Court Opinion

ID: 7799816
Source: CourtListenerOpinion
Date Created: 2022-08-11 15:02:16.659215+00
Date Added: 2024-06-11T16:28:59.641861
License: Public Domain

The summaries of the Colorado Court of Appeals published opinions
  constitute no part of the opinion of the division but have been prepared by
  the division for the convenience of the reader. The summaries may not be
    cited or relied upon as they are not the official language of the division.
  Any discrepancy between the language in the summary and in the opinion
           should be resolved in favor of the language in the opinion.

                                                                 SUMMARY
                                                             August 11, 2022

                                2022COA93

No. 20CA2105, Herrera v. Santangelo Law Offices, P.C. — ADR
— Arbitration — Colorado Uniform Arbitration Act — Vacating
Award — Sanctions

     A division of the court of appeals examines whether an

arbitrator had authority to sanction an arbitrating party’s attorney

who was not himself a party to the arbitration agreement that

bound his client. The division first determines that, as a nonparty

to the arbitration agreement, the attorney was not bound to his

client’s arbitration obligation by ordinary principles of contract or

agency law under N.A. Rugby Union LLC v. U.S. of Am. Rugby

Football Union, 2019 CO 56. The division thus concludes that the

arbitrator did not possess any authority to sanction the attorney by

virtue of his client’s arbitration obligation.
     The division then concludes that the arbitrator did not

otherwise possess authority to sanction the attorney, either

inherently as a quasi-judicial tribunal or statutorily under C.R.C.P.

11; section 13-17-102, C.R.S. 2021; or the provisions of the

Colorado Uniform Arbitration Act, sections 13-22-201 to -230,

C.R.S. 2021.
COLORADO COURT OF APPEALS                                           2022COA93

Court of Appeals No. 20CA2105
Larimer County District Court No. 19CV30116
Honorable Daniel M. McDonald, Judge

Robert J. Herrera,

Plaintiff-Appellant,

v.

Santangelo Law Offices, P.C.,

Defendant-Appellee.

                       JUDGMENT REVERSED AND CASE
                        REMANDED WITH DIRECTIONS

                                 Division VII
                          Opinion by JUDGE KUHN
                       Navarro and Lipinsky, JJ., concur

                          Announced August 11, 2022

Gordon & Rees LLP, John M. Palmeri, John R. Mann, Denver, Colorado, for
Plaintiff-Appellant

Ringenberg & Beller, P.C., Richard D. Beller, Fort Collins, Colorado, for
Defendant-Appellee
¶1    In an arbitration between Santangelo Law Offices, P.C., and

 Touchstone Home Health LLC, the arbitrator sanctioned

 Touchstone’s arbitration counsel, Robert J. Herrera, after Herrera

 fraudulently obtained Santangelo’s signature on a settlement

 agreement and told the arbitrator a known falsehood — that the

 parties had settled. Invoking C.R.C.P. 11 and section 13-17-102,

 C.R.S. 2021, the arbitrator awarded Santangelo nearly $150,000

 against Herrera personally for attorney fees Santangelo incurred in

 responding to Herrera’s falsehood and in pursuing sanctions

 against him. The district court confirmed this award.

¶2    On appeal, Herrera contends that the arbitrator lacked the

 authority to sanction him personally. We agree and reverse

 accordingly.

                          I.   Background

¶3    Touchstone contracted for Santangelo’s legal services, entering

 into an Agreement for Legal Services (the Touchstone-Santangelo

 fee agreement) containing an arbitration clause:

           The parties agree to submit any controversy or
           claim in any way arising from this Agreement
           or the parties’ relationship to confidential
           binding arbitration . . . by a single attorney.
           Such arbitration shall be conducted pursuant

                                  1
           to the Commercial Arbitration Rules (CARs) of
           the American Arbitration Association (AAA)
           . . . .1

 Herrera did not sign the fee agreement in either a personal or

 representative capacity, nor was he even counsel for Touchstone

 when it was executed.

¶4    Years later, when Touchstone and Santangelo’s relationship

 ended, Santangelo sought to collect its unpaid legal fees and

 demanded arbitration pursuant to the Touchstone-Santangelo fee

 agreement. Herrera entered his appearance in the arbitration as

 Touchstone’s sole attorney. The parties participated in a

 preliminary hearing. The arbitrator memorialized that hearing in a

 report and scheduling order, which stated that “[t]he Colorado

 Rules of Civil Procedure shall govern [the arbitration] and the laws

 of the State of Colorado shall apply.”

