Central Ceilings, Inc. v. Suffolk Construction Co., Inc.
Central Ceilings, Inc. v. Suffolk Construction Co., Inc.
Opinion
*207 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 *208 interest to a Superior Court judge. The parties did not agree to this reservation. On the plaintiff's motion *940 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 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.
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 *209 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. Meanwhile, the parties were unable to agree on the attorney's fees and costs owed to the plaintiff. The arbitrator awarded attorney's *941 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, the lack of any explicit agreement between the parties on the issue precluded its reservation for a judge. Accordingly, the remanding judge *210 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 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
.,
The calculation of preaward interest, however, may properly be reserved for a confirming court in certain conditions. Talty, Talty, & Braunstein,
supra
, citing
Bolman
,
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' arbitration agreement."
Lynn
v.
Council 93, Am. Fedn. of State, County, & Mun. Employees, Local 193
,
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
.,
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
,
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
.,
General Laws c. 251, § 12, inserted by St. 1960, c. 374, § 1, likewise, specifies that a judge shall vacate an arbitration award if:
"(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."
*214 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
,
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
.,
*945
*215
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
.,
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 .
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.
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.
The calculation of postaward interest, of course, remains a judicial duty where the parties cannot agree. See
Diaz
v.
Cruz
,
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.
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
,
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
.,
The subcontract, while referenced by both parties, does not appear in the record before us.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.