Opinion
No. 65262-1-I.
Filed: August 1, 2011. UNPUBLISHED OPINION.
Appeal from a judgment of the Superior Court for King County, No. 07-3-06767-5, James A. Doerty, J., entered March 22, 2010.
Affirmed by unpublished opinion per Spearman, J., concurred in by Cox and Ellington, JJ.
An arbitration award may be vacated if the arbitrator exceeded the scope of his or her authority under the arbitration agreement. In this action concerning the sale of a home under a property settlement agreement and dissolution decree, the former husband contends the arbitrator exceeded his authority under the agreement by approving a sale of the home to the former wife. We conclude that the arbitrator acted within his authority to settle "[a]ny disagreement or dispute regarding [the] sale of the home," and that the superior court did not err in denying the husband's motion to vacate the arbitrator's award.
FACTS
Darren and Corinna Gillespie divorced in 2008. The decree incorporated a property settlement agreement that included a section entitled "Sale of Residence." This section provided in part that the family home would be "listed and sold as soon a[s] practicable," that the parties would "actively market the property until sold, taking all steps necessary to effectuate a prompt sale," and that "[a]ny disagreement or dispute regarding [the] sale of the home or implementation of this order shall be submitted for binding arbitration . . . pursuant to RCW 7.04."
In November, 2009, Corinna submitted "for mediation and arbitration, my request to purchase [the home] for the Purchase Price of $618,000 [.]" She noted that the home, which was originally purchased for $830,000, had been listed for seven months with only one short-sale offer of $635,000. It now had an outstanding loan balance of $618,000 and a "negative debt to equity ratio." Corinna stated she had secured financing and that Darren would "be removed from the underlying mortgage and Title, thus relieving him of any further liability."
Darren objected to arbitration, arguing that there was no arbitrable issue and that Corinna "inappropriately seeks an arbitration ruling to modify their PSA. Any such ruling would exceed the authority granted to you by the arbitration provisions of the PSA."
By letter dated November 18, 2009, the arbitrator ruled that he had authority to arbitrate "any disagreements or disputes surrounding the sale of the home, and that includes any potential sale to Ms. Gillespie. Nothing in the PSA prohibits such a sale." The arbitrator reserved ruling on the dispute until he received information regarding the value of the residence. He noted that "[i]f the sale of this property to a third party is going to result in a short sale situation, it may very well be best to permit the sale to Ms. Gillespie [.]"
On December 18, 2009, after receiving "overwhelming evidence . . . that the value of the former family residence is at, or below, the current amount of the mortgage," the arbitrator "awarded" Corinna the residence "at the current amount of the outstanding mortgage, which is approximately $618,000." The arbitrator ordered her to refinance the home and remove Darren from the mortgage. Darren would then make maintenance payments directly to Corinna, "with no further payments being made to the mortgage."
In February, 2010, Corinna moved in superior court for orders confirming the arbitration award and appointing a special master to release Darren's interest in the home. Darren did not respond and the superior court entered both orders. Darren did not timely appeal either order. The special master subsequently executed a quitclaim deed transferring Darren's interest in the property to Corinna.
On March 4, 2010, Darren moved to vacate the arbitration award, arguing in part that the arbitrator exceeded his authority. The court denied the motion. Darren appeals.
DECISION
Initially, Corinna contends Darren's appeal is moot because he did not timely appeal earlier orders confirming the arbitration award and appointing a special master. According to Corinna, those orders are now final and cannot be affected by an order vacating the underlying arbitration award. We considered and rejected similar claims in Martin v. Hydraulic Fishing Supply, Inc., 66 Wn. App. 370, 374, 832 P.2d 118 (1992).
Like Darren, the appellant in Martin did not timely appeal an order confirming an arbitration award but did file a timely motion to vacate the award. In holding that the motion to vacate was unaffected by the order confirming the arbitration award, we noted that nothing in the Arbitration Act explicitly provided that a party's rights under the vacation statute are limited by entry of an order confirming an arbitration award. Martin, 66 Wn. App. at 374. Significantly, we expressly acknowledged that the statutory scheme potentially created "situations where actions taken in reliance on a final judgment confirming an arbitration award must somehow be undone if parties are permitted to file a motion to vacate after the 30-day appeal period has run." (Emphasis added.) Martin, 66 Wn. App. at 374 n. 4. We nevertheless concluded that the statutes permitted this result. Corinna does not address Martin or its viability under the current statutory scheme. We therefore adhere to it in this case.
