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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Kinn v. Alaska Sales & Service, Inc. (09/29/2006) sp-6055
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
| JERRY KINN, VALLEY MOTORS, | ) |
| INC., and KINN/SINGLETARY | ) Supreme Court Nos. S- 11748/11768 |
| PARTNERSHIP, | ) |
| ) Superior Court No. | |
| Appellants/ | ) 3AN-02-13376 CI |
| Cross-Appellees, | ) |
| ) O P I N I O N | |
| v. | ) |
| ) No. 6055 - September 29, 2006 | |
| ALASKA SALES & SERVICE, | ) |
| INC., | ) |
| ) | |
| Appellee/ | ) |
| Cross-Appellant. | ) |
| ) | |
Appeal from the Superior Court of the State
of Alaska, Third Judicial District,
Anchorage, Sharon L. Gleason, Judge.
Appearances: Susan E. Reeves, Anchorage, for
Appellants and Cross-Appellees. Barbra Z.
Nault and Jon T. Givens, Bankston Gronning
O'Hara, P.C., Anchorage, for Appellee and
Cross-Appellant.
Before: Bryner, Chief Justice, Matthews,
Eastaugh, Fabe, and Carpeneti, Justices.
FABE, Justice.
I. INTRODUCTION
This appeal arises from an arbitration decision
regarding the sale of two lots of land used for an automobile
dealership in Wasilla. After purchasing the lots and the
dealership located thereon from Jerry Kinn and Charles
Singletary, Alaska Sales and Service brought an action against
them on the grounds that the property was contaminated. The
arbitrator partially rescinded the contract and awarded
additional damages and attorney's fees to Alaska Sales and
Service. Kinn and Singletary appealed the arbitrator's decision
to the superior court, alleging that there was "evident
partiality" on the part of the arbitrator, and that the
arbitrator exceeded his powers by partially rescinding the
contract. The superior court affirmed.
Both parties now appeal the superior court's decision.
Kinn and Singletary contend that the superior court committed
four reversible errors: (1) holding that the arbitrator was not
biased; (2) affirming the partial rescission of the contract; (3)
issuing a final judgment under Alaska Civil Rule 54(b) while
their claims against other parties were still pending; and (4)
requiring certain future claims related to the dispute to be
brought before the arbitrator. Alaska Sales and Service does not
challenge the holdings regarding partiality and rescission, but
it claims that the superior court erroneously decided four minor
issues that should have been remanded to the arbitrator: (1) the
amount of attorney's fees; (2) the rate of postjudgment interest;
(3) the method of tender of the rescission deed; and (4) the
appropriate form of the rescission deed. For the reasons set
forth below, we affirm the superior court's decision on all
issues.
II. FACTS AND PROCEEDINGS
A. Background
1. Kinn and Singletary's acquisition of the property
The property at issue consists of an automobile
dealership, Valley Motors, Inc., and two underlying parcels of
land. According to Kinn, he and Singletary purchased the two
lots, as well as eighty percent of the dealership's stock, with
an option to purchase the remaining twenty percent from Richard
Hagen in June 1995. In a third-party claim against Hagen, Kinn
and Singletary assert that "Hagen represented that there were no
violations of environmental laws or regulations, nor any
liability for environmental damages and that the modifications
made to the building and other structures, and the oil recovery
tank located on and sold as part of the Property, were built and
installed in compliance with all applicable codes, laws and
regulations." The septic systems, oil-water separator, and
underground oil recovery tank were allegedly installed by Hagen.
For the next five years, Kinn and Singletary owned the property
as tenants in common and were shareholders in Valley Motors, Inc.
Kinn claims that he "did not personally have any knowledge
regarding the condition of the property."
2. Alaska Sales and Service's purchase of the
property
In December 2000 Kinn and Singletary entered into a
"Contract for Sale of Real Property" and an "Asset Purchase
Agreement" with Alaska Sales and Service. The former provided
for the sale of the two lots underlying the dealership, and the
latter provided for the sale of the dealership itself. Kinn and
Singletary claim that Alaska Sales and Service originally sought
to purchase only the dealership, but that they refused to sell
the dealership without also selling the land.
3. Alaska Sales and Service's discovery that the
property was contaminated
Several months after acquiring the land, Alaska Sales
and Service discovered that the property had been contaminated by
used motor oil, which had overfilled the underground tank,
migrated through the oil-water separator, and contaminated the
septic system. There were also illegal surface spills, some of
which the arbitrator found that Singletary attempted to conceal.1
The Alaska Department of Environmental Conservation and the
federal Environmental Protection Agency had not been notified of,
and did not approve, the design of the oil and septic system.
After discovering that the property was contaminated,
Alaska Sales and Service requested that Kinn and Singletary "take
all necessary actions to immediately resolve the problem[]" and
sought to be indemnified for expenses associated with the
contamination. These demands, and Alaska Sales and Service's
subsequent request to rescind the contract, were rejected.
B. Proceedings Before the Arbitrator
1. Alaska Sales and Service's lawsuit
In December 2002 Alaska Sales and Service brought an
action against Kinn and Singletary, asserting a number of claims,
including misrepresentation and breach of contract. Alaska Sales
and Service's complaint also sought enforcement of the real
estate contract's arbitration provision, and in March 2003 Kinn
and Alaska Sales and Service agreed to arbitration.2 Singletary
did not sign the stipulation regarding arbitration, but he was a
party to the original contract providing for arbitration. Kinn
and Singletary brought a third-party claim against Hagen in May
2003, but this claim was not included in the arbitration. The
arbitrator who heard the case was Paul Davis, an Anchorage
attorney.
2. Factual findings regarding contamination
The dispute was arbitrated in 2003, and the arbitrator
issued findings of fact, conclusions of law, and a final award.
He subsequently issued supplemental findings of fact and
conclusions of law, a revised final award, and a summary of all
awards. The initial findings of fact stated that both lots had
been contaminated in violation of federal and state environmental
laws, and that Kinn and Singletary had "intentionally
misrepresented substantial and material historical environmental
events that Mr. Singletary had direct, personal knowledge of
. . . for the purpose of causing [Alaska Sales and Service] to
enter into the transactions." The arbitrator further found that
both the real estate contract and the asset purchase agreement
contained misrepresentations about whether the property was
contaminated, and that Alaska Sales and Service reasonably relied
on the misrepresentations.
In addition to liability under contract, the arbitrator
found that each of the defendants had violated AS 46.03.822(a),
which imposes strict liability for the costs "resulting from an
unpermitted release of a hazardous substance." As the
arbitrator's opinion noted, "the actions of Mr. Singletary in
directing employees to shovel up the oiled gravel, place it into
opaque bags, deposit[] the bags at the dump and replac[e] the
removed gravel with clean gravel taken from a river bed
represent[] an intentional violation of state, federal, and,
probably, local environmental laws."
3. Allocation of responsibility
The arbitrator found that "Mr. Kinn's sins were more of
omission rather than commission," but noted that "Kinn and
Singletary were equally irresponsible" in their management of the
land because neither of them "made any effort whatsoever to
understand the functioning of what they owned or what the
infrastructure's capabilities and weak points were." Although
Kinn and Singletary denied the existence of a partnership, the
arbitrator found that they had been partners during their
ownership of the property, and that, "[a]s partners[,] . . . Mr.
