Court Opinion

ID: 4172503
Source: CourtListenerOpinion
Date Created: 2017-05-30 15:11:15.522787+00
Date Added: 2024-06-11T09:21:05.908624
License: Public Domain

MAINE	SUPREME	JUDICIAL	COURT	                                       Reporter	of	Decisions	
Decision:	 2017	ME	106	
Docket:	   BCD-16-466	
Argued:	   May	12,	2017	
Decided:	  May	30,	2017	
	
Panel:	    SAUFLEY,	C.J.,	and	ALEXANDER,	MEAD,	GORMAN,	JABAR,	HJELM,	and	HUMPHREY,	JJ.	
	
	
                         XPRESS	NATURAL	GAS,	LLC,	et	al.	
                                      	
                                     v.		
                                      	
                             WOODLAND	PULP,	LLC	
                                      	
	
PER	CURIAM	

	     [¶1]	 	 Xpress	 Natural	 Gas,	 LLC,	 and	 XNG	 Maine,	 LLC,	 (Xpress)	 appeal	

from	a	judgment	entered	in	the	Business	and	Consumer	Docket	(Cumberland	

County,	 Murphy,	 J.)	 denying	 their	 application	 to	 vacate	 several	 arbitration	

awards	 pursuant	 to	 14	M.R.S.	 §	 5938(1)(C)	 (2016)	 and	 granting	 the	

application	 of	 Woodland	 Pulp,	 LLC,	 to	 confirm	 the	 same	 awards	 pursuant	 to	

14	M.R.S.	§	5937	(2016).		We	affirm	the	judgment.	

	     [¶2]	 	 This	 dispute	 concerns	 the	 rights	 and	 obligations	 of	 Xpress	

pursuant	to	a	pipeline	capacity	agreement	it	has	with	Woodland.		The	parties	

participated	 in	 arbitration	 pursuant	 to	 that	 agreement.	 	 After	 a	 hearing,	 the	

arbitrator	 found	 that	 the	 failure	 to	 include	 a	 balancing	 provision	 in	 the	

agreement	 had	 created	 “a	 significant	 ambiguity	 as	 to	 the	 parameters	 of	
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Xpress’[s]	 rights	 and	 obligations”	 and	 concluded	 that	 “[i]mplicit	 in	 the	

[agreement]	 is	 an	 obligation	 for	 [Xpress]	 to	 reasonably	 balance	 its	

nominations	 and	 consumption	 of	 gas.”	 	 He	 then	 gave	 the	 parties	 the	

opportunity	 to	 articulate	 the	 terms	 of	 their	 existing	 but	 undelineated	

balancing	 agreement	 and,	 when	 they	 again	 could	 not	 agree,	 he	 provided	 the	

opportunity	to	propose	the	language	of	the	balancing	agreement	he	would	set.		

Based	on	the	parties’	proposals	and	testimony,	the	arbitrator	set	out	the	terms	

of	the	balancing	agreement	in	a	supplemental	arbitration	award.	

	     [¶3]		The	standard	for	showing	that	an	arbitrator	exceeded	his	powers	

is	“an	extremely	narrow	one”	in	large	part	because	the	parties	have	bargained	

for	the	arbitrator’s	construction	of	the	contract	at	issue.		Xpress	Nat.	Gas,	LLC	v.	

Cate	 St.	 Capital,	 Inc.,	 2016	 ME	 111,	 ¶	 9,	 144	 A.3d	 583	 (quotation	 marks	

omitted).	 	 We	 generally	 resolve	 any	 doubts	 in	 favor	 of	 the	 arbitrator’s	

authority	and	will	uphold	the	arbitration	award—even	if	it	contains	errors	of	

law	or	fact—“if	any	rational	construction	of	the	agreement	could	support	[the	

arbitrator’s]	interpretation.”		Id.	(quotation	marks	omitted);	see	Caribou	Bd.	of	

Educ.	 v.	 Caribou	 Teachers	 Ass’n,	 404	 A.2d	 212,	 215	 (Me.	 1979)	 (“If	 this	

[arbitration]	 award	 can	 in	 any	 rational	 way	 be	 derived	 from	 the	 agreement,	
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viewed	 in	 the	 light	 of	 its	 language,	 its	 context	 and	 any	 other	 indicia	 of	 the	

parties’	intention,	it	will	be	upheld.”	(emphasis	added)).	

