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17-P-184                                              Appeals Court

CENTRAL CEILINGS, INC.    vs.     SUFFOLK CONSTRUCTION COMPANY, INC.,
                                & others.1


                            No. 17-P-184.

           Suffolk.      January 10, 2018. - May 9, 2018.

             Present:    Blake, Neyman, & Ditkoff, JJ.


Arbitration, Award, Discretion of arbitrator, Scope of
     arbitration, Confirmation of award, Judicial review,
     Attorney's fees. Contract, Arbitration. Practice, Civil,
     Interest, Attorney's fees.



     Civil action commenced in the Superior Court Department on
January 31, 2008.

     A motion to confirm an arbitration award was heard by Peter
M. Lauriat, J., and a motion to correct and confirm as corrected
or to vacate an arbitration award was heard by Linda E. Giles,
J.


     Paul R. Mordarski (Margaret Capp also present) for the
plaintiff.
     Joel Lewin (John P. Connelly also present) for the
defendants.

     1 Fidelity and Deposit Company of Maryland, Safeco Insurance
Company of America, and XL Specialty Insurance Company.
                                                                   2




    DITKOFF, J.    The parties submitted a construction dispute,

pending in litigation in the Superior Court, to arbitration

under the Uniform Arbitration Act, G. L. c. 251, §§ 1 et seq.

The arbitrator issued a substantial award in favor of the

plaintiff, Central Ceilings, Inc., but purported to reserve the

calculation of preaward interest to a Superior Court judge.     The

parties did not agree to this reservation.    On the plaintiff's

motion to confirm the arbitration award, the judge (remanding

judge) remanded the matter to the arbitrator for the calculation

of preaward interest.   After the arbitrator awarded preaward

interest well below that requested by the plaintiff, the

plaintiff moved to correct or to vacate that award.   The

plaintiff now appeals from the order denying that motion.

Concluding that an arbitrator may not reserve the calculation of

preaward interest for a judge without the agreement of the

parties, and finding no error in the failure to award attorney's

fees, we affirm.

    1.   Background.    The plaintiff was a subcontractor to

defendant Suffolk Construction Company, Inc. (Suffolk), the

general contractor, in a project for the renovation and

construction converting the old Charles Street jail in Boston
                                                                   3


into the Liberty Hotel.2   On January 31, 2008, the plaintiff

commenced an action in Superior Court against the defendants,

raising various claims arising out of its subcontract with

Suffolk.   After discovery and pretrial proceedings, the parties

filed a joint motion to stay the case in favor of resolving the

dispute through arbitration.   On October 8, 2013, the parties

entered into an arbitration agreement governed by the Uniform

Arbitration Act, G. L. c. 251, §§ 1 et seq., expressly

incorporating the Construction Industry Arbitration Rules of the

American Arbitration Association.   The arbitration agreement

reached "all relevant issues appertaining" to the civil lawsuit

and granted the arbitrator "full power and authority to award

money damages and to grant such other relief, including without

limitation reasonable attorney's fees and any other

contractually authorized damages as he, in his sole discretion,

shall deem just and proper" "[t]o the same extent as if he were

a justice of the Massachusetts Superior Court."   A judge allowed

the motion and stayed the case during the pendency of the

arbitration.




     2 The remaining defendants, Fidelity and Deposit Company of
Maryland, Safeco Insurance Company of America, and XL Specialty
Insurance Company, are the joint sureties on the payment bond
covering the project.
                                                                   4


     After extensive arbitration proceedings, the arbitrator

issued an initial award on the merits in favor of the plaintiff

in a decision dated February 20, 2015, in the amount of

$1,324,819.24, "with interest thereon in the amount ultimately

assessed by the Court," plus attorney's fees and costs as set

out in the subcontract between the parties.3

     The parties filed timely cross motions with the arbitrator

requesting modification, correction, and clarification of the

initial award.   The arbitrator denied the defendants' motion and

allowed the plaintiff's motion.     The modified award, dated April

6, 2015, changed the award only to require an additional

interest calculation.   It continued to reserve the task of

calculating interest on the $1,324,819.24 award to a judge, but

also required that judge to calculate interest on a payment of

$402,852 already made by Suffolk shortly after the parties

agreed to arbitration and prior to any award.

     On April 15, 2015, the defendants moved in Superior Court

to vacate the arbitrator's award.    The defendants soon

reconsidered, paid the modified award plus postaward interest on

June 24, 2015, and then withdrew their motion to vacate.




     3 The arbitrator also stated, "Should the parties fail to
agree upon the amount due for attorney's fees and costs, the
matter shall be submitted for determination by the Arbitrator
pursuant to" the subcontract between the parties.
                                                                   5


Meanwhile, the parties were unable to agree on the attorney's

fees and costs owed to the plaintiff.   The arbitrator awarded

attorney's fees and costs on July 20, 2015, which Suffolk paid

within one month.

    The parties, however, continued to dispute the issue of

preaward (as opposed to postaward) interest, as neither the

initial nor the modified award expressly stated that the

interest to be calculated by a judge included preaward interest.

The plaintiff maintained that the arbitrator either explicitly

or implicitly awarded preaward interest from the commencement of

the suit at the statutory rate of twelve percent, see G. L.

c. 231, § 6C, and that the judge had the duty to calculate that

interest.   The defendants, in turn, asserted that only the

arbitrator could calculate preaward interest.

    On October 26, 2015, the plaintiff moved to confirm the

modified award under G. L. c. 251, §§ 11, 14, 15, and to enter

judgment against the defendants for the disputed preaward

interest in the amount of $1,563,763.58 plus an additional

$500.46 for every day after September 16 to the date of

judgment.   The defendants, conversely, asserted that the

preaward interest had been submitted to the arbitrator and thus

no additional preaward recovery was permissible.

    After a hearing, the remanding judge concluded that,

although the arbitrator implicitly awarded preaward interest,
                                                                    6


the lack of any explicit agreement between the parties on the

issue precluded its reservation for a judge.    Accordingly, the

remanding judge remanded the matter to the arbitrator pursuant

to G. L. c. 251, §§ 9, 13, for the calculation of preaward

interest.

    On remand, the arbitrator explained that he had "mistakenly

believed" that he lacked the authority to calculate the preaward

interest.   The arbitrator acceded to the remanding judge's order

and issued a postremand clarification dated August 9, 2016.      The

arbitrator awarded the plaintiff $287,036 in preaward interest,

declining to adopt the statutory interest rate under G. L.

c. 231, § 6C.   Citing his broad discretion on the matter, the

arbitrator instead considered "various factors" of the

underlying dispute to award a "fair and equitable" amount based

on the "totality of circumstances."    Suffolk promptly paid that

amount.

    In response, on September 26, 2016, the plaintiff moved

under G. L. c. 251, §§ 12, 13, to "correct" the arbitrator's

postremand award to $1,462,600, based on the twelve percent

interest rate in G. L. c. 231, § 6C, and additionally to award

the plaintiff supplemental attorney's fees and costs for the

postarbitration court proceedings.    The defendants opposed the

motion, contending that (1) the plaintiff's motion was untimely;

(2) the arbitrator did not exceed his authority; and (3) the
                                                                      7


plaintiff was not entitled to further attorney's fees and costs

because the defendants were the "prevailing party" in the

postremand litigation.     A third Superior Court judge denied the

plaintiff's motion, citing the reasons set forth in the

defendants' opposition.

     2.     Remand to the arbitrator to calculate preaward

interest.    We review de novo a judge's decision on a motion to

confirm an arbitration award under G. L. c. 251, § 11, Bolman v.

Plymouth Rock Assur. Corp., 82 Mass. App. Ct. 135, 142 (2012),

recognizing "that 'the entitlement of a party to preaward

interest is a decision that is within the purview of the

arbitrator[].'"    Id. at 139, quoting from Connecticut Valley

Sanitary Waste Disposal, Inc. v. Zielinski, 436 Mass. 263, 271

(2002).     "Generally, in a proceeding to confirm an arbitration

award, a judge may not alter an arbitrator's decision that

allows, denies or fails to mention pre award interest."      Talty,

Talty, & Braunstein, Methods of Practice § 38.20 (4th ed. supp.