Kinn and Mr. Singletary are individually jointly and severally
liable for Mr. Singletary's acts and omissions."3 But elsewhere
in the opinion, the arbitrator noted that each had the right to
pursue a contribution claim from the other in superior court.4
4. Award
Noting that rescission is available for a party who
enters a contract based on justifiable reliance on a
misrepresentation, the arbitrator discussed the merits of this
remedy:
Although I would have the power to reject
rescission and award that the defendants
[Kinn and Singletary] pay all future clean-up
costs, I believe doing so would create an
almost unmanageable situation where the
defendants would challenge many of the
decisions made by [Alaska Sales and Service]
. . . . Should that be so, we could
confidently expect that the parties would
have to again and again return to the court
to seek enforcement of my award, all the
while generating even more attorney['s] fees
and costs. Because a legal remedy is
uncertain, I find rescission to be the better
course.
Rescission seems to be the only fair relief
that can be given because of the degree of
speculation that all of the parties have had
to engage in up to this point in the
litigation. There are a number of
significant unknowns concerning the extent of
contamination and the amount of future costs
for investigation, evaluation, and
remediation and monitoring.
The arbitrator also noted that, "insofar as the defendants are
concerned, rescission will allow them to take over the
remediation of the land on their own terms."
The arbitrator therefore rescinded the real estate
contract and ordered the defendants to "repay . . . the purchase
price of the property, less the reasonable rental rate for
[Alaska Sales and Service's] use of the property since January 1,
2001 for a total of $1,211,928.00." As noted in the summary of
all awards, the defendants were also required to pay several
other types of damages: (1) "[r]escission [t]ransactional
[d]amages" of $67,060.00; (2) ongoing "rescission damages of
interest," which amounted to $308,209.70 as of July 15, 2003; (3)
100% of the ongoing costs of cleaning up Lot 3; (4) eighty
percent of the ongoing costs of cleaning up Lot 7; (5) Alaska
Sales and Service's costs in bringing the action, including but
not limited to litigation attorney's fees of $181,782.50; (6)
additional post-award litigation and cleanup costs incurred by
Alaska Sales and Service; (7) pre- and post-award interest; and
(8) the arbitrator's fee. Alaska Sales and Service was ordered
to pay rent of $15,968.00 a month and all utilities while it
continued to occupy the land, and was also required to pay twenty
percent of the cleanup costs of Lot 7.
5. Allegation of partiality
In August 2003, shortly after arbitrator Paul Davis
issued his supplemental findings, attorney Susan Reeves sent
Davis a letter claiming that she had recently learned of
undisclosed ties between Davis and Bill Bankston, counsel for
Alaska Sales and Service. In her capacity as counsel to Kinn and
Singletary, Reeves requested that Davis "disclose and describe
any business dealings that you presently have, have had in the
past year, or anticipate in the next 6 months, with Mr. Bankston
or his law firm."
Davis sent a letter to Reeves and Bankston stating that
he had had prior dealings with the firms representing both sides.
He and Bankston had both been involved in Veco Alaska, Inc. v.
Alaska Electric Generation & Transmission, Inc., a case that was
settled in January 2003. Davis explained that he "acted as
counsel for a codefendant to Mr. Bankston's client," and noted
that "[a]lthough our clients were aligned, there were independent
interests of my client that were separate from the interest[s] of
Mr. Bankston's client."5 He pointed out that there was one
remaining "collateral matter," and that if that matter developed
into litigation, "Mr. Bankston and I will be representing
opponents." In addition, Davis noted that he referred bankruptcy
cases to a partner of Bankston "from time to time," and that
Davis's partner, Ron Black, had recently referred a case to
Bankston's office because of a conflict of interest. Davis
maintained that he "d[id] not have reason to anticipate that Mr.
Bankston will refer any other cases to me during the next six
months."
Davis's letter also discussed his dealings with Tom
Amodio, a member of Reeves's firm. Davis described Amodio as "a
friend of mine, in much the same manner that Mr. Bankston has
been," and noted that Amodio's wife, Debra Fitzgerald, "has
performed substantial (and uniformly excellent) legal work for me
on and off for close to twenty years, and I hold her as a close
friend, even closer than either Mr. Amodio or Mr. Bankston."
Amodio had referred several cases to Davis in the past, including
one that had settled in the previous year, and Davis "ha[d] no
reason to think that either Mr. Amodio will or will not refer
cases to me within the next year." Davis also asserted that he
had used space in Reeves's and Amodio's firm to prepare for a
trial when his own firm was in the process of moving. Finally,
Davis maintained that he had been approached to handle the
present case by both Bankston and Amodio, and that, although he
"was long time friends with both attorneys, had referred and/or
been referred by both, and had personal dealings with both,"
neither side had raised doubts about his partiality at the
outset.
In response to this letter, Reeves requested additional
information about Davis's work in Veco, including the amount that
Davis's firm had billed in that case, and whether Davis had
spoken with Bankston about Veco during the arbitration of the
present case. Although Reeves claims never to have received a
response, the excerpt contains a letter from Davis answering
Reeves's questions. In addition to discussing his work in Veco
in greater detail, Davis noted that, when negotiating his
retainer with the attorneys in the present case, he "told the
group that because all of them were my friends I would not
require that more [than one day's fees] be deposited." Davis
addressed the issue whether he was biased toward Bankston because
of his work in Veco as follows:
Although not solicited by you, it is clear to
me that you or your client are concerned that
I might have loyalties to Mr. Bankston
arising out of the Agrium6 case. I want to
make it perfectly clear that Agrium was not
referred to me by Mr. Bankston or anyone in
his office. Agrium was referred to me by
Rick Baldwin . . . . Just prior to the
referral to me, Mr. Baldwin's firm found
themselves in a conflict because they
represented both AEG&T and Agrium which, as I
outlined above, had conflicting interests.
Because of the conflict situation his firm
was in, it was decided that the AEG&T client
would be referred to Mr. Bankston's office,
and the Agrium client would be referred to my
office. I owe nothing to Mr. Bankston for
that referral[;] he, along with myself, were
the beneficiaries of Mr. Baldwin's judgment.
If you have any questions in this regard,
please call Rick Baldwin . . . and I am sure
he will confirm what happened.
Finally, in support of her argument that Davis was not
impartial, counsel for Kinn and Singletary points to an
advertisement for a continuing legal education program held in
September 2003, which was coordinated by Bankston. The program
featured Davis as one of two Anchorage attorneys on the
plaintiff's team in a mock trial. C. The Superior Court's
Decision
1. Ruling on Kinn and Singletary's appeal
In October 2003 Kinn and Singletary appealed the
judgment of the arbitrator to the superior court, alleging that
Davis had exceeded his powers by rescinding the real estate
contract, had displayed "evident partiality," and had "exhibited
a manifest disregard of the law" in his decision. Alaska Sales
and Service moved for confirmation of the arbitration award. In
May 2004, after oral argument, the superior court issued a ruling
from the bench confirming the award. The court held that the
rescission was within the arbitrator's authority, stating that "I
. . . don't find merit to the defendants' argument that the
arbitrator could not rescind only the contract for the sale of
real property and leave the asset purchase agreement in place."
