Court Opinion

ID: 9542854
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:39:32.856648+00
Date Added: 2024-06-11T15:09:06.071679
License: Public Domain

*225Becker, J.,
(dissenting) — I respectfully disagree with the majority’s conclusion that parties, to an arbitration agreement can contract their way out of the arbitration statute, RCW 7.04, and secure a trial de novo on an issue that has already been resolved by arbitration. I would not enforce the contractual provision at issue because it allows either party to set aside an award of damages and proceed to trial without establishing one of the five statutorily recognized grounds for vacation. I would, instead, follow Division Three in its holding that the court must reduce the award to judgment when it cannot find one of the grounds for vacation identified in RCW 7.04.160. Petersen v. United Servs. Auto. Ass’n, 91 Wn. App. 212, 216, 955 P.2d 852 (1998); see also Barnett v. Hicks, 119 Wn.2d 151, 157, 829 P.2d 1087 (1992).
The majority is reluctant, and properly so, to declare nonbinding arbitration to be an invalid form of alternative dispute resolution. Majority op. at 224. The holding of Petersen does not, however, lead to that result. Nonbinding arbitration is the submission of a dispute to an arbitrator with the understanding at the outset that the result will be purely advisory, and the result will be treated by the parties as a recommendation for settlement. See Washington State Bar Ass’n, Alternate Dispute Resolution Deskbook: Arbitration and Mediation in Washington § 9A.3(1), at 9A-5 (1989). If the parties do settle as a result of nonbinding arbitration, the court does not confirm the arbitration award; rather, it enforces the settlement contract, the terms of which may be different from the arbitrator’s award. Thus, nonbinding arbitration is a valid method of dispute resolution. But the award it produces is outside the statute, subject neither to confirmation under RCW 7.04,150, nor to vacation under RCW 7.04.160.
In contrast, the Hartford contract expresses the parties’ desire for a procedure that is a genuine trial substitute, resulting in an award subject to confirmation or vacation under the statute. The contract primarily envisions a procedure that is “binding,” not merely a prelude to a possible *226settlement. At the same time, the contract allows either party to convert a binding and confirmable award of damages to a nonbinding award after the fact. This “unless” clause, “unless either party demands the right to a trial within 60 days,” subverts the statutory requirement to show one of the approved grounds for vacating an award.
Hartford builds on a shaky foundation when it relies on the statement in Van Horne v. Watrous, 10 Wash. 525, 39 P. 136 (1895), to the effect that any doubt about whether the parties intended an award to be final should be construed in favor of “ ‘the right to resort to the courts for redress in the usual manner.’ ” See Majority op. at 221. In the century that has followed Van Home, an 1895 decision last cited in 1928, public policy has moved virtually 180 degrees in the opposite direction from that statement. It was to reverse the old judicial attitude of hostility to arbitration agreements that the 1925 Federal Arbitration Act, 9 U.S.C. §§ 1-307, and its state counterparts including RCW 7.04, were enacted. See, e.g., Allied-Bruce Terminix Co. v. Dobson, 513 U.S. 265, 270, 115 S. Ct. 834, 130 L. Ed. 2d 753 (1995).
Emphasizing the primacy of contract, the Ninth Circuit has gone so far as to hold that courts may enforce a provision of an arbitration agreement that expands judicial review of the award beyond the specific powers enumerated in the federal act. LaPine Tech. Corp. v. Kyocera Corp., 130 F.3d 884, 889-90 (9th Cir. 1997). But the parties in that case had contracted for appellate-type review of findings of fact and conclusions of law, not for a trial de novo. Id. at 887. One reason why the court was willing to honor the contractual agreement for expanded review is that review for substantial evidence and errors of law is less burdensome than a full trial. Id. at 889. The Hartford contract does impose the burden of a trial de novo. Even if the parties do not regard the second trial as burdensome to themselves, it burdens the conflict-resolution system as a whole by making use of two trial forums. The arbitration panel must assume the award will be final, and proceed *227with the requisite care. So must the trial court in the trial de novo. Having two trials is at odds with this state’s strong policy favoring arbitration as a “quick, certain, and inexpensive alternative to litigation.” Pegasus Constr. Corp. v. Turner Constr. Co., 84 Wn. App. 744, 751, 929 P.2d 1200 (1997). Reflecting that policy, our statutory code of arbitration, RCW 7.04, allows a litigant to have either binding arbitration or a trial, but not both.
I would affirm the superior court’s decision to enter judgment on the arbitrator’s award of damages.
Review granted at 141 Wn.2d 1006 (2000).