Keyclick Outsourcing, Inc. v. Ochsner Health Plan, Inc.
| Decision Date | 14 March 2012 |
| Docket Number | No. 2011–CA–0598.,2011–CA–0598. |
| Citation | 89 So.3d 1207 |
| Parties | KEYCLICK OUTSOURCING, INC. v. OCHSNER HEALTH PLAN, INC. |
| Court | Court of Appeal of Louisiana — District of US |
89 So.3d 1207
KEYCLICK OUTSOURCING, INC.
v.
OCHSNER HEALTH PLAN, INC.
No. 2011–CA–0598.
Court of Appeal of Louisiana,
Fourth Circuit.
March 14, 2012.
[89 So.3d 1208]
J. Alex Watkins, T. Carey Wicker III, Capitelli & Wicker, New Orleans, LA, for Plaintiff/Appellant.
Donald J. Miester, Jr., Perry R. Staub, Jr., Taggart Morton, L.L.C., New Orleans, LA, for Defendant/Appellee.
(Court composed of Judge JAMES F. McKAY, III, Judge TERRI F. LOVE, and Judge JOY COSSICH LOBRANO).
TERRI F. LOVE, Judge.
[4 Cir. 1]This matter arises following an arbitration proceeding. The arbitrator granted awards to both parties with a net amount being awarded to KeyClick and concluded an expanded scope of judicial review. that neither party was entitled to attorney's fees or costs. KeyClick moved to vacate the award, and the trial court judge found that the parties had no authority to contractually expand the scope of judicial review. KeyClick filed a motion for new trial, which the trial court denied, and this appeal followed.
We find that the decision to vacate the 2003 arbitration award was not based on
[89 So.3d 1209]
Further, KeyClick's request to reinstate the 2003 arbitration award is not properly before this Court. We also find that the law of the case doctrine is inapplicable in that it would be contrary to intervening caselaw. Further, we find no abuse of discretion in the trial court's confirmation of the assessment of attorneys' fees made by the arbitrator and affirm.
This arbitration proceeding resulted from a breach of contract action regarding pricing between KeyClick Outsourcing, Inc. (“KeyClick”) and Ochsner Health Plan 1 (hereinafter “OHP”). In 2002, KeyClick invoked a clause in the contract between the parties (hereinafter “the agreement”) that required arbitration, and OHP challenged the arbitration by filing a petition for declaratory and injunctive relief to stop the arbitration, wherein OHP asserted that KeyClick was not a party to the contract because the original party, AMS, changed its name to KeyClick during the pendency of the contract.2 The 24th Judicial District Court, Parish of Jefferson denied the petition and OHP appealed. The Court of Appeal, Fifth Circuit, State of Louisiana affirmed the decision of the trial court and the Louisiana Supreme Court denied writ. Ochsner Health Plan, Inc. v. Advanced Medical Systems, Inc., 03–118 (La.App. 5 Cir. 5/28/03), 846 So.2d 1286,writ denied,03–2035 (La.11/7/03), 857 So.2d 4953.
While that appeal was pending, the arbitration proceeded, and the arbitrator issued a ruling after the trial court rendered its decision but prior to the appellate court's affirmation of the decision. The arbitrator found that no agreement existed between OHP and KeyClick and determined that a net amount of $58,907.45 was owed to KeyClick by OHP.
[4 Cir. 3]KeyClick sought to have the trial court in Jefferson Parish vacate, modify or correct the arbitrator's ruling; OHP also sought modification of the award. The trial court conducted a hearing and determined that the arbitrator was operating under a mistake of law given that the appellate court subsequently affirmed the trial court's determination that there was a contract between KeyClick and OHP but the arbitrator found that no agreement existed between OHP and KeyClick. The trial court determined that the appropriate disposition was to vacate the arbitrator's ruling and remand the matter for a new arbitration proceeding in light of the court's ruling on the existence of a contract between KeyClick and OHP. The trial court judge stated, “I think he made a material mistake of law ... the Fifth Circuit stated it was a contract. He didn't enforce the agreement, because he didn't find that you were contracting parties.” KeyClick Outsourcing, Inc. v. Ochsner Health Plan, Inc., 06–359, p. 5 (La.App. 5 Cir. 10/31/06), 946 So.2d 174, 176.
