Court Opinion

ID: 4248866
Source: CourtListenerOpinion
Date Created: 2018-02-28 16:34:14.19265+00
Date Added: 2024-06-11T07:48:10.996440
License: Public Domain

February 28, 2018

                                                                        Supreme Court
                                                                        No. 2016-309-Appeal.
                                                                        (PM 14-4568)

                     David DiSano                  :

                          v.                       :

              Argonaut Insurance Company.          :

                     NOTICE: This opinion is subject to formal revision before
                     publication in the Rhode Island Reporter. Readers are requested to
                     notify the Opinion Analyst, Supreme Court of Rhode Island,
                     250 Benefit Street, Providence, Rhode Island 02903, at Telephone
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                     corrections may be made before the opinion is published.
                                                                 Supreme Court

                                                                 No. 2016-309-Appeal.
                                                                 (PM 14-4568)

              David DiSano                   :

                    v.                       :

      Argonaut Insurance Company.            :

             Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.

                                         OPINION

       Chief Justice Suttell, for the Court. The plaintiff, David DiSano (DiSano), appeals

from a Superior Court order that denied his petition to vacate an arbitration award; granted the

petition of the defendant, Argonaut Insurance Company (Argonaut), to confirm the arbitration

award; and granted Argonaut’s motion to quash the deposition subpoena of the dissenting

arbitrator. This case came before the Supreme Court pursuant to an order directing the parties to

appear and show cause why the issues raised in this appeal should not be summarily decided.

After considering the parties’ written and oral submissions and reviewing the record, we

conclude that cause has not been shown and that this case may be decided without further

briefing or argument. For the reasons set forth in this opinion, we affirm the order of the

Superior Court.

                                                 I

                                       Facts and Travel

       This case concerns an automobile accident that occurred on April 14, 2010, involving

DiSano and an individual named Justin Lorello. At the time of the accident, DiSano was

employed by the Providence Water Supply Board (PWSB) and was operating a PWSB-owned

vehicle. DiSano sought underinsured-motorist coverage through an insurance policy issued by

                                                 1
Argonaut to PWSB.1 Because the policy contained an arbitration provision, the parties executed

an arbitration-submission agreement in which they agreed that the Superior Court Rules

Governing Arbitration of Civil Actions would apply.

       A two-day hearing was conducted before a panel of three arbitrators. On August 25,

2014, a majority of the arbitrators issued a decision that found in favor of Argonaut; one

arbitrator dissented from the decision. The majority found Lorello liable for the April 14, 2010

accident. The majority also found that: (1) Lorello’s insurer, Liberty Insurance Company, had

paid DiSano $25,000, the policy limit; (2) DiSano’s insurer, Metropolitan Property and Casualty

Insurance Company, had paid DiSano $25,000, the underinsured-motorist coverage policy limit;

and (3) the workers’ compensation insurer for PWSB, Liberty Mutual, had paid DiSano

$258,303 in workers’ compensation benefits.        Consequently, the majority determined that

Argonaut was entitled to an offset of $308,303 from any damages awarded to DiSano in the

arbitration, which it calculated by adding the aforementioned insurance payments and workers’

compensation benefits received by DiSano.

       The majority further found that DiSano “had significant pre-existing hip and low back

conditions which pre-dated the subject accident[,]” and that the accident marginally aggravated

these conditions. The majority determined that the medical testimony demonstrated that the

accident exacerbated DiSano’s low-back condition for approximately three months, but that hip

replacement surgery that he underwent on February 23, 2011, after the accident, “was not

causally related to the accident.” The majority concluded that DiSano was entitled to damages

for three months with respect to reasonable pain and suffering, medical expenses, and lost wages.

However, because the majority also found that DiSano’s damages were less than the $308,303

1
  We note that DiSano sought underinsured-motorist coverage through an uninsured-motorist
coverage endorsement in the policy.
                                               2
offset amount to which it had determined Argonaut was entitled, “judgment” was entered in

favor of Argonaut.

         On September 16, 2014, DiSano filed a petition in the Superior Court to vacate the

arbitration award, pursuant to G.L. 1956 § 10-3-12. Argonaut objected to DiSano’s petition and

brought a cross-petition to confirm the arbitration award, pursuant to § 10-3-11. On November

13, 2015, DiSano filed a notice to depose the dissenting arbitrator. Argonaut moved to quash the

deposition subpoena pursuant to Rules 26(c) and 45(c)(3) of the Superior Court Rules of Civil

Procedure. It maintained that: (1) Superior Court Arbitration Rule 5(f) prohibits the deposition

of an arbitrator; (2) common law provides arbitrators with quasi-judicial immunity; and (3) there

is no factual or legal basis to depose the dissenting arbitrator. DiSano objected to the motion to

quash.

