Court Opinion

ID: 9737266
Source: CourtListenerOpinion
Date Created: 2023-08-26 19:20:24.474209+00
Date Added: 2024-06-11T07:23:57.724960
License: Public Domain

FLANDERS, Justice,
concurring.
I concur in the result in this case, but for different reasons than those expressed by the majority. Under G.L.1956 § 10-3-14(a), the Superior Court, upon the application of any party to the arbitration, is empowered to modify or correct an arbitration award in any of the following cases:
“(1) Where there was an evident material miscalculation of figures, or an evident material mistake in the description of any person, thing, or property referred to in the award.
“(2) Where the arbitrators have awarded upon a matter not submitted to them, unless it is a matter not affecting the merits of the decision upon the matters submitted.
“(3) Where the award is imperfect in matter of form not affecting the merits of the controversy.”
If the court finds that any one or more of the above-listed circumstances exists, then it “must modify and correct the award, so as to effect the intent thereof and promote justice between the parties.” Section 10-3-14(b).
Here, one of the parties to the arbitration alleged that the arbitrator mistakenly designated a portion of the damages award as punitive rather than as compensatory. If it were so, then the award would be “imperfect in matter of form not affecting the merits of the controversy,” requiring the court, under § 10-3-14 to “modify and correct the award.” Also, if the only dispute submitted to the arbitrators was merely one having to do with an alleged breach of the lease agreement, then it was possible that the arbitrator, in awarding punitive damages, “awarded upon a matter not submitted to [the arbitrator].” This also would require modification and correction of the award “to effect the intent thereof and to promote justice between the parties.” Section 10-3-14(b).
The question raised but unanswered by the text of § 10-3-14 is how should the Superior Court ascertain whether “the award is imperfect in matter of form not affecting the merits of the controversy,” or whether “the arbitrators have awarded upon a matter not submitted to them”? In other words, how is the Superior Court to determine whether, as alleged, the arbitrator’s designation in the award of a portion of the damages as “punitive” was a mistake? In cases such as this one, the court may have to go beyond the face of the award to answer these questions. In my judgment, one of the most efficient and direct ways to get to the bottom of such allegations is to remand the proceeding to the arbitrator with a request to clarify the *808award or that portion of it that has been questioned or challenged as mistaken. I agree with the majority that providing a time limit for the arbitrator to respond is doubtless the most prudent course to follow.
To be sure, “a general rule in common law arbitration [is] that when arbitrators have executed their award and declared their decision they are functus officio and have no power or authority to proceed further.” Mercury Oil Refining Co. v. Oil Workers International Union, 187 F.2d 980, 983 (10th Cir.1951). (Emphasis added.) But this “common law doctrine of functus officio ’ has been modified by statute in some states to permit the arbitrator to modify or correct the award, to the limited extent stated in the statute, upon submission by a court or upon direct application to the arbitrator by one of the parties.” Elkouri & Elkouri, How Arbitration Works 313, 388 (5th ed.1997). (Emphasis added.) Given the mandate of §§ 10-3-13 and 10-3-14 for courts to correct and to modify arbitration awards in certain circumstances, and to vacate them and remand the case to the arbitrator(s) for a rehearing in others, I believe that the common-law doctrine of functus officio has been modified in this jurisdiction to the extent necessary for courts to fulfill their duties under these statutes.
Thus, I would hold that § 10-3-14, together with § 10-3-13 (authorizing the court, “in its discretion, [to] direct a rehearing by the arbitrators” after vacating an award, if the time to make the award under the agreement has not yet expired), have modified the common-law doctrine of functus officio by allowing rehearings, modifications, and corrections of awards in the situations specified “so as to effect the intent thereof and promote justice between the parties.” Section 10-3-14(b). Cf. Locals 2222, 2320-2327, International Brotherhood of Electrical Workers AFL-CIO v. New England Telephone and Telegraph Co., 628 F.2d 644 (1st Cir.1980) (citing numerous cases recognizing the power of courts to resubmit awards to the original arbitrators for interpretation or amplification).
