John A. Cookson Co. v. Nhbb

Decision Date24 December 2001
Docket NumberNo. 2000-183.,2000-183.
Citation787 A.2d 858
CourtNew Hampshire Supreme Court

Wiggin & Nourie, P.A., of Manchester (Jeffrey B. Osburn & another on the brief, and Stephanie A. Bray orally), for the plaintiff.

Sheehan Phinney Bass & Green, P.A., of Manchester (Michael C. Harvell and Michael J. Lambert on the brief, and Mr. Harvell orally), for the defendants.


This is a dispute between the plaintiff, John A. Cookson Company, and the defendants, New Hampshire Ball Bearings, Inc. (NHBB) and NMB Corporation (NMB), relating to the breach of certain sales representative agreements. The plaintiff appeals decisions of the superior court requiring arbitration of its claims against the defendants and upholding the arbitrator's award. We affirm in part, reverse in part and remand.

The record discloses the following facts. The plaintiff agreed to act as the defendants' sales representative, selling products to companies in the aviation and aerospace industry for a commission. The plaintiff's sales territory was California, Oregon and Washington. It maintained an office in Seattle, Washington.

Originally, the agreements contained a termination clause allowing either the plaintiff or the defendants to terminate the contracts upon sixty days' notice. This provision was amended in August 1992 to allow termination upon eighteen months' notice. In March 1994, the defendants informed the plaintiff that they would terminate the contracts in sixty days and that the plaintiff was not to contact any of the defendants' customers on behalf of other companies. In addition, the defendants limited the products that the plaintiff could continue selling, eliminating approximately eighty percent of its business. As a result, the plaintiff was forced to close its office. The plaintiff filed suit in superior court in July 1996, alleging breach of contract, breach of the covenant of good faith and fair dealing, unfair trade practices, interference with business relationships, and intentional and negligent misrepresentation.

The contract with NHBB contained an arbitration clause, which stated that "[a]ny dispute between the Representative and NHBB, unless relating to the division of commissions, shall be arbitrated in Hillsborough County, New Hampshire at the American Arbitration Association in conformity with the rules of said Association then in effect." Similarly, the contract with NMB provided that "[i]f the parties do not resolve the dispute through mediation within forty-five (45) days of the Initial Notice, then the dispute shall be resolved by binding arbitration conducted in accordance with the rules then in effect of the American Arbitration Association." The defendants filed a motion to stay proceedings and compel arbitration, which the superior court granted.

Prior to arbitration, the plaintiff moved to amend its suit to include a claim under RSA chapter 339-E (1995), Sales Representatives and Post-Termination Commissions. The arbitrator denied the motion on the ground that the plaintiff did not have standing under the statute. On September 15, 1998, the arbitrator awarded the plaintiff $199,000 in damages representing commissions owed by both defendants. He did not, however, award a separate amount for the tort claims because he concluded that: 1) with respect to damages, the plaintiff's claim for intentional interference with contractual relations was the same as its breach of contract claim; and 2) there was insufficient evidence to support the plaintiff's misrepresentation claims.

In his damages calculation, the arbitrator reduced the plaintiff's total damages of $410,000 by $211,000, the amount the arbitrator concluded the plaintiff saved by not having to perform under the contract. He also determined that the plaintiff failed to introduce any substantive evidence regarding the value of its lost investment or the amount of future lost profits from other prospective customers. The arbitrator also denied the plaintiff interest because the parties' agreements did not contain any provision for the payment of interest.

The plaintiff applied to the superior court for a modification of the arbitrator's award. See RSA 542:8 (1997). It argued, among other things, that the arbitrator committed plain mistake by finding that: 1) the plaintiff did not have standing under RSA chapter 339-E; 2) the plaintiff was not entitled to separate damages for the defendants' alleged tortious conduct; 3) the plaintiff's damages should be reduced by $211,000; and 4) the plaintiff was not entitled to interest. The court denied the plaintiff's request and this appeal followed. See RSA 542:10.

