Harris v. GRANGE INSURANCE ASS'N.

868 P.2d 201, 73 Wash. App. 195, 1994 Wash. App. LEXIS 86
CourtCourt of Appeals of Washington
DecidedMarch 1, 1994
Docket12810-5-III
StatusPublished
Cited by4 cases

This text of 868 P.2d 201 (Harris v. GRANGE INSURANCE ASS'N.) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Harris v. GRANGE INSURANCE ASS'N., 868 P.2d 201, 73 Wash. App. 195, 1994 Wash. App. LEXIS 86 (Wash. Ct. App. 1994).

Opinion

Schultheis, J.

— Elaine Harris appeals the Superior Court order denying her motion to vacate an arbitration award, contending the arbitrators exceeded their powers and were guilty of misconduct. We reverse the Superior Court, vacate the award, and remand to the same panel for full deliberation.

Ms. Harris had an insurance policy with Grange Insurance Association which included a provision for arbitrating disputes about uninsured and underinsured motorist (UIM) coverage. In April 1985, Ms. Harris was involved in a motor vehicle accident with two other motorists. The other motorists admitted liability, and Ms. Harris settled with their insurance companies for a total of $112,500.

Claiming her damages were greater than $112,500, and that she settled for less than the other motorists’ policy limits, Ms. Harris sought additional recovery under her UIM policy with Grange. Grange contended her damages did not exceed the amount already recovered. As required by the UIM policy, the dispute was submitted to arbitration, and three arbitrators were appointed. Ms. Harris appointed Richard Eymann, Grange appointed John Riseborough, and these two jointly selected James Gillespie as the neutral *197 arbitrator. Under RCW 7.04.070, 1 a majority decision was required to render a final award.

On July 7, 1992, the three arbitrators heard the evidence offered by the parties. On Saturday, July 11, the three heard closing arguments from 7 a.m. until shortly before 9 a.m. The arbitrators then went into closed session, discussed their initial impressions of the case, and agreed to deliberate further by telephone on Sunday evening.

On Sunday evening, Mr. Gillespie spoke with Mr. Eymann twice by phone, but Mr. Eymann explained he was in the midst of a family emergency. Mr. Eymann further explained he would be out of town most of the following week. No firm time for another meeting was set.

The next day, Monday, Mr. Gillespie consulted with Mr. Riseborough about Mr. Eymann’s situation, and they decided to issue an award without him. The two arbitrators found that Ms. Harris’ total damages were $104,667.09, and since this amount was less than the $112,500 she had already received, she was not entitled to additional recovery under her UIM policy.

Ms. Harris moved the Superior Court to vacate the arbitration award. The court denied her motion to vacate and granted Grange’s cross motion to confirm the arbitration award and to dismiss Ms. Harris’ motion with prejudice.

On appeal, Ms. Harris contends the majority exceeded its powers and committed misconduct by holding deliberations 2 and issuing an award without her appointed arbitrator. There is no dispute as to the following facts: Mr. Eymann heard all the evidence; he heard all the parties’ arguments; and he attended a brief conference with the other two *198 arbitrators, during which the arbitrators discussed their initial impressions of the case.

Appellate review of an arbitration decision is strictly limited. Barnett v. Hicks, 119 Wn.2d 151, 157, 829 P.2d 1087 (1992); Westmark Properties, Inc. v. McGuire, 53 Wn. App. 400, 402, 766 P.2d 1146 (1989). An arbitration award can only be vacated upon one of the grounds specified in RCW 7.04.160. Westmark, at 402. Unless the award on its face shows adoption of an erroneous rule or a mistake in applying the law, the award will not be vacated or modified. Northern State Constr. Co. v. Banchero, 63 Wn.2d 245, 249-50, 386 P.2d 625 (1963). The burden of proving a violation of RCW 7.04.160 is on the party seeking to vacate the award. Lindon Commodities, Inc. v. Bambino Bean Co., 57 Wn. App. 813, 816, 790 P.2d 228 (1990).

The arbitration panel’s conduct appears to raise a question of first impression in this state. However, a well-settled body of law developed in other jurisdictions indicates the proper rule governing an arbitration panel’s deliberations.

As a general rule,

[I]t is essential that there should be a unanimous participation by the arbitrators in the consultations and deliberations upon the award to be made. . . . However, the failure of one or a minority of a number of arbitrators to appear and act with the majority, after sufficient notice and reasonable opportunity therefor, constitutes, substantially, a dissent from the action of the majority which will enable the latter to proceéd, in the absence of such minority, to the rendition of a majority award in case a majority award has been authorized,. . ..

(Italics ours.) 6 C.J.S. Arbitration § 89, at 310-11 (1975).

It is well settled that if an agreement allows a majority of the arbitration panel to decide an issue, and a minority withdraws after the full panel hears all the relevant evidence and has an opportunity to discuss the issue, the remaining majority has authority to render an award. C.T. Drechsler, Annotation, Effect of Vacancy Through Resignation, Withdrawal, or Death of One of Multiple Arbitrators on Authority of Remaining Arbitrators To Render Award, 49 A.L.R.2d 900, 909 (1956); Colombia v. Cauca Co., 190 U.S. *199 524, 528, 47 L. Ed. 1159, 1163, 23 S. Ct. 704 (1903); Szuts v. Dean Witter Reynolds, Inc., 931 F.2d 830, 830-31 (11th Cir. 1991); Atchison, T.&S.F. Ry. v. Brotherhood of Locomotive Firemen, 26 F.2d 413, 417 (7th Cir. 1928); Amalgamated Ass’n of St. Elec. Ry. & Motor Coach Employees v. Connecticut Co., 142 Conn. 186, 193-94, 112 A.2d 501, 504-05, 49 A.L.R.2d 891 (1955).

As Ms. Harris points out, the courts applying this rule have sometimes vacated an arbitration award. As Grange points out, other courts have refused to vacate an arbitration award under somewhat different facts. The proper test is as follows:

[T]he line must be drawn at the time when all of the evidence has been heard and the arbitrators have had an opportunity to discuss the issues among themselves.

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