Randall v. Conley

2010 ME 68, 2 A.3d 328, 2010 Me. LEXIS 71, 2010 WL 2853710
CourtSupreme Judicial Court of Maine
DecidedJuly 22, 2010
DocketDocket: BCD-09-596
StatusPublished
Cited by14 cases

This text of 2010 ME 68 (Randall v. Conley) is published on Counsel Stack Legal Research, covering Supreme Judicial Court of Maine primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Randall v. Conley, 2010 ME 68, 2 A.3d 328, 2010 Me. LEXIS 71, 2010 WL 2853710 (Me. 2010).

Opinion

SILVER, J.

[¶ 1] Mark L. Randall, J. Michael Conley, and Wenonah M. Wirick formed a law practice partnership. After a short time, tensions arose among the three partners. The partnership agreement requires arbitration of any disputes. The parties filed for arbitration and Randall now appeals from a judgment upholding the arbitrator’s award. He argues that the award was procured by fraud and that the arbitrator exceeded his authority in issuing a clarification of the arbitration award. We affirm the judgment.

I. FACTS AND PROCEDURE

[¶ 2] Randall, Conley, and Wirick signed an agreement under which, in part, Randall transferred and merged all of the assets and interests of his business, Randall Law Office, P.A., in exchange for shares in Conley’s law firm, which became Conley, Randall & Wirick, P.A., effective January 1, 2007. The agreement specified that Randall was transferring all “work in progress, [and] contingent fee cases,” and incorporated an attached list of Randall’s active and potential cases.

[¶ 3] The list included cases for clients Licciardi and Roberts, stating that Licciar-di was set for trial in early 2007, and Roberts was on a trial list. Both of these cases were resolved in 2007, and Randall collected fees. Employees of the newly-merged firm worked on the two cases pri- or to their resolution. Randall paid the expenses for those two cases out of his separate account.

[¶ 4] In July of 2007, the parties met to discuss the status of their business. At that meeting, the Roberts and Licciardi cases were discussed. Conley and Wirick testified at arbitration that they believed Randall was obligated to pay the firm the fees from those cases, and they sought at the meeting to discuss those payments. Randall testified that he believed that the fees for those cases had been excluded from the merger agreement, but that he told Conley and Wirick at the July meeting that he wanted to compensate the firm for the time that he spent on the cases in 2007, and that they agreed he would pay $35,000.

[¶ 5] Conley took notes during the meeting, and a copy of those notes was submitted at the arbitration hearing. The notes state, in part, that Randall would *330 pay the firm $35,000 “now. We will work out balance owed at year end.” Conley testified at the hearing that the notes were taken during the meeting. Randall did not object to or contradict the notes.

[¶ 6] The relationship between the parties further deteriorated over issues including the case fees and bookkeeping concerns, and Conley and Wirick called a default on the agreement in January 2008. The parties went to arbitration pursuant to the agreement to resolve outstanding disputes including the Roberts and Lic-ciardi fees.

[¶ 7] After a three-day evidentiary hearing, the arbitrator issued an award on October 23, 2008, finding, in part, that the cases listed in the attachment to the agreement “were all part of the [a]greement” and ordering Randall to pay the firm seventy-five percent of the fees earned on the Roberts and Liceiardi cases, after deduction of the $40,000 referral fee and the $35,000 already paid, which the arbitrator stated “equals $104,500.” On November 21, 2008, the arbitrator issued a “clarification” explaining that he had calculated that amount assuming that the referral fee had not yet been subtracted from the $226,000 total fee amount, and stating that if in fact the referral fee had already been deduct 1 ed, then his calculation would be in error. On December 9, 2008, the arbitrator corrected the award amount to $134,500. Finally, on February 4, 2009, the arbitrator issued an order finding Randall in contempt for failure to pay and imposing sanctions.

[¶ 8] Randall filed a motion to vacate the arbitration award on January 20, 2009, alleging that the arbitrator had exceeded his powers in various aspects of the award. He amended the motion on March 12, 2009, to include a count challenging the February order and a count alleging that the award was procured by fraud. Randall asserted that he had discovered, after arbitration, a copy of the July meeting notes that differed from the copy submitted to the arbitrator. Randall’s copy simply states that Randall will pay $35,000, and does not include the language in the submitted copy that he was paying that amount “now. We will work out balance owed at year end.”

[¶ 9] In a judgment entered by the court in the Business and Consumer Docket (Sagadahoc, Nivison, /.), the court vacated the arbitrator’s contempt order of February 2009, but otherwise confirmed the arbitrator’s award. In its judgment, the court held that the document submitted by Randall did not compel a finding of fraud at the arbitration proceeding and additionally held that Randall had not established that a different outcome would have resulted if the arbitrator had the recently-found document. The court also held that the arbitrator’s clarification orders were permissible corrections of a computational error.

[¶ 10] Randall requested a hearing on the fraud issue in a motion to alter or amend the judgment. The court denied that motion on November 9, 2009. Randall timely appealed.

II. DISCUSSION

A. Award Procured by Undue Means

[¶ 11] On appeal of an arbitration award, we review the judgment of the court for errors of law and “will uphold the Superior Court’s confirmation of an arbitration award unless the court was compelled to vacate the award.” Dep’t of Transp. v. Me. State Emps. Ass’n, 1999 ME 7, ¶ 7, 727 A.2d 896, 898. A court “shall vacate an award where ... [t]he award was procured by corruption, fraud or other undue means.” 14 M.R.S. § 5938(1)(A) (2009). The determination of *331 fraud is a factual finding, which is reviewed for clear error. See Pine Ridge Realty, Inc. v. Mass. Bay Ins. Co., 2000 ME 100, ¶ 29, 752 A.2d 595, 602.

[¶ 12] In the context of a party seeking to vacate a court judgment on the basis of fraud, we have required the party alleging fraud to show “clear and convincing proof that an advantage has been gained in the obtaining of a judgment by an act of bad faith whereby the court has been made an instrument of injustice.” Estate of Paine, 609 A.2d 1150, 1153 (Me.1992), cited in Wooldridge v. Wooldridge, 2008 ME 11, ¶ 9, 940 A.2d 1082, 1084. This is consistent with the standard applied in other contexts. See 2 Field, McKusick & Wroth, Maine Civil Practice § 60.8 at 76 (2d ed. 1970) (“[I]n all cases where fraud is asserted, it must be proved by clear and convincing evidence.”). To prove fraud on a court, we have held that the party asserting the fraud must produce clear and convincing evidence: (1) of a false representation; (2) of a material fact; (3) with knowledge or reckless disregard of its falsity; (4) for the purpose of inducing the court to act in rebanee; and (5) actual reliance. See Adoption of Patricia S., 2009 ME 76, ¶ 22, 976 A.2d 966, 972.

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Cite This Page — Counsel Stack

Bluebook (online)
2010 ME 68, 2 A.3d 328, 2010 Me. LEXIS 71, 2010 WL 2853710, Counsel Stack Legal Research, https://law.counselstack.com/opinion/randall-v-conley-me-2010.