Thursday, March 25, 2010

Appellate Court had Jurisdiction to Hear and Hold Circuit Court had Jurisdiction

Mikelson v. United Services Automobile Association (ICA March 24, 2010)

Background. Mikelson was riding his motorcycle when he was hit by an automobile. He suffered injuries and brought a lawsuit against his father's insurance company, United Services Automobile Association (USAA). The case went to arbitration. The arbitrator awarded Mikelson around $110,00. Mikelson filed in the circuit court a motion to confirm the award. USAA opposed on the grounds that the award was satisfied and that the circuit court did not have jurisdiction to hear the motion. The motion was granted and USAA appealed.

ICA has Jurisdiction to Hear the Appeal. The ICA first rejected Mikelson's contention that it did not have appellate jurisdiction. Review "of arbitration awards by the circuit and appellate courts is limited by the provisions of the arbitration statute." United Pub. Workers, AFSCME, Local 646, AFL-CIO v. Dawson Int'l, Inc., 113 Hawai'i 127, 137-38, 149 P.3d 495, 505-06 (2006). Parties can appeal from an "order confirming or denying confirmation of an award." HRS § 658A-28(a)(1). According to the ICA, this is an appeal from the order granting Mikelson's motion to confirm the arbitration award and so there is appellate jurisdiction to hear the case.

Okay, so There's Jurisdiction, so how does the Appellate Court Review it? The appellate courts "review the circuit court's ruling on an arbitration award de novo, but we also are mindful that the circuit court's review of arbital awards must be extremely narrow and exceedingly deferential." Tatibouet v. Ellsworth, 99 Hawai'i 226, 233, 54 P.3d 397, 404 (2002). This is an interesting standard. Typically, when the appellate court reviews a decision de novo, there is almost no deference to the circuit court--as opposed to the abuse-of-discretion standard. Then again, the circuit court has to be deferential to the arbitrator. So in a sense, the ICA still does not have to defer to the circuit court, but it must still defer to the arbitrator--just as the circuit court should.

. . . And the Circuit Court had Jurisdiction too. "[C]ourts will not consume time deciding abstract propositions of law or moot cases, and have no jurisdiction to do so," Lingle v. Hawai'i Gov't Employees Ass'n, AFSCME, Local 152, AFL-CIO, 107 Hawai'i 178, 187, 11 P.3d 587, 596 (2005). Once a party receives notice of an award, "the party may make a motion to the court for an order confirming the award at which time the court shall issue a confirming order unless the award is modified or corrected pursuant to section 658A-20 or 658A-24 or is vacated pursuant to section 658A-23." HRS § 658A-22. Confirmation is an "expeditious procedure for reducing or converting the arbitration award to a judgment which can be enforced by judicial writ." Krystoff v. Kalama Land Co., 88 Hawai'i 209, 214, 965 P.2d 142, 147 (App. 1998). The ICA rejected USAA's contention that the circuit court did not have jurisdiction to confirm the award because they already paid Mikelson and, thus, the issue was moot.

Turning to Federal Interpretations Because Similarity in Statutes. Because HRS § 658A-22, according to the ICA, "is virtually identical to the language of the federal arbitration statute, we may look to federal authority for guidance" in interpreting it. See Bateman Constr., Inc. v. Haitsuka Bros., Ltd., 77 Hawai'i 481, 485, 889 P.2d 58, 62 (1995). The ICA surveyed a hodge-podge of federal cases and found a split in opinions. Some, according to the ICA, have held that the arbitration award must be confirmed despite compliance with the award because the plain language of the statute mandates it and because the confirmation of the award "is concerned with the propriety of the award itself and is unrelated to enforcement[.]" See Zeiler v. Deitsch, 500 F.3d 157 (2d Cir. 2007); Collins v. D. R. Horton, Inc., 361 F. Supp.2d 1085 (D. Ariz. 2005); District Council No. 9 v. APC Painting, Inc., 272 F.Supp. 2d 229 (S.D.N.Y. 2003); Ottley v. Schwartzberg, 819 F.2d 373 (2d Cir. 1987).

Others do not distinguish the confirmation of an award from the enforcement of an award and would not confirm awards that have been satisfied. Derwin v. General Dynamics Corp., 719 F.2d 484, 491-92 (1st Cir. 1983) (confirmation of satisfied award "seems to us cumbersome, unnecessary, and potentially misleading"); Local 2414 of United Mine Workers of America v. Consolidated Coal Co., 682 F.Supp. 399 (S. D. Ill. 1988). According to the ICA, equating confirmation of the award with the enforcement of the award, departs from the plain language of the statute. And the ICA saw no reason to reject the plain language of HRS § 658A-22.

Mootness is not a Ground for Denying Confirmation. Furthermore, the statute plainly requires confirmation upon motion unless it is modified, corrected, or vacated. USAA did not seek to modify, correct, or vacate the award. The sole issue raised before the circuit court was that it was moot because the award had been satisfied. This is not one of the statutory grounds allowing the circuit court to deny a motion for confirmation.

Carefully Crafted Statutory Construction Rules. The ICA relied extensively on cases outside this jurisdiction, particularly federal jurisdictions. The ICA was sensitive to looking beyond Hawai'i and noted that its reliance of federal interpretations was based on the fact that the federal arbitration statute is "virtually identical" to the Hawai'i statute. The federal law itself was in disarray. The ICA acknowledged the differences in opinion on the issue and went with the line of federal cases that appeared to be more consistent with Hawai'i's own rules of statutory construction--that the plain language rules. Honda v. Bd. of Trs. of the Employees' Ret. Sys. of the State, 108 Hawai'i 212, 233, 118 P.3d 1155, 1176 (2005) ("following our well-settled approach to statutory interpretation, we look first to the plain language of the statute.").

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