Court Opinion

ID: 4103589
Source: CourtListenerOpinion
Date Created: 2016-12-01 08:09:35.568946+00
Date Added: 2024-06-11T14:36:37.426541
License: Public Domain

STATE OF MICHIGAN

                            COURT OF APPEALS

KRISTOFOR C. HARRISON,                                               UNPUBLISHED
                                                                     November 29, 2016
               Plaintiff-Appellant,

v                                                                    No. 328303
                                                                     Wayne Circuit Court
BLUE CROSS BLUE SHIELD OF MICHIGAN,                                  LC No. 14-008471-CL

               Defendant-Appellee.

Before: WILDER, P.J., and CAVANAGH and SERVITTO, JJ.

PER CURIAM.

       In this action seeking confirmation of an arbitration award pursuant to a collective
bargaining labor dispute, plaintiff appeals as of right the trial court’s order dismissing his case
without prejudice for lack of subject-matter jurisdiction. We affirm.

        Plaintiff was employed by defendant beginning in 2010. Plaintiff’s employment was
subject to a collective bargaining agreement (CBA) between his union, UAW Local 2500, and
defendant. Plaintiff was employed in defendant’s Medicare Advantage Division, which was
subject to strict regulations promulgated by defendant in order to gain compliance with the
Centers for Medicaid and Medicare Services’ (CMS) standards. In 2011, defendant began
investigating plaintiff for apparent violations of those regulations, including taking
undocumented and unscheduled break time and falsifying documents. After the investigation,
defendant terminated plaintiff’s employment. Plaintiff immediately filed a grievance with his
union, citing wrongful termination by defendant. Plaintiff’s union represented him throughout
the grievance process, which ultimately ended with defendant finding that it had acted properly
in terminating plaintiff’s employment.

        Plaintiff’s union then appealed defendant’s decision, as was permitted pursuant to the
CBA, by submitting the claim to arbitration. In July of 2013, the arbitrator issued an opinion
finding that defendant had violated the CBA by terminating plaintiff’s employment. The
arbitrator also held, however, that pursuant to the CBA, defendant had been permitted to enforce
some sort of punishment against plaintiff. The arbitrator determined that the proper amount of
discipline should have been for 90 days of suspension without pay. As such, the arbitrator
entered an award for plaintiff requiring defendant to rehire plaintiff at his previous position with
full seniority and for

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       full back pay and benefits, less the ninety (90) work day suspension and less any
       monies he earned from other employment beyond said ninety (90) work day
       suspension and less any workers’ compensation he received beyond said ninety
       (90) work days which [plaintiff] is not obligated to return to the State of Michigan
       by virtue of this Award.

Plaintiff was immediately rehired by defendant, and defendant requested certain information in
order to calculate the back pay. Defendant asserted that it needed plaintiff’s tax returns for the
time in question to properly calculate how much money he had received during the intervening
time between his employment so that it could be offset from the back pay award. Plaintiff stated
that he had not filed tax returns for that time, and therefore, he could not comply with the
request. However, plaintiff provided defendant with W2’s and pay stubs from his intervening
jobs, which he purported to be sufficient for defendant to make the calculation.

        Eventually, the parties reached an impasse with defendant refusing to pay the back pay
award without the requested documentation. Plaintiff then filed the instant litigation, seeking
confirmation and enforcement of the arbitrator’s award. During discovery, the trial court issued
an order, sua sponte, ordering the parties to appear for a hearing to show cause why the case
should not be dismissed for lack of subject-matter jurisdiction. At the hearing, plaintiff argued
that the trial court had jurisdiction to confirm and enforce arbitration awards pursuant to the
Uniform Arbitration Act, MCL 691.1681 et seq., and specifically MCL 691.1683(2). Defendant
argued that the trial court did not have jurisdiction, because in order to grant the relief requested
by plaintiff, the trial court would be required to consider the arbitrator’s award, determine how it
should be calculated, and then engage in findings of fact to calculate the amount owed. The trial
court agreed with defendant and entered an order dismissing plaintiff’s claim without prejudice
for lack of subject-matter jurisdiction.

        On appeal, plaintiff argues that the trial court abused its discretion in dismissing his claim
to confirm and enforce the arbitration award because Michigan law plainly permitted such an
action. This Court reviews a trial court’s decision to dismiss a case for an abuse of discretion.
Donkers v Kovach, 277 Mich. App. 366, 368; 745 NW2d 154 (2007). “[A]n abuse of discretion
occurs only when the trial court’s decision is outside the range of reasonable and principled
outcomes.” Saffian v Simmons, 477 Mich. 8, 12; 727 NW2d 132 (2007). Meanwhile, “whether a
trial court had subject-matter jurisdiction over a claim is a question of law that is reviewed de
novo.” Harris v Vernier, 242 Mich. App. 306, 309; 617 NW2d 764 (2000). To the extent that
this appeal requests this Court to interpret a statute, the trial court’s decision in that respect is
also reviewed de novo. Michigan AFSCME Council 25 v Woodhaven-Brownstown School Dist,
293 Mich. App. 143, 146; 809 NW2d 444 (2011).

        The issue presented to this Court is whether the trial court had subject-matter jurisdiction
to hear plaintiff’s case seeking confirmation and enforcement of the arbitrator’s award. While
circuit courts are courts of general jurisdiction, “their jurisdiction is not absolute.” In re Harper,
302 Mich. App. 349, 352-353; 839 NW2d 44 (2013). Michigan case law supports that
“arbitration is a favored means of resolving labor disputes[.]” Port Huron Area School District v
Port Huron Ed Assoc, 426 Mich. 143, 150; 393 NW2d 811 (1986). As such, Michigan courts
have long engaged in a system of “judicial deference” which takes into account that the
arbitrator’s power comes from the parties’ contract. See SEIU Local 466M v Saginaw, 263 Mich

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App 656, 660-661; 689 NW2d 521 (2004). Consequently, with regard to decisions rendered by
an arbitrator, a circuit court’s review of that decision is “narrowly circumscribed.” Ann Arbor v
AFSCME Local 369, 284 Mich. App. 126, 144; 771 NW2d 843 (2009).

