Walker v. Warren

7 Mass. L. Rptr. 453
CourtMassachusetts Superior Court
DecidedAugust 15, 1997
DocketNo. 967022
StatusPublished

This text of 7 Mass. L. Rptr. 453 (Walker v. Warren) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Walker v. Warren, 7 Mass. L. Rptr. 453 (Mass. Ct. App. 1997).

Opinion

Fremont-Smith, J.

This matter is before the Court on the plaintiffs motion for summary judgment pursuant to Mass.R.Civ.P. 56(b). As grounds for his motion, the plaintiff, Bradford C. Walker, (“Walker”) asserts that, as neither party “otherwise agreed” to the award of attorney fees in their underlying arbitration proceeding, the arbitrator’s award of attorney fees to the defendants, Elizabeth Warren and Bruce Mann, pursuant to the Copyright Act, 17 U.S.C. §505, is in contravention of G.L.c. 251, §10 which prohibits such an award.1 Walker therefore moves to enforce the arbitrator’s award, except for the award of attorney fees, which Walker moves to vacate as beyond the arbitrator’s authority.

DISCUSSION

The award of attorney fees by an arbitrator in an arbitration proceeding is prohibited by G.L.c. 251, §10, which provides that “(u]nless otherwise provided in the agreement to arbitrate, the arbitrators’ expenses and fees, together with other expenses, not including counsel fees, incurred in the conduct of the arbitration, shall be paid as provided in the award.” G.L.c. 251, §10. In interpreting this language, the Supreme Judicial Court has held that “in the absence of a special agreement to the contrary, legal fees arising out of arbitration may not be awarded, even if the arbitrator seeks to enforce a statute which, if litigated in court, would permit an award of attorney’s fees to the prevailing party.” Floors, Inc. v. B.G. Danis of New England, Inc., 380 Mass. 91, 101 (1980).

By submitting their dispute to arbitration,2 the plaintiff contends, neither party “otherwise agreed” to an award of attorney fees arising out of their arbitration proceeding. Floors, supra, at 101. Therefore “ [i]n the absence of agreement to award [attorney] fees, the award of fees is prohibited and the arbitrator was powerless to grant them in the underlying arbitration action.” Baxter Health Care, Corp. v. Harvard Apparatus, Inc. 35 Mass.App.Ct. 204, (1993).

The defendants respond that 9 U.S.C. §§1-16, the Federal Arbitration Act, and 17 U.S.C. §301(a) of the Federal Copyright Act, preempt G.L.c. 251 §10, which prohibits an award of attorney fees by an arbitrator in an arbitration proceeding. The defendants therefore move to confirm the arbitrator’s award attorney fees pursuant 17 U.S.C. §505, the statutory damages provision of the Federal Copyright Act.

The Federal Arbitration Act (“FAA”) applies to contracts evidencing transactions in interstate commerce. 9 U.S.C. §§ 1 and 1px solid var(--green-border)">2. To ascertain whether a transaction is one involving interstate commerce, the court must examine the agreement, the complaint, and the facts in order to determine whether it is within the purview of the FAA. Foster v. C.F. Turley, 808 F.2d 38, 40 (10th Cir. 1986). Two competing judicial interpretations of the phrase “evidence a transaction involving commerce,” as used in the FAA, formerly existed. The difference centered on whether the reviewing court [454]*454interpreted the phrase broadly, so as to signify a congressional intent to exercise its full Commerce Clause power, or whether the reviewing court interpreted the phrase narrowly, so as to signify a congressional intent to limit the FAA’s application.

According to the narrow “contemplation of the parties” judicial interpretation:

The significant question is not whether, in carrying out the terms of the contract, the parties did cross state lines, but whether, at the time they entered into it and accepted the arbitration clause, they contemplated substantial interstate activity.

Lachney v. Profitkey International, Inc., 818 F.Supp. 922, 924 (E.D.Va. 1993). Thus, in Lachney, the court held that substantial interstate activity was contemplated by a New Hampshire software manufacturer and its Virginia customers where their contract required the interstate exchange of order forms, the interstate transfer of money for payment, the interstate transfer of employees, and the interstate shipment of software. 818 F.Supp. 922, 924 (E.D.Va. 1993).

Conversely, the “commerce in fact” judicial interpretation empowered a reviewing court to apply the FAA to the full extent of the Commerce Clause. Allied-Bruce Terminix Companies, Inc. v. Dobson, 513 U.S. 265, 279-280 (1995). Under this broad interpretation, the FAA applied to the contract upon the showing of actual interstate activity, whether contemplated or not by the parties. Id. See Del E. Webb Const. v. Richardson Hosp. Authority, 823 F.2d 145, 147 (5th Cir. 1987) (where a construction contract involved persons from different states, the interstate use of mails, the interstate travel of employees, and the interstate movement of construction materials, the court determined that the parties’ activities involved interstate commerce and held that the contract was within the scope of the FAA).

In choosing between interpretations, the United State Supreme Court recently held in Allied-Bruce Terminix, supra, that “the interpretive choice is difficult, but for several reasons we conclude that ‘commerce in fact’ is more faithful to the statute than ‘contemplation of the parties.’ ” 513 U.S. 265, 278 (1995). In this case, the Court concludes that the degree of interstate activity, if any, which actually “occurred in fact,” did not rise to the level of federally regulated interstate commerce. Allied-Bruce Terminix, supra. Although the signed agreement between the parties indicated that Walker’s principal place of business was Cambridge, Massachusetts, and that the defendants were domiciled in Pennsylvania, the work performed under the contract occurred in Massachusetts. Under the contract, Walker, a Cambridge-based architect, provided architectural drawings for the design and construction phases of the renovations to be made to the defendants’ 24 Linnaen Street Cambridge residence. As the parties did not actually engage in interstate commerce, the FAA does not apply to their agreement to arbitrate. Lachney v. Profitkey International, Inc., 818 F.Supp. 922, 924 (E.D.Va. 1993). See Allied-Bruce Terminix Companies, Inc. v. Dobson, 513 U.S. 265, 265-82 (1995).

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Related

Fogerty v. Fantasy, Inc.
510 U.S. 517 (Supreme Court, 1994)
Allied-Bruce Terminix Cos., Inc. v. Dobson
513 U.S. 265 (Supreme Court, 1995)
Lacheney v. Profitkey International, Inc.
818 F. Supp. 922 (E.D. Virginia, 1993)
NLFC, Inc. v. Devcom Mid-America, Inc.
916 F. Supp. 751 (N.D. Illinois, 1996)
Merrill Lynch, Pierce, Fenner & Smith Inc. v. Jana
835 F. Supp. 406 (N.D. Illinois, 1993)
Baxter Health Care, Corp. v. Harvard Apparatus, Inc.
617 N.E.2d 1018 (Massachusetts Appeals Court, 1993)
Floors, Inc. v. B. G. Danis of New England, Inc.
401 N.E.2d 839 (Massachusetts Supreme Judicial Court, 1980)
Repp v. Webber
892 F. Supp. 552 (S.D. New York, 1995)

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Bluebook (online)
7 Mass. L. Rptr. 453, Counsel Stack Legal Research, https://law.counselstack.com/opinion/walker-v-warren-masssuperct-1997.