         On January 21, 2016, a hearing was held before a justice of the Superior Court on the

parties’ pending petitions and Argonaut’s motion to quash. DiSano explained, in support of his

petition to vacate the arbitration award, that he was relying on the fourth ground provided in

§ 10-3-12, which mandates that an arbitration award must be vacated “[w]here the arbitrators

exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award

upon the subject matter submitted was not made.” Section 10-3-12(4). DiSano noted that he

was not disputing that Argonaut was entitled to an offset; however, he maintained that the

majority had miscalculated the offset amount. Specifically, DiSano asserted that the arbitrators

miscalculated the amount because they did not subtract from his workers’ compensation benefits

the amount that was attributable to his hip replacement. DiSano argued that “a substantial

portion of that $308,[303] * * * included the hip replacement surgery [and] the lost wages

incurred as a result of the hip replacement surgery.”

                                                 3
        In response, Argonaut first noted the limited review of arbitration awards and the “strong

public policy in favor of arbitration awards.” It asserted that, although DiSano was attempting to

challenge the adequacy of the award by arguing that the award was miscalculated, the purported

inadequacy of an arbitration award is not a ground upon which the courts can vacate an

arbitration award.

        With respect to Argonaut’s motion to quash the deposition subpoena, DiSano explained

that he sought to depose the dissenting arbitrator to ascertain why the majority, in calculating the

offset, had included certain amounts that he had received. However, Argonaut argued that

DiSano’s attempt to depose the dissenting arbitrator violated Superior Court Arbitration Rule

5(f), as well as various recognized immunities for arbitrators.

        The hearing justice rendered a bench decision. He found the majority’s decision to be

“rational and logical.” He stated that the majority found DiSano’s injuries to be minor, and

accordingly had decided that the offset amount exceeded his damages. The hearing justice noted

that, although the majority did not specify the amount of DiSano’s damages, it was “clearly

because the arbitrators did not believe it was necessary to get to that point.” He stated:

                “While [plaintiff] says he should be able to recover his losses here
                disregarding the workers’ compensation award, not even that is
                clear. He received $50,000 in liability. There’s no evidence that
                he incurred special damages, lost pay, and wages above that or that
                he suffered pain and suffering above that.”

Further, the hearing justice noted that it was not necessary for the arbitrators to quantify the

amount of damages, nor should arbitrators be required to do so.

        When considering the motion to quash, the hearing justice noted that he was “skeptical

* * * about the deposition of an arbitrator, particularly, in this case, the minority arbitrator * * *.”

He deemed DiSano’s subpoena seeking to depose the dissenting arbitrator to be “unusual” and

                                                   4
“unnecessary.”     Accordingly, the hearing justice denied DiSano’s petition to vacate the

arbitration award and granted Argonaut’s petition to confirm the arbitration award and motion to

quash the deposition subpoena. DiSano timely filed a notice of appeal to this Court.

                                                  II

                                        Standard of Review

       “In this jurisdiction, the authority of the Courts to review an arbitral award is statutorily

prescribed and is limited in nature.” Nappa Construction Management, LLC v. Flynn, 152 A.3d
1128, 1132 (R.I. 2017) (quoting Buttie v. Norfolk & Dedham Mutual Fire Insurance Co., 995
A.2d 546, 549 (R.I. 2010)). “[A]n arbitration award can be vacated only if the award falls within

one of the statutory criteria set out in § 10-3-12, or if the award is irrational, or if the arbitrator

has manifestly disregarded the law.” Pier House Inn, Inc. v. 421 Corporation, Inc., 812 A.2d
799, 803 (R.I. 2002). However, “[n]either an arbitrator’s mistake of law nor an error of law is a

ground for vacating an arbitration award.” Id.

       With respect to the hearing justice’s decision to grant Argonaut’s motion to quash the

deposition subpoena, this Court has held that “[i]n granting or denying discovery motions, a

Superior Court justice has broad discretion.” Dawkins v. Siwicki, 22 A.3d 1142, 1150 (R.I. 2011)

(quoting Travelers Insurance Co. v. Hindle, 748 A.2d 256, 259 (R.I. 2000)). “[W]e will not

disturb a trial justice’s decision relating to discovery ‘save for an abuse of that discretion.’” Id.

(quoting Hindle, 748 A.2d at 259).

                                                  5
                                                   III

                                               Discussion

                                                    A

                                Petition to Vacate Arbitration Award

           On appeal, DiSano argues that the hearing justice erred in denying his petition to vacate

the arbitration award and in granting defendant’s cross-petition to confirm the award. He

contends that the award is “irrational” and “implausible” in its calculation of damages. He

argues that the majority of arbitrators improperly utilized the amount of workers’ compensation

benefits attributable to his hip replacement to calculate the offset amount, because the majority

had found that his hip replacement was not causally related to the accident. In sum, DiSano

asserts:

                  “Either the hip replacement is not causally related and [Argonaut]
                  is entitled to only a partial offset from the workers compensation
                  lien; or the hip replacement is causally related and [DiSano] is
                  entitled to an award for pain and suffering for same and [Argonaut]
                  is entitled to an offset from the entire workers compensation lien.”

           As noted above, this Court will vacate an arbitration award only if it is irrational, if the

arbitrator manifestly disregarded the law, or if one of the statutory grounds set forth in § 10-3-12

applies. See Pier House Inn, 812 A.2d at 803. Section 10-3-12 sets forth the statutory grounds

for when an arbitration award must be vacated:

                  “In any of the following cases, the court must make an order
                  vacating the award upon the application of any party to the
                  arbitration:

                          “(1) Where the award was procured by corruption, fraud or
                          undue means.