        “A court may not review an arbitrator’s factual findings or decision on the merits.
Likewise, a reviewing court cannot engage in contract interpretation, which is an issue for the
arbitrator to determine.” Id. “Michigan case law is clear that an arbitrator is the sole fact-finder
in arbitration[.]” SEIU Local 466M, 263 Mich. App. at 661. Further, “[a] reviewing court is
without authority to fashion its own remedy.” Id., citing Michigan State Employees Assoc v Dept
of Mental Health, 178 Mich. App. 581, 585; 444 NW2d 207 (1989). Due to these strict
limitations on a trial court’s power to review arbitration decisions, this Court has held “that a
court could ‘enforce an arbitrator’s clear and specific award,’ but could not ‘adjudicate the merits
of a contingent claim created by a past award.’ ” SEIU Local 466M, 263 Mich. App. at 663,
quoting with authority Armco Employees Independent Federation Inc v Armco Steel Co, 65 F3d
492, 497 (CA 6, 1995).

        In the present case, the arbitrator granted plaintiff an award requiring that he be rehired in
his former position with full seniority, and that he be paid back pay for the time he was
wrongfully terminated. The arbitrator described the back pay award, by stating that plaintiff was
entitled to

        full back pay and benefits, less the ninety (90) work day suspension and less any
        monies he earned from other employment beyond said ninety (90) work day
        suspension and less any workers’ compensation he received beyond said ninety
        (90) work days which [plaintiff] is not obligated to return to the State of Michigan
        by virtue of this Award.

The issue presented in this case arose when the parties disagreed regarding the calculation of the
back pay award. Due to this disagreement, back pay has yet to be provided to plaintiff. Upon
review of the record, it is clear that if the trial court were to enter the relief requested by plaintiff,
it would be required to construe the meaning of the arbitrator’s award, determine what evidence
was required to calculate the proper amount of back pay, and then engage in findings of fact
relating to what the back pay calculations should be. Plainly, this would require the trial court to
“adjudicate the merits of a contingent claim created by a past award,” namely, if defendant acted
properly in requiring certain evidence in rendering its calculation for back pay. SEIU Local
466M, 263 Mich. App. at 663. “Michigan case law is clear that an arbitrator is the sole fact-finder
in arbitration[.]” Id. at 661. As such, this requirement for findings of fact to be made by the trial
court is outside the jurisdiction of the trial court, and moreover, it would potentially require the
trial court to fashion its own award, by making the final determination of what specific amount
of money is required for the back pay award, which is also outside the trial court’s jurisdiction.
See id.; see also Michigan State Employees Assoc, 178 Mich. App. at 585. Only the arbitrator can
make the determination that the plaintiff seeks.

        Plaintiff nevertheless argues that the language in MCL 691.1683(2) and MCR 3.602(I)
provide for jurisdiction in the present case. We disagree. Both the aforementioned statute and
court rule do contain language permitting a trial court to enter an order confirming an arbitrator’s
award. Specifically, MCL 691.1683(2) states that parties benefiting from an arbitration award

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“may request a court to enter an order confirming” that award and the court “may confirm the
award.” Additionally, MCR 3.602(I) states that “[a] party may move for confirmation of an
arbitration award within one year after the award was rendered” and the court “may confirm the
award.” While the above both permit-not require-confirmation of an arbitration award, they still
do not change the prior analysis. As discussed supra, the award considered here does not contain
the requisite clarity to allow for a simple confirmation. The arbitrator’s award does not contain a
definite dollar amount of back pay or a method in which to calculate the same. Under the
Uniform Arbitration Act, “arbitration in this state confers exclusive jurisdiction on the court to
enter judgment on an award.” MCL 691.1706. Thus, the purpose in confirming an award is
generally to enter a judgment on the same. However, here there is a dispute concerning whether
defendant is justified in not paying the back pay without receiving what it deems necessary
documentation and the trial court is in no position to resolve that factual dispute, or in calculating
the back pay. Therefore, the trial court properly determined that it lacked subject-matter
jurisdiction. See SEIU Local 466M, 263 Mich. App. at 663.

        Plaintiff also argues that the Federal Arbitration Act (FAA), 9 USC 1 et seq., and the
cases construing that statutory scheme support his argument. We disagree. Quite plainly, the
FAA and its associated case law provides a similar analytical structure to that discussed in the
present case, and is therefore unhelpful to plaintiff. See, e.g., United Steelworkers v American
Mfg Co, 363 U.S. 564, 567-568; 80 S. Ct. 1343; 4 L. Ed. 2d 1403 (1960) (holding that federal courts
“have no business weighing the merits of the grievance, considering whether there is equity in a
particular claim, or determining whether there is particular language in the written instrument
which will support the claim.”). Indeed, the decision in Armco Steel, 65 F3d at 498, provided
relevant analysis to the present case, when the Sixth Circuit held that “[a] court may enforce an
arbitrator’s clear and specific award. What it may not do is adjudicate the merits of a contingent
claim created by a past award.” Considering the similar federal law, plaintiff’s reliance thereon
is without merit.

       Affirmed.

                                                              /s/ Kurtis T. Wilder
                                                              /s/ Mark J. Cavanagh
                                                              /s/ Deborah A. Servitto

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