DeVore v. IHC Hospitals, Inc.

• Decision Date: 18 November 1994
• Docket Number: No. 930474,930474
• Citation: DeVore v. IHC Hospitals, Inc., 884 P.2d 1246 (Utah 1994)
• Parties: Greggory R. DeVORE, Plaintiff and Appellant, v. IHC HOSPITALS, INC., Defendant and Appellee.
• Court: Utah Supreme Court

Page 1246

884 P.2d 1246

Greggory R. DeVORE, Plaintiff and Appellant, v. IHC HOSPITALS, INC., Defendant and Appellee.

No. 930474.

Supreme Court of Utah.

Nov. 18, 1994.

Anthony B. Quinn, Mary Anne Q. Wood, Richard G. Wilkins, Salt Lake City, for plaintiff.

David A. Greenwood, Patricia M. Leith, Robert W. Payne, Salt Lake City, for defendant.

DURHAM, Justice:

Plaintiff Greggory R. DeVore, M.D., appeals from a Third District Court order denying his motion to vacate an arbitration award granted in favor of defendant Intermountain Health Care Hospitals ("IHCH"). ¹ Dr. DeVore filed the motion under section 78-31a-14 of the Utah Code. ² We affirm and remand.

This case arises out of the attempts of IHCH and the School of Medicine at the University of Utah to establish a cooperative perinatology program. As head of IHCH's perinatology service, Dr. DeVore played a large role in the negotiations with the School of Medicine. Nevertheless, IHCH asked Dr. DeVore to resign soon after the parties reached agreement. Dr. DeVore accepted and signed a letter of resignation that IHCH had prepared for him.

About six months after his July 1990 resignation, Dr. DeVore filed a claim for wrongful employment termination against IHCH. Pursuant to the employment contract, the parties submitted the claim to arbitration under the Utah Arbitration Act, Utah Code Ann. §§ 78-31a-1 to -20, and the Commercial Arbitration Rules of the American Arbitration Association. The parties selected former federal bankruptcy judge Ralph R. Mabey to preside and stipulated to an order providing that, with the exception of an oral explanation of Mabey's ruling, the proceedings would be closed and unrecorded.

During the May 1991 proceeding, Dr. DeVore introduced evidence regarding a 1988 meeting with Dr. Cecil O. Samuelson, then Dean of the School of Medicine. ³ Dr. DeVore testified that during the meeting, Dr. Samuelson questioned Dr. DeVore's capabilities on both a personal and a professional level. Dr. DeVore also presented several letters written to, sent from, or referencing Dr. Samuelson. The letters dealt primarily with the state of negotiations between IHCH and the School of Medicine and occasionally mentioned Dr. DeVore. ⁴

At the conclusion of the hearing, Mabey ruled in favor of IHCH. Mabey found that (1) IHCH had not breached, nor anticipatorily breached, the employment contract; (2) Dr. DeVore resigned voluntarily rather than changing his billing and treatment practices; and (3) IHCH had valid grounds on which to terminate Dr. DeVore for cause. IHCH subsequently moved to confirm the award in district court, and Dr. DeVore simultaneously moved to vacate. In January 1992, the district court confirmed the award.

Nearly one year later, on December 5, 1992, Dr. DeVore received a telephone call from a colleague on an unrelated matter. During their conversation, the subject of the arbitration arose, and Dr. DeVore mentioned that Mabey had presided. The colleague indicated that he knew Mabey because he and Mabey had served together as bishops in The Church of Jesus Christ of Latter-day Saints ("LDS Church") from about 1977 to 1980. Dr. DeVore's colleague further indicated that they had served under the same stake president, Dr. Cecil O. Samuelson. ⁵

Following this discovery, on December 24, 1992, Dr. DeVore filed a motion in the Third District Court to vacate the arbitration award. See Utah Code Ann. § 78-31a-14. In essence, Dr. DeVore complained that following his introduction of the evidence regarding Dr. Samuelson, Mabey was aware that Dr. Samuelson disapproved of Dr. DeVore both personally and professionally. Dr. DeVore theorized that having served as a bishop under Dr. Samuelson, Mabey had likely developed an enduring love, admiration, and respect for Dr. Samuelson and his views. Thus, Dr. DeVore concluded that Mabey's failure to disclose his prior ecclesiastical relationship with Dr. Samuelson, an individual who thought negatively of Dr. DeVore and whose views Mabey highly regarded, had impermissibly tainted the arbitration proceeding and created at least the appearance of partiality or misconduct within the meaning of section 78-31a-14(1)(b). Dr. DeVore alleged that IHCH's failure to disclose the relationship also produced at least the appearance that the award had been procured by undue means in violation of section 78-31a-14(1)(a).