                          “(2) Where there was evident partiality or corruption on the
                          part of the arbitrators, or either of them.

                                                    6
                       “(3) Where the arbitrators were guilty of misconduct in
                       refusing to postpone the hearing, upon sufficient cause
                       shown, or in hearing legally immaterial evidence, or
                       refusing to hear evidence pertinent and material to the
                       controversy, or of any other misbehavior by which the
                       rights of any party have been substantially prejudiced.

                       “(4) Where the arbitrators exceeded their powers, or so
                       imperfectly executed them that a mutual, final, and definite
                       award upon the subject matter submitted was not made.”

       As noted above, in the Superior Court, DiSano relied on the basis provided in

§ 10-3-12(4), maintaining that the majority imperfectly executed their powers by miscalculating

the offset amount. DiSano challenges the portion of the offset that was calculated with the

workers’ compensation benefits that were attributable to his hip replacement. However, because

the arbitrators did not quantify the total amount of damages, there is no support for DiSano’s

suggestion that, but for the inclusion of this amount in the offset, his damages award would have

been greater than the offset amount and judgment would have entered in his favor.2 Aside from

the workers’ compensation benefits, there is an additional $50,000 offset amount that arose from

insurance payments, which DiSano does not challenge. As the hearing justice astutely remarked,

it is conceivable that DiSano’s damages award did not even rise above this $50,000 offset

amount, given the finding of minimal damages by the majority. Because of this very real

possibility, this Court cannot say that the majority of the arbitrators “so imperfectly executed

[their powers] that a mutual, final, and definite award upon the subject matter submitted was not

made.” Section 10-3-12.

2
  We note, as the hearing justice also mentioned, that the arbitrators were not required to quantify
the damages amount. Pierce v. Rhode Island Hospital, 875 A.2d 424, 427 (R.I. 2005) (“In the
absence of an express agreement or a requirement by statute, an arbitrator is not required to set
forth any findings of fact and conclusions of law supporting an award.”).
                                                 7
       Further, even if the arbitrators did err by failing to subtract the amount of workers’

compensation benefits attributable to DiSano’s hip replacement from the offset amount, “[a]n

arbitrator’s award will not be overturned for mere errors of law.” Atwood Health Properties, LLC

v. Calson Construction Co., 111 A.3d 311, 315 (R.I. 2015). We are persuaded by the following

language set forth in Loretta Realty Corp. v. Massachusetts Bonding and Insurance Co., 83 R.I.
221, 114 A.2d 846 (1955), where this Court declined to vacate an arbitration award despite the

acknowledgment that the arbitrator had made a mistake of law:

               “The only complaint is that the arbitrator committed an error of
               law in making [the arbitration award] and that in doing so he
               imperfectly executed his powers. But assuming that the arbitrator
               made the alleged mistake it did not result in his failing to make a
               mutual, final and definite award within the submission. The
               plaintiffs’ real complaint is that the award is unfavorable to them
               and that this is the result solely of the arbitrator’s alleged error of
               law.” Loretta Realty, 83 R.I. at 227, 114 A.2d at 849.

       Keeping in mind this Court’s limited review of arbitration awards, the majority’s

arbitration award does not rise to the level necessary to vacate such an award. Accordingly, we

are satisfied that the hearing justice appropriately denied plaintiff’s petition to vacate the

arbitration award.

                                                 B

           Motion to Quash the Deposition Subpoena of the Dissenting Arbitrator

       During oral argument before this Court, DiSano represented that he was not pressing on

appeal the grant of Argnoaut’s motion to quash the deposition subpoena addressed to the

dissenting arbitrator. We deem this issue waived, therefore, and we simply note that Superior

Court Arbitration Rule 5(f) provides that “[a]n arbitrator may not be deposed or called as a

witness to testify concerning anything said or done in an arbitration proceeding.”

                                                 8
                                             IV

                                         Conclusion

       For the reasons stated herein, we affirm the order of the Superior Court and remand the

papers thereto.

                                              9
STATE OF RHODE ISLAND AND                                  PROVIDENCE PLANTATIONS

                         SUPREME COURT – CLERK’S OFFICE

                                 OPINION COVER SHEET

Title of Case                        David DiSano v. Argonaut Insurance Company.
                                     No. 2016-309-Appeal.
Case Number
                                     (PM 14-4568)
Date Opinion Filed                   February 28, 2018
                                     Suttell, C.J., Goldberg, Flaherty, Robinson, and
Justices
                                     Indeglia, JJ.
Written By                           Chief Justice Paul A. Suttell

Source of Appeal                     Providence County Superior Court

Judicial Officer From Lower Court    Associate Justice Jeffrey A. Lanphear
                                     For Plaintiff:

                                     Thomas R. Ricci, Esq.
                                     Michael S. Pezzulo, Esq.
Attorney(s) on Appeal
                                     For Defendant:

                                     John J. Cloherty, Esq.

SU-CMS-02A (revised June 2016)