The court also determined that Davis and Bankston did not have
the type of relationship that required disclosure to the parties
and emphasized that "the vast majority of cases that have
discussed whether there is evident partiality are concerned with
th[e] financial interest that parties could - that the parties
might have or the lawyers might have with the arbiter." In
addition, the court observed "that this is a small legal
community, [and] that you do tend to cross paths with just about
everyone during the course of practicing here for decades at a
time as Mr. Davis has done." Concluding that there was no
"indication in the record that Mr. Davis had any interest,
financial, personal or otherwise in the outcome of the dispute
here," the court held that there was no evident partiality on the
part of the arbitrator.
2. Civil Rule 54(b) order for final judgment
In accordance with the court's ruling, Alaska Sales and
Service moved for entry of final judgment under Alaska Rule of
Civil Procedure 54(b). Noting "Mr. Kinn's asset transfers in
recent years," and specifically holding "that delaying entry of
final judgment pursuant to the arbitration award, pending a trial
between Hagen [and Kinn and Singletary] (on an unrelated sale of
real estate which occurred years previous to the Alaska Sales
purchase) would cause undue delay," the court granted the motion
in June 2004.
Kinn and Singletary appeal the superior court's rulings
that the arbitrator did not display evident bias, that partial
rescission was within the arbitrator's powers, that final
judgment should issue while the third-party claim was still
pending, and that certain future disputes regarding the
implementation of the final judgment should be submitted to the
arbitrator. Alaska Sales and Service cross-appeals, claiming
that the superior court erroneously decided four issues regarding
the award that should first have been decided by the arbitrator.
III. DISCUSSION
A. Standards of Review
1. Issues on appeal
We review de novo a superior court's decision to affirm
an arbitration award.7 But "[t]he arbitrator's findings of both
fact and law . . . receive great deference"8 and "as a matter of
both policy and law, we are `loathe to vacate an award made by an
arbitrator.' "9 Where one party alleges that the arbitrator has
exceeded his or her authority, we will affirm the arbitrator's
conclusion as to the scope of his or her powers if "the
arbitrator's conclusion is reasonably possible."10 An entry of
final judgment under Rule 54(b) is reviewed for abuse of
discretion.11
2. Issues on cross-appeal
A superior court's decision whether a particular issue
is arbitrable - an issue underlying all of the objections raised
by Alaska Sales and Service on cross-appeal - is reviewed de
novo.12 A trial court's award of attorney's fees is reviewable
for an abuse of discretion.13 The postjudgment rate of interest is
set by statute, and a superior court's application of this
statute is a question of law that we review de novo.14
B. Evident Partiality
Kinn and Singletary raise two related arguments
regarding the alleged partiality of the arbitrator. First, they
argue that, under the arbitration provision in the contract,
Davis was bound to follow the American Arbitration Association
(AAA)/American Bar Association Code of Ethics for Commercial
Arbitrators and that these rules required disclosure of Davis's
ties with opposing counsel.15 Second, they argue that Davis
showed "evident partiality," listed in AS 09.43.120(a)(2) as a
ground for vacating an arbitration result.16 Both of these
arguments turn on whether the relationships that Davis had with
counsel for Alaska Sales and Service were the type of
relationships that could raise reasonable doubt as to his
partiality.
1. Is failure to disclose under the AAA Rules an
appealable issue?
As Kinn and Singletary point out, the arbitration
clause in the property contract specified that the arbitration be
"in accordance with the Rules and Procedures of the American
Arbitration Association." Canon II of the AAA Code of Ethics for
Arbitrators in Commercial Disputes states that "[p]ersons who are
requested to serve as arbitrators should, before accepting,
disclose . . . any known existing or past financial, business,
professional or personal relationships which might reasonably
affect impartiality or lack of independence in the eyes of any of
the parties."17 The AAA Commercial Arbitration Rules specify that
an arbitrator must "disclose to the AAA any circumstance likely
to give rise to justifiable doubt as to the arbitrator's
impartiality or independence, including any bias or any financial
or personal interest in the result of the arbitration or any past
or present relationship with the parties or their
representatives."18 The AAA is then responsible for
"communicat[ing] the information to the parties and, if it deems
it appropriate to do so, to the arbitrator and others."19
Although Alaska Sales and Service may be correct in arguing that
the AAA Code of Ethics, standing alone, does not create grounds
for appeal,20 neither party claims that Davis disclosed his
relationship to the AAA. For this reason, if the relationships
that Davis failed to disclose were "likely to give rise to
justifiable doubt as to [his] impartiality,"21 his failure to
disclose would not only have been a violation of the Code of
Ethics, but also of the AAA Rules specifically invoked in the
arbitration clause. Having raised the issue before the superior
court, Kinn and Singletary can therefore raise it here.
2. Did Davis's ties with Bankston constitute evident
partiality?
Alaska Statute 09.43.120(a)(2), like the federal
Uniform Arbitration Act, provides that a court must vacate an
arbitration award if there was evident partiality by an
arbitrator.22 In determining whether evident partiality exists,
federal courts have applied a similar analysis to the one called
for by the AAA Rules.23 As Justice White's concurrence in
Commonwealth Coatings Corp. v. Continental Casualty Co. points
out, this standard does not treat all connections between an
arbitrator and a party as grounds for finding evident partiality.24
Rather, it focuses on whether the relationship would cause a
reasonable person to doubt the impartiality of the arbitrator,
particularly on the grounds of "some financial interest or other
loyalty owed to one side of the dispute."25 Federal courts, and
state courts interpreting similar provisions, have articulated
different versions of this standard, with some courts finding
evident partiality where arbitrators fail to disclose
relationships that would lead a reasonable person to believe that
a conflict actually exists,26 and others finding evident
partiality where the information not disclosed by the arbitrator
would lead a reasonable person to believe that a conflict could
exist.27 Other versions of this standard do not address the
distinction between actual and potential conflicts at all.28
Although we have previously decided an appeal alleging evident
partiality, we have not specifically determined which version of
the standard to adopt.29 But we need not do so here, because the
result will the be same under any version of the standard.
Even if evident partiality is found whenever a
reasonable person would have the impression that there could
potentially be a conflict - a standard coextensive with what AAA
Rule 16 requires arbitrators to disclose - the ties between Davis
and Bankston do not rise to the level of evident partiality.
Kinn and Singletary have made no showing of any financial
interest or other loyalty that would predispose Davis to rule in
favor of Bankston. Indeed, Kinn's attorney clarified at oral
argument that "[w]e are not arguing that [Davis and Bankston] had
a financial relationship." Without a showing of financial
interest or a similar reason for loyalty to one side, Davis's
having represented a different client in the same case as
Bankston would be unlikely to constitute evident bias even in a
large legal community, and it certainly does not constitute it in
a legal community as small as Anchorage.30 If the opposite were
true, the most experienced members of the Anchorage bar would be
effectively disqualified from acting as arbitrators, and it would
be difficult to find any arbitrator at all for some disputes.31
Similarly, the occasional referral of cases from
Bankston's office to Davis's office, and vice versa, based on the
specialties of the attorneys in those offices does not establish
that Davis had reason to be partial.32 Exclusive or frequent
referrals, or referrals made for substantial consideration, could
raise serious doubts as to an arbitrator's partiality, but the
referrals here appear to have been infrequent and nonexclusive.33
Moreover, Kinn and Singletary do not claim that the referrals
created a financial interest on the part of Davis.
