JAMES STANLEY, JR., BARBARA STANLEY, and NORTHEAST MARINE SERVICES, INC., Movants,
MICHAEL A. LIBERTY, LIBERTY GROUP, INC., EQUITY BUILDERS, INC., LIBERTY MANAGEMENT, INC., AMERICAN HOUSING PRESERVATION CORP., and MAINLAND DEVELOPMENT CO., Respondents
George Royle, Esq. Michael Buescher, Esq. George Dillworth, Esq.
George Marcus, Esq. Daniel Rosenthal, Esq. Andrew Helman, Esq.
ORDER ON MOTION TO CONFIRM ARBITRATION AWARD AND MOTION TO VACATE, CORRECT, OR MODIFY ARBITRATION AWARD
A. M. Horton, Justice
James Stanley, Jr., Barbara Stanley, and Northeast Marine Services, Inc. (collectively, "Movants" or "the Stanley parties") move to confirm the arbitration award against Michael A. Liberty, Liberty Group, Inc., Equity Builders, Inc., Liberty Management Inc., American Housing Preservation Corp., and Mainland Development Co. (collectively, "Respondents" or "the Liberty parties") pursuant to 14 M.R.S. § 5937 (2013). The Liberty parties move to vacate the same award, pursuant to 14 M.R.S. § 5938 (2013), or correct or modify the award pursuant to 14 M.R.S. §5939 (2013).
After oral argument on February 12, 2014, and a thorough review of the arbitrator's decision, die applicable law, and the parties' arguments, the court affirms the arbitration award in full.
In an agreement dated August 17, 2012, Mr. Stanley and Mr. Liberty agreed to resolve their numerous disputes through binding arbitration. (M. Confirm Exh. 1.) The parties appointed David Plimpton as their arbitrator. After discovery and a hearing, the arbitrator issued his decision on all claims, defenses, and counterclaims on July 22, 2013, awarding the Stanley parties over $2, 000, 000 in damages, including $1, 836, 499, 20 for retirement payments. (Arbitration Award (M. Confirm Exh. 3 (hereinafter, "AA")).)
On July 31, 2013, the Stanley parties filed in Cumberland County Superior Court: a motion to confirm the arbitration award; an ex parte motion for attachment and attachment on trustee process; and a motion to temporarily seal the filings in this matter. The latter two motions were granted by the Superior Court (Cole J.) on August 1, 2013.
Upon motion of the Liberty parties, the arbitrator modified the award on August 27, 2013, in order to correct a calculation error in the retirement payments and reducing the award on that claim to $1, 778, 495.08. (M. Vacate Exh. H.) After the arbitrator corrected the award, the Liberty parties then moved to vacate, correct, or modify the corrected award on October 21, 2013, The matter was approved for transfer to the Business and Consumer Court on November 27, 2013, Oral argument was conducted on February 12, 2014.
STANDARD OF REVIEW
The grounds upon which a court may vacate an arbitration award are narrow. The "exclusive grounds for a court to vacate an arbitration award" are those contained in section 5938(1). HL 1, LLC v. Riverwalk, LLC, 2011 ME 29, ¶28, 15 A.3d 725. The primary issue typically is whether the award exceeded the scope of the arbitrator's powers. See Leete & Lemieux, P.A. v. Horowitz, 2012 ME 115, ¶12, 53 A.3d 1106. "When an arbitrator stays within the scope of his or her authority, the award will not be vacated even when there is an error of law or fact, unless the challenger demonstrates that the arbitration violated one of the grounds to vacate an award stated in 14 M.R.S. § 5938(1)." Id. "A reviewing court is not empowered to overturn an arbitration award merely because it believes that sound legal principles were not applied." HL 1, LLC v. Riverwalk LLC, 2011 ME 29, ¶19, 15 A.3d 725 (quotation marks omitted).
Similarly, the grounds upon which a court may modify or correct an award are also narrow. Modification is permitted pursuant to 14 M.R.S. § 5939, "but only in those cases when a modification is necessary to correct a formal or jurisdictional deficiency in the award and when the modification will not affect the merits of the controversy." Me. State Emps. Ass'n Local 1989 v. State Dep't of Con., 593 A.2d 650, 652 (Me. 1991); accord, Anderson v. Elliott, 555 A.2d 1042, 1047 (Me, 1989) (stating section 5939 is only available "to rectify a technical error or an 'evident miscalculation' or misdescription").
The grounds asserted by the Liberty parties to vacate the award are in subsections (C) and (D) of section 5938(1):
C. The arbitrators exceed their powers;
D. The arbitrators refused to postpone the hearing upon sufficient cause being shown therefor or refused to hear evidence material to the controversy or otherwise so conducted the hearing, contrary to the provision of section 5931, as to prejudice substantially the rights of a party.
14 M.R.S. § 5938(1). The Liberty parties also assert that the award is subject to correction pursuant to section 5939, which requires the court to "modify or correct the award where, ., [t]here was an evident miscalculation of figures or an evident mistake in the description of any person, thing or property referred to in the award;" or "[t]he award is imperfect in a matter of form, not affecting the merits of the controversy." 14 M.R.S. § 5939(1)(A), (C). The Liberty parties have the burden of proof to show the award should be vacated, modified, or corrected. See NCO Portfolio Mgmt., Inc. v. Folsom, 2007 ME 152, ¶, 938 A.2d 24.
The decision of the arbitrator spans 99 single-spaced pages and encompasses claims that are not at issue in the present proceedings. Because the parties included a confidentiality provision in their arbitration agreement, and because most of the arbitrator's decision is not in question, the court only recounts those portions of the factual ...