Thereafter, OHP filed a motion for new trial and argued therein that the trial court should have limited the hearing to the scope of its review rather than addressing the merits of KeyClick's appeal. The trial court denied the motion for new trial, and OHP appealed. On appeal, OHP argued that the only grounds for vacating an arbitration decision should be those established
[89 So.3d 1210]
by statute, which does not include material errors of law as a basis.
The Court of Appeal, Fifth Circuit, State of Louisiana affirmed that decision finding that the law between the parties included the contract's expanded scope of review. The Court found authority for the trial court's direction of a rehearing by [4 Cir. 4]the arbitrators and determined that pursuant to La. R.S. 9:4210(D), a court may issue an order vacating an arbitration award where the arbitrator exceeded its powers. The Court stated that the agreement that provides for arbitration is the source of the arbitrator's powers and, as found by the trial court judge, the arbitrator had no authority to make “material errors of law” or to “refuse to enforce any agreements between the parties.”
The second arbitration concluded in 2010 and was conducted in two phases—a liability/contractual interpretation phase and a second phase to determine damages. The arbitrator granted awards to both parties with a net amount being awarded to KeyClick in the amount of $9,887.46. The arbitrator concluded that neither OHP nor KeyClick were entitled to attorney's fees or costs.
KeyClick moved to have the trial court in Orleans Parish vacate the award based on material errors of law. The trial court judge found that a recent U.S. Supreme Court decision forbid the parties from contractually expanding the scope of judicial review under the Federal Arbitration Act. Thus, even if the arbitrator made material errors of law, the trial court judge found that it was not a basis for vacating the award.
On a motion for new trial, KeyClick argued that the law of the case doctrine applied to the question of the contractual basis for the scope of an appeal. KeyClick's motion was denied. This appeal followed.
Arbitration is a substitute for litigation. Montelepre v. Waring Architects, 2000–0671, 2000–0672, p. 3 (La.App. 4 Cir. 5/16/01), 787 So.2d 1127, 1130. (Other citations omitted.). Arbitration is utilized as a fast and inexpensive mechanism for the settlement of differences. Id.
The positive law of Louisiana favors arbitration, and any doubt concerning the scope of arbitrable issues should be resolved in favor of arbitration. Aguillard v. Auction Mgmt. Corp., 04–2804, 04–2857, p. 6 (La.6/29/05), 908 So.2d 1, 7. In Collins v. Prudential Ins. Co. of America, 99–1423, p. 6 (La.1/19/00), 752 So.2d 825, the Louisiana Supreme Court explained the review of interlocutory judgments as they pertain to arbitration orders and noted that although an interlocutory judgment ordering arbitration is not subject to an immediate appeal, an aggrieved party under these circumstances is not entirely barred from relief. “In a case where the trial judge has committed a clear error in ordering arbitration, supervisory relief might be appropriate based upon the facts and circumstances of a particular case.” Collins, 99–1423, p. 9, 752 So.2d at 831. The Court concluded, however, that “in keeping with our policy favoring arbitration, such relief should be granted only sparingly.” Id.
KeyClick argues that the interlocutory decision vacating the first arbitration award was in error. KeyClick maintains that the decision vacating the award was based on the parties' contractual expansion of the scope of [4 Cir. 6]judicial review. KeyClick contends that the 2003 arbitration award that it previously moved to vacate should be reinstated.
[89 So.3d 1211]
KeyClick did not advance this reinstatement argument in the trial court. Under Rule 1–3 of the Uniform Rules, Courts of Appeal, we cannot consider an argument not raised in the trial court “unless the interest of justice clearly requires otherwise.” We find that the issue is not properly before this Court nor would the interests of justice be served by our consideration of this argument for the first time on appeal.
As a result of a second...
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