Davis's participation in a bar event coordinated by
Bankston is equally unpersuasive as evidence of partiality. As
other states' courts have noted, participation or leadership in a
professional organization's activities does not necessarily
create an impression of bias.34 Nor is participation in that
organization's activities or leadership.35 Furthermore, every
practicing lawyer in this community is a member of one of the
sponsors of the "Masters in Trial" program - the Alaska Bar
Association. A holding that participation with a party's
attorney in this organization's activities constituted evident
bias would make it difficult for parties in Anchorage to find
qualified arbitrators for their disputes and, for those lawyers
interested in acting as arbitrators, would severely restrict the
available range of professional enrichment activities.
Finally, the overall context of Davis's alleged
partiality includes not only his relationships with Bankston, but
also his relationships with counsel for Kinn and Singletary.36
Davis appears to have had a professional relationship with the
spouse of Amodio, an attorney representing Kinn and Singletary,
that was significantly closer than his dealings with Bankston.
In contrast to his work representing a co-party in Veco and
occasional referrals to and from Bankston, Davis maintains in his
first letter to Reeves that Amodio's wife "has performed
substantial . . . legal work for me on and off for close to
twenty years," and that his law firm's "billing system has only
recently been updated to take [her] name out of it." Davis also
noted that he "had referred and/or been referred" by both
Bankston and Amodio. The fact that Davis had similar, or even
closer, ties with Amodio makes it even less likely that he was
partial toward Bankston's client. Because Davis had professional
contacts with both sides, none of which could reasonably create
an impression of evident partiality, we affirm the superior
court's holding on this issue.
C. Scope of the Arbitrator's Authority
Kinn and Singletary argue that the arbitrator exceeded
the scope of his authority under AS 09.43.120(a)(3)37 by
rescinding the property contract, but not the asset purchase
agreement. But the question whether Kinn and Singletary
successfully negotiated for a single contract (as opposed to two
separate contracts) is a question of fact, and the determination
whether rescission is an appropriate remedy and, if so, how that
remedy should be applied, is a question of law. As Alaska Sales
and Service correctly points out, we apply an extremely
deferential standard of review to the arbitrator's decisions on
questions of fact and law: under Alaska's Uniform Arbitration
Act, "the arbitrator's findings of fact are unreviewable, even in
the case of gross error," and the arbitrator's legal conclusions
are equally unreviewable, except where they pertain to
arbitrability.38 Claims that the arbitrator construed the
contract in a manner exceeding his or her powers are reviewable,
but will only be reversed "if all fair and reasonable minds would
agree that the construction of the contract made by the
arbitrator(s) was not possible under a fair interpretation of the
contract."39
Kinn and Singletary point to our holding that "[a]
contract is severable . . . when it is of such a nature that it
is clear that the formation of the contract itself was not
dependent on all of its parts together, but rather that it could
just as well have been entered into as several different
agreements."40 They also rely on the rule of construction that
"[w]here two or more contractual documents are executed
substantially simultaneously and are clearly interrelated, they
must be construed as the whole contract."41 But whether and how
these rules apply to the interpretation of the contract in the
present case are questions of law, as is the question of the
appropriate remedy. Although this court might reach a different
result if it interpreted the contract on the merits, the
arbitrator's interpretation is not so obviously wrong that "all
fair and reasonable minds"42 would find it impossible under the
terms of the contract. The parties themselves provide strong
support for this view: each of their briefs contains a lucid,
detailed argument - relying on authority from this and other
jurisdictions - that the party's preferred interpretation and
remedy are the ones required by Alaska law. Because reasonable
minds can differ on whether the arbitrator interpreted the
contract(s) in a manner that exceeded his powers, we affirm the
superior court's decision on this issue.
D. Issuance of the Rule 54(b) Judgment
Kinn and Singletary argue next that the superior court
erred in issuing a Rule 54(b) judgment while they were pursuing
relief against a third party. Alaska Civil Rule 54(b) carves out
an exception to the general rule that appeals "may be taken only
after the entire case is disposed of on all substantive issues,"43
providing that
[w]hen more than one claim for relief is
presented in an action, whether as a claim,
counterclaim, cross-claim, or third-party
claim, or when multiple parties are involved,
the court may direct the entry of a final
judgment as to one or more but fewer than all
of the claims or parties only upon an express
determination that there is no just reason
for delay and upon an express direction for
the entry of judgment.
Entry of final judgment under Rule 54(b) is "[t]ypically . . .
appropriate only if the party seeking judgment is likely to
suffer actual hardship otherwise."44
Although Kinn and Singletary claim that the superior
court "did not find that [Alaska Sales and Service] would suffer
any hardship if the [c]ourt did not grant the [R]ule 54(b)
motion," the court's initial Rule 54(b) order specifically
identified the harm of "undue delay in enforcement of arbitration
awards."45 The court also noted that delaying judgment "would be
contrary to both the parties' express agreement for arbitration"
and, more broadly, that such a delay "could discourage parties
from engaging in arbitration and would delay the aggrieved party
their rights."
The delay at issue would hinge on the third-party claim
brought by Kinn and Singletary against Hagen, for which "[t]rial
[was] scheduled to begin in March, 2006." Hagen, in turn, has
brought a third-party claim against Cliff Bond, d/b/a M&B
Plumbing and Heating, who has brought yet another third-party
complaint against David Heusser. If Hagen successfully argues
that resolution of his claim depends on resolution of his own
third-party claim, and this pattern applies to subsequent third-
party claims, judgment could be delayed indefinitely.46 Because
the arbitrator resolved the present dispute without resolving the
claim against Hagen, and specifically found that the
Kinn/Singletary partnership had illegally concealed and
contributed to the contamination of the lot, resolution of the
claim against Hagen does not appear to be necessary to resolve
any of the substantive issues in this case. Thus, the harm that
Alaska Sales and Service would experience without a Rule 54(b)
order is obvious: Judgment would be unnecessarily delayed,
pending the resolution of a third-party claim that has not yet
even gone to trial. For this reason, we conclude that the
superior court did not abuse its discretion in entering a final
judgment under Rule 54(b).
E. The Superior Court's Remand of Future Disputes to the
Arbitrator
The final argument raised by Kinn and Singletary is
that the superior court in its Revised Entry of Final Judgment
erred by remanding future disputes regarding the interpretation
of the award to the arbitrator. Kinn argues that such a remand
is inconsistent with the language of our decision in
International Brotherhood of Electric Workers, Local Union 1547
v. City of Ketchikan,47 which emphasized the "fundamental common
law principle that once an arbitrator has made and published a
final award, the arbitrator's authority is exhausted and he or
she can proceed no further"48 and held that "remand [of an
arbitrator's award] is appropriate only where the award is
patently ambiguous."49 But many jurisdictions now permit
arbitrators to exercise limited, continuing jurisdiction over the
issues that they were initially responsible for adjudicating.50
Indeed, the 2003 edition of the treatise Elkouri: How
Arbitration Works, which we cited in IBEW, states that
[t]he arbitration process does not
automatically end in those cases where a
grievance has been sustained and where a
remedy has been ordered. Questions over the
application of a remedy can arise after an
arbitration award has been issued, which is
why arbitrators may decide, at their
discretion, to retain limited jurisdiction to
resolve any such remedial issues.[51]
Thus, our dicta in IBEW should not be interpreted to prohibit
arbitrators from retaining limited jurisdiction to ensure that
their awards are carried out properly.
Here, the arbitration award provided that "[a]ny
further disputes between these parties as to: the terms of
rescission, remediation and expenses of remediation on Lot 7 . .
. calculation of pre-award or post-award interest, future
attorney's fees and costs or interpretation of these awards may
be submitted to the undersigned [(Davis)] for resolution." Far
from reopening issues that had already been decided, the
arbitrator was simply offering to resolve any ambiguities in the
award and ensure the enforcement of the award. This is precisely
the type of limited jurisdiction that other courts now permit
arbitrators to retain.52 For this reason, we hold that the
superior court did not abuse its discretion in permitting Davis
to retain limited continuing jurisdiction.
F. Alaska Sales and Service's Cross-Appeal
On cross-appeal, Alaska Sales and Service argues that
the superior court erred by failing to remand four issues to the
arbitrator: (1) attorney's fees and costs for the proceedings
before the superior court; (2) the postjudgment interest rate;
(3) the method of tender of the rescission deed; and (4) the
proper form of the rescission deed. Although an arbitrator may
retain jurisdiction, such jurisdiction is generally limited to
"[q]uestions over the application of a remedy,"53 the resolution
of which is necessary to ensure compliance with the award.54 A
superior court need not remand issues that have already been
resolved unambiguously, or that are only tangentially related to
the award.55 For this reason, whether the superior court erred by
failing to remand these issues depends on whether remand was
necessary to ensure that the award be carried out properly.
1. Attorney's fees and costs
a. Whether the arbitration award was ambiguous
Alaska Sales and Service first claims that the award of
attorney's fees and costs during the confirmation process should
have been decided by the arbitrator, noting that the arbitration
provision in the contract gives the arbitrator authority to
"assess the
costs of arbitration, including legal/accountant's fees and costs
against the non-prevailing party." The arbitrator exercised his
power to "assess the costs for arbitration" under this provision
in a detailed, and unambiguous, section of the summary of all
awards.
But the award of fees and costs made by the superior
court did not involve the costs of arbitration and did not
implicate any ambiguous portion of the arbitrator's award.
Because it was an award for costs incurred only in proceedings
before the superior court, after the arbitrator had already
issued his opinion, it fell entirely outside the scope of the
arbitrator's award. This is explicitly recognized by AS
09.43.140, which provides that "[c]osts of the application [to
confirm or modify an arbitration award] and of the proceedings
subsequent to the application, and disbursements may be awarded
by the court."
b. The superior court's decision
Alaska Sales and Service further claims that the
superior court erred by failing to grant it full attorney's fees
and costs when the arbitration clause required the full cost of
arbitration to be paid by the non-prevailing party.56 As noted
above, the proceedings in the superior court were separate from
the arbitration proceedings. This court held in Marathon Oil Co.
v. ARCO Alaska, Inc. that where the language of the attorney's
fee clause "suggests that the parties were referring only to the
arbitration itself when they agreed to each bear their own
costs,"57 the clause does not apply to post-arbitration
proceedings. The same conclusion applies to this case, for the
applicable clause in the arbitration agreement states that "the
arbitrator shall assess the costs of arbitration, including
legal/accountant's fees and costs against the non-prevailing
party." The parties argue extensively about whether the superior
court should have followed Alaska Civil Rule 82 in awarding fees,
but AS 09.43.140 gives the superior court broad discretion to
award, or decline to award, fees in confirmation proceedings.
Granting post-arbitration attorney's fees in accordance with
Civil Rule 82 was appropriate,58 and for this reason, we affirm
the award of attorney's fees.
2. Postjudgment interest
Alaska Sales and Service next argues that the superior
court erred in following the arbitrator's decision to award
postjudgment interest at 3.75% per annum because "[t]he arbiter
did not establish a post[]judgment interest rate or indicate
whether the post-award rate should apply if the award was reduced
to judgment." But, as Kinn and Singletary correctly note, the
arbitrator's award of 3.75% interest until all amounts were paid
effectively established this as the postjudgment interest rate.
The superior court's award of 3.75% postjudgment interest -
relative to the arbitrator's judgment, not its own59 - was
therefore nothing more than a confirmation of this portion of the
arbitrator's decision. Because Alaska Sales and Service has not
established that there was any ambiguity in the arbitrator's
decision, or that remand is necessary to properly enforce the
award, we hold that the superior court did not err in adhering to
the arbitrator's postjudgment interest rate.
3. Method of tendering the rescission deed
Alaska Sales and Service alleges that the portion of
the arbitrator's award specifying how the deed of rescission is
to be tendered was ambiguous, and that the superior court erred
by choosing a particular method of tender. The superior court's
revised final judgment states that "once [d]efendants, or any
individual or combination of [d]efendants, have partially
satisfied this judgment by paying [the purchase price minus
accrued rents], Alaska Sales shall execute a warranty deed
conveying title to the defendant or defendants who paid this
judgment for the two parcels of real property."
The relevant portion of Davis's decision stated that
"[t]he property must be deeded back to [Kinn and Singletary] by
warranty deed," and ordered Kinn and Singletary to "repay the
plaintiffs the purchase price of the property."60 In the summary
of all awards, the arbitrator commented in a footnote that,
"until there is a closing for the return of the property, and the
amounts awarded to [Alaska Sales and Service] are paid, interest
will continue to accrue at the rates I awarded."61 Alaska Sales
and Service claims that this is ambiguous because it does not
indicate whether the entire award must be paid at the time of the
closing, or just the purchase price of the property. But this
footnote actually draws a distinction between the "closing" and
the payment of interest on remaining unpaid sums. For this
reason, the language of the arbitration award was not ambiguous,
and remand is not necessary for the proper enforcement of the
award.62 Since the superior court's order does not differ
materially from the arbitrator's order with regard to the method
of tender, we affirm the judgment of the superior court on this
issue.
4. Form of the rescission deed
Finally, Alaska Sales and Service claims that the
definition of the term "property" that the arbitrator directed
the parties to use in the rescission deed is ambiguous and should
be remanded to the arbitrator. Specifically, the definition of
"property" used in the original property contract, and used by
the superior court, includes "all of the improvements,
structures, fixtures, facilities, installations and equipment in,
on[,] over or under the [l]and." Although Alaska Sales and
Service claims that this creates tension with the arbitrator's
award, the arbitrator's discussion of this issue is perfectly
consistent with both the contract and the superior court's
revised final judgment:
VMI requests that the definition of the
"property" to be returned to it in rescission
include the fixtures. "Property," as that
word is used in Paragraph 45 of the award[,]
is defined as it is in the Contract for Sale
of Real Property. However, personalty
attached to the property sold separately by
Mr. Kinn, Mr. Singletary or VMI to [Alaska
Sales and Service] from the sale of the real
estate would not, of course, be part of the
rescission; unless the consideration paid by
[Alaska Sales and Service] for these items
was returned as well.
