Opinion ID: 2654071
Heading Depth: 2
Heading Rank: 3

Heading: McAlpine’s Appeal

Text: “[W]e consider pro se [papers] liberally in an effort to determine what legal claims have been raised.”8 McAlpine generally challenges the merits of the panel’s decision; she also appears to claim that the arbitration decision was fraudulently obtained and that the panel violated public policy by giving effect to an “unconscionable” fee agreement.9 Judicial review of attorney’s fee arbitration awards is governed by the Revised Arbitration Act; a court can review the award only on the grounds listed in the statute.10 Under the Revised Arbitration Act, a court shall vacate the award if: (1) the award was procured by corruption, fraud, or other undue means; (2) there was 7 State v. Pub. Safety Emps. Ass’n (PSEA 2010), 235 P.3d 197, 201 (Alaska 2010) (citing State v. Alaska Pub. Emps. Ass’n , 199 P.3d 1161, 1162 (Alaska 2008)). 8 Toliver v. Alaska State Comm’n for Human Rights, 279 P.3d 619, 622 (Alaska 2012) (citing Clemensen v. Providence Alaska Med. Ctr., 203 P.3d 1148, 1150 (Alaska 2009)). 9 See State v. Pub. Safety Emps. Ass’n (PSEA 2011), 257 P.3d 151, 158 (Alaska 2011) (“Following a path taken by the U.S. Supreme Court and many other state jurisdictions, we now . . . adopt the exception to enforcing arbitration decisions where doing so would violate an explicit, well defined, and dominant public policy.” (quoting PSEA 2010, 235 P.3d at 203) (internal quotation marks omitted)). 10 Alaska Bar R. 40(a)(2); Haeg v. Cole, 200 P.3d 317, 320 (Alaska 2009) (adopting supeior court order); Breeze v. Sims, 778 P.2d 215, 217 (Alaska 1989). -6- 6866 (A) evident partiality by an arbitrator appointed as a neutral arbitrator; (B) corruption by an arbitrator; or (C) misconduct by an arbitrator prejudicing the rights of a party to the arbitration proceeding; (3) an arbitrator refused to postpone the hearing on showing of sufficient cause for postponement, refused to consider evidence material to the controversy, or otherwise conducted the hearing contrary to AS 09.43.420, so as to prejudice substantially the rights of a party to the arbitration proceeding; (4) an arbitrator exceeded the arbitrator’s powers; (5) there was not an agreement to arbitrate, unless the person participated in the arbitration proceeding without raising the objection under AS 09.43.420(c) not later than the beginning of the arbitration hearing; or (6) the arbitration was conducted without proper notice of the initiation of an arbitration as required under AS 09.43.360 so as to prejudice substantially the rights of a party to the arbitration proceeding.[11] A court shall modify an award if: (1) there was an evident mathematical miscalculation or an evident mistake in the description of a person, thing, or property referred to in the award; (2) the arbitrator has made an award on a claim not submitted to the arbitrator and the award may be corrected without affecting the merits of the decision on the claims submitted; or 11 AS 09.43.500(a). -7- 6866 (3) the award is imperfect in a matter of form not affecting the merits of the decision on the claims submitted.[12] 1. The merits of the arbitration panel’s decision are unreviewable. McAlpine asks us to review the merits of the arbitration panel’s decision on many of the same grounds she raised before the superior court. Her merits challenge can be distilled into five main points. She argues that the panel: (1) erred in finding that the written fee agreement superseded the alleged verbal fee agreement; (2) erred in determining that the written fee agreement was not invalidated by Priddle’s failure to give McAlpine a copy or explain the fee; (3) erred in determining the fee was reasonable because it failed to consider all the Bar Rule 35(a) factors; (4) gave Priddle’s witnesses’ testimony improper weight; and (5) could not have properly assessed the fee’s reasonableness because Priddle did not account for the time he worked on the case. The superior court considered several variations of these arguments and concluded that all were unreviewable. McAlpine asserts that the superior court erred in determining it lacked authority to review the panel’s decision except under the statutory grounds. But we repeatedly have rejected requests for heightened review of attorney’s fee arbitration awards.13 Under our precedent, neither the panel’s factual findings nor its legal 12 AS 09.43.510(a). 