Opinion ID: 2564358
Heading Depth: 3
Heading Rank: 1

Heading: The Arbitration Proceeding

Text: Inasmuch as the parties made no progress toward resolution, Dawson demanded, on March 21, 2001, that Dispute Prevention & Resolution, Inc. (the DPR) begin the resolution procedure set forth in section 5.03 of the Plan Agreement, i.e., the mediation/arbitration process. For reasons that are unclear from the record, the alternative dispute resolution process was never completed. Two years later, on April 17, 2003, [6] UPW suggested that the parties submit the dispute to arbitration. [7] On August 25, 2003, the parties selected attorney James T. Paul as the arbitrator. Three days later, on August 28, 2003, UPW executed an Agreement to Participate in Binding Arbitration [hereinafter, the DPR Arbitration Agreement], which provides in its entirety: By agreement of the parties set forth below, [the DPR]/James Paul, Esq. have agreed to conduct a binding arbitration of the matters in controversy between the parties. James Paul, Esq. has agreed to serve in the capacity of a neutral and unbiased Arbitrator and will provide arbitration services to the parties on an impartial basis. It is understood [that,] as a neutral[,] the Arbitrator will not act as attorney or advocate for any party. The parties, DPR, and James Paul, Esq. agree to follow and abide by the DPR Arbitration Rules, Procedures & Protocols, as established by [the] DPR. Unless the parties' agreement provides otherwise, the Arbitrator must determine all issues submitted to arbitrator by the parties and may grant any and all remedies that the Arbitrator determines to be just and appropriate under the law. In the Award of Arbitrator, the Arbitrator shall issue a determination on the issue of all arbitration-related fees and costs, including: Arbitrator's compensation and expenses; [the] DPR's fees and expenses; and, if provided for in the parties' agreement or the Submission to Arbitration, attorney's fees and costs. The DPR/Arbitrator fee is $275.00/hour, plus GET, plus any out of pocket expenses. Initially the parties are responsible for the DPR/Arbitrator's fees and out of pocket expenses on an equal basis. [The] DPR shall collect deposits from the parties in advance for all fees and expenses to be incurred in this matter. All funds deposited with [the] DPR shall be held in trust. [The] DPR will issue payment to the Arbitrator at the conclusion of this matter and in accordance with this Agreement. (Emphasis added.) Dawson, however, did not execute the DPR Arbitration Agreement until January 30, 2004, after UPW agreed to advance Dawson's share of the arbitrator's anticipated fees of $6,000. [8] On February 12, 2004, the parties filed their respective arbitration briefs with the DPR. Dawson essentially claimed that UPW breached the Plan Agreement and, therefore, owed Dawson an additional $1,388,674 in plan premiums (equivalent to premiums for the remaining fifteen months of the two-year contract). UPW, on the other hand, asserted that it rightfully terminated the agreement, and, in any event, Dawson had a duty to mitigate its damages. UPW maintained that it was entitled to the return of the balance of prepaid funds being held in reserve by Dawson as of the date UPW terminated the Plan Agreement, i.e., December 31, 2000.