In re Arbitration Before Leo G. Bisson, No. S0724-10 CnC (Toor, J., Oct. 25, 2010)

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                                               VERMONT SUPERIOR COURT
                                                  CHITTENDEN UNIT
                                                   CIVIL DIVISION

                                                                         │
IN RE ARBITRATION BEF0RE                                                 │
LEO G. BISSON                                                            │
                                                                         │
DENNIS VANE, M.D. and NEIL HYMAN,                                        │
M.D.                                                                     │
 Plaintiffs                                                              │
                                                                         │
 v.                                                                      │                Docket No. S724-10 CnC
                                                                         │
FLETCHER ALLEN HEALTH CARE,                                              │
INC. and FLETCHER ALLEN                                                  │
PROVIDER CORPORATION,                                                    │
 Defendants                                                              │
                                                                         │

   RULING ON MOTIONS TO CONFIRM AND MODIFY ARBITRATION AWARD

           This case was initiated by a motion to confirm an arbitration award. The plaintiffs

are doctors in a dispute with their employer over payment for unused vacation days.

Arbitration took place before Leo Bisson, Esq. and his decision was issued in April of

2010. The doctors, plaintiffs Vane and Hyman (Doctors), have filed a motion to confirm

the award as issued. Defendant Fletcher Allen Health Care (FAHC) has filed a motion to

modify a portion of the award.

                                                 The Arbitrator’s Decision

           The dispute between the parties relates to the meaning and enforceability of a

rather informal vacation policy that existed prior to the time that Surgical Associates, Inc.

merged with FAHC. The arbitrator concluded that Vane was entitled to half his claim, for

an award of $53,784.50, and that Hyman was entitled to take 350 hours as excess

vacation time during his employment at FAHC and that he would be entitled to financial
reimbursement, at his then-existing pay rate, for fifty percent of any remaining amount at

the time his employment terminates. The arbitrator denied all requests for interest, costs

or fees.

                                           The Motions

           The Doctors seek to confirm the arbitrator’s decision. FAHC seeks to have it

modified. Both sides agree to accept the actual relief awarded, but FAHC seeks

modification of the legal finding that it waived its right to enforce certain contract

provisions, presumably because that issue may also arise with regard to numerous other

doctors not parties to this case. FAHC’s position is that the ruling on that issue was

arbitrary and capricious. The Doctors’ position is that the court should not be reviewing

that question.

           “[T]he standard of review of an arbitration award by the superior court . . . is very

limited. Vermont has a strong tradition of upholding arbitration awards whenever

possible.” Vermont Built, Inc., v. Krolick, 2008 VT 131, ¶13, 185 Vt. 139 (internal

quotation omitted). “[I]f courts were accorded a broad scope of review, then arbitration

would become merely another expensive and time consuming layer to the already

complex litigation process.” Brinckerhoff v. Brinckerhoff, 2005 VT 75, ¶5, 179 Vt. 532.

Courts do not “reweigh the evidence presented to the arbitrator or subject the merits of

the controversy to judicial review.” Matzen Constr., Inc. v. Leander Anderson Corp., 152

Vt. 174, 177 (1989). The court “has no authority to review for an arbitrator’s legal

errors,” or “to review an arbitrator’s decision for manifest disregard of the law.” Krolick,

2008 VT 131, ¶13 n. 2, citing Hall Street Assocs. v. Mattel, Inc., 552 U.S. 576 (2008).




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“The scope of the trial court’s review is limited to ensuring that the arbitration

proceedings fall within the boundaries of due process.” Matzen Const., 152 Vt. at177.

       The parties agree in theory on the standard of review: the court can “modify or

vacate an arbitrator’s award only pursuant to statutory grounds or if the parties are denied

due process.” Krolick, 2008 VT 131, ¶ 139 (internal quotation omitted). However, they

differ over how that standard of review applies in this case.

       FAHC argues that the award is arbitrary and capricious, and thus a violation of

due process which can be reviewed on a motion to modify an arbitration award. For this

latter proposition it cites two federal cases, Ainsworth v. Skunick, 960 F. 2d 939 (11th

Cir. 1992) and Swift Industries, Inc. v. Botany Industries, Inc., 466 F. 2d 1125 (3rd Cir.

1972). Both cases, however, predated the Hall Street case, in which the United States

Supreme Court rejected the idea that “manifest disregard of the law” was a basis for

rejecting an arbitrator’s award. Hall Street, 552 U.S. at 583-89. Although Ainsworth did

not equate “manifest disregard” with “arbitrary and capricious,” the court perceives the

two as essentially the same. While courts have distinguished between them as relating to

irrationality versus intentional failure to apply the law, there is little reasoned basis to say

that one is an appropriate ground for modification if the other is not.

       In fact, in the wake of Hall Street, the Eleventh Circuit has itself rejected its

earlier position, as reflected in Ainsworth, that courts could review arbitration decisions

on “arbitrary and capricious” grounds. See, Frazier v. CitiFinancial Corp., LLC, 604 F. 3d

1313 (11th Cir. 2010). This court concludes that Hall Street’s elimination of the “manifest

disregard for the law” review must also be taken to eliminate any “arbitrary and

capricious” review.




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       Even if the court can review an arbitrator’s decision under the “arbitrary and

capricious” standard, the court does not find the decision here to fit within that category.

A decision is arbitrary and capricious when it is “arrived at without reference to any

standards or principles.” In re Miserocchi, 170 Vt. 320, 325 (2000). “The United States

Supreme Court has defined an ‘arbitrary’ decision as one ‘[f]ixed or arrived at through an

exercise of will or by caprice, without consideration or adjustment with reference to

principles, circumstances, or significance ....’” Lewandoski v. Vermont State Colleges,

142 Vt. 446, 453-54 (1983)(citation omitted). Here, there is nothing to suggest that the

arbitrator was acting out of caprice. He stated his reasons for finding waiver, and whether

he was right or wrong as a matter of law, he stated what he understood to be the law on

waiver and he applied that law to the facts he had found. Arbitration Decision ¶¶ 9-10. In

reality, all that FAHC points to is an alleged error of law: a finding of waiver without first

finding (1) an unequivocal waiver and (2) reasonable and detrimental reliance. Even if

true, this may have been an error of law, but it was far from arbitrary or capricious.

                                           Order

       The motion to modify the award is denied. The motion to confirm the award is

granted.


Dated at Burlington, Vermont this 21st day of October, 2010.



                                               _____________________________
                                               Helen M. Toor
                                               Superior Court Judge




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