13 Butler v. Dunlap, 931 P.2d 1036, 1040 (Alaska 1997) (rejecting request to review attorney’s fee arbitration decision under arbitrary and capricious standard); A. Fred Miller v. Purvis, 921 P.2d 610, 618 (Alaska 1996) (holding attorney’s fee arbitration without judicial review for factual or legal errors does not violate due process); Breeze, 778 P.2d at 217 (rejecting request to review attorney’s fee arbitrator’s factual findings for gross error). -8- 6866 conclusions are reviewable.14 The superior court therefore applied the correct standard in concluding that McAlpine’s challenges to the panel’s decision’s merits were not reviewable. For the same reason, we will not review the merits of the panel’s decision on appeal. 2. The superior court properly determined it could not review the arbitration panel’s conclusion that the fee agreement was not fraudulent. McAlpine also asserts that the panel relied on a fraudulent copy of the fee agreement supplied by Priddle. Whether an award was procured by fraud is one of the statutory grounds for reviewing an arbitration award.15 The superior court acknowledged that McAlpine had raised a statutory ground on which it could review the award, but it concluded that “the arbitration panel’s finding of fact that the fee agreement document was not falsified, manufactured, or otherwise illegitimate . . . is not reviewable by the court.” We have not articulated the proper standard of review under the Revised Arbitration Act for determining whether an arbitration award was procured by fraud. 14 See Haeg, 200 P.3d at 320; Breeze, 778 P.2d at 217; see also Univ. of Alaska v. Modern Const., Inc., 522 P.2d 1132, 1140 (Alaska 1974) (“The general rule in both statutory and common law arbitration is that arbitrators need not follow otherwise applicable law when deciding issues properly before them, unless they are commanded to do so by the terms of the arbitration agreement.” (citing Ramonas v. Kerelis, 243 N.E.2d 711, 717 (Ill. App. 1968); In re Reynold’s Estate, 20 S.E.2d 348, 351 (N.C. 1942))). 15 AS 09.43.500(a)(1). McAlpine does not expressly invoke the Revised Arbitration Act, but does claim that Priddle committed “fraud” in presenting the panel with a forged agreement. See Wilkerson v. State, Dep’t of Health & Soc. Servs., 993 P.2d 1018, 1022 (Alaska 1999) (explaining pro se litigant’s failure to identify and apply precise legal test not fatal when test is well established and easily applied). -9- 6866 Federal courts applying a similar Federal Arbitration Act provision16 require a party seeking an arbitration award’s vacatur to “show that the fraud was (1) not discoverable upon the exercise of due diligence prior to the arbitration, (2) materially related to an issue in the arbitration, and (3) established by clear and convincing evidence.”17 Under the federal standard’s first prong, a court will not independently review an arbitration award for fraud when the arbitrators already considered and resolved the fraud claim 18 because fraud “necessarily raises issues of credibility which have already been before the arbitrators once.”19 It follows that a court should give deference to arbitrators’ credibility determinations on fraud claims. Fifteen states and the District of Columbia have adopted the Revised Uniform Arbitration Act.20 Courts in these jurisdictions generally have followed the 16 Compare 9 U.S.C. § 10(a)(1) (2012) (court may vacate arbitration award “where the award was procured by corruption, fraud, or undue means”), with AS 09.43.500(a)(1) (court shall vacate arbitration award if “the award was procured by corruption, fraud, or other undue means”). 17 Lafarge Conseils Et Etudes, S.A. v. Kaiser Cement & Gypsum Corp., 791 F.2d 1334, 1339 (9th Cir. 1986) (citing Dogherra v. Safeway Stores, Inc., 679 F.2d 1293, 1297 (9th Cir. 1982)). 18 A.G. Edwards & Sons, Inc. v. McCollough, 967 F.2d 1401, 1404 (9th Cir. 1992) (“[W]here the fraud or undue means is not only discoverable, but discovered and brought to the attention of the arbitrators, a disappointed party will not be given a second bite at the apple.”); cf. Johnson v. Wells, 73. So. 188, 191-92 (Fla. 1916) (holding evidence that records presented in arbitration were falsified was reviewable by trial court for fraud because such evidence was not considered by arbitrators nor available to plaintiff during arbitration). 19 Karppinen v. Karl Kiefer Mach. Co., 187 F.2d 32, 35 (2d Cir. 1951). 20 U NIF . A RBITRATION A CT (2000), 7(1A) U.L.A. 1 (Supp. 2013) (Table Of Jurisdictions Wherein Act Has Been Adopted) (adopted by Alaska, Arizona, Arkansas, (continued...) -10- 6866 federal standard for determining whether an arbitration award was procured by fraud. Courts in Hawaii, Nevada, North Dakota, and Utah expressly adopted the federal standard in reviewing claims brought under those states’ versions of the Revised Uniform Arbitration Act fraud provision.21 Other courts have applied the federal standard to arbitration fraud claims under an identical vacatur provision in the original Uniform Arbitration Act.22 Because Alaska’s fraud provision is nearly identical to that of the Federal Arbitration Act, and most other states that have adopted the Revised Uniform Arbitration Act apply the federal standard, we conclude that Alaska courts should apply the federal standard in reviewing a claim that an arbitration award was procured by fraud.23 Under the federal standard the superior court correctly concluded that the arbitration panel’s finding regarding the fee document’s authenticity is not reviewable; 20 (...continued) Colorado, District of Columbia, Hawaii, Minnesota, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Utah, and Washington). 