82 Hawai'i 57, Mathewson v. Aloha Airlines, Inc.

Decision Date01 July 1996
Docket NumberNo. 16583,16583
Parties82 Hawai'i 57, 152 L.R.R.M. (BNA) 2986 Harry Michael MATHEWSON, Plaintiff-Appellee, v. ALOHA AIRLINES, INC., Defendant-Appellant, and John Does 1-10; Jane Does 1-10; Doe Corporations 1-10; Doe Partnerships 1-10; or other Entities 1-20, Defendants.
CourtHawaii Supreme Court

Robert S. Katz (Richard M. Rand with him on the brief; Torkildson, Katz, Jossem, Fonseca, Jaffe, Moore & Hetherington), on the briefs, Honolulu, for defendant-appellant Aloha Airlines, Inc.

Jerry M. Hiatt (Craig K. Shikuma, Alan K. Lau and Paul M. Saito with him on the brief; Bays, Deaver, Hiatt, Kawachika & Lezak), on the briefs, Honolulu, for plaintiff-appellee Harry Michael Mathewson.

Before MOON, C.J., LEVINSON, NAKAYAMA, and RAMIL, JJ., MARIE N. MILKS, Circuit Court Judge in place of KLEIN, J., recused.

LEVINSON, Justice.

In these consolidated proceedings, the defendant-appellant Aloha Airlines, Inc. (Aloha) appeals the First Circuit Court's orders (1) denying Aloha's motion, filed pursuant to Hawai'i Revised Statutes (HRS) § 658-9 (1993), 1 to vacate an arbitration award and (2) granting the plaintiff-appellee Harry Michael Mathewson's motion, filed pursuant to HRS § 658-8 (1993), 2 to confirm the award and "modifying" it pursuant to HRS § 658-10 (1993). 3

On appeal, Aloha argues that the circuit court committed reversible error because: (1) it lacked jurisdiction to enter any orders (including an order approving the parties' stipulation to arbitrate their dispute) or confirm the arbitration award until a certified order remanding Civil No. 89-2522 from the United States District Court from the District of Hawai'i--to which the matter had been removed--had been officially filed in the circuit court record, as allegedly required by 28 U.S.C. § 1447(c); (2) it confirmed--rather than vacated--the arbitration award notwithstanding that the arbitrator "had violated HRS § 658-9(4) by deciding an issue not submitted to him, namely, Mathewson's claim for breach of an implied contract [as set forth] in Count III of [Mathewson's] [c]omplaint[,] which had already been dismissed"; (3) it confirmed--rather than vacated--the arbitration award notwithstanding that the arbitrator "had refused to hear evidence pertinent and material to the controversy in violation of HRS § 658-9(3) and ... to decide the issue submitted to him in violation of HRS § 658-9(4)"; and (4) it modified the arbitration award, pursuant to HRS § 658-10, although "no motion to modify had been filed under HRS § 658-10 within [ten] days after service of the [a]rbitration [a]ward as required by HRS § 658-11 [ (1993) ],[ 4] and the only [m]otions before the [circuit] [c]ourt were to [v]acate the [a]ward pursuant to HRS § 658-9 or [c]onfirm it pursuant to HRS § 658-8."

For the reasons set forth below, we deem Aloha's points of error to be without merit. Accordingly, we affirm the circuit court's orders.

A. Preliminary Events And Initial Proceedings

Beginning in June 1988, Mathewson entered Aloha's employ as an airline pilot. On May 11, 1989, approximately two weeks prior to the end of his one-year probationary period, Aloha removed Mathewson from flight status and, effective May 15, 1989, terminated him on the sole basis that his evaluations had not been satisfactory. Aloha had given Mathewson no advance notice of any anticipated termination, no termination hearing, no severance pay, and no explanation for his termination other than that his peer-pilot evaluations had been unsatisfactory. Moreover, despite his requests to do so, Aloha declined to allow Mathewson to review the evaluations that had allegedly served as the basis for his termination.

On August 15, 1989, Mathewson filed a wrongful termination complaint against Aloha in the First Circuit Court. Mathewson's complaint alleged, inter alia, that, because he had previously been "blacklisted" by the pilots' union--the Air Line Pilots Association (ALPA)--for having worked as a pilot for another airline during an ALPA strike, certain ALPA members who were employed by Aloha had engaged in conduct calculated to force his termination or resignation 5 and that the only reason for his discharge was that Aloha had succumbed to pressure exerted by ALPA to blacklist and terminate him. The complaint asserted the following claims for relief: (1) discharge in violation of public policy (Count I); (2) promissory estoppel (Count II); (3) breach of contract, express and implied (Count III); (4) negligent and/or intentional misrepresentation and/or fraud (Count IV); and (5) intentional and/or negligent infliction of emotional distress (Count V).

