Opinion ID: 1996492
Heading Depth: 3
Heading Rank: 1

Heading: Finality of a Judicially Unconfirmed Arbitration Award

Text: [¶ 12] Collateral estoppel applies to factual issues determined by a prior final judgment. Portland Water Dist. v. Town of Standish, 2008 ME 23, ¶ 9, 940 A.2d 1097, 1100 (quotation marks omitted). Allstate contends that applying collateral estoppel in this case is not proper because the arbitration award was not reduced to a final judgment that was adopted or confirmed by the court. Whether a judicially unconfirmed arbitration award can be preclusive for the purposes of offensive collateral estoppel is an issue of first impression in Maine. [¶ 13] In an analogous context, we have relied on the Restatement (Second) of Judgments to determine when a nonjudicial or quasi-judicial determination should be treated as a final judgment. In Town of North Berwick v. Jones, we held that a final adjudication in an administrative proceeding before a quasi-judicial municipal body had the same preclusive effect as a final judgment in a court proceeding because the administrative proceeding entailed the essential elements of adjudication. 534 A.2d 667, 670-71 (Me.1987) (citing 2 Restatement (Second) of Judgments § 83 (1982)); see also Maines v. Sec'y of State, 493 A.2d 326, 328-29 (Me.1985) (following section 83 of the Restatement to hold that determinations by state administrative tribunals could be final for purposes of res judicata). There, we based our analysis on the Restatement's recitation of the essential elements of adjudicatory procedure. See Town of N. Berwick, 534 A.2d at 670. These elements include: (1) adequate notice, (2) the right to present evidence and legal argument and to rebut opposing evidence and argument, (3) a formulation of issues of law or fact to apply rules to specified parties concerning a specified transaction, (4) the rendition of a final decision, and (5) any other procedural elements as may be necessary to constitute the proceeding a sufficient means of conclusively determining the matter in question. Id. (quoting in part 2 Restatement (Second) of Judgments § 83(2)) (quotation marks omitted). [¶ 14] Referencing these same elements, section 84 of the Restatement states that a valid and final award by arbitration has the same effects under the rules of res judicata . . . as a judgment of a court unless the procedure leading to the award lacked the elements of adjudicatory procedure prescribed in § 83(2). 2 Restatement (Second) of Judgments § 84(1), (3)(b) (1982). To have preclusive effect, an arbitration decision must become final, 2 Restatement (Second) of Judgments § 84, cmt.e (citing 1 Restatement (Second) of Judgments § 13 (1982)), rather than remain tentative, provisional, or contingent, 1 Restatement (Second) of Judgments § 13, cmt.b. Given the Maine Legislature's `strong policy favoring arbitration,' e.g., Barrett v. McDonald Investments, Inc., 2005 ME 43, ¶ 16, 870 A.2d 146, 149-50, and because the purpose of collateral estoppel is to prevent harassing and repetitious litigation, to avoid inconsistent holdings which lead to further litigation, and to give sanctity and finality to judgments, Van Houten v. Harco Construction, Inc., 655 A.2d 331, 333 (Me.1995) (quotation marks omitted), we adopt sections 84(1) and 84(3)(b) of the Second Restatement. [3] [¶ 15] As between Beal and Prosky, the elements of adjudication were clearly present. Both parties had adequate notice of the arbitration proceeding. Procedurally, the arbitration agreement provided for both sides to present evidence (although not in strict conformity with the Rules of Evidence) and required advance notice of witnesses to be called and any documents or medical records that they intended to introduce. The arbitrator's award became final because the parties intended to submit the issue of damages for final determination, and after the arbitrator's decision, Allstate tendered payment to Beal, thus obviating any need for Beal to reduce the award to an enforceable judgment of the court. Furthermore, on the parties' stipulation of dismissal, the court dismissed Beal's complaint with prejudice. [¶ 16] On these facts, we conclude that the arbitrator's determination of damages related to Beal's tort claim against Prosky is sufficiently analogous to a final judgment for the purposes of collateral estoppel.