The arbitrator simply held that a particular category of personal
property - items unrelated to the underlying real property63 that
had been treated separately in the first transaction - would be
treated the same way in the rescission deed. The enforcement of
this portion of the award does not require a remand to the
arbitrator, as no ambiguity is evident on the face of the
statement, and the superior court's use of the original contract
language does not conflict with the arbitrator's legal conclusion
regarding the appropriate award. For this reason, we affirm this
portion of the superior court's decision.
IV. CONCLUSION
For the reasons set forth above, we AFFIRM the judgment
of the superior court.
_______________________________
1 The arbitrator found that Singletary's denial of
knowledge of the surface spills was "not at all credible," and
further found that Singletary had "direct[ed] employees to shovel
up the oiled gravel, place it into opaque bags, deposit[] the
bags at the dump and replac[e] the removed gravel with clean
gravel taken from a river bed."
2 The arbitration provision specified that "[a]ll
disputes shall be resolved by a single arbitrator in accordance
with the Rules and Procedures of the American Arbitration
Association pertaining to commercial disputes."
3 The question whether a partnership existed is not
disputed in this appeal.
4 According to the appellants, Singletary has no assets.
Singletary maintained in a January 2004 affidavit that the sale
of the business was "financially devastating for [him]," and that
he had only been employed for a total of six weeks in 2003.
5 Davis stated that he "underst[oo]d that Mr. Bankston
did recommend me, but the case was in fact referred to me by Rick
Baldwin, an attorney in Kenai."
6 Davis's client in Veco was Agrium U.S.
7 Marathon Oil Co. v. ARCO Alaska, Inc., 972 P.2d 595,
600 (Alaska 1999); see also Ahtna, Inc. v. Ebasco Constructors,
Inc., 894 P.2d 657, 660 (Alaska 1995) (reviewing de novo a lower
court's decision regarding an arbitration award).
8 Ahtna, 894 P.2d at 660.
9 Id. (quoting Dep't of Public Safety v. Public Safety
Employees Ass'n, 732 P.2d 1090, 1093 (Alaska 1987)). As noted by
the Ahtna court, this court's review focuses on questions of
arbitrability, not on whether the arbitrator construed the
contract in the way that this court would have construed it. See
Butler v. Dunlap, 931 P.2d 1036, 1039 (Alaska 1997) (noting that
"there are no statutory grounds for review of an arbitrator's
determination as to the meaning of contract provisions which do
not pertain to the issue of arbitrability"); Ahtna, 894 P.2d at
661 (stating that "an arbitrator's misconstruction of a contract
is not open to judicial review, except on questions of
arbitrability").
10 Marathon, 972 P.2d at 600.
11 Williams v. Mammoth of Alaska, Inc., 890 P.2d 581, 586
(Alaska 1995). Kinn and Singleton argue that their fourth issue
on appeal, "whether the [s]uperior [c]ourt erred in issuing a
[f]inal [j]udgment requiring that future disputes relating to the
implementation of certain provisions of the [f]inal [j]udgment be
brought before the arbiter," should be subject to a de novo
standard of review. The case they cite, International
Brotherhood of Electrical Workers, Local Union 1547 v. City of
Ketchikan, 805 P.2d 340 (Alaska 1991), does not support their
argument with regard to the standard of review. Rather, IBEW
holds that a court asked to clarify an ambiguous arbitration
award "should simply determine whether the award is, in fact,
ambiguous or unclear [and] [i]n cases where real ambiguity exists
. . . remand those parts of the award that are ambiguous to the
arbitrator for clarification." Id. at 341.
12 Ahtna, 894 P.2d at 660.
13 Laidlaw Transit, Inc. v. Anchorage Sch. Dist., 118 P.3d
1018, 1038 (Alaska 2005).
14 Marine Solution Servs., Inc. v. Horton, 70 P.3d 393,
414 (Alaska 2003).
15 Alaska Sales and Service claims that the AAA ethics
issue was not raised below, but Kinn and Singletary did raise it
before the superior court.
16 Alaska Sales and Service makes a different waiver
argument with regard to evident partiality. Pointing out that
Davis told both parties in conference that he would not require a
deposit of more than a day's fees "because all of them were my
friends," Alaska Sales and Service argues that Kinn and
Singletary waived any claim of evident partiality by failing to
request disclosure immediately. See Alaska State Hous. Auth. v.
Riley Pleas, Inc., 586 P.2d 1244, 1248 (Alaska 1978) (holding
that a claim of evident partiality had been waived by a party's
failure to object after an arbitrator told it "[y]ou guys . . .
haven't presented your case yet, but . . . you guys don't have a
chance," and noting that "[a] party may not obtain a second
hearing by silently collecting his [or her] objections for the
contingency of a loss in the first one"). But an arbitrator's
comment that "all of [the attorneys for both sides participating
in the conference] were my friends" does not suggest bias toward
one party in the manner that "you guys don't have a chance" does.
In a small legal community like Anchorage, a long-practicing
attorney's statement that every member of a particular group of
attorneys is a friend is unremarkable. Because of this context,
and because Davis did not differentiate between his friendships
with attorneys for the various parties, it is unlikely that the
statement would have been sufficient to give notice of the need
to object.
17 Code of Ethics for Arbitrators in Commercial Disputes
Canon IIA(1) (2004) (Am. Arbitration Ass'n), available at
http://www.adr.org/sp.asp?id=21958. As Kinn and Singletary point
out, the version in effect at the time of the arbitration was
substantially similar, requiring disclosure of "any existing or
past financial, business, professional, family or social
relationships which are likely to affect impartiality or which
might reasonably create an appearance of partiality or bias."
18 Commercial Arbitration Rules and Mediation Procedures
R. 16(a) (2005) (Am. Arbitration Ass'n), available at
http://www.adr.org/sp.asp?id=22440#R16. Cf. Alaska R. Admin. P.
23(f)(1)-(6) (requiring retired judges who seek appointment pro
tempore to disclose prior relationships with the parties in the
case, including whether the judge has acted as a private mediator
for the parties within the past two years).
19 Commercial Arbitration Rules and Mediation Procedures
R. 16(b) (2005) (Am. Arbitration Ass'n), available at
http://www.adr.org/sp.asp?id=22440#R16.
20 See ANR Coal Co. v. Cogentrix of N. Carolina, Inc., 173
F.3d 493, 497 (4th Cir. 1999) ("Even if [the arbitrator] violated
Canon II . . . the [AAA] Code of Ethics itself forecloses any use
of such a violation as a basis for vacatur. The Preamble of the
Code specifically states that it does not . . . establish new or
additional grounds for judicial review of arbitration awards.")
(quotation marks omitted).
21 Commercial Arbitration Rules and Mediation Procedures
R. 16(a) (2005) (Am. Arbitration Ass'n), available at
http://www.adr.org/sp.asp?id=22440#R16.
22 Compare AS 09.43.120(a)(2) ("On application of a party,
the court shall vacate an award if . . . there was evident
partiality by an arbitrator appointed as a neutral."), with 9
U.S.C. 10(a)(2) (2002) ("In any of the following cases the
United States court in and for the district wherein the award was
made may make an order vacating the award upon the application of
any party to the arbitration . . . where there was evident
partiality or corruption in the arbitrators.").