21 See Low v. Minichino, 267 P.3d 683, 690-92 (Haw. App. 2011); Sylver v. Regents Bank, N.A., 300 P.3d 718, 721-22 (Nev. 2013); MBNA Am. Bank, N.A. v. Hart, 710 N.W.2d 125, 129 (N.D. 2006); Fleming v. Simper, 158 P.3d 1110, 1112-13 (Utah App. 2007). 22 See U NIF . A RBITRATION A CT (1956), 7(1A) U.L.A. 9 (Supp. 2013) (Table Of Jurisdictions Wherein Act Has Been Adopted); Davenport v. Dimitrijevic, 857 So.2d 957, 961 (Fla. Dist. App. 2003); West v. Heart of the Lakes Constr., Inc., No. C5-01­ 1823, 2002 WL 1013529, at  (Minn. App. May 21, 2002); Las Palmas Med. Ctr. v. Moore, 349 S.W.3d 57, 67 (Tex. App. 2010). Compare U NIF . A RBITRATION A CT § 12(a)(1) (1956), 7(1A) U.L.A. 514 (2009) (requiring court to vacate award if “[t]he award was procured by corruption, fraud or other undue means”), with U NIF . A RBITRATION A CT § 23(a)(1) (2000), 7(1A) U.L.A. 77 (2009) (requiring court to vacate award if “the award was procured by corruption, fraud, or other undue means”). 23 See Lafarge Conseils Et Etudes, 791 F.2d at 1339. -11- 6866 the panel considered the fraud allegation and made credibility findings. We therefore affirm the superior court on this issue and likewise decline to review the panel’s finding regarding fraud. 3. The arbitration panel’s decision does not enforce a nonrefundable fee provision in violation of public policy. In PSEA 2011 we adopted a non-statutory exception to enforcing arbitration awards when doing so would violate an “explicit, well defined, and dominant” public policy.24 McAlpine appears to argue on appeal that the panel’s award should be vacated because it enforces a contract that violates public policy.25 McAlpine generally complains that Priddle’s putative $75,000 flat fee is “unconscionable” because it violates Alaska Bar Association Ethics Opinions and amounts to pay for work not done. But the panel did not give effect to the “nonrefundable” aspect of the fee agreement’s flat fee provision. The panel interpreted the flat fee provision as allowing the $75,000 fee to be refundable to the extent it was unearned and therefore unreasonable, in compliance with Ethics Opinion 2009-1.26 The panel acknowledged the “nonrefundable” term was unenforceable, noting that the term on its face violated the Ethics Opinion. The panel’s subsequent determination that the 24 257 P.3d 151, 158-60 (Alaska 2011) (adopting public policy exception from W.R. Grace & Co. v. Local Union 759, Int’l Union of the United Rubber, Cork, Linoleum & Plastic Workers, 461 U.S. 757, 766 (1983) and E. Associated Coal Corp. v. United Mine Workers, Dist. 17, 531 U.S. 57, 62-63 (2000)). 25 McAlpine also appears to have properly raised these arguments before the arbitration panel and the superior court, preserving them for appeal. Neither the panel nor the superior court expressly ruled on the merits of the public policy argument. 26 The Ethics Opinion states “[e]ven if characterized as nonrefundable, an unearned fee must be refunded.” Alaska Bar Ass’n Ethics Comm., Ethics Op. 2009-1 (2009). -12- 6866 $75,000 flat fee was reasonable reflects its conclusion that the fee was not “unearned” and did not need to be refunded. In addition, the panel referred Priddle to bar counsel because the “nonrefundable” term “misleads clients about their ability to fire an attorney and obtain a refund so they can seek other representation” (emphasis added). This statement implies the panel believed the fee agreement established a refundable fee notwithstanding its “nonrefundable” terms. Under this interpretation, the panel did not enforce a contract in violation of public policy because the panel interpreted the contract to provide that the fee was refundable; the panel read the improper “nonrefundable” term out of the contract. The public policy exception we adopted in PSEA 2011 requires a reviewing court to assess the contract “as interpreted by” the arbitrator in determining whether the court should refrain from enforcing the arbitration award.27 Because the panel interpreted the flat fee in the agreement to be refundable, and refundable flat fees do not violate public policy, the panel’s award does not violate public policy and should not be vacated.