Accordingly, for the purpose of resolving this case, I would assume, without deciding, that arbitrators have the power to issue punitive-damage awards in situations in which, for example, the .scope of the arbitration agreement is broad enough to include within its ambit disputes that involve intentional tort claims (such as fraud, conversion, or intentional interference with contract). See, e.g., Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 61-62 n. 7, 115 S.Ct. 1212, 1218 n. 7, 131 L.Ed.2d 76, 87 n. 7 (1995) (if contracting parties agree to include punitive damage claims within the issues to be arbitrated, then the Federal Arbitration Act ensures that their agreement will be enforced even if state law otherwise would exclude such claims from arbitration); see also Raytheon Co. v. Automated Business Systems, Inc., 882 F.2d 6, 10 (1st Cir.1989) (interpreting “all disputes” and “any remedy or relief’ phrases in an arbitration agreement to allow arbitrators to award punitive damages).4 In such cireum-*809stances, an arbitration agreement that is not limited to breach-of-eontract disputes may allow the arbitrator to award such damages because they would be available as a matter of law if such claims were litigated in a judicial tribunal. On the other hand, if the parties simply agreed to arbitrate a contractual dispute, then the arbitrators might well exceed their powers by awarding punitive damages because such relief is not generally available as a remedy for a breach of contract.
But here, however, we have no need to decide these issues because, even if punitive damages could be awarded under this arbitration agreement, the question presented is whether the court had the power to obtain a clarification from the arbitrator about whether, as alleged, the apparent award of punitive damages was a mistake because of a mislabeling or misidentification of this damages component by the arbitrator.
Although, in this case, the Superior Court did not actually proceed under § 10-3-14, it could have done so and reached the same result. Thus, even if the court erred both in vacating the award under § 10-3-12 (because the grounds specified therein for doing so did not exist in this case) and in remanding the case for a rehearing under § 10-3-13 (because “the time within which the agreement required the award to be made” had expired in this case, and, therefore, the court lacked the ability to direct a rehearing by the arbitrators under § 10-3-13), such errors were harmless because the court nevertheless had the power to seek a clarification of the award under § 10-3-14 without any need for a rehearing and, thus, without regard to the expiration of any applicable period for obtaining a rehearing. Moreover, this Court can affirm a Superior Court judgment for different reasons than those relied upon by the trial justice. Levine v. Bess Eaton Donut Flour Co., 705 A.2d 980, 984 (R.I.1998) (holding that the Supreme Court can affirm a trial justice’s decision on grounds other than those stated by the trial justice); see also Liberty Mutual Insurance Co. v. Tavarez, 797 A.2d 480, 486 n. 5 (R.I.2002); Borsay v. State of Rhode Island, 714 A.2d 1201, 1202 (R.I.1998).
For these reasons, I would affirm the judgment confirming the award as modified on the grounds that, under § 10-3-14, the court had the power to ascertain whether, as alleged, the award of punitive damages was a mistake, and it could do so by asking the arbitrator to clarify the award in this respect. In effect, that is what happened here. Even though the court vacated the award and remanded it for a rehearing, no such rehearing occurred and the arbitrator merely clarified for the court and the parties that he intended the punitive portion of the damages award to be compensatory. In these circumstances, the Superior Court “must modify and correct the award so as to effect the intent thereof and promote justice between the parties.” Section 10-3-14(b). Because the Superior Court accomplished this same objective (albeit by a different route), I would affirm the judgment that confirmed the award as modified to reflect the arbitrator’s true intention.

. Punitive damages "serve as an effective deterrent to malicious or fraudulent conduct.” Raytheon Co. v. Automated Business Systems, Inc., 882 F.2d 6, 12 (1st Cir.1989). In a situation in which such conduct could give rise to punitive damages if proven to a court, there does not appear to be any compelling reason to prohibit a party that proves ffaudu-' lent conduct to an arbitrator from recovering punitive damages, unless the scope of an arbitration agreement is limited to breach-of-contract disputes. Id. An arbitration agreement, therefore, can be construed to authorize the arbitrator to award punitive damages in the same circumstances in which a court could do so, unless an agreement to arbitrate explic*809itly excludes such damages from its arbitration provisions. Id.