23 See Commonwealth Coatings Corp. v. Cont'l Cas. Co., 393
U.S. 145 (1968) (holding that an arbitrator who had sold services
to a contractor involved in an arbitration dispute, including
rendering services on the projects at issue in the dispute,
displayed evident partiality, and noting that the AAA disclosure
rule then in effect, which required disclosure of "any
circumstances likely to create a presumption of bias," was
"highly significant" in determining that evident partiality could
support vacatur of an arbitration award. But the Court did not
state a definite test for evident partiality.).
24 Id. at 150 ("It is often because they are men of
affairs, not apart from but of the marketplace, that
[arbitrators] are effective in their adjudicatory function.");
("[A]rbitrators are not automatically disqualified by a business
relationship with the parties before them if both parties are
informed of the relationship in advance, or if they are unaware
of the facts but the relationship is trivial.").
25 Cellular Radio Corp. v. OKI Am., Inc., 664 A.2d 357,
360-61 (D.C. 1995); see id. at 361 n.5 (listing cases where
courts addressed undisclosed relationships between arbitrators
and parties that raised implications of financial interests or
other loyalties).
26 See, e.g., Morelite Constr. Corp. (Div. of Morelite
Elec. Serv., Inc.) v. New York City Dist. Council Carpenters
Benefit Funds, 748 F.2d 79, 84 (2d Cir. 1984) ("[W]e hold that
`evident partiality' within the meaning of 9 U.S.C. 10 will be
found where a reasonable person would have to conclude that an
arbitrator was partial to one party to the arbitration."). In
cases where an arbitrator is selected because of his or her
particular expertise, the Morelite court held that even the
"appearance of bias" is not necessarily sufficient to disqualify
the arbitrator. Id. Cf. Univ. Commons-Urbana, Ltd. v. Universal
Constructors, Inc., 304 F.3d 1331, 1340 (11th Cir. 2002) ("At
first blush, a large number of . . . encounters would seem to
imply an inappropriately close association between arbitrator and
counsel. Closer inspection reveals, however, that frequent
interactions between Meyerson and Bradley Arant may simply be the
result of the fact that both specialize in construction law in
Birmingham, Alabama. Such familiarity due to confluent areas of
expertise does not indicate bias.").
27 Cf. Univ. Commons-Urbana, Ltd., 304 F.3d at 1339 ("[A]n
arbitration award may be vacated due to the `evident partiality'
of an arbitrator only when either (1) an actual conflict exists,
or (2) the arbitrator knows of, but fails to disclose,
information which would lead a reasonable person to believe that
a potential conflict exists.") (quotation marks omitted); Nw.
Mech., Inc. v. Pub. Util. Comm'n, 283 N.W.2d 522, 524 (Minn.
1979) (reversing an arbitration award on the grounds that
dealings between two of the arbitrators and one of the parties
"might create an impression of possible bias").
28 See, e.g., Positive Software Solutions, Inc. v. New
Century Mortgage Corp., 436 F.3d 495, 502 (5th Cir. 2006)
(holding that "an arbitrator selected by the parties displays
evident partiality by the very failure to disclose facts that
might create a reasonable impression of the arbitrator's
partiality"); Schmitz v. Zilveti, 20 F.3d 1043, 1047 (9th Cir.
1994) (holding that, where the arbitrator fails to disclose a
relationship with a party, "[s]howing a reasonable impression of
partiality is sufficient" to establish evident partiality)
(quotation marks omitted).
29 See Riley Pleas, Inc., 586 P.2d at 1248-49 (holding
that a claim of evident partiality against one arbitrator had
been waived by a party's failure to object after an arbitrator
told it "[y]ou guys . . . haven't presented your case yet, but .
. . you guys don't have a chance," and rejecting a claim of
evident partiality on the part of a second arbitrator where that
arbitrator had failed to disclose his one-third interest in a
partnership for which one party's attorney had previously
performed legal services).
30 Cf. Cellular Radio Corp., 664 A.2d 357 (applying New
Jersey law to hold that an arbitrator's previous representation
of a client in a case in which one party's lawyer represented a
party adverse to the arbitrator's client did not constitute
evident partiality). In the present case, the clients
represented by Davis and Bankston were not adversaries but,
according to Davis, "there were independent interests of
[Davis's] client that were separate from the interest[s] of Mr.
Bankston's client." At oral argument, Kinn's attorney cited
Milliken Woolens, Inc. v. Weber Knit Sportswear, Inc., 202
N.Y.S.2d 431, 435 (N.Y. App. Div. 1960) in support of the
proposition that an arbitrator's involvement in another case with
a party can constitute evident partiality. But Milliken is
inapposite because the relationship between the arbitrator and
the attorney was significantly closer in that case. Unlike the
arbitrator and lawyer at issue in Milliken, Davis and Bankston
were not co-counsel and, unlike the previous case in Milliken,
VECO was not pending at the time of the arbitration. Cf.
Positive Software Solutions, 436 F.3d at 497-98, 504 (holding
that an arbitrator displayed evident partiality by failing to
disclose that he was co-counsel with one of the parties'
attorneys in a previous action, even after he was asked about
prior professional relationships). Furthermore, unlike in
Milliken, there is nothing in the record here to "sustain[] a
conclusion that there was covert influence in the selection of
[the] arbitrator[]," and there is no allegation that "a
substantial claim which respondents' counsel was prosecuting
against this arbitrator's company at the time of the arbitration
was settled immediately after the award . . . was made." Id. at
435-36.
31 Cf. Morelite, 748 F.2d at 83 (noting that "to
disqualify any arbitrator who had professional dealings with one
of the parties (to say nothing of a social acquaintanceship)
would make it impossible, in some circumstances, to find a
qualified arbitrator at all"). This would be an even greater
problem in other Alaska communities, all of which are smaller
than Anchorage.
32 Cf. San Luis Obispo Bay Props., Inc. v. Pac. Gas &
Elec. Co, 28 Cal. App. 3d 556, 568 (Cal. App. 1972) ("Here there
is no showing that Goode and Shelger did anything more than
merely refer their overflow cases to other appraisers -
presumably to several others as well, since both men had more
business than they could handle. It would perhaps be a different
matter if they had referred more cases to each other than to
other appraisers, or had regularly given each other the first
opportunity at a reference (or the first opportunity at
particularly desirable cases), but there is no indication of any
favoritism or unusual preference here - nothing, in short, that
could be fairly said to create an impression of possible bias as
a matter of law.").
33 Davis, in his second letter to Reeves, explains the
referrals as follows:
I told you . . . that over the years Mr.
Bankston and I have referred cases to one
another on an infrequent basis, and have been
opposing counsel as well. I believe I have
already told you that I have infrequently
referred clients to Mike Mills [(a member of
Bankston's firm)] on bankruptcy matters. No
one, either Mr. Bankston or Mr. Amodio [(an
attorney representing Kinn and Singletary)],
has ever told me the reasons I was
recommended by either of them. I have never
asked and have simply assumed that my
experience in environmental cases might have
been a factor that was considered by both of
them.
34 San Luis Obispo Bay Props., 28 Cal. App. 3d at 567.
35 See, e.g., St. Paul Ins. Cos. v. Lusis, 492 P.2d 575,
581 (Wash. App. 1972) (holding that "the arbitrator's failure to
disclose either his membership on the Board of Governors or his
service with one of respondent's counsel on that board does not
constitute sufficient grounds to warrant vacatur of the
arbitrator's award").
