Opinion ID: 2614937
Heading Depth: 2
Heading Rank: 3

Heading: The Order Compelling Arbitration

Text: Eyecor has also appealed the trial court's order compelling arbitration in this case pursuant to HRS § 658-3. [18] As previously noted, the ICA held that the order to compel arbitration was not final and thus was not an appealable order. Excelsior Lodge, at ___, 847 P.2d at 672. We disagree. In Association of Owners of Kukui Plaza v. Swinerton & Walberg, 68 Haw. 98, 705 P.2d 28 (1985), this court held that orders compelling arbitration under HRS § 658-3 are appealable orders within the contemplation of HRS § 641-1(a) (appeals in civil actions). The Swinerton court determined that there exists a small class of orders, including those under HRS § 658-3, which finally determine claims of right separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated. Id. at 105, 705 P.2d at 34 (citation omitted); see also Koolau Radiology, Inc. v. The Queen's Medical Center, 73 Haw. 433, 834 P.2d 1294 (Haw. 1992); Westin Hotel Co. v. Universal Investment, Inc., 72 Haw. 178, 179-80, 811 P.2d 467, 468 (1991). Eyecor contends that it can validly appeal the trial court's § 658-3 order in the present case according to the ICA's decision in Kukui Nuts of Hawaii, Inc. v. R. Baird & Co., Inc., 7 Haw.App. 598, 789 P.2d 501, cert. denied, 71 Haw. 668, 833 P.2d 900 (1990), where the ICA held that an unappealed  though independently appealable  collateral order, such as one under HRS § 658-3, can be considered by an appellate court reviewing a final judgment in the same case. In Kukui Nuts, the appellant argued that although it had failed to timely appeal certain independently appealable collateral orders, the ICA could still review them on an appeal from the final judgment in the same case. Id. at 617, 789 P.2d at 513. The ICA noted that the authorities are split on the propriety of allowing the review of unappealed collateral orders from a final judgment. The ICA then cited with favor the following statement: Any rule that requires forfeiture of appellate opportunities for guessing wrong about an unclear rule would greatly increase the costs of the collateral order doctrine by forcing protective appeals in many situations of doubtful appealability. Id. at 617, 789 P.2d at 514 (citing 15 C. Wright, A. Miller, E. Cooper, Federal Practice and Procedure, Jurisdiction § 3911 at 498-99 (1976)). The ICA proceeded to hold that where relief can be afforded from the terms of a collateral order upon appeal from the final judgment, the collateral order may be reviewed at that time, and the right to appeal the collateral order is not forfeited because it was not appealed from when it was entered. Id. However, in this case, Eyecor is foreclosed from appealing the trial court's order compelling arbitration because it had appealed that decision once before. On May 6, 1991, Eyecor filed a notice of appeal, [19] which raised the propriety of the trial court's April 3, 1990 order compelling arbitration. This court subsequently dismissed that appeal as untimely because Eyecor had waited until well beyond the thirty-day limit mandated by Hawaii Rule of Appellate Procedure 4(a)(1) to bring its appeal. Therefore, because the ICA's ruling in Kukui Nuts specifically addressed collateral orders that were not originally appealed, Eyecor's reliance on that ruling to appeal the order compelling arbitration is misplaced. We now take this occasion to restrict the broad authority seemingly conferred on reviewing courts by the ICA's ruling in Kukui Nuts. In the present case, the rationale of Kukui Nuts may have justified appellate review of a hypothetical collateral order on appeal from a final judgment on the basis that not to do so would tend to forc[e] protective appeals in many situations of doubtful appealability. Id. (emphasis added). However, as the foregoing discussion of Swinerton demonstrates, there is nothing doubtful in this jurisdiction about the appealability of § 658-3 orders to compel arbitration. Indeed, Eyecor itself appealed the April 3, 1990 order, albeit more than a year late. The policies that have moved this court to constrain judicial review of arbitration awards within the strictest possible limits likewise militate against giving a party who has failed to appeal a § 658-3 order a second chance to attack it on an appeal of a confirmation order. Given its principal claim that the provisions of HRS § 519-3(a)(2) apply to the instant arbitration, Eyecor should have immediately appealed the trial court's initial decision to compel arbitration in order to have the issue settled at the most opportune time in the dispute. Instead, Eyecor in effect sat on its hands and allowed the arbitration process to proceed for more than a year before it again decided to challenge the process on the same grounds it had argued to the trial court prior to the § 658-3 order to compel arbitration. This court will not countenance procedures that allow parties to frustrate the policies and legislative objectives behind the arbitration and award statute. We therefore hold that a reviewing court shall not consider an unappealed § 658-3 order compelling arbitration on an appeal from a final judgment in the same case.