On September 29, 1989, Aloha removed Civil No. 89-2522 to the United States District Court for the District of Hawai'i, which redesignated the matter as Civil No. 89-00758 DAE. Mathewson filed a motion for remand in the federal district court on October 28, 1989, and, on March 19, 1990, the district court granted Mathewson's motion and entered an order remanding the matter to the First Circuit Court. On March 21, 1990, the chief clerk of the federal district court transmitted a letter to the chief clerk of the First Circuit Court advising the latter that the "case was remanded to the Circuit Court of the First Circuit, State of [Hawai'i]" and enclosing a certified copy of the district court's remand order. The circuit court clerk acknowledged receipt of the transmittal letter and remand order on March 23, 1990. However, apparently through inadvertence, the certified remand order was not filed in the circuit court record until February 22, 1993. Nevertheless, Aloha has conceded in its opening brief that it "does not dispute that the Clerk of the United States District Court ... mailed a certified copy of the Order of Remand to the Clerk's Office for the Circuit Court of the First Circuit and that such Order was received." (Emphases added.)

On May 10, 1990, Aloha filed a motion to dismiss Civil No. 89-2522 on the grounds that it was "preempted by the Railway Labor Act ('RLA'), 45 U.S.C. § 151[,] and that [Mathewson] has failed to initiate or exhaust his exclusive contractual remedies under the [c]ollective [b]argaining [a]greement between Aloha and the Air Line Pilots Association ('ALPA')." Attached as Exhibit B to Aloha's motion was a copy of the federal district court's remand order. Aloha explained in its supporting memorandum that it had "removed this action to the federal district court" and that, thereafter, Mathewson had "filed a Motion to Remand[,] which was granted by Order dated March 19, 1990 (attached as Exhibit B)." Mathewson opposed the motion, arguing, inter alia, that federal law did not preempt his state law claims.

On July 12, 1990, the circuit court granted Aloha's motion in part and denied it in part. Noting that "the authorities are apparently in agreement that only claims which hinge on the application or interpretation of the collective bargaining agreement are subject to federal preemption," the circuit court entered the following dispositional order:

1. [Aloha's] [m]otion is granted with respect to Count III (Breach of Contract) of [Mathewson's] [c]omplaint and such of Count IV (Negligent and/or Intentional Misrepresentation and/or Fraud) and such of Count V (Intentional and/or Negligent Infliction of Emotional Distress) as relate to or are parasitic of the claims under Count III.

2. [Aloha's] [m]otion is denied with respect to Count I (Discharge in Violation of Public Policy) and Count II (Promissory Estoppel) and such of Counts III and V as relate to or are parasitic of the claims under Counts I and II.

(Emphases added.)

Subsequently, on March 18, 1992, the parties entered into a court-approved stipulation, which was officially filed in the circuit court record in Civil No. 89-2522, to arbitrate Mathewson's surviving claims. The stipulation to arbitrate provided in relevant part:

IT IS HEREBY STIPULATED by the parties hereto, by and through their respective counsel, as follows:

1. ... [T]he parties hereby stipulate that they will arbitrate this matter. The arbitration shall be final and binding as to all claims and defenses which were raised or which could properly have been raised in this matter.

2. In consideration for the submission to arbitration, [Aloha] waives any defenses to jurisdiction based on preemption in this matter, but retains its right to defend against [Mathewson's] claims on the merits based on its collective bargaining agreement and statutory provisions.

3. The arbitration shall be before a single neutral arbitrator from [Hawai'i] selected from a list supplied by the American Arbitration Association ("AAA")....


5. [Hawai'i] law shall apply to the arbitration and the arbitration shall otherwise be governed by the applicable rules of the AAA. The parties shall have the same burdens of proof as they would have had at trial on all issues.


7. The arbitration in the above-captioned proceeding is meant to replace a trial by jury on all issues herein. The civil suit shall be stayed by stipulation pending the completion of the arbitration for the purposes of confirming or vacating or otherwise acting upon the arbitration award. Any arbitration award may be confirmed as a final judgment by a motion made in Civil No. 89-2522 ... pursuant to Chapter 658 of the [Hawai'i] Revised Statutes....


9. ... This agreement shall be construed in accordance with [Hawai'i] law and any litigation to enforce the terms of this agreement shall be decided by the Circuit Court of the First Circuit, State of Hawai'i....

(Emphases added.)

B. Result Of Arbitration

Pursuant to the stipulation, the parties selected Ted T. Tsukiyama as the arbitrator and proceeded to arbitration. On May 8, 1992, Tsukiyama issued a "Preliminary Arbitration Decision and Award" (Preliminary Decision). The Preliminary Decision identified the "issues submitted for determination" as being "those ... set...

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