In subsequent cases, we have expressed a preference for having motions to vacate heard at the same time as motions to confirm an award. Clearwater v. Skyline Const. Co. Inc., 67 Wn. App. 305, 315, 835 P.2d 257 (1992); Federated Services Ins. Co. v. Personal Representative of Estate of Norberg, 101 Wn. App. 119, 123, 4 P.3d 844 (2000). But we have also reaffirmed Martin's holding that "[e]ven after a judgment has been entered confirming an award, a motion to vacate can still be heard as long as it is made within the statutory three-4 month period." Federated Services Ins. Co., 101 Wn. App. at 123.
Turning to the merits, Darren contends the superior court erred in denying his motion to vacate the arbitration award. Specifically, he contends the court erred in failing to hold that the arbitrator exceeded his authority under the settlement agreement when he allowed Corinna to purchase the family home.
In reviewing an arbitration award under chapter 7 .04A RCW, we use the same review standard the superior court applied. Barnett v. Hicks, 119 Wn.2d 151, 153-54, 829 P.2d 1087 (1992).
The superior court's power to vacate an arbitration award is governed by RCW 7.04A.230(1). Subsection (1)(d) requires a superior court to vacate an award if the arbitrator "exceeded the arbitrator's powers." RCW 7.04A.230(1)(d). An arbitrator's powers are governed by the agreement to arbitrate and may not exceed the authority established in the agreement. Anderson v. Farmers, Ins. Co. of Washington, 83 Wn. App. 725, 730, 923 P.2d 713 (1996). If the scope of an arbitration clause is debatable or reasonably in doubt, we must construe it in favor of arbitration. King County v. Boeing Co., 18 Wn. App. 595, 603, 570 P.2d 713 (1977).
In determining whether an issue was presented to the arbitrator, we consider the face of the award in light of the arbitration agreement, the demand, and any documents reflecting the charge to the arbitrator. Hanson v. Shim, 87 Wn. App. 538, 546, 943 P.2d 322 (1997).
Darren contends the approval of the sale to Corinna exceeded the arbitrator's authority in two respects. First, he contends the settlement agreement only authorized a sale to a third party; therefore, the arbitrator lacked authority to hear the dispute over a sale to Corinna or to sell her the home. We disagree. Although the settlement agreement contains language consistent with a sale to a third party, it does not explicitly prohibit a sale to one of the parties. In these circumstances, and given the arbitrator's broad authority to hear disputes "regarding the sale of the home," the arbitrator had authority to hear the dispute regarding the sale and to order a sale to one of the parties.
Darren argues alternatively that even if the arbitrator had authority to sell the home to Corinna, he did not do so. Pointing to language used in the arbitrator's ruling, he contends the home was actually "awarded," not sold as required by the settlement agreement. Again, we disagree.
Darren's reliance on the arbitrator's use of the word "award" is misplaced. How the transaction is labeled by the arbitrator or the parties is not determinative of whether a "sale" occurred. And while the settlement agreement contains language consistent with a conventional sale, nothing in the agreement prohibited a sale by the means utilized by the arbitrator. The arbitrator directed Corinna "to refinance the residence so as to completely remove Mr. Gillespie from the underlying mortgage" and expressly relieved Darren of further payments on the mortgage. This was, in effect, a sale of the property. The arbitrator did not exceed his authority. Given this resolution, we need not decide whether, as Corinna suggests, the arbitrator had additional and/or broader authority to settle the parties' dispute under the language empowering him to settle disputes regarding "the implementation of this order." Affirmed.
We note, however, that in addressing Corinna's "request to purchase" the home, the arbitrator repeatedly referred to it as a proposed "sale to Ms. Gillespie."
For the first time in his reply brief, Darren contends there was no "sale" of the property because the transaction was not taxed. We need not consider claims raised for the first time in reply. Cowiche Canyon Conservancy v. Bosley, 118 Wn.2d 801, 809, 828 P.2d 549 (1992) (issue raised and argued for the first time in a reply brief is too late to warrant consideration).
WE CONCUR: