Plymouth-Carver Regional School Dist. v. J. Farmer & Co., Inc.

• Decision Date: 17 May 1990
• Docket Number: PLYMOUTH-CARVER
• Parties: , 60 Ed. Law Rep. 188 REGIONAL SCHOOL DISTRICT v. J. FARMER & CO., INC., et al. 1
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 1284

553 N.E.2d 1284

407 Mass. 1006, 60 Ed. Law Rep. 188

PLYMOUTH-CARVER REGIONAL SCHOOL DISTRICT v. J. FARMER & CO., INC., et al. ¹

Supreme Judicial Court of Massachusetts,

Suffolk.

Argued Feb. 5, 1990.

Decided May 17, 1990.

Peter J. Gagne, Boston, for J. Farmer & Co., Inc. John W. Fieldsteel, Boston, for Edward R. Marden Corp.

John H. Wyman, Plymouth, for plaintiff.

Before LIACOS, C.J., and WILKINS, ABRAMS, NOLAN and LYNCH, JJ.

RESCRIPT.

The defendants appeal from a decision of the Superior Court denying their motions to confirm an arbitrator's award and granting the plaintiff's motion to vacate that award. The defendants assert that the judge erred in substituting her judgment for that of the arbitrator in the interpretation of a provision in a contract between Farmer and Marden. We allowed Farmer's application for direct appellate review. We agree with the defendants. We reverse and remand to the Superior Court for confirmation of the arbitrator's award.

The plaintiff awarded a contract to Marden to construct a new regional high school. Marden awarded the landscape subcontract to Farmer. The contracts between the plaintiff and Marden and between Marden and Farmer each contained an "all claims and disputes" arbitration clause. A dispute arose between Farmer and Marden over a requirement by the plaintiff that seeded areas be maintained indefinitely.

Farmer demanded arbitration against Marden "for performing increased maintenance" and "for increased cost of labor and materials to perform the seeding and planting out of sequence and beyond the contract completion date." Marden, in turn, demanded arbitration against the plaintiff for "all sums recovered by Farmer against Marden, together with applicable markup, bond cost, and increased cost of overhead, administration and other items incurred by Marden relating to this claim." The arbitrations were consolidated, hearings held, and the arbitrator awarded $75,000 to Marden, $70,000 of which was to be paid to Farmer. The arbitrator stated no reasons for his award. The plaintiff petitioned to vacate the award as being in excess of the arbitrator's authority. The judge, after hearing, agreed with the plaintiff and vacated the award. The defendants appeal, claiming that the judge's ruling was error. We agree. We reverse.

A matter submitted to arbitration is subject to a very narrow scope of review. Absent fraud, errors of law or fact are not sufficient grounds to set aside an award. See Trustees of Boston & Me. Corp. v. Massachusetts Bay Transp. Auth., 363 Mass. 386, 390, 294 N.E.2d 340 (1973). "Even a grossly erroneous decision is binding...." Id. Courts inquire into an arbitration award only to determine if the arbitrator has exceeded the scope of his authority, or decided the matter based on "fraud, arbitrary conduct, or procedural irregularity in the hearings." Marino v. Tagaris, 395 Mass. 397, 400, 480 N.E.2d 286 (1985), quoting Greene v. Mari & Sons Flooring Co., 362 Mass. 560, 563, 289 N.E.2d 860 (1972). "To do otherwise would undermine the predictability, certainty, and effectiveness of the arbitral forum that has been voluntarily chosen by the parties," Marino, supra 395 Mass. at 400, 480 N.E.2d 286. The policy of limited judicial review is reflective of the strong public policy favoring arbitration as an expeditious alternative to litigation for setting commercial disputes. Danvers v. Wexler Constr. Co., 12 Mass.App.Ct. 160, 163, 422 N.E.2d 782 (1981), quoting Quirk v. Data Terminal Syss., Inc., 379 Mass. 762, 767, 400 N.E.2d 858 (1980) (purpose of G.L. c. 251, governing arbitration, is to provide further speedy resolution of disputes by a method which is "not subject to delay and obstruction in the courts").

The judge ruled that the award exceeded the arbitrator's authority. We do not agree. An arbitrator exceeds his authority by granting relief beyond the scope of the arbitration agreement, see Royal Indem. Co. v. Blakely, 372 Mass. 86, 87 n. 2, 360 N.E.2d 864 (1977), by awarding relief beyond that to which the parties bound themselves, see Local 589, Amalgamated Transit Union v. Massachusetts Bay Transp. Auth., 392 Mass. 407, 411, 467 N.E.2d 87 (1984), or by awarding relief prohibited by law. See Marlborough v. Cybulski, Ohnemus & Assocs., 370 Mass 157, 160, 346...