Opinion ID: 2614937
Heading Depth: 3
Heading Rank: 1

Heading: The Arbitration and Award Statute, HRS Chapter 658

Text: Eyecor's principal contention throughout the circuit court level proceedings and on appeal has been that the rent ceiling provision of HRS § 519-3(a)(2) should apply to its rent dispute with Excelsior. On the other hand, Excelsior argues that Eyecor is precluded from raising its § 519-3(a)(2) claim in this appeal because any challenge to a circuit court's confirmation of an arbitration award is specifically controlled by the provisions of HRS chapter 658. Excelsior points out that HRS § 658-8 [11] requires that the trial court confirm an arbitration award, unless the award is vacated, modified, or corrected, as prescribed in sections 658-9 and 658-10. HRS § 658-8 (emphasis added). HRS § 658-9 provides only four specific grounds upon which an award can be vacated, [12] while HRS § 658-10 provides only three grounds for modifying or correcting an award. [13] Additionally, HRS § 658-11 provides that [n]otice of a motion to vacate, modify, or correct an award [under HRS §§ 658-9 and 658-10], shall be served ... upon the adverse party or the adverse party's attorney within ten days after the award is made and served.  HRS § 658-11 (1985) (emphasis added). Excelsior notes that Eyecor failed to timely serve either a § 658-9 motion to vacate or a § 658-10 motion to modify or correct the award in this case. Therefore, Excelsior submits that the trial court was required to confirm the award, and Eyecor now has no right to appeal the confirmation order because it failed to timely challenge the award in the only manner provided in the arbitration and award statute, HRS chapter 658. The ICA, relying on this court's decision in Gozum v. American Int'l Adjustment Co., Inc., 72 Haw. 41, 805 P.2d 445 (1991), ruled that [a] party who disagrees with an arbitration award on the ground that the arbitrators have exceeded their powers has two opportunities to challenge it. First, the party may file an HRS § 658-9 application to vacate the award and serve it as required by HRS § 658-11. Second, the party may wait until the other party applies pursuant to HRS § 658-8 to confirm the award and then challenge the confirmation motion pursuant to HRS §§ [sic] 658-9. Excelsior Lodge, at ___ _ ___, 847 P.2d at 672. The ICA's reliance on Gozum is misplaced. We acknowledge that one comment in dictum might suggest that a trial court could vacate, modify, or correct an award at a § 658-8 confirmation hearing. However, the specific holding in Gozum was that a party would not be barred from asking for a clarification of an arbitrator's award at a § 658-8 confirmation hearing, even though that party had failed to bring a timely motion under either HRS §§ 658-9 or 658-10. Gozum, 72 Haw. at 45-46, 805 P.2d at 447. Moreover, we pointed out that the notice provision of HRS § 658-11 applied when a party wished to change the substance or the amount of an award, but not when a party merely asked for clarification of an ambiguous award. Id. at 46, 805 P.2d at 447. In Association of Apartment Owners of Tropicana Manor v. Jeffers, 73 Haw. 201, 830 P.2d 503 (1992), this court, citing Gozum, again ruled that a request for clarification of an arbitration award, which did not seek to change the substance or amount of that award, could avoid the ten-day service requirement of HRS § 658-11. In Jeffers, the parties on one side of an arbitrated dispute who had not moved to vacate, modify, or correct an award sought to re-open the arbitration process for what they termed a clarification. Id. at 212, 830 P.2d at 510. However, this court concluded that the parties were actually seeking a modification or correction of the award in the guise of a clarification. Id. at 212-14, 830 P.2d at 510-11. We reiterated in Jeffers that in order to change an award under HRS chapter 658, a party must timely move either to vacate the award under HRS § 658-9 or to modify or correct it under HRS § 658-10. Id. at 213, 830 P.2d at 510. We also noted that [i]n Gozum, we distinguished an arbitrator's clarification of an ambiguous award from a court's vacation, modification, or correction of an award. Id. We specifically stated, in Jeffers, that [i]mplicit in our decision in Gozum to allow the arbitrator's clarification was the understanding that the total amount the insureds could recover would remain [the same amount] which appeared on the face of the award. Clearly, the clarification would not have changed the amount of the award. Id. at 214, 830 P.2d at 511 (emphasis added). In this case, Eyecor is seeking a substantial change in the arbitration award. According to Eyecor's position, the annual rent, which the arbitrators determined to be $169,200, would not have exceeded $82,500 had the statutory formula prescribed in HRS § 519-3(a)(2) been applied. It is obvious that Eyecor is seeking more than a mere clarification, as that term is used in Gozum and Jeffers, but rather a substantive change of the award. Thus, we conclude that because Eyecor failed to timely bring either a § 658-9 motion to vacate or a § 658-10 motion to modify or correct the award and because it is seeking more than a mere clarification, Eyecor is precluded from challenging the trial court's confirmation order.