2017), quoting from Bolman, supra.4    If the award is simply

silent as to preaward interest, the confirming court lacks the

authority to add preaward interest.     Reilly v. Metropolitan

Property & Liab. Ins. Co., 412 Mass. 1006, 1007 (1992), citing


     4 The calculation of postaward interest, of course, remains
a judicial duty where the parties cannot agree. See Diaz v.
Cruz, 76 Mass. App. Ct. 773, 774 (2010).
                                                                     8


Sansone v. Metropolitan Property & Liab. Ins. Co., 30 Mass. App.

Ct. 660, 662-663 (1991).

    The calculation of preaward interest, however, may properly

be reserved for a confirming court in certain conditions.

Talty, Talty, & Braunstein, supra, citing Bolman, 82 Mass. App.

Ct. at 140-141.     Specifically, in Bolman, supra at 141, we

decided that the issue of preaward interest may be properly

reserved for the confirming court where "the reservation

unambiguously was agreed to by the parties and the arbitrator."

Here, there is no suggestion in the record that the parties

agreed to this reservation.     Both the arbitration agreement and

the parties' own conduct, in fact, demonstrate the opposite.

The arbitration agreement was broad enough to include the

calculation of preaward interest within the arbitrator's

authority, and in no way expressly reserved the issue for the

confirming court.     The plaintiff, moreover, specifically

requested that the arbitrator calculate a sum certain award of

preaward interest, and the defendants took the position in the

Superior Court that they agreed for only the arbitrator to

calculate preaward interest.

    We reject the suggestion that an arbitrator may reserve the

calculation of preaward interest to a confirming court without

the agreement of the parties.     It is a "fundamental principle

that the arbitrator's authority is defined by the parties'
                                                                    9


arbitration agreement."    Lynn v. Council 93, Am. Fedn. of State,

County, & Mun. Employees, Local 193, 51 Mass. App. Ct. 905, 905

(2001).   See Bolman, 82 Mass. App. Ct. at 141 ("the issue of

preaward interest properly was reserved because the reservation

unambiguously was agreed to by the parties and the arbitrator").

Cf. Perlin & Blum, Procedural Forms Annotated § 116:1 (6th ed.

supp. 2017), citing Sansone, 30 Mass. App. Ct. at 662–663 ("In

the absence of an explicit agreement to the contrary, pre-award

damage claims, including interest must be considered to have

been submitted to arbitration").    Moreover, when agreed to by

the parties, there is a "strong public policy favoring

arbitration as an expeditious alternative to litigation for

settling commercial disputes."     Massachusetts Hy. Dept. v.

Perini Corp., 79 Mass. App. Ct. 430, 441 (2011), quoting from

Plymouth–Carver Regional Sch. Dist. v. J. Farmer & Co., 407

Mass. 1006, 1007 (1990).   This strong public policy would not be

honored if we allowed an arbitrator to reserve the calculation

of preaward interest when the parties had agreed to arbitrate

the issue.   Furthermore, that course of action presumes that

there will be further litigation, where the hope is that the

losing party to the arbitration will comply with the

arbitrator's award without the necessity of resort to the

courts.   See Katz, Nannis & Solomon, P.C. v. Levine, 473 Mass.

784, 794 (2016) (allowing parties to redefine "the scope of what
                                                                    10


a court was to review with respect to every arbitration award

. . . would spawn potentially complex and lengthy case-within-a-

case litigation devoted to determining what the parties intended

. . . .   This is fundamentally contrary to the intent and

purpose of our arbitration statute").    Indeed, the instant case

demonstrates the complications that would arise if the parties

could be required to return to court, rather than allowed simply

to comply with the arbitrator's award.

     Faced with an arbitrator's award that erroneously reserved

the calculation of preaward interest to the court, the judge

properly returned the matter to the arbitrator for correction.