¶5    Then, however, “something very strange happened.” In re

 Touchstone Home Health LLC, 572 B.R. 255, 264 (Bankr. D. Colo.

 2017). Soon after the parties rejected opposing settlement offers,

 1The parties agreed to several modifications of the Commercial
 Arbitration Rules not relevant here.

                                   2
 Herrera asserted in an email to the arbitrator that the parties had

 reached a settlement, but

            [Santangelo] disputed this, asserting that
            [Touchstone] had engaged in a fanciful scheme
            to fabricate a settlement by using a fake FedEx
            driver to obtain a signature from [Santangelo]
            on a delivery slip [in exchange for a box
            containing approximately 5,000 one-dollar
            bills], which signature was then superimposed
            or forged on a settlement agreement that
            [Santangelo] had not even seen.

 Id.

¶6     In response, Santangelo moved for sanctions against

 Touchstone and Herrera in his personal capacity. Herrera

 responded by disclaiming any obligation to arbitrate his individual

 liability for sanctions and filing a court action for declaratory relief

 establishing that the arbitrator lacked the authority to enter

 sanctions against him.

¶7     Following hearings on the purported settlement and

 Santangelo’s motion, the arbitrator found that Herrera admitted he

 knew that (1) Santangelo’s signature on the purported settlement

 agreement was obtained and placed on the document through

 deception; (2) this signature formed the basis for his assertion to

 the arbitrator that the parties had settled; and (3) his email to the

                                     3
 arbitrator was therefore without merit and went uncorrected even

 through the arbitrator’s initial hearing on the purported

 settlement.2 The arbitrator also found that Herrera was aware that

 the Colorado Rules of Civil Procedure and Colorado law generally

 would apply to the arbitration because, at the preliminary hearing,

 he had agreed on behalf of Touchstone that those authorities would

 govern the arbitration.

¶8    The arbitrator then determined that the issue of sanctions

 against Herrera was arbitrable, that Rule 11 and section 13-17-102

 governed his consideration of sanctions, that Herrera’s conduct was

 sanctionable under both, and that Santangelo reasonably incurred

 $148,184.15 in fees and expenses in both responding to Herrera’s

 false assertion and moving for sanctions against him. The

 arbitrator awarded this amount to Santangelo and ordered Herrera

 to pay it personally. Touchstone and Santangelo later settled their

 2 Herrera later stipulated to many of these facts in his agreement
 with Colorado’s Office of Attorney Regulation Counsel to a
 three-year suspension of his license to practice law for this and
 other misconduct. People v. Herrera, (Colo. O.P.D.J. No. 18PDJ026,
 Nov. 29, 2018).

                                   4
  fee dispute but did not resolve the arbitrator’s award of sanctions

  against Herrera individually.

¶9     In his district court suit, Herrera moved to vacate the

  arbitrator’s award of sanctions against him pursuant to section

  13-22-223(1), C.R.S. 2021. The court denied Herrera’s motion and

  instead confirmed the award under section 13-22-223(4).

                              II.   Analysis

¶ 10   Herrera contends the award of sanctions must be vacated

  because (1) he did not agree to arbitrate any issues of attorney

  sanctions, either individually in the arbitration hearing or as a

  nonparty bound to the Touchstone-Santangelo fee agreement; and

  (2) the arbitrator had no authority to sanction the attorney of an

  arbitrating party absent an agreement granting the arbitrator such

  authority. We agree with both contentions.

                        A.    Standard of Review

¶ 11   “Colorado law favors the resolution of disputes through

  arbitration.” J.A. Walker Co. v. Cambria Corp., 159 P.3d 126, 128

  (Colo. 2007). This preference is embedded in both the Colorado

  Constitution and the Colorado Uniform Arbitration Act (CUAA).

  §§ 13-22-201 to -230, C.R.S. 2021; Johnson-Linzy v. Conifer Care

                                    5
  Communities A, LLC, 2020 COA 88, ¶ 16 (citing Colo. Const. art.

  XVIII, § 3).

¶ 12   “To facilitate confidence in the finality of arbitration awards

  and discourage piecemeal litigation, the [CUAA] strictly limits the

  role of the courts in reviewing awards.” Magenis v. Bruner, 187

  P.3d 1222, 1224 (Colo. App. 2008). Thus, “a court may decline to

  confirm an arbitration award only in limited circumstances.”

