3) the arbitrator committed a miscalculation in revising the original award. That same day, September 9, 2004, Dawson filed a separate motion in the arbitration proceedings, requesting the arbitrator to modify, correct, or clarify the amended award [hereinafter, Dawson's motion to modify]. The parties subsequently entered into discussions regarding a stipulation to the arbitrator's jurisdiction to review Dawson's motion to modify. In a letter to UPW's counsel, dated October 15, 2004, Dawson's counsel wrote: I am enclosing a signed copy of the [s]tipulation in the format approved by you and sent over yesterday for my signature. As confirmed on a couple of occasions by the [a]rbitrator, all proceedings prior to this date were conducted by the [a]rbitrator pursuant to HRS [c]hapter 658. That's why he is requiring a stipulation by the parties to allow the current motion[, i.e., Dawson's motion to modify,] to be reviewed by him pursuant to HRS [c]hapter 658A. Although you have not agreed to include express mutual non-waiver language in the [s]tipulation, it is still our client['s] intent and position that the agreement by way of stipulation only be applied prospectively. Our client[ is] not waiving or releasing any claims, defenses or positions with respect to prior proceedings and decisions. (Emphasis added.) On October 18, 2004, the parties stipulated that the arbitrator shall have jurisdiction, pursuant to DPRAR Rule 31 and HRS §§ 658A-20(a)(1) through (3), to consider and decide Dawson's motion to modify. After briefing and a hearing, the arbitrator denied Dawson's motion to modify via his written order filed in the arbitration proceedings on November 8, 2004. On November 9, 2004, Dawson filed a memorandum in opposition to UPW's motion to confirm, wherein Dawson reiterated that [c]orrecting or modifying the amount of the award by the [a]rbitrator is not permitted. [U]nder Hawai`i law governing Chapter 658 arbitrations, the [c]ourt cannot delegate its statutory authority to correct or modify a monetary award to an [a]rbitrator, nor does the [a]rbitrator have the jurisdiction to reopen the arbitration and hold a hearing on a motion filed under HRS § 658-10. Dawson further argued that a finding that the original [award] was patently ambiguous . . . is a condition precedent to the [circuit c]ourt's ability to remand to an arbitrator for clarification. Gozum [v. Am. Int'l Adjustment Co., 72 Haw. 41, 44-46, 805 P.2d 445, 446-47 (1991)]. Therefore, the June 2, 2004 Order reversing and modifying the original [award] from a judgment in favor of the winner, [Dawson], to a judgment in favor of the loser, UPW, was clearly a situation where the remand from the [c]ourt was invalid and the [a]rbitrator also exceeded his power and lawful jurisdiction. Moreover, there was no finding of ambiguity in the original award as a basis for remand. See Jeffers, [ supra ]. Lastly, Dawson asserted that the arbitrator erred in (1) treating mitigation of damages as an affirmative claim, as opposed to an affirmative defense and (2) disregarding the law of contract damages, which prevents a breaching party from recovering damages against a non-breaching party. On the same day, November 9, 2004, UPW filed its memorandum in opposition to Dawson's motion to vacate. UPW argued that no ground to vacate the amended award existed inasmuch as Dawson's motion does not allege any fraud, evident partiality, corruption, misconduct, or misbehavior by the [a]rbitrator, or that the [a]rbitrator exceeded his powers, did not allow evidence, or give proper notice of the proceedings, as required under HRS § 658A-23 and HRS § 658-9. Thereafter, UPW also filed its memorandum in support of its motion to confirm, contending, inter alia, that: [1.] Dawson's memorandum in support of its motion to vacate, filed November 9, 2004, for the first time alleged statutory grounds for vacating the [amended] award. Dawson specifically cites to HRS § 658-9(a)(4) arbitrators exceeding their powers and argues, for the first time on November 9, 2004, that [the arbitrator] exceeded his powers when correcting the original award[.] A motion under HRS § 658-9 to vacate must be brought within 10 days after the award is rendered. See HRS § 658-11. Dawson's motion to vacate based upon HRS § 658-9(a)(4) is, therefore, too late. [2.] . . . Dawson is judicially estopped [from] mak[ing] th[e above] argument. After having moved in the arbitration proceedings pursuant to [DPRAR] Rule 31 to change the [amended] award, and after the [a]rbitrator then considered and decided Dawson's motion, Dawson cannot be heard to complain that the [a]rbitrator lacks the power to consider and decide whether to correct his award. [3.] This [c]ourt, by virtue of [the June 2, 2004 order] already determined that [the arbitrator] did have jurisdiction and power to consider UPW's motion to correct the original award. That [o]rder is law of the case. The [c]ourt should reject Dawson's efforts to have th[e c]ourt belatedly reconsider the prior [o]rder. Notwithstanding the above, UPW also contended that the arbitrator did not exceed his authority because, under DPRAR Rule 31, the arbitrator is permitted to correct an evident mathematical miscalculation in the award and that the circuit court specifically remanded the matter to the arbitrator for determination. UPW further maintained that the arbitrator's correction of the original award did not constitute a reopening of the arbitration proceedings. A hearing was held on the parties' motions on November 17, 2004. In its written order, issued on January 6, 2005, the circuit court granted UPW's motion to confirm and denied Dawson's motion to vacate, concluding that [t]he previous [j]udge had already issued a ruling[,] remanding this matter to the [a]rbitrator to correct or modify the award. There being no cogent reasons to overturn the previous [j]udge's ruling, this [c]ourt finds that the [a]rbitrator did not exceed his scope of authority. On the same day, the circuit court entered judgment in favor of UPW and against Dawson in the amount of $189,924.00. On February 7, 2005, Dawson timely filed its notice of appeal.