Opinion ID: 2576374
Heading Depth: 2
Heading Rank: 1

Heading: vacation of an arbitration award is the proper remedy when an arbitrator exceeds granted authority

Text: ¶ 14 Although the court of appeals ultimately concluded that modifying the arbitration award was appropriate, it initially held that the district court failed to conduct the required analysis to determine whether modification of the award was the appropriate remedy. Allstate Ins. Co. v. Wong, 2004 UT App 193, ¶ 10, 93 P.3d 849. As noted, according to the court of appeals, if a district court determines that an arbitrator exceeded the authority granted by an arbitration agreement, the proper remedy, absent further analysis, is vacation, rather than modification, of the award. Id. In the present case, the district court modified the arbitration award after concluding that the arbitrator exceeded his authority when he purported to fix Allstate's liability. The court of appeals held that the district court, by confining its analysis to a determination of whether the arbitrator exceeded his authority, failed to fully analyze whether modification of the award was appropriate under the circumstances. We agree. ¶ 15 The Utah Code allows parties aggrieved by the issuance of an improper arbitration award to seek either vacation or modification of the award. Utah Code Ann. §§ 78-31a-14 to -15 (2002). [2] Specifically, section 78-31a-14 outlines situations in which vacation of an arbitration award is an appropriate remedy and section 78-31a-15 outlines situations in which modification of an arbitration award is an appropriate remedy. See id. In relevant part, the Utah Arbitration Act provides that a reviewing court shall vacate an arbitration award if the arbitrators exceeded their powers, id. § 78-31a-14(1)(c), but it also provides that a reviewing court shall modify an arbitration award if it is based on a matter not submitted to [arbitration], [and] the award can be corrected without affecting the merits of the award upon the issues submitted, id. § 78-31a-15(1)(b). ¶ 16 In essence, the district court melded these two provisions together, first concluding that the arbitrator exceeded his authority and then modifying the award, a remedy not applicable to situations where an arbitrator has only exceeded granted authority. As noted by the court of appeals, the district court was foreclosed from providing the remedy of modification without first determining whether modification, rather than vacation, was the appropriate remedy under the circumstances. See Wong, 2004 UT App 193 at ¶ 10, 93 P.3d 849; see also Softsolutions, Inc. v. Brigham Young Univ., 2000 UT 46, ¶¶ 17-39, 1 P.3d 1095 (analyzing each claim that an arbitration award should be either vacated or modified by invoking the two relevant statutory provisions and conducting separate analyses under each statute). ¶ 17 Because the district court modified the arbitration award without determining whether the award satisfied the requirements contained in section 78-31a-15, which governs modification of arbitration awards, the court of appeals undertook that analysis to determine whether the district court's modification could nevertheless be affirmed. Wong, 2004 UT App 193 at ¶¶ 13-15, 93 P.3d 849. We conclude that this was an appropriate course of action. Having so concluded, we now turn our analysis to a discussion of whether the court of appeals correctly determined that modification of the arbitration award was the appropriate remedy in this case.