General Laws c. 251, § 9, authorizes the direct submission from

the court to the arbitrator for the modification or correction

of an award pending confirmation if (1) there is an evident

mistake or miscalculation; (2) the award was imperfect in a

matter of form, not affecting the merits of the controversy; or

(3) for the purpose of clarifying the award.5   G. L. c. 251,

§§ 9, 13.   Baxter Health Care, Corp. v. Harvard Apparatus, Inc.,

35 Mass. App. Ct. 204, 209 (1993).   Here, because the award

improperly directed the judge to calculate preaward interest

without the requisite agreement of the parties, it was imperfect


     5 Section 9 expressly allows resubmission to the arbitrator
by the judge independent of a party's application; as a result,
the plaintiff's argument on the basis of waiver is meritless.
                                                                   11


as a matter of form, in a manner outside the merits of the

underlying dispute.6   G. L. c. 251, § 13(a)(3).   Accordingly, the

issue of preaward interest was properly remanded to the

arbitrator for calculation.    See Baxter Health Care, Corp.,

supra at 210 (resubmission to arbitrator under § 9 "is within

the discretion of the court, and may be upon such conditions as

the court orders").

     It follows from the preceding conclusion that the

plaintiff's motion to "correct" the arbitrator's postremand

award was properly denied.    The plaintiff's motion essentially

asked the judge to disregard the arbitrator's postremand

decision and to calculate the postaward interest himself.

Because, however, the remanding judge properly had remanded the

matter to the arbitrator, the third judge also properly rejected

this motion.   See Bolman, 82 Mass. App. Ct. at 141.   See also




     6 This is because the arbitrator awarded preaward interest
but failed to calculate it. See Finn, Mone, & Kelly, Mediation
and Arbitration § 19:172 (2017-2018 ed. 2017) ("The corrections
and modifications may be made without affecting the merits of
the award upon the issues submitted to the arbitrators"
[emphasis supplied]). Cf. Bruner and O'Connor on Construction
Law § 21:215 (2014) ("Courts are authorized to correct or modify
awards that are 'imperfect in matter of form,' as long as doing
so does not affect the merits of the controversy. As a general
rule, courts have been reluctant to modify damage awards on this
ground because changing the amount awarded affects the merits"
[emphasis supplied]). By contrast, had the award merely been
silent on the issue of preaward interest, the remanding judge
could not have remanded. See Reilly, 412 Mass. at 1007.
                                                                  12


Bruner and O'Connor on Construction Law § 21:215 (2014) (courts

generally reluctant to correct awards imperfect in matter of

form when doing so would change the amount awarded).

    3.   Motion in the alternative to vacate the arbitrator's

postremand award.   We uphold an arbitration award even if the

arbitrator's findings and conclusions "appear erroneous,

inconsistent, or unsupported by the record at the arbitration

hearing."   Katz, Nannis & Solomon, P.C., 473 Mass. at 790,

quoting from Lynn v. Thompson, 435 Mass. 54, 61 (2001), cert.

denied, 534 U.S. 1131 (2002).   "With respect to awarding

damages, so long as the arbitrator 'do[es] not overstep the

limits of the issues submitted to [him], a court may not

substitute its judgment on the matter.'"   Perini Corp., 79 Mass.

App. Ct. at 435, quoting from Softkey, Inc. v. Useful Software,

Inc., 52 Mass. App. Ct. 837, 839 (2001).   "We do, however,

vacate an award if '[a]n arbitrator exceeds his authority by

granting relief beyond the scope of the arbitration agreement

. . . or by awarding relief prohibited by law.'"   Springfield v.

United Pub. Serv. Employees Union, 89 Mass. App. Ct. 255, 257-

258 (2016), quoting from Lynn v. Lynn Police Assn., 455 Mass.

590, 596 (2010).

    General Laws c. 251, § 12, inserted by St. 1960, c. 374,

§ 1, likewise, specifies that a judge shall vacate an

arbitration award if:
                                                                  13


    "(1) the award was procured by corruption, fraud or other
    undue means;
    (2) there was evident partiality by an arbitrator appointed
    as a neutral, or corruption in any of the arbitrators, or
    misconduct prejudicing the rights of any party; [or]
    (3) the arbitrators exceeded their powers."

Here, the plaintiff does not allege corruption, fraud, or

prejudice.   Rather, the plaintiff contends only that the

arbitrator exceeded his authority in the postremand award.

    As previously discussed, however, arbitrators are

authorized to grant preaward interest.   See Bolman, 82 Mass.