36 This is not to suggest that relationships that would
constitute evident partiality can be "cancelled out" by ties with
the other side that would also indicate bias. All such ties
should be disclosed. See Commercial Arbitration Rules and
Mediation Procedures R. 16(a) (2005) (Am. Arbitration Ass'n),
available at http://www.adr.org/sp.asp?id=22440#R16. But, where
the relationships with neither side rise to the level of evident
partiality, the fact that an arbitrator has professional contacts
with both sides casts doubt on the view that the arbitrator is
biased in favor of one side.
37 See AS 09.43.120(a)(3) (providing that a court must
vacate an award if "the arbitrators exceeded their powers").
38 Ahtna, 894 P.2d at 660-61. A claim involving a garden
variety error in contract interpretation, rather than "the
arbitrator's construction of the contract with regard to
arbitrability," is ordinarily not reviewable. Id. at 661.
(Emphasis added.) Kinn and Singletary, however, assert not only
that the arbitrator misinterpreted the contract, but also that he
lacked the authority to impose partial rescission. The
arbitrator's choice of this remedy necessarily implies a
determination that he has the authority to impose such a remedy.
The sole focus of our review is that determination, and nothing
in this section should be construed as a ruling on the underlying
contractual issues, or the general appropriateness of partial
rescission as a remedy. Id.
39 Univ. of Alaska v. Modern Constr., Inc., 522 P.2d 1132,
1137 (Alaska 1974).
40 Johnson v. Olympic Liquidating Trust, 953 P.2d 494, 497
(Alaska 1998). As Alaska Sales and Service notes, however, this
court actually allowed partial rescission in Johnson. See id. at
498 (holding that one party had "no right to avoid the note at
least to the extent of [the sums not procured by fraud]," but
permitting rescission as to the amounts tainted by fraud).
41 Sea Lion Corp. v. Air Logistics of Alaska, 787 P.2d
109, 115 (Alaska 1990).
42 Univ. of Alaska v. Modern Constr., Inc., 522 P.2d at
1137.
43 Johnson v. State, 577 P.2d 706, 709 (Alaska 1978).
44 Williams, 890 P.2d at 586.
45 See id. at 587 (holding that "the superior court could
properly consider the delay resulting from an indefinite stay or
continuance in deciding whether to enter a Rule 54(b) judgment").
The court also noted cryptically that the order was being granted
"in light of Mr. Kinn's asset transfers in recent years."
Whether this alone would constitute an "express determination
that there is no just reason for delay" under Rule 54(b) is
unclear.
46 If Hagen's third-party claim is similar in substance to
Kinn and Singletary's third-party claim (i.e., an allegation that
the party being sued is the one primarily responsible for the
contamination of the property), subsequent third-party claims
could continue the chain of lawsuits ad infinitum. Judgment in
this case would be held hostage until the chain finally reached a
party who could not find someone else to sue.
47 805 P.2d 340 (Alaska 1991).
48 Id. at 343 n.7; but see Symons v. Schuylkill County
Vocational Sch., 884 A.2d 953, 958 (Pa. Commw. 2005) (holding
that "the doctrine of functus officio [stating that an arbitrator
generally cannot retain jurisdiction absent a mistake, omission,
or ambiguity in the award] is a common law concept and applies to
common law arbitrations," but that it "has no application" under
the Uniform Arbitration Act).
49 Id. at 344; see also United Steelworkers of Am., Local
12886 v. ICI Am., Inc., Atlas Point Plant, 545 F. Supp. 152, 154
(D. Del. 1982) ("Where the true intent of an arbitrator is
apparent, the award should not be resolved by resubmission to the
arbitrator."). The IBEW court noted the possibility that, even
where an issue is ambiguous, "there may be some instances where
remand to the arbitrator is not feasible." IBEW, 805 P.2d at
344. Because the arbitrator himself offered to resolve any
ambiguities in the arbitration award, this does not appear to be
an issue here.
50 See, e.g., LLT Intern., Inc. v. MCI Telecomm. Corp., 69
F. Supp. 2d 510, 515 (S.D.N.Y. 1999) (stating that "courts have
routinely provided for the remand of arbitration awards for
clarification or completion," and listing cases); Dean Foods Co.
v. United Steel Workers of Am., 911 F. Supp. 1116, 1127-28 (N.D.
Ind. 1995) (noting that "[t]here is a wealth of case law, both in
this circuit and in others, recognizing the propriety of an
arbitrator retaining jurisdiction over the remedy portion of an
award," and listing cases); Engis Corp. v. Engis Ltd., 800 F.
Supp. 627, 632 (N.D. Ill. 1992) (holding that an arbitrator may
retain jurisdiction "solely for the purpose of ensuring
compliance with his [or her] award").
51 Elkouri & Elkouri, How Arbitration Works, 333 (Alan
Miles Ruben ed., BNA Books 2003); see id. at 333 n.195 (noting
that it is now "common for arbitrators to retain jurisdiction so
that their awards are properly carried out and disagreements
about the award can be resolved" and citing cases). IBEW cites
the 1985 edition of How Arbitration Works. See IBEW, 805 P.2d at
343 n.7.
52 See Elkouri & Elkouri: How Arbitration Works, 333
n.195.
53 Id. at 333.
54 See, e.g., Engis, 800 F. Supp. at 632 (holding that an
arbitrator may retain jurisdiction "solely for the purpose of
ensuring compliance with his [or her] award").
55 See id.
56 The superior court awarded Alaska Sales and Service
twenty percent of its actual expenditures on attorney's fees in
accordance with Civil Rule 82(b)(2).
57 972 P.2d at 604.
58 See Integrated Res. Equity Corp. v. Fairbanks N. Star
Borough, 799 P.2d 295, 300 (Alaska 1990) (distinguishing between
fees incurred in the course of the arbitration, to which Civil
Rule 82 does not apply, and fees incurred in post-arbitration
proceedings, to which Civil Rule 82 can apply).
59 Had the postjudgment interest been relative to the
court's own judgment, the court would have been bound by AS
09.30.070(a), which provides in relevant part that "the rate of
interest on judgments and decrees for the payment of money . . .
is three percentage points above the 12th Federal Reserve
District discount rate in effect on January 2 of the year in
which the judgment or decree is entered."
60 The arbitrator's award repeats this, requiring tender
of the warranty deed and repayment of the purchase price, but not
stating whether tender of the warranty deed is triggered by
partial payment of the purchase price, full payment of the
purchase price but partial payment of the entire award, or full
payment of the entire award.
61 The footnote is appended to a sentence discussing
interest on the amount awarded for environmental damages, a
component of the award separate from repayment of the purchase
price of the property.
62 See Engis, 800 F. Supp. at 632 (noting that an
arbitrator's continuing jurisdiction exists "solely for the
purpose of ensuring compliance with his [or her] award").
63 See K&L Distribs., Inc. v. Kelly Elec., Inc., 908 P.2d
429, 432 (Alaska 1995) (noting the VCC's distinction between
personal property unrelated to real estate and "fixtures," which
are "items of personal property that become so affixed or
otherwise so related to real estate that they become part of the
real estate") (quotation marks omitted).
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