  Barrett v. Inv. Mgmt. Consultants, Ltd., 190 P.3d 800, 802 (Colo.

  App. 2008); see also Treadwell v. Vill. Homes of Colo., Inc., 222 P.3d

  398, 401 (Colo. App. 2009) (“These limited circumstances . . . do not

  include the merits of the award. Rather, they involve ‘specific

  instances of outrageous [arbitral] conduct’ and ‘egregious

  departures from the parties’ agreed-upon arbitration.’” (quoting Hall

  Street Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 586 (2008))).

¶ 13   This limited scope of judicial review springs from the general

  principle that “[a]rbitration is ‘a matter of contract between the

  parties; it is a way to resolve those disputes — but only those

  disputes — that the parties have agreed to submit to arbitration.’”

  See Johnson-Linzy, ¶ 11 (quoting First Options of Chi., Inc. v.

  Kaplan, 514 U.S. 938, 943 (1995)). And because arbitration is a

                                     6
  matter of contract, “[t]he powers of an arbitrator derive from the

  arbitration agreement between the parties and are strictly defined

  by the terms of that agreement.” Magenis, 187 P.3d at 1224 (citing

  Coors Brewing Co. v. Cabo, 114 P.3d 60, 64 (Colo. App. 2004)).

  That being said, the CUAA provides that it “shall govern” arbitration

  agreements, § 13-22-203, C.R.S. 2021, and “[p]arties may waive or

  vary the effect of the CUAA ‘to the extent permitted by law,’”

  Johnson-Linzy, ¶ 16 (quoting § 13-22-204(1), C.R.S. 2021).

¶ 14   As relevant here, the CUAA states that “the court shall vacate

  an award made in the arbitration proceeding if it finds that . . . [a]n

  arbitrator exceeded the arbitrator’s powers . . . [or] [t]here was no

  agreement to arbitrate . . . .” § 13-22-223(1)(d), (e). It also provides

  that “[t]he court shall decide whether an agreement to arbitrate

  exists or a controversy is subject to an agreement to arbitrate.”

  § 13-22-206(2), C.R.S. 2021.

¶ 15   We thus review de novo both whether an enforceable

  agreement to arbitrate exists and, if so, the scope of that agreement.

  Moffett v. Life Care Ctrs. of Am., 219 P.3d 1068, 1072 (Colo. 2009);

  N.A. Rugby Union LLC v. U.S. of Am. Rugby Football Union, 2019 CO

  56, ¶ 19. We also review de novo whether an arbitrator exceeded

                                     7
  their powers.3 See Treadwell, 222 P.3d at 400 (“Courts

  independently review whether an arbitrator had power to resolve a

  dispute.”).

¶ 16   Lastly, the interpretation of the CUAA also presents a question

  of law we review de novo. In re Marriage of Roth, 2017 COA 45,

  ¶ 15. “When interpreting the CUAA, ‘[w]e begin by analyzing the

  text of the CUAA, giving its words their ordinary and commonly-

  understood meanings.’” E-21 Eng’g, Inc. v. Steve Stock & Assocs.,

  Inc., 252 P.3d 36, 39 (Colo. App. 2010) (quoting Ingold v.

  AIMCO/Bluffs, L.L.C. Apartments, 159 P.3d 116, 120 (Colo. 2007)).

  We “striv[e] to give effect to the General Assembly’s intent and

  chosen legislative scheme.” Sooper Credit Union v. Sholar Grp.

  Architects, P.C., 113 P.3d 768, 771 (Colo. 2005).

  3 Santangelo argues that we review the arbitrator’s conclusion that
  the issue of sanctions was arbitrable for a “manifest disregard of the
  law.” We disagree. See Johnson-Linzy v. Conifer Care Communities
  A, LLC, 2020 COA 88, ¶ 16 (“To deviate from [section 13-22-206(2),
  C.R.S. 2021,] . . . ‘the law requires that parties must plainly and
  unambiguously empower an arbiter to decide arbitrability and that
  they must clearly and knowingly assent to terms incorporated by
  reference.’” (quoting Taubman Cherry Creek Shopping Ctr., LLC v.
  Neiman-Marcus Grp., Inc., 251 P.3d 1091, 1095 (Colo. App. 2010))).

