Einhorn v. Valley Medical Specialists, P.C.
| Decision Date | 07 April 1992 |
| Docket Number | CA-CV,No. 2,2 |
| Citation | 838 P.2d 1332,172 Ariz. 571 |
| Parties | Daniel EINHORN, D.O., Petitioner/Appellee/Cross-Appellant, v. VALLEY MEDICAL SPECIALISTS, P.C., an Arizona professional corporation; Robert D. Ligorsky, D.O. and Edythe Ligorsky, husband and wife; Robert S. Cohen, D.O. and Anna Cohen, husband and wife, Respondents/Appellants/Cross-Appellees. 92-0037. |
| Court | Arizona Court of Appeals |
The dispute before us questions an arbitrator's authority to enter an award that was confirmed on review by the trial court. We have jurisdiction pursuant to A.R.S. § 12-2101.01(A)(6).
Dr. Daniel Einhorn was an employee/shareholder with three other physicians in Valley Medical Specialists, P.C. (VMS). Because of differences with the others, Einhorn's employment was terminated effective December 17, 1988. Disputes arose thereafter as to the amounts due Einhorn for (a) his year-end bonus under the VMS employment agreement, (b) his stock in both VMS and VMS Equipment Leasing, Inc. under the respective stock redemption agreements, and (c) his partnership interest in VMS Investments under the partnership agreement. All of the agreements provided that any controversy, claim or dispute arising out of the agreement would be submitted to binding arbitration.
After the parties agreed upon an arbitrator, VMS sought a ruling from the arbitrator that he was bound by the value set by the company's certified public accountant for the VMS stock based upon the following provision in the stock redemption agreement:
The calculation of the purchase price [of the stockholder's stock] shall be made by the firm of certified public accountants employed by [VMS]....
The arbitrator initially ruled he was so bound unless Einhorn could show that the CPA's determination of the stock's value was either fraudulent or made in bad faith, and thus limited Einhorn's witnesses to rebuttal testimony on such matters. However, on the first day of the arbitration hearing, upon Einhorn's motion, the arbitrator apparently reconsidered his ruling (which is not part of the record on appeal) and permitted unrestricted testimony from Einhorn's witnesses, including opinion testimony as to the stock's value. While this ruling may have been subject to challenge pursuant to A.R.S. § 12-1502, VMS, nevertheless, elected to proceed with arbitration. At the conclusion of the three and one-half day hearing, the arbitrator awarded Einhorn $177,076 for his VMS stock (which the CPA valued at $97,851), a year-end bonus of $35,000 (which the VMS board of directors had denied) and $3,850 for his interests in VMS Equipment Leasing and VMS Investments.
Einhorn filed an application for confirmation of the award with the superior court pursuant to A.R.S. § 12-1511. VMS opposed the application contending, pursuant to A.R.S. § 12-1512(A)(3), that the arbitrator had exceeded his powers. The trial court found otherwise and confirmed the award. This appeal followed.
This state has had a long-standing public policy favoring arbitration. See Gates v. Arizona Brewing Co., 54 Ariz. 266, 95 P.2d 49 (1939); Smitty's Super-Valu, Inc. v. Pasqualetti, 22 Ariz.App. 178, 525 P.2d 309 (1974); Jeanes v. Arrow Ins. Co., 16 Ariz.App. 589, 494 P.2d 1334 (1972); and New Pueblo Constructors, Inc. v. Lake Patagonia Recreation Ass'n, 12 Ariz.App. 13, 467 P.2d 88 (1970). Consistent with this public policy, Arizona has adopted the Uniform Arbitration Act, A.R.S. § 12-1501, et seq., and pursuant to A.R.S. § 12-133, has mandated arbitration in all civil cases filed in the superior court where the amount in controversy does not exceed certain jurisdictional limits. In deference to the parties' contractually agreed-upon means of dispute resolution, and to avoid undermining the objectives of arbitration as an inexpensive and speedy final disposition of the parties' controversy, judicial review of an arbitration award is limited. Smitty's...
To continue reading
Request your trial
-
Canon School Dist. No. 50 v. W.E.S. Const. Co., Inc.
...it confirmed the arbitration award. Because the public policy of this state favors arbitration, Einhorn v. Valley Medical Specialists, 172 Ariz. 571, 572, 838 P.2d 1332, 1333 (App.1992); Jeanes v. Arrow Ins. Co., 16 Ariz.App. 589, 591, 494 P.2d 1334, 1336 (1972), judicial review of arbitrat......
-
HALLMARK INDUS. v. FIRST SYSTECH INTERN.
...matter of public policy." Foy v. Thorp, 186 Ariz. 151, 153, 920 P.2d 31, 33 (App.1996); see also Einhorn v. Valley Medical Specialists, P.C., 172 Ariz. 571, 572, 838 P.2d 1332, 1333 (App.1992). Permitting a party to avoid arbitration of disputes arising from three contracts with clear, enfo......
-
Atreus Communities Grp. of Ariz. v. Stardust Dev., Inc.
...of a dispute, judicial review of an arbitration award is severely limited by statute. Einhorn v. Valley Med. Specialists, P.C., 172 Ariz. 571, 572–73, 838 P.2d 1332, 1333–34 (App.1992). The “boundaries of [an] arbitrator['s] powers are defined by the agreement of the parties.” Smitty's Supe......
-
City of Cottonwood v. James L. Fann Contracting, Inc.
...of an agreement to arbitrate. Smitty's Super-Valu, 22 Ariz.App. at 180, 525 P.2d at 311; Einhorn v. Valley Medical Specialists, P.C., 172 Ariz. 571, 572-73, 838 P.2d 1332, 1333-34 (App.1992). Moreover, the public policy of Arizona favors arbitration. Id. Because of the public policy favorin......