	      [¶4]	 	 Contrary	 to	 Xpress’s	 contention	 on	 appeal,	 the	 arbitrator	 did	 not	

exceed	his	authority	pursuant	to	14	M.R.S.	§	5938(1)(C).		Considering	that	the	

parties	 themselves	 could	 not	 determine	 Xpress’s	 rights	 pursuant	 to	 the	

agreement,	the	arbitrator	found	that	the	agreement	was	ambiguous,	examined	

the	 intent	 of	 the	 parties	 in	 entering	 the	 agreement,	 and	 implied	 a	 balancing	

obligation	to	remedy	the	ambiguity.		See	Coastal	Ventures	v.	Alsham	Plaza,	LLC,	

2010	ME	 63,	 ¶	 26,	 1	 A.3d	 416	 (“A	 contractual	 provision	 is	 considered	

ambiguous	 if	 it	 is	 reasonably	 possible	 to	 give	 that	 provision	 at	 least	 two	

different	meanings.”	(alteration	omitted)	(quotation	marks	omitted)).			

	      [¶5]		In	issuing	the	supplemental	award,	the	arbitrator	did	expand	upon	

Xpress’s	 implied	 obligation	 to	 “reasonably	 balance”	 its	 nominations	 and	

consumption	of	natural	gas	by	adding	terms	including	remedies	for	any	future	

imbalances.		The	arbitrator	did	so,	however,	only	after	finding	that	the	parties	

had	 understood	 in	 entering	 the	 agreement	 that	 Xpress	 would	 “adjust	 its	 use	

[of	 the	 pipeline]	 to	 accommodate	 Woodland’s	 [balancing	 obligations],”	 that	

the	 balancing	 terms	 proposed	 by	 Woodland	 were	 appropriate	 “for	 the	

foreseeable	future”	but	could	be	revisited	if	Xpress’s	business	grew,	and	that	
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the	remedies	for	future	imbalances	proposed	by	Woodland	were	“appropriate	

and	consistent	with	reasonable	industry	standards	.	.	.	.”		Given	these	findings,	

the	 arbitration	 awards	 did	 not	 “directly	 contradict[]	 the	 language	 of	 the	

agreement,”	 Am.	Fed’n	 of	 State,	 Cty.,	 &	 Mun.	 Emps.,	 Council	 93	 v.	 City	 of	

Portland,	 675	 A.2d	 100,	 102	 (Me.	 1996),	 and	 did	 not	 constitute	 a	 “manifest	

disregard”	for	the	terms	of	the	agreement,	Me.	State	Emps.	Ass’n	v.	Me.	Dep’t	of	

Def.	 &	 Veterans’	 Servs.,	 436	 A.2d	 394,	 397	 (Me.	 1981)	 (“[I]n	 light	 of	 the	

reservations	contained	in	[the	agreement]	and	the	lack	of	any	clear	or	express	

language	 addressing	 the	 instant	 issue	 .	 .	 .	 we	 cannot	 conclude	 that	 the	

arbitrator’s	 decision	 exhibits	 a	 ‘manifest	 disregard’	 for	 the	 terms	 of	 the	

agreement.”).	

	     [¶6]		Xpress’s	remaining	contentions	on	appeal	are	not	persuasive	and	

we	do	not	address	them	further.	

	     The	entry	is:	

                   Judgment	affirmed.	
	
	     	      	     	      	      	
	
	
	
	
	
                                                                                     5	

Jennifer	A.	Archer,	Esq.,	and	Timothy	H.	Norton,	Esq.	(orally),	Kelly	Remmel	&	
Zimmerman,	Portland,	for	appellants	Xpress	Natural	Gas,	LLC,	and	XNG	Maine,	
LLC	
	
William	 S.	 Harwood,	 Esq.	 (orally),	 Martha	 C.	 Gaythwaite,	 Esq.,	 and	 Brian	 T.	
Marshall,	Esq.,	Verrill	Dana,	LLP,	Portland,	for	appellee	Woodland	Pulp,	LLC	
	
	
Business	and	Consumer	Docket	docket	number	CV-2016-12		
FOR	CLERK	REFERENCE	ONLY