App. Ct. at 139.   Indeed, arbitrators have substantial

discretion to determine the scope of their contractual authority

to fashion remedies, "unless expressly restricted by the

agreement or the submission to arbitration."   Perini Corp., 79

Mass. App. Ct. at 443, quoting from Superadio Ltd. Partnership

v. Winstar Radio Prods., LLC, 446 Mass. 330, 339 (2006).     An

arbitrator's preaward interest award, moreover, "when made as a

component of an award, is an integral part of the total remedy

that he fashions and, as such, is not subject to the statutory

provisions which apply to court-awarded interest on contract

claims" (emphasis supplied).   Id. at 434, quoting from Blue

Hills Regional Dist. Sch. Comm. v. Flight, 10 Mass. App. Ct.

459, 472 (1980), S.C., 383 Mass. 642, 644 (1981).   See also

Construction Industry Arbitration Rules and Mediation Practices

R-48(d)(i) (2015) (arbitrator's award may include "interest at
                                                                 14


such rate and from such date as the arbitrator may deem

appropriate").

     The agreement in this case contained no such provision

limiting the arbitrator's authority to award interest of any

kind, nor prescribed interest rates.   The arbitrator did not, as

the plaintiff suggests, thereby exceed his authority in

calculating preaward interest below the statutory rate under

G. L. c. 231, § 6C.   See Perini Corp., 79 Mass. App. Ct. at 446

("once the parties resort to arbitration and legal proceedings

to resolve payment of disputed claims, . . . the interest

provisions of [the statute] are no longer controlling").    To the

contrary, the determination was consistent with the Construction

Industry Arbitration Rules incorporated into the arbitration

agreement.   See Construction Industry Arbitration Rules and

Mediation Procedures R-48(a) (2015) ("The arbitrator may grant

any remedy or relief that the arbitrator deems just and

equitable and within the scope of the agreement of the

parties").   The third judge thus correctly denied the

plaintiff's motion to vacate the arbitrator's postremand award.7


     7 The defendants had paid all existing obligations awarded
by the arbitrator at the time of the plaintiff's motion. As a
result, there was no need for the judge to confirm the
arbitrator's postremand award pursuant to G. L. c. 251, § 12(d).
See Murphy v. National Union Fire Ins. Co., 438 Mass. 529, 533
(2003) ("confirmation of the award became moot because the
obligation owed to the [prevailing party] had been satisfied").
                                                                   15


     4.   Attorney's fees and costs.    As a general rule,

"litigants bear their own expenses unless a statute or a

contract or other agreement provides otherwise."     E. Amanti &

Sons, Inc. v. R.C. Griffin, Inc., 53 Mass. App. Ct. 245, 258

(2001).    Here, the plaintiff claims supplemental attorney's fees

and costs from the proceedings in the Superior Court to confirm

the arbitrator's award pursuant to art. 8.16 of the subcontract

between the plaintiff and Suffolk.8    In the absence of such an

agreement, legal fees arising out of arbitration, including

those to confirm, modify, or vacate an arbitration award, may

not be awarded by a reviewing court.     Finn, Mone, & Kelly,

Mediation and Arbitration § 9:9 (2017-2018 ed. 2017), citing

Floors, Inc. v. B. G. Danis of New England, Inc., 380 Mass. 91,

99-101 (1980).   See Sun Fire Protection & Engr., Inc. v. D.F.

Pray, Inc., 73 Mass. App. Ct. 906, 907-908 (2009) (declining to

award attorney's fees and costs incurred solely in connection

with obtaining award's confirmation).     Rather, so far as the

record before us reveals, the arbitration agreement confers on

the arbitrator the sole power to award attorney's fees and

costs.    Accordingly, the parties have not demonstrated to us any

error in the third judge's decision not to award attorney's fees




     8 The subcontract, while referenced by both parties, does
not appear in the record before us.
                                                                16


for the litigation in Superior Court.    Similarly, we do not

award attorney's fees for this appeal.

    5.   Conclusion.   The order dated November 10, 2016, denying

the motion to confirm and correct or vacate the postremand

arbitration award is affirmed.

                                   So ordered.
