118 F.Supp.2d 55 (D.Mass. 1999), C. A. 98-10998, Bull HN Information Systems, Inc. v. Hutson

Docket NºC. A. 98-10998
Citation118 F.Supp.2d 55
Party NameBull HN Information Systems, Inc. v. Hutson
Case DateSeptember 17, 1999
CourtUnited States District Courts, 1st Circuit, District of Massachusetts

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118 F.Supp.2d 55 (D.Mass. 1999)

BULL HN INFORMATION SYSTEMS INC., Plaintiff,

v.

Charles J. HUTSON, Defendant.

Civil Action No. 98-10998-RBC.

United States District Court, D. Massachusetts.

Sept. 17, 1999

Page 56

David B. Chaffin, Robert T. Nagle, Hare & Chaffin, Boston, MA, for plaintiff.

Nelson G. Harris, Brooks, Stevens & Pope, P.A. Cary, NC, Michael J. Liston, Carr & Liston, Boston, MA, for defendant.

OPINION AND ORDER ON AMENDED APPLICATION AND MOTION TO VACATE MODIFIED ARBITRATION AWARD (# 31) AND MOTION OF CHARLES J. HUTSON TO CONFIRM MODIFIED ARBITRATION AWARD (# 35)

COLLINGS, Chief United States Magistrate Judge.

I. Introduction

Following an arbitrator's modification of an arbitration award on remand from a judgment vacating the previous award,1 the plaintiff Bull HN Information Systems Inc. (hereinafter "Bull HN") filed an application and motion to vacate that modified award.2 On July 24, 1998, defendant Charles Hutson's (hereinafter "Hutson") motion to dismiss the complaint for lack of subject matter jurisdiction was granted. See Bull HN Information Systems Inc. v. Hutson, 1998 WL 426047 (D.Massachusetts). Approximately two weeks thereafter Bull HN filed a Motion for Leave to Amend or For Reconsideration (# 17) which was ultimately allowed on January 6, 1999, in order to permit amendment of the defective allegations regarding the jurisdictional amount in controversy. See Bull HN Information Systems Inc. v. Hutson, 184 F.R.D. 19 (D.Massachusetts, 1999).

In due course an Amended Application and Motion to Vacate Modified Arbitration Award (# 31) (hereinafter "the Amended Application") was submitted wherein Bull HN requests as relief either vacatur of the Modified Award with no remand due to the untimeliness of Hutson's demand for arbitration or vacatur of the Modified Award with remand to the arbitrator with instructions to answer questions regarding the timeliness of Hutson's demand for arbitration.3 In support of its position that vacatur is warranted, Bull HN argues that "[t]he modified award is every bit as fatally flawed as its predecessor [in that] [t]he arbitrator exceeded his authority again, manifestly disregarded the law again, and

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again applied his own notions of industrial justice." (Memorandum in Support of Amended Application and Motion to Vacate Modified Arbitration Award # 32 at 2) Moreover, it is further asserted that the arbitrator failed to heed what Bull HN views as instructions to be followed on remand:

[1.] In this instance, the Plan provides that no claim for arbitration may be advanced "more than two years after the claim or cause of action has arisen." This provision, not "any statute of limitation," is what must be interpreted and applied by the arbitrator.

* * * * * *

[And 2.] Because the arbitrator deemed the cause to have been submitted to arbitration pursuant to Rule 7 [of the AAA Commercial Arbitration Rules], from all that appears, he never considered whether a timely, i.e., within the two years provided by the contract, demand for arbitration as defined in Rule 6 was ever effected. Of course, this was the first issue that the arbitrator was to have decided.

Bull HN Information Systems Inc. v. Hutson, 983 F.Supp. 284, 291-2 (D.Massachusetts, 1997).

Hutson opposes the Amended Application and concomitantly seeks confirmation of the modified arbitration award. (Motion of Defendant Charles J. Hutson to Confirm Modified Arbitration Award # 35) With the parties' consent this case has been referred and reassigned to the undersigned for all purposes, including trial and the entry of judgment, pursuant to 28 U.S.C. § 636(c).

II. The Facts

The relevant facts were detailed at length in the prior case and therefore now need only be briefly recapped. See Bull HN, 983 F.Supp. at 286-9. In 1990 Hutson was employed as a sales representative for Bull HN. Under the provisions of the then applicable Sales Compensation Plan (hereinafter "the Plan"), Hutson claims he was entitled to commissions from sales generated on the North Carolina Agricultural Extension account to which he was assigned. Indeed, in 1990 the "defendant asserted that he was due commissions for work that he had done on that account." See Bull HN, 983 F.Supp. at 286. Thereafter in October and December of 1991, Hutson's wife wrote two letters to Bull HN claiming that commissions owed to her husband had not been paid and requesting arbitration as set forth in the Plan to settle this grievance. See id. Then on March 6, 1995, a Demand For Arbitration was served by Hutson upon Bull HN and copies were also filed with the American Arbitration Association. See id. It was stated in the Demand For Arbitration that "[t]he named Claimant, [Hutson] a party to an arbitration agreement contained in the Sales Compensation Plan for Individual Contributors, providing for arbitration under the Commercial Arbitration Rules, demands arbitration thereunder." (# 31, Exh. B)

Hutson was "employed at the will of the Company"; the Plan did not create a "contract of employment for any specified period of time." (# 31, Exh. A) The Plan provided that:

All disputes which involve claims for $3,000 or more, and which arise out of the participant's course of employment or out of the termination thereof, ... whether or not such claims are based exclusively on the terms of this Plan, shall be submitted to arbitration in Boston, Massachusetts if the parties are

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unable to resolve their dispute after good faith efforts.

Amended Application And Motion to Vacate Modified Arbitration Award # 31, Exh. A.

The rules to govern any arbitration that may arise under the Plan were the Commercial Arbitration Rules of the American Arbitration Association. (Id.) The Plan also contained a Limitation of Actions provision which stated:

Neither party may demand arbitration or institute any lawsuit in any form arising out of this Plan, or arising in any way out of the employment relationship between the parties, more than two (2) years after the claim or cause of action arises.

Amended Application And Motion to Vacate Modified Arbitration Award # 31, Exh. A.

Finally for present purposes, the arbitrator of any dispute under the Plan was to "honor the terms and conditions of this Plan and construe said Plan in accordance with the laws of the Commonwealth of Massachusetts." (Id.)

In the instant case, the parties stipulated to the issues to be determined by the arbitrator:

Was the Claimant barred by the Sales Compensation Plan from filing a claim for arbitration under the two-year limitation provision of that Plan?

If the Claimant was not barred from filing a claim, is any compensation and/or commission due to Claimant on the 1990 sale of Bull HN equipment to the North Carolina Agricultural Extension?

Amended Application And Motion To Vacate Modified Arbitration Award # 31, Exh. C.

The arbitrator's resolution of the first issue in the Modified Phase I Award was as follows:

1. Limitations of Action (sic):

a. Based on the evidence produced at the hearings, the Arbitrator finds the Bull HN Information Systems, Inc. (hereinafter referred to as the "Respondent") Sales Compensation Plan (the "SCP"--Claimant's Exhibit 3) to be an archetypal contract of adhesion.

b. As a...

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