Opinion ID: 1643072
Heading Depth: 2
Heading Rank: 3

Heading: Did the Arbitrators Exceed Their Powers or Act in Manifest Disregard of the Law in Exceeding the Limitation of Damages in the Agreements?

Text: As noted, paragraph 10 provides: In any event, News Dealer shall not claim any additional compensation for good will, but acknowledges that his entire compensation under this agreement is the difference between the wholesale and resale price of the newspapers purchased and sold by him. The News argues that this provision precluded the plaintiffs from claiming damages for goodwill, mental anguish, or, for that matter, punitive damages. Certainly paragraph 10 is reasonably susceptible of the interpretation that a dealer's sole redress for any breach of the agreement or for any tortious conduct by the News, no matter how wrongful, would be the compensation otherwise due under the arrangement between the parties. The agreement, by its literal terms, purports to grant the dealer only the right to purchase newspapers from the News at a prescribed wholesale rate, to sell them to subscribers and customers in their assigned area for the suggested resale price, and to pay the News for those newspapers by the 10th day of each month. The agreement specifies that it is up to the dealer to collect money in payment of such copies of said newspapers. The actual practice relating to collections as found by the panel, however, was as follows: Dealers receive a monthly bill from The News. This bill charges the dealer for papers sold to him during the preceding month. It also debits the dealers for a bond, the cost of supplies or equipment and other specified charges. Generally, however, this bill reflects a credit balance for the dealer since the dealer is given credit for all monies paid to The News by customers in the dealer's given area. Accordingly, construing the subject provision of paragraph 10 in the context of the parties' practice of a monthly settling up, the panel could have understood the provision to limit a dealer's remedy against the News in contract or tort to that monthly credit balance for the dealer that might exist at any given time. That sum, of course, would already be due the dealer, independent of any civil wrong by the News. The panel found the provisions in question to be invalid and void as contrary to public policy, citing Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., supra; Ex parte Celtic Life Insurance Co., 834 So.2d 766 (Ala.2002); Ex parte Thicklin, 824 So.2d 723 (Ala.2002); Cavalier Manufacturing, Inc. v. Jackson, 823 So.2d 1237 (Ala.2001), cert. denied, 535 U.S. 986, 122 S.Ct. 1536, 152 L.Ed.2d 464 (2002), overruled on other grounds, Thicklin, supra; and American General Finance, Inc. v. Branch, 793 So.2d 738 (Ala.2000). The News argues that the arbitrators exceeded their powers, citing Vulcan Chemical Technologies, Inc. v. Barker, 167 F.Supp.2d 867 (W.D.Va.2001), vacated on other grounds, 297 F.3d 332 (4th Cir.2002), and Amanda Bent Bolt Co. v. International Union, United Automobile, Aerospace, Agricultural Implement Workers of America Local 1549, 451 F.2d 1277 (6th Cir.1971). The News acknowledges that the district court's decision in Vulcan Chemical was vacated in its entirety by the Fourth Circuit Court of Appeals. Therefore that decision cannot stand as authority for anything. In Amanda Bent Bolt a labor arbitrator awarded relief explicitly prohibited under an agreement that also specified that the arbitrator would have `no power to add to, subtract from or modify any of the terms of this agreement.' 451 F.2d at 1280. Thus, the arbitrator's action, by the express terms of the underlying agreement, exceeded his power. The News also asserts that the arbitrators disregarded Leonard v. Terminix International Co., 854 So.2d 529 (Ala.2002). The News quotes from that case, however, only the statement that limitations on damages that may be recovered are not, per se, against public policy, 854 So.2d at 534, and summarizes its holding as being that an arbitration clause is not unconscionable solely because it purports to preclude a particular remedy or limit damages. The arbitration panel did not express its holding in terms of a per se violation of public policy; many factors can enter into a determination that contractual terms are contrary to public policy. As noted, the panel cited American General Finance, supra, in support of its finding. That case explained the multi-factorial analysis appropriate in assessing an arbitration award for unconscionability. Thus, constrained by the limited reach of our review under the exceeded powers ground, we cannot say that the arbitration panel exceeded its authority, in the face of Leonard, by holding the provision invalid and void as unconscionable. Likewise, the News's alternative approach of arguing that the arbitration panel manifestly disregarded the law of Leonard must fail. Leonard, like American General Finance, lists various considerations attending a determination of unconscionability. Further, because Leonard was not released until after the panel had issued its decision, it was not available to the panel to be disregarded.