JAMES D. KLEIN and MARGARET L. K. SELIAK Plaintiffs, MARK C. KLEIN Defendant, GEROLD K. V. KLEIN, JR., ELEANOR K. IYER, KATE E. KLEIN, PETER L. KLEIN, and MARGARET L. KLEIN Parties-in-Interest.
ORDER ON PLAINTIFFS' MOTION TO CONFIRM
ARBITRATION AWARD AND DEFENDANT'S MOTION TO STAY
ARBITRATION OR VACATE ARBITRATION AWARD.
E. Walker Justice, Superior Court.
the court is Plaintiffs' motion to confirm an arbitration
award, and Defendant's motion to stay arbitration, deny
Plaintiffs' motion to confirm, and/or vacate the
August 1, 2016, attorney William Robitzek conducted mediation
to settle a lawsuit regarding, inter alia, the
division of royalties from a burn treatment. (D.'s
Opp'n and Mot. Stay 1.) The mediation resulted in a Term
Sheet with provisions whereby the parties indicated their
intent to draft a settlement agreement, and to submit
disputes as to the terms or implementation of the Term Sheet
to Robitzek for binding arbitration. (Pl/s Mot Confirm,
Arbitration Award ¶¶ 2-3.) The Term Sheet was
signed by Plaintiffs, Defendant, and all Parties-in-Interest
except Gerold K. V. Klein, Jr. (Id. ¶ 2 n. 1.)
disputes arose on the final language of the settlement
agreement, the parties requested arbitration. (Id.
¶¶ 4-5; D.'s Opp'n and Mot. Stay 2.) By
agreement, in lieu of a hearing, the parties submitted
written materials to Robitzek. (D.'s Opp'n and Mot.
Stay 2.) Robitzek issued his Arbitrator's Award on
November 3, 2016. (Pl's Mot. Confirm Arbitration Award
¶ 19.) On November 14, 2016, after several telephonic
conferences following November 3, 2016 during which he
considered requested changes to his Arbitrator's Award,
Robitzek announced he would issue a final Amended Award on
November 15, 2016. (Id. ¶¶ 21-23.) On that
morning, Defendant contacted Robitzek to object to the
issuance. (D.'s Opp'n and Mot. Stay 2-3.)
November 17, 2016, Plaintiffs filed a motion to confirm the
Arbitrator's Award. On December 7, 2016, Defendant filed
his opposition and a motion to stay arbitration and/or vacate
the Arbitrator's Award. On December 20, 2016, Plaintiffs
filed a reply in support of their motion to confirm.
strongly favors arbitration. Barrett v. McDonald Invs.,
Inc., 2005 ME 43, ¶ 16, 870 A.2d 146. An
arbitration agreement or an arbitration provision in a
written contract is valid, enforceable and irrevocable, save
upon such grounds as exist at law or in equity for contract
revocation. 14 M.R.S. § 5927. The agreement can be a
single document or writings exchanged between the parties.
Roosa v. Tillotson, 1997 ME 121, ¶ 4, 695 A.2d
1196. General rules of contract interpretation apply, and the
contract is interpreted to effect the parties' intentions
as reflected in the written instrument, construed with regard
for the subject matter, motive, and purpose of the agreement,
as well as the object to be accomplished. Reg'l Sch.
Unit No. 5 v. Coastal Educ. Ass'n, 2015 ME 98,
¶ 15, 121 A.3d 98. Part of what is bargained for is the
arbitrator's contract interpretation. City of
Lewiston v. Lewiston Firefighters Ass'n, 1AG, Local
#785, 629 A.2d 50, 52-53 (Me. 1993.) The court will
uphold the arbitrator's interpretation if it is a
rational construction of the contract. Westbrook v.
Teamsters Local No. 48, 578 A.2d 716, 717 (Me. 1990.)
The Term Sheet from the August 1, 2016 mediation provides, in
pertinent part: (6) Disputes as to the meaning of these terms
or its implementation, the parties agree to submit them to
William Robitzek for binding arbitration, who shall have
discretion to award attorneys' fees to the prevailing
Stay of arbitration
Validity of the Term Sheet
court may grant a stay of arbitration on a showing that there
is no agreement to arbitrate. 14 M.R.S. § 5928(2).
Parties are not ordered to arbitrate their dispute unless
they have agreed to do so in writing. Patrick v.
Moron, 2001 ME 6, ¶ 5, 764 A.2d 256. Determining
substantive arbitrability, i.e., whether parties have made an
arbitration agreement, is a function of the court.
Westbrook Sch. Comm. v. Westbrook Teachers Asso.,
404 A.2d 204, 207 (Me. 1979). However, the absence of a
signature goes to the validity of an entire contract, and the
validity of the whole contract is a question properly subject
to arbitration. Stenzel v. Dell, Inc., 2005 ME 37,
¶ 15, 870 A.2d 133; see Prima Paint Corp. v. Flood
& Conklin Mfg. Co., 388 U.S. 395, 403-04, 87 S.Ct.
1801, 1806 (1967).
argues there was no valid arbitration agreement because the
Term Sheet was not signed by Gerold who was listed as one of
the "Parties" on the Term Sheet, and that a
November 16, 2016 email from Robitzek saying "whether
there was ever a valid agreement to arbitrate" was
"a matter that needed to be litigated" implied the
arbitration provision may not be valid. (D.'s Opp'n
and Mot. Stay 9-10.)
Robitzek's interpretation that the Term Sheet was a valid
contract, implied by his performance of the arbitration
despite the absence of Gerold's signature, was reasonable
where the Term Sheet, including the arbitration provision,
was negotiated during a long day of mediation, see
Barrett,2005 ME 43, ¶ 22, 870 A.2d 146, and did
not explicitly require all parties to sign to establish its
validity. All parties, including Defendant, were aware Gerold
did not sign, and yet they voluntarily invoked and
participated in the subsequent arbitration, when they
exchanged emails to establish a non-testimonial arbitration
process and then submitted written materials as directed by
Robitzek's September 30, 2016 arbitration order,
evidencing their agreement to arbitrate their disputes as
described in the Term Sheet. (Pl's Mot. Confirm
Arbitration Award ¶¶ 2, 6, 8; D.'s Opp'n
and Mot. Stay 2); Roosa,1997 ME 121, ¶ 3, 695
A.2d 1196. Defendant did not object to the arbitration
process until November 15, 2016, after teleconferencing
several times with Robitzek following the November 3, 2016
issuance of the Arbitrator's Award to press for
amendments. (D.'s Opp'n and Mot. Stay 2.)
Robitzek's email that the arbitration agreement's
validity must be litigated is only a restatement of law which
says the courts decide substantive arbitrability via either a
motion to compel or stay, or a motion to vacate. 14 M.R.S.
§§ 5928(2), 5938(1)(E); Anderson v. Banks,2012 ME 6, ¶ 13, 37 A.3d 915. The language of the
arbitration provision ...