Opinion ID: 2446909
Heading Depth: 2
Heading Rank: 1

Heading: Award Procured by Undue Means

Text: [¶ 11] On appeal of an arbitration award, we review the judgment of the court for errors of law and will uphold the Superior Court's confirmation of an arbitration award unless the court was compelled to vacate the award. Dep't of Transp. v. Me. State Emps. Ass'n, 1999 ME 7, ¶ 7, 727 A.2d 896, 898. A court shall vacate an award where ... [t]he award was procured by corruption, fraud or other undue means. 14 M.R.S. § 5938(1)(A) (2009). The determination of fraud is a factual finding, which is reviewed for clear error. See Pine Ridge Realty, Inc. v. Mass. Bay Ins. Co., 2000 ME 100, ¶ 29, 752 A.2d 595, 602. [¶ 12] In the context of a party seeking to vacate a court judgment on the basis of fraud, we have required the party alleging fraud to show clear and convincing proof that an advantage has been gained in the obtaining of a judgment by an act of bad faith whereby the court has been made an instrument of injustice. Estate of Paine, 609 A.2d 1150, 1153 (Me.1992), cited in Wooldridge v. Wooldridge, 2008 ME 11, ¶ 9, 940 A.2d 1082, 1084. This is consistent with the standard applied in other contexts. See 2 Field, McKusick & Wroth, Maine Civil Practice § 60.8 at 76 (2d ed. 1970) ([I]n all cases where fraud is asserted, it must be proved by clear and convincing evidence.). To prove fraud on a court, we have held that the party asserting the fraud must produce clear and convincing evidence: (1) of a false representation; (2) of a material fact; (3) with knowledge or reckless disregard of its falsity; (4) for the purpose of inducing the court to act in reliance; and (5) actual reliance. See Adoption of Patricia S., 2009 ME 76, ¶ 22, 976 A.2d 966, 972. [¶ 13] We now apply the same standard to arbitration awards. In order to prove that an award was procured by fraud or other undue means, the party asserting the fraud must provide clear and convincing evidence of the existence of fraud and that the fraud affected the arbitration award. This is consistent with the approach taken by several federal courts, which require proof of a nexus between the fraud and the basis for the arbitration award and will deny a motion to vacate if the award rests on grounds independent from those allegedly affected by fraud. See, e.g., Forsythe Int'l, S.A. v. Gibbs Oil Co. of Tx., 915 F.2d 1017, 1022 (5th Cir. 1990). [¶ 14] When clear and convincing evidence is required, plaintiffs bear the burden of persuasion to place in the ultimate factfinder an abiding conviction that the truth of [their] factual contentions [is] highly probable. St. Francis De Sales Fed. Credit Union v. Sun Ins. Co. of N.Y., 2002 ME 127, ¶ 26, 818 A.2d 995, 1003 (quotation marks omitted). Randall has not met this burden with regard to either component of the testproof of fraud, or proof that the award was procured by such fraud. [¶ 15] As the court found, there are a number of non-fraudulent explanations for the disparate copies of the July meeting notes. For example, Conley could have given Randall a copy of the notes, and then, as they continued to talk, jotted down the remaining two lines. Alternatively, Conley could have added the lines to his own copy after the meeting to further clarify for himself what had been said. Neither of these scenarios involves a fraudulent intent, and the court did not err in finding that the existence of the second version did not prove fraud. [¶ 16] Randall contends that because his affidavit and submission of the second copy of the meeting notes was unrebutted, it creates an inference of fraud. This is incorrect because, in contrast to the case cited by Randall, LeMay v. Anderson, 397 A.2d 984, 988 (Me.1979), the document submitted by Randall here could reasonably support multiple conclusions, and the court was not compelled to accept Randall's interpretation of the evidence, see In re Estate of Fournier, 2009 ME 17, ¶ 17, 966 A.2d 885, 890 (The weight and credibility of evidence are for the trial court to determine.). Randall bears the burden to prove fraud by clear and convincing evidence. Wooldridge, 2008 ME 11, ¶ 9, 940 A.2d at 1084. [¶ 17] Alternatively, Randall failed to prove that any fraud procured the award. To explain his award of the case fees, the arbitrator noted that the case list was part of the merger agreement, and did not reference the July meeting or the notes. His award was based on the agreement itself, rather than on any modification that may have occurred at the July status meeting. Additionally, Conley and Wirick did not rely upon the contested language during the arbitration hearing, and there is no indication that this document was central to the issue or even affected the award. Under these facts, Randall failed to prove by clear and convincing evidence that the award was procured by fraud or other undue means.