                                    8
                    B.   Herrera Did Not Agree with
                      Santangelo to Arbitrate Sanctions

¶ 17    Santangelo argues that the arbitrator had the authority to

  sanction Herrera because either (1) the arbitration language in the

  Touchstone-Santangelo fee agreement bound Herrera; or (2) Herrera

  personally agreed that the arbitrator possessed the authority to

  sanction the parties’ counsel individually. We are not persuaded.

       1.   The Arbitration Language of the Touchstone-Santangelo
                     Fee Agreement Did Not Bind Herrera

¶ 18    Santangelo does not dispute that the arbitration language of

  its fee agreement with Touchstone by its terms bound only the

  “parties” — and that Herrera was not a “party.” The arbitrator

  agreed, consistently finding that, throughout the arbitration,

  Herrera was acting as counsel for Touchstone and not in his

  individual capacity. Nonetheless, Santangelo contends that the

  Touchstone-Santangelo fee agreement empowered the arbitrator to

  sanction the parties’ attorneys, and that Herrera was bound to it

  under principles of contract and agency law. We disagree with its

  second contention and need not reach its first.

¶ 19    As a general rule, “when the requirement to arbitrate is

  created by an agreement, it can be invoked only by a signatory of

                                    9
  the agreement, and only against another signatory.” Smith v.

  Multi-Fin. Sec. Corp., 171 P.3d 1267, 1272 (Colo. App. 2007).

  However, in Rugby Union, ¶¶ 20-22, the supreme court adopted

  seven exceptions, born of ordinary principles of contract and agency

  law, that may bind a nonparty to an arbitration agreement:

  (1) incorporation of an arbitration provision by reference in another

  agreement; (2) the nonsignatory’s assumption of the arbitration

  obligation; (3) agency; (4) veil-piercing/alter ego; (5) equitable

  estoppel; (6) successor-in-interest; and (7) third-party beneficiary.

¶ 20   Santangelo first argues that Herrera assumed Touchstone’s

  obligation to arbitrate. See id. (citing Thomson-CSF, S.A. v. Am. Arb.

  Ass’n, 64 F.3d 773, 777 (2d Cir. 1995)).4 According to Santangelo,

  Herrera did so by (1) entering his appearance as counsel for

  Touchstone and (2) agreeing — on Touchstone’s behalf in the

  preliminary hearing before the issue of sanctions arose — that “[t]he

  4 The parties have not cited — nor have we found — a Colorado case
  applying this exception. For guidance, we look to federal cases
  interpreting the Federal Arbitration Act. See E-21 Eng’g, Inc. v.
  Steve Stock & Assocs., Inc., 252 P.3d 36, 39 (Colo. App. 2010) (citing
  Ingold v. AIMCO/Bluffs, L.L.C. Apartments, 159 P.3d 116, 120 (Colo.
  2007)).

                                     10
  Colorado Rules of Civil Procedure shall govern [the arbitration] and

  the laws of the State of Colorado shall apply.”

¶ 21   We conclude that Herrera did not “manifest an intention to be

  bound” by the Touchstone-Santangelo fee agreement through his

  conduct. See Thomson-CSF, S.A., 64 F.3d at 777; In re Arb.

  Between Promotora da Navegacion, S.A. & Sea Containers, Ltd., 131

  F. Supp. 2d 412, 417 (S.D.N.Y. 2000) (“[T]he fundamental question

  . . . is whether [the nonsignatory] evidenced — expressly or

  implicitly — an unambiguous intent to arbitrate the submitted

  dispute.”). Rather, Herrera “explicitly disavowed any obligations

  arising out of it” from the moment Santangelo filed its motion for

  sanctions against Herrera — even going as far as filing a court

  action seeking a declaration that the arbitrator lacked the authority

  to impose sanctions against him. See Thomson-CSF, 64 F.3d at

  777; Gvozdenovic v. United Air Lines, Inc., 933 F.2d 1100, 1103-05

  (2d Cir. 1991) (concluding that a nonsignatory “manifested a clear

  intent” to arbitrate because, in part, nonsignatory did not, at any

  point before or during the arbitration, object to the process, refuse

  to arbitrate, or make any attempt to seek judicial relief); Henry v.