I. Requirement of Arbitration

We begin by determining whether the superior court erred in requiring the plaintiff to arbitrate its claims. The scope of an arbitration provision contained in a contract presents a question of law for this court. See Dunn & Sons, Inc. v. Paragon Homes of New Eng., Inc., 110 N.H. 215, 217, 265 A.2d 5 (1970). "Such a clause is to be interpreted so as to make it speak the intention of the parties at the time it was made bearing in mind its purpose and policy." Id. (quotation omitted). Absent evidence establishing the parties' intent, we consider the face of the plaintiff's writ and the terms of the arbitration provisions contained in the parties' contracts. See id. While there is a presumption of arbitrability if the contract contains an arbitration clause, we may conclude that a particular grievance is not arbitable if it is determined "with positive assurance that the [contract] is not susceptible of an interpretation that covers the dispute." Appeal of Town of Bedford, 142 N.H. 637, 640, 706 A.2d 680 (1998).

The plaintiff argues that the plain language of the arbitration provisions reveals that the parties did not intend to arbitrate tort and statutory claims. In support of its position, the plaintiff relies upon Dunn & Sons, Inc.

Dunn & Sons, Inc. is distinguishable because the arbitration clause in that case was narrower in scope. See id. at 218, 706 A.2d 680. The arbitration clause in that case was intended to cover "`any dispute or disagreement ... concerning ... the terms ... performance ... breach... or ... interpretation' of the contract." Id. at 218, 706 A.2d 680. We construed the arbitration clause as applying only to contract causes of action, not tort claims. See id.

The arbitration provisions in this case are broader than the clause in Dunn & Sons, Inc. The provisions here contain no language limiting their scope to contract claims. "Broad language of this nature covers contract-generated or contract-related disputes between the parties however labeled: it is immaterial whether claims are in contract or in tort...." Acevedo Maldonado v. PPG Industries, Inc., 514 F.2d 614, 616 (1st Cir.1975). In fact, the only apparent limitation is contained in the contract with NHBB, which excludes from arbitration any dispute relating to the division of commissions. The plaintiff does not contend that any of its claims pertain to the division of commissions.

We conclude, therefore, that the superior court did not err in ruling that all of the plaintiff's claims should be arbitrated. Further, because the plaintiff agreed to arbitrate all of its claims, the superior court did not violate the plaintiff's right to a jury trial by submitting the plaintiff's case to arbitration. See Lowell v. U.S. Savings Bank, 132 N.H. 719, 724, 572 A.2d 184 (1990) (addressing how party may waive right to jury trial).

We next address the plaintiff's arguments regarding the arbitrator's decision. An arbitration decision may be corrected or modified upon a showing that the arbitrator committed "plain mistake." RSA 542:8 (1997). A "plain mistake" is an error that "is apparent on the face of the record and which would have been corrected had it been called to the arbitrator`s attention." Rand v. Aetna Life & Cas. Co., 132 N.H. 768, 771, 571 A.2d 282 (1990). It must be shown that the arbitrator manifestly fell into such error concerning the facts or law, and that the error prevented his free and fair exercise of judgment on the subject. Id. When undertaking a "plain mistake" analysis, we afford great deference to the arbitrator's decision. Masse v. Commercial Union Ins. Co., 134 N.H. 523, 526, 593 A.2d 1164 (1991). We examine the face of the record to determine if there is validity to the claim of "plain mistake," and defer to the arbitrator's decision if the record reveals evidence supporting it. See id.

II. RSA Chapter 339-E

The plaintiff first argues that the superior court erred in finding that the arbitrator did not commit plain mistake when it ruled that the plaintiff did not have standing to bring a claim under RSA chapter 339-E.

RSA chapter 339-E, Sales Representatives and Post-Termination Commissions, provides a cause of action by which "sales representatives" can recover commissions owed by a "principal." RSA 339-E:3. A "sales representative" is defined as "an individual other than an employee, who contracts with a principal to solicit orders...." RSA 339-E:1, III. A "principal" is defined as "a person who manufactures, produces, imports or distributes a product for sale...." RSA 339-E:1, II. The arbitrator concluded that the plaintiff did not have standing under RSA 339-E:1 because a corporation cannot be a "sales representative" for purposes of the statute.

"In statutory interpretation, this court is the final arbiter of the intent of the legislature as expressed in the words of a statute considered as a whole." Appeal of Naswa Motor Inn, 144 N.H. 89, 90, 738 A.2d 349 (1999) (quotation omitted). We begin by considering the statutory language, construing its plain and ordinary meaning, if possible. See id. "While legislative history may be helpful in the interpretation of an ambiguous statute,...

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