Paola v. Commercial Union Assur. Companies

• Decision Date: 30 June 1983
• Docket Number: No. 81-166-A,81-166-A
• Citation: 461 A.2d 935
• Parties: Theodore W. PAOLA v. COMMERCIAL UNION ASSURANCE COMPANIES. ppeal.
• Court: Rhode Island Supreme Court

Page 935

461 A.2d 935

Theodore W. PAOLA v. COMMERCIAL UNION ASSURANCE COMPANIES.

No. 81-166-Appeal.

Supreme Court of Rhode Island.

June 30, 1983.

Ronald J. Resmini, Providence, for plaintiff.

John T. Walsh, Jr., Providence, for defendant.

OPINION

BEVILACQUA, Chief Justice.

This is an appeal from a Superior Court judgment confirming an arbitration award but denying the plaintiff's request to add interest to the award.

The facts of this case are not in dispute. On October 24, 1979, Theodore W. Paola (plaintiff) sustained personal injuries and property damage when he was involved in a motor vehicle accident. The plaintiff filed a claim against his insurance company, Commercial Union Assurance Companies (defendant), alleging that the owner of the other vehicle was an uninsured motorist and that coverage should therefore be provided under plaintiff's uninsured-motorist policy.

The plaintiff submitted his claim to arbitration and was awarded the sum of $2,934.80. He subsequently filed a petition for confirmation of the award in Superior Court. In addition, plaintiff asked that interest be added to the award. The trial justice granted the confirmation but denied the request for interest on two grounds: (1) that based upon the award filed, he had no way of knowing whether or not the sum of $2,934.80 included interest; and (2) that G.L.1956 (1969 Reenactment) § 9-21-10 did not apply to arbitration proceedings when the matter is before the Superior Court solely for the purpose of confirming the award. We agree.

The issues presented on appeal are (1) whether a Superior Court justice can add prejudgment interest to an arbitration award pursuant to § 9-21-10 at the time of confirmation; and (2) whether an arbitrator can award prejudgment interest to an arbitration award pursuant to § 9-21-10.

I

In addressing the first issue, plaintiff contends that an arbitration award that is confirmed pursuant to G.L.1956 (1969 Reenactment) § 10-3-16, ripens into judgment and thus comes within the purview of § 9-21-10, as amended by P.L.1981, ch. 54, § 1, requiring interest to be added to the amount of damages from the date of the cause of action. ¹ Additionally, plaintiff argues that this is a necessary result if arbitration awards are to be consistent with judgments filed in civil suits. The plaintiff, in support of his position, relies on § 10-3-18 which states that an arbitration judgment "[s]hall have the same force and effect, in all respects, as, and be subject to all the provisions of law relating to, a judgment in an action at law * * *."

The defendant, in opposition, argues that § 9-21-10 only applies to civil actions that are commenced pursuant to the District or Superior Court Rules of Civil Procedure. Since arbitration proceedings are nonjudicial and therefore not subject to the rules, such proceedings cannot be considered "civil actions" under § 9-21-10.

In addition, defendant argues that the trial justice was correct in not looking behind the award itself and reviewing the merits of the arbitrator's decision. He contends that absent complete irrationality an arbitrator's award is not subject to judicial revision.

On numerous occasions, we have emphasized the limited role the judiciary has in the arbitration process. See Romano v. Allstate Insurance Co., R.I., 458 A.2d 339, 341 (1983) (citing Coventry Teachers' Alliance v. Coventry School Committee, R.I., 417 A.2d 886, 888 (1980)). We have established that a trial justice may vacate an arbitration award only if it falls within one of the statutory grounds ² or if the trial justice determines that a specific award is irrational under the circumstances. Id. 458 A.2d at 341 (citing Burns v. Segerson, R.I., 404 A.2d 500, 504 (1979)). In the instant case, there were no allegations of statutory violations. Furthermore, neither party contested the award itself. Because the amount of the award was given in a lump sum, there is no indication of whether or not the arbitrator included interest in the first instance. We cannot speculate on the merits of arbitration awards and therefore do not find the award to be irrational under the circumstances.

We further find that the trial justice was correct when he refused to add interest to the award at the time of the confirmation. Rhode Island statutory law limits a Superior Court justice's role concerning arbitration to either vacating or confirming the awards. See §§ 10-3-11, -12. A trial justice has no power to modify an award unless there has been miscalculation of figures, or mistake in description of property or person; or where the award is imperfect in form only; or where the arbitrator made an award concerning a matter not before them unless such matter would not affect the merits of the decision regarding the submitted issues. Section 10-3-14. To allow a Superior Court justice to add interest to a proper award would be to grant a much broader authority than the Legislature intended. Thus, a Superior Court justice may not award interest at the time he confirms an award pursuant to § 9-21-10.

II

We turn now to the second issue of whether or not an arbitrator can add prejudgment interest to an award pursuant to § 9-21-10. We believe that he can.

The purpose of arbitration is to provide an expeditious and informal means of private dispute settlement. Westminster Construction Corporation v. PPG Industries, Inc., 119 R.I. 205, 209, 376 A.2d 708, 710 (1977). This does not, however, change the nature of the action. Rather, the nature...