  Imbruce, 177 A.3d 1168, 1184 (Conn. App. Ct. 2017) (“The

                                    11
  [nonsignatory’s] conduct belies his claim that he is not bound by

  the arbitration. . . . [H]e repeatedly represented himself both at the

  trial court and in the arbitration as involved in and bound by the

  arbitration . . . [and he] did not argue that he was not a party until

  after the arbitrator rendered her award.”); see also Invista S.À.R.L.

  v. Rhodia, SA, 625 F.3d 75, 85 (3d Cir. 2010) (citing Thomson-CSF

  in background for the proposition that “non-signatories may

  assume the obligations contained in an arbitration clause where

  there is a sufficiently close relationship to justify doing so, and the

  circumstances warrant that result,” but ultimately ruling on other

  grounds).

¶ 22   We also reject Santangelo’s contention that Herrera is

  equitably estopped from asserting that he is not bound by

  Touchstone’s arbitration obligation. He has not “knowingly

  exploited” the Touchstone-Santangelo fee agreement by claiming

  direct benefits from, enjoying rights under, or seeking to enforce

  other provisions of it for his own benefit. See Rugby Union, ¶ 38.

  Any benefits Herrera received because of his representation of

  Touchstone in the arbitration are simply too indirect to estop him

                                     12
  from disclaiming the arbitrator’s authority to impose sanctions

  against him under Touchstone’s arbitration obligation.

¶ 23   Santangelo advances no other theory for binding Herrera to

  the Touchstone-Santangelo fee agreement, and we see no other

  Rugby Union exception as applicable under the facts of this case.

  See Rugby Union, ¶ 31 (“[T]he signatory must establish one of the

  recognized legal or equitable bases to compel the nonsignatory to

  arbitrate.”); compare Bak v. MCL Fin. Grp., Inc., 88 Cal. Rptr. 3d

  800, 806 (Ct. App. 2009) (upholding arbitrator’s sanctions award

  against party’s attorney because, in part, the attorney was the

  party’s agent), and Bigge Crane & Rigging Co. v. Docutel Corp., 371

  F. Supp. 240, 246 (E.D.N.Y. 1973) (upholding arbitrator’s sanctions

  award against nonparty principal of agent-signatory to an

  arbitration agreement), with Rugby Union, ¶ 36 (“The agency

  exception to the general principle that a party cannot be required to

  arbitrate any dispute that it has not agreed to arbitrate is premised

  on traditional principles of agency law. Under those principles, an

  agent may bind a principal to a contract. A principal, however,

  cannot bind an agent.”). Other cases Santangelo cites for binding

                                    13
  Herrera are inapposite.5 See First Pres. Cap. v. Smith Barney, Harris

  Upham & Co., 939 F. Supp. 1559, 1567 (S.D. Fla. 1996) (motion for

  sanctions directed against party to arbitration agreement); Pisciotta

  v. Shearson Lehman Bros., 629 A.2d 520, 524 (D.C. 1993) (same).

¶ 24   We therefore conclude that the Touchstone-Santangelo fee

  agreement did not bind Herrera to the arbitrator’s authority

  because Herrera was a nonparty to that agreement and did not fall

  within any of the Rugby Union exceptions. See MCR of Am., Inc. v.

  Greene, 811 A.2d 331, 343-44 (Md. Ct. Spec. App. 2002) (vacating

  sanctions award against a party’s attorney because attorney was

  not bound by the parties’ arbitration agreement).

  5 To the extent out-of-state cases have concluded that the terms of
  the parties’ arbitration agreement can authorize an arbitrator to
  sanction a party’s attorney without some basis existing in contract
  or agency law to bind the attorney to that agreement, we disagree
  with their conclusions. See Polin v. Kellwood Co., 103 F. Supp. 2d
  238, 264-67 (S.D.N.Y. 2000) (Polin I) (reasoning, in part, that
  arbitration panel had authority to sanction nonparty attorney
  because the parties’ agreement “g[ave] the panel broad remedial
  power, and provid[ed] that the panel ‘may grant any remedy or relief
  that the arbitrator deems just and equitable, including any remedy
  or relief that would have been available to the parties had the
  matter been heard in court’”), aff’d, 34 F. App’x 406 (2d Cir. 2002).

                                   14
                2.   Herrera Did Not Personally Agree to
                the Arbitrator’s Authority to Impose Sanctions

¶ 25   We also reject Santangelo’s argument that Herrera personally

  agreed to arbitrate attorney-sanctions disputes.