IHCH responded by challenging both the timeliness and the sufficiency of Dr. DeVore's section 78-31a-14 motion. Pointing to section 78-31a-14(2), IHCH argued that an aggrieved party has only twenty days following service of a copy of the award to challenge an arbitrator's ruling based upon partiality. Thus, IHCH concluded that Dr. DeVore's motion, filed almost one year following service, was time barred. With respect to the sufficiency of Dr. DeVore's motion, IHCH claimed that (1) Dr. Samuelson had no involvement in the arbitration proceeding or IHCH's relationship with Dr. DeVore, (2) Dr. DeVore had failed to demonstrate that Mabey "showed partiality" or engaged in misconduct prejudicing Dr. DeVore's rights, and (3) IHCH could not have procured the award by undue means because it did not introduce the evidence regarding Dr. Samuelson and, in any event, had no reason to know, let alone disclose, the prior ecclesiastical relationships of its corporate parent's senior vice presidents.

After a hearing and oral argument, the district court denied Dr. DeVore's motion. The court found that (1) Mabey and Dr. Samuelson had had a "significant and important" ecclesiastical relationship from 1977 to 1980, eleven years before the arbitration; (2) there was no evidence that the relationship had continued in any substantial way since that time; (3) Dr. Samuelson was not a party or an agent or a representative of a party to Dr. DeVore's terminated employment contract; (4) Dr. Samuelson was not a party or employed by a party to the arbitration; (5) Dr. Samuelson did not testify at the arbitration, nor was he deposed or identified as a witness by either party; (6) Dr. Samuelson was never involved in any employment decisions regarding Dr. DeVore and had no involvement with the arbitration proceeding. Thus, the court concluded that Dr. DeVore had failed to establish that the award "was 'procured by corruption, fraud or undue means,' or that the arbitrator 'showed partiality' or that the arbitrator 'was guilty of misconduct that prejudiced the rights of any party.' " ⁶ Dr. DeVore appeals. ⁷

We note at the outset that the policy of our law favors arbitration as a speedy and inexpensive method of adjudicating disputes. Utility Trailer Sales of Salt Lake, Inc. v. Fake, 740 P.2d 1327, 1329 (Utah 1987); Robinson & Wells, P.C. v. Warren, 669 P.2d 844, 846 (Utah 1983). Pursuant to that policy, judicial review of arbitration awards should not be pervasive in scope or encourage repetitive adjudications but should be limited to the statutory grounds and procedures for review. Id. As a general rule, an arbitration award will not be disturbed on account of irregularities or informalities in the proceeding or because the court does not agree with the award as long as the proceeding was fair and honest and the substantial rights of the parties were respected. Utility Trailer Sales, 740 P.2d at 1329; Bivans v. Utah Lake Land, Water & Power Co., 53 Utah 601, 174 P. 1126, 1130 (1918).

Bearing these fundamental arbitration principles in mind, we emphasize that the central issue before us is whether the district court properly denied Dr. DeVore's section 78-31a-14 motion to vacate the award. Reviewing the district court's determination requires us to analyze three interrelated questions. First, did the district court err in ruling sub silentio that Dr. DeVore had filed a timely motion under section 78-31a-14? Second, if Dr. DeVore's motion was timely, what evidentiary standard does section 78-31a-14(1)(b) require? Need a movant establish facts sufficient to prove actual partiality or bias on the arbitrator's part, or does the statute merely require a movant to demonstrate the appearance of partiality? Finally, does Dr. DeVore's claim merit relief under the evidentiary standard required by section 78-31a-14(1)(b)?

Timeliness of Dr. DeVore's Section 78-31a-14 Motion

We turn first to the question of whether the district court erred in ruling that Dr. DeVore had timely filed a motion under section 78-31a-14. The proper construction of section 78-31a-14 is a question of law. State v. Larsen, 865 P.2d 1355, 1357 (Utah 1993); State v. James, 819 P.2d 781, 796 (Utah 1991). Accordingly, we grant no particular deference to the district court's conclusions but review them for correctness. Ward v. Richfield City, 798 P.2d 757, 759 (Utah 1990).

When faced with a question of statutory construction, we look first to the plain language of the statute. Larsen, 865 P.2d at 1357; Schurtz v. BMW of N.Am., Inc., 814 P.2d 1108, 1112 (Utah 1991); Bonham v. Morgan, 788 P.2d 497, 500 (Utah 1989) (per curiam). Only when we find ambiguity in the plain language of the statute need we seek guidance from legislative history and relevant policy considerations. Schurtz, 814 P.2d at 1112; Bonham, 788 P.2d at 500. Section 78-31a-14(2) states:

A motion to vacate an award shall be made to the court within 20 days after a copy of the award is served upon the moving party, or if predicated upon corruption, fraud, or other undue means, within 20 days after the grounds are known or should have been known.

Utah Code Ann. § 78-31a-14(2). Thus, section 78-31a-14(2) contains two independent timeliness standards, a twenty-day time bar following service of the award upon the moving party and a twenty-day tolling provision for motions predicated upon corruption, fraud, or undue means.

Dr. DeVore acknowledges that section 78-31a-14(2)'s twenty-day time bar is designed to further the goal of arbitration as a speedy, inexpensive, and final alternative to adjudication by a court. Ho...