Woods v. Commercial Union Insurance

753 N.E.2d 840, 52 Mass. App. Ct. 398, 2001 Mass. App. LEXIS 845
CourtMassachusetts Appeals Court
DecidedAugust 28, 2001
DocketNo. 99-P-612
StatusPublished

This text of 753 N.E.2d 840 (Woods v. Commercial Union Insurance) is published on Counsel Stack Legal Research, covering Massachusetts Appeals Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Woods v. Commercial Union Insurance, 753 N.E.2d 840, 52 Mass. App. Ct. 398, 2001 Mass. App. LEXIS 845 (Mass. Ct. App. 2001).

Opinion

Jacobs, J.

The plaintiff brought this action against Commercial Union Insurance Companies (C.U.) pursuant to G. L. c. 251, § 11, to confirm an arbitration award. Acting on cross motions for summary judgment, a Superior Court judge allowed that of the plaintiff. In its appeal, C.U. repeats the claim it made below, that it was not a party to the arbitration proceeding.1 We agree with that contention and reverse the judgment.

[399]*399Background. While operating a mail truck on July 9, 1996, in Wilmington, the plaintiff was involved in a collision with a vehicle operated by Nathan Balestrieri, and insured by the Commonwealth Mutual Insurance Company (Commonwealth) for up to $20,000 for bodily injury liability to a single individual. At the time, the plaintiff had the benefit of underinsurance coverage of $50,000 under his mother’s policy with the defendant, C.U. The plaintiff and Commonwealth agreed to arbitrate the plaintiff’s bodily injury claim against Balestrieri. Sometime prior to September 2, 1997, that claim was submitted to National Arbitration & Mediation (NAM) for arbitration. Under NAM’s procedural rules, parties who agree to arbitration “initiate a case by submitting a jointly-executed submission form to NAM or by requesting NAM to invite another party to join in a submission to arbitration . . . .” The form submitted to NAM designated Michael Woods as “plaintiff” and Nathan Balestrieri as “defendant,” and indicated that both liability and damages were at issue.2 A representative of Commonwealth is listed as the contact person for Balestrieri. No mention of C.U. is contained in the submission form, nor is there any indication in the record that C.U. was aware of the arbitration proceeding before September of 1997.

By letter dated September 2, 1997, plaintiff’s counsel informed C.U. that it was “being notified of the pending arbitration so as to be an included party in the same.” The letter also identified the plaintiff’s mother as C.U.’s insured and stated that “damages will exceed the applicable policy limits” under Commonwealth’s bodily injury policy. By letter dated September 10, 1997, an adjuster from C.U. requested information concerning the accident, copies of medical records and bills, and a statement of lost wages. Records and bills relating to the plaintiff’s medical treatment were forwarded to C.U. by plaintiff’s counsel on October 10, 1997.

On or about October 7, 1997, NAM’s regional manager

[400]*400By fax dated November 24, 1997, C.U. informed plaintiff’s counsel it was still investigating whether or not it had been prejudiced by late notice of the claim, and that its investigation had been hindered by plaintiff’s failure, until November 17, 1997, to supply information concerning his workers’ compensation benefits. C.U. also raised questions concerning the bodily injury liability limit under Commonwealth’s policy with Bal-estrieri and concerning plaintiff’s and Balestrieri’s “HI/LOW” agreement (see note 2, supra). C.U. indicated that “[b]ased on [these factors]” it was “not in any position to participate in [the scheduled] arbitration.”

On November 24, 1997, an arbitration conducted by NAM was attended by the plaintiff, his counsel and a representative of Commonwealth. On November 26, 1997, the arbitrator rendered a decision, which included findings as to liability, causation and damage and an award in the “net amount” of $40,000 in favor of the plaintiff. Commonwealth paid $20,000 upon receipt of the arbitrator’s decision. After receiving a copy of the decision together with the plaintiff’s demand for payment of the excess $20,000 under its underinsurance coverage, C.U. notified plaintiff’s counsel that it would not recognize the award. Soon thereafter, the plaintiff filed his complaint to confirm the arbitrator’s award and, based thereon, to obtain a judgment ordering C.U. to pay him the disputed $20,000.

Discussion. The summary judgment record is devoid of any evidence that C.U. was a party to the arbitration. Neither the [401]*401submission form filed with NAM nor the arbitration award contained any reference to C.U. as being a party to, represented at, affected by or subject to the NAM arbitration proceeding. The underinsured motorist coverage provisions of the standard Massachusetts motor vehicle policy in effect in 1996, and continuing in effect to date, specify, in a form approved pursuant to G. L. c. 175, § 113A, that if agreement is not reached by the injured party and the underinsurance carrier as to liability or damages, “[arbitration will be used.” Assuming that the summary judgment