¶ 26   On this issue, the district court concluded that Herrera

  “voluntarily agreed to the arbitrator’s authority under Colorado law

  twice” when he (1) entered his appearance as counsel in the

  arbitration and (2) expressly agreed at the preliminary hearing that

  Colorado law and the Rules of Civil Procedure would apply to the

  arbitration proceedings. In so agreeing, the court ruled that

  Herrera “bound not only his client but also himself to the rule of the

  arbitrator,” and, “[t]herefore, he (like his client) could be sanctioned”

  under Rule 11 or section 13-17-102.

¶ 27   As an initial matter, Santangelo appears to contend that the

  trial court found that Herrera agreed that Colorado law applied to

  him individually — as well as in a representative capacity. To the

  extent the court did so, we find no record support for this finding.

  See Albright v. McDermond, 14 P.3d 318, 322 (Colo. 2000) (“In

  reviewing a breach of contract case, we defer to the trial court’s

  findings of fact if the record supports them, and we review its

                                     15
  conclusions of law de novo.”). Rather, the arbitrator’s report merely

  memorialized that Colorado law applied to the proceedings; the

  arbitrator later found that Herrera only agreed to the application of

  Colorado law on Touchstone’s behalf; and, in determining the

  proper parties for the sanctions motion, the arbitrator specifically

  stated that sanctions apply to Herrera “by virtue of his role as

  counsel for Touchstone and not in his individual capacity.”

¶ 28   Having rejected Santangelo’s contention, we do not see

  Herrera’s appearance as counsel for Touchstone, his agreement on

  behalf of Touchstone that Colorado law would apply to the

  arbitration, or both, as forming an enforceable agreement to

  arbitrate. See City & Cnty. of Denver v. Dist. Ct., 939 P.2d 1353,

  1361 (Colo. 1997) (“As a general rule, courts should follow state law

  principles governing contract formation to determine whether the

  parties agreed to submit an issue to alternative dispute

  resolution.”); § 13-22-206(1) (“An agreement contained in a record

  to submit to arbitration any existing or subsequent controversy

  arising between the parties to the agreement is valid, enforceable,

  and irrevocable . . . .”); see also E-21 Eng’g, 252 P.3d at 39

  (“Although the CUAA requires that an arbitration agreement be

                                    16
  ‘contained in a record,’ it does not specifically require that the

  written instrument be signed by either or both parties.”). Neither of

  these actions satisfies the elements of a contract formed between

  Herrera and Santangelo to arbitrate the issue of sanctions. See

  Lane v. Urgitus, 145 P.3d 672, 677 (Colo. 2006) (“In determining

  whether the parties have agreed to submit the issue in question to

  arbitration, we follow state law principles governing contract

  formation.”).

¶ 29   In summary, we conclude that no agreement bound Herrera to

  arbitrate the issue of sanctions against him in an individual

  capacity.

¶ 30   Nonetheless, this is not the end of our inquiry. While “[t]he

  powers of an arbitrator derive from the arbitration agreement,”

  Magenis, 187 P.3d at 1224, federal cases have entertained the

  possibility — which Santangelo urges us to adopt — that,

  notwithstanding the lack of an agreement binding nonparty

  attorneys, arbitrators possess “inherent authority” to sanction

  attorneys appearing before them as a part of their “obligation to

  protect the forum.” InterChem Asia 2000 Pte. Ltd. v. Oceana

  Petrochemicals AG, 373 F. Supp. 2d 340, 358 (S.D.N.Y. 2005)

                                     17
  (quoting Polin v. Kellwood Co., 132 F. Supp. 2d 126, 134 (S.D.N.Y.

  2000) (Polin II)).

¶ 31    We thus turn to examine whether the arbitrator has authority

  to sanction an arbitrating party’s attorney, regardless of whether

  the attorney is personally subject to an agreement to arbitrate the

  issue of sanctions.

               C.      Arbitrators Have No Inherent Authority
                            to Sanction a Party’s Attorney

¶ 32    Santangelo argues, as it did before the arbitrator, that the

  arbitrator has the authority to craft appropriate sanctions for an

  attorney’s misconduct due to the tribunal’s inherent power to

  regulate the proceeding before it. We disagree.

¶ 33    Santangelo is correct regarding the well-settled principle that

  “[c]ourts have inherent authority to issue orders that are necessary

  for the performance of judicial functions.” People v. McGlotten, 134

  P.3d 487, 489 (Colo. App. 2005); see Halaby, McCrea & Cross v.

  Hoffman, 831 P.2d 902, 907 (Colo. 1992) (“The inherent powers

  which courts possess consist of all powers reasonably required to

  enable a court to efficiently perform its judicial functions, to protect

                                      18
  its dignity, independence, and integrity, and to make its lawful

  actions effective.”).

¶ 34   However, it does not follow that, because judicial tribunals

  possess inherent authority to regulate the proceedings before them,

  all quasi-judicial tribunals possess the same authority. After all, the

  powers of an arbitrator arise primarily from contract, while those of

  courts arise from the judiciary’s constitutional role, statutory

  authority, and historical practice. See Chambers v. NASCO, Inc.,

  501 U.S. 32, 47 (1991); InterChem Asia, 373 F. Supp. 2d at 358

  (concluding that arbitrators do not have inherent sanction authority

  because “finding that the Arbitrator had inherent authority to

  sanction [an arbitrating party’s attorney] would directly contradict

  the principle that an arbitrator’s authority is circumscribed by the

  agreement of the parties”); c.f. Munich Reinsurance Am., Inc. v. ACE

  Prop. & Cas. Ins. Co., 500 F. Supp. 2d 272, 275-76 (S.D.N.Y. 2007)

  (concluding that disqualification of an attorney for an alleged

  conflict of interest was not within arbitrator’s authority to decide as

  that function “has historically been a matter for judges and not

  arbitrators because it requires an application of substantive state

                                    19
  law regarding the legal profession and results in an enforceable

  judicial order”).

¶ 35   Moreover, we agree with Herrera that no Colorado statute or

  rule of civil procedure confers on arbitrators the authority to

  sanction a party’s attorney. See Seagate Tech., LLC v. W. Digit.

  Corp., 854 N.W.2d 750, 761 (Minn. 2014) (noting that arbitrators

  may have authority conferred by the legislature). As he argues,

  Rule 11 and section 13-17-102 only empower “courts” to sanction

  attorneys, so absent an arbitration agreement incorporating these

  provisions to which Herrera was bound, they provide no

  independent, standalone authority for an arbitrator to sanction a

  party’s attorney. Compare Halaby, 831 P.2d at 907 (interpreting a

  previous version of C.R.C.P. 107 that defined “contempt” to include

  “[m]isbehavior of any person in the presence of . . . an arbitrator

  while sitting on arbitration” and stating: “Thus, a judge, a master

  and an arbitrator all have clear authority to impose sanctions for

  conduct which interferes with the functions of the court”), with In re

  Marriage of Leverett, 2012 COA 69, ¶ 11 (interpreting the current

  Rule 107 and noting that, because “arbitrator” is not included in

                                    20
  the definition of “court,” violation of an arbitrator’s order is not

  “contempt”).

¶ 36   Further, we agree with Herrera that no provision of the CUAA

  explicitly confers on arbitrators the authority to sanction a party’s

  attorney. The CUAA does grant arbitrators specific statutory

  powers that can be exercised in arbitration proceedings. See

  § 13-22-215(1), C.R.S. 2021 (noting that the CUAA confers certain

  authority upon the arbitrator). For example, arbitrators can issue

  subpoenas, authorize depositions, and issue protective orders. See,

  e.g., § 13-22-217, C.R.S. 2021. But the legislature has also

  specifically limited the bounds of these powers. See, e.g.,

  § 13-22-217(1) (subpoenas must be enforced via court order);

  § 13-22-217(4) (arbitrators do not have the power of contempt);

  § 13-22-217(7) (granting courts the power to enforce subpoenas and

  discovery-related orders issued by arbitrators). And while the CUAA

  authorizes arbitrators to award “reasonable attorney fees . . . if such

  an award is authorized by law in a civil action involving the same

  claim or by the agreement of the parties to the arbitration

  proceeding,” § 13-22-221(1), C.R.S. 2021, we do not see this

  authorization as broad or express enough to apply to an arbitrating

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  party’s attorney. Most importantly, nowhere else in these

  provisions has the General Assembly imbued arbitrators with

  general powers, particularly against nonparties.6

¶ 37   Lastly, we acknowledge a looming concern Santangelo raises

  in its briefing — that if arbitrators are not permitted to control and

  protect the arbitration proceedings through the sanction power,

  then attorneys may be more likely to commit misconduct in

  arbitration. See Polin II, 132 F. Supp. 2d at 134 (“If an attorney

  were free to disregard and flaunt the authority of the arbitral forum,

  [the] benefits [of arbitration] would be lost; the interest of . . . courts

  in following the . . . policy of promoting arbitration as a means of

  resolving disputes would be frustrated.”); see also Positive Software

  Sols., Inc. v. New Century Mortg. Corp., 619 F.3d 458, 460-63 (5th

  Cir. 2010) (concluding that courts lack inherent authority to

  sanction attorneys for their conduct during arbitration); Teamsters

  6 To the contrary, in enacting the CUAA, the General Assembly
  declined to enact language contained in the Uniform Arbitration Act
  that would have authorized arbitrators to “order such remedies as
  the arbitrator considers just and appropriate under the
  circumstances of the arbitration proceeding.” Compare Unif. Arb.
  Act § 21(c) (Unif. L. Comm’n 2000) (containing quoted language),
  with § 13-22-221, C.R.S. 2021 (containing no such language).

                                      22
  Loc. Union No. 430 v. Cement Express, Inc., 841 F.2d 66, 70 (3d Cir.

  1988) (concluding that federal courts lack authority under F.R.C.P.

  11 to sanction attorneys for their submissions to arbitration).

¶ 38   But even if valid, other safeguards alleviate his concern. First,

  going forward arbitrators could ask attorneys appearing before

  them to explicitly and personally agree to the arbitrator’s authority

  to sanction the lawyers. Second, as happened here, attorney

  misconduct in arbitration is still subject to regulation by the

  Colorado Office of Attorney Regulation Counsel. But more

  importantly in our view, attorneys committing misconduct in

  arbitration could open the door to the arbitrator sanctioning their

  clients. See, e.g., Certain Underwriters at Lloyd’s London v.

  Argonaut Ins. Co., 264 F. Supp. 2d 926, 944 (N.D. Cal. 2003)

  (noting that parties may agree by arbitration contract to confer

  sanction power on the arbitrator); Commercial Arbitration Rules

  and Mediation Procedures R-58(a) (Am. Arb. Ass’n, amended and

  effective Oct. 1, 2013) (“The arbitrator may, upon a party’s request,

  order appropriate sanctions where a party fails to comply with its

  obligations under these rules or with an order of the arbitrator.”);

  see also § 13-22-221(1). Either way, we don’t see the absence of

                                    23
  arbitrator authority to sanction a party’s attorney as opening a

  Pandora’s box of attorney misconduct in arbitration.

¶ 39   Importantly, too, there are significant concerns counseling

  against concluding that arbitrators have authority to sanction

  nonparty attorneys absent an agreement to that effect. Here,

  Herrera claims it would be futile for him to challenge the merits of

  the arbitrator’s sanctions award — his factual findings or

  application of law — because, Herrera argues, the scope of judicial

  review of that award is so narrow. See Cabo, 114 P.3d at 66

  (“[A]rbitration awards are not open to review on the merits.”). That

  may be so in Herrera’s case, but even if not,

            [w]e are . . . [still] not inclined to accept a
            broadening of the powers of an arbitrator while
            our authority to review the exercise of those
            powers remains narrow. To hold otherwise
            would grant arbitrators greater power to
            sanction attorneys by awarding arbitration or
            attorney’s fees than the courts presently enjoy,
            because the power of arbitrators to do so is
            less reviewable. That would be an unfortunate
            result, given that arbitrators are not judges
            and arbitrations are not trials. If arbitrators’
            powers are to be so expanded, it should be
            done expressly by rule or statute, not
            inferentially by this Court.

  Greene, 811 A.2d at 344.

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¶ 40   Ultimately, arbitration in Colorado is largely a function of

  statutory and contract law, and an arbitrator can only act within

  the scope of an agreement between the parties, with authority

  granted by that agreement or by law. We conclude that arbitrators

  have no authority — either inherent to the arbitration tribunal or

  conferred by Rule 11, section 13-17-102, or the CUAA — to

  sanction a party’s attorney absent an agreement that provides

  otherwise, and to which that attorney is bound.

                            III.   Conclusion

¶ 41   We conclude that the arbitrator exceeded his authority in

  sanctioning Herrera personally, as (1) Herrera was not bound to any

  agreement to arbitrate the issue of sanctions against himself; and

  (2) the arbitrator otherwise possessed no authority to do so. The

  district court therefore erred in denying Herrera’s motion to vacate

  and instead confirming the award. We reverse the district court’s

  judgment accordingly and remand with instructions to vacate the

  arbitration award against Herrera.

       JUDGE NAVARRO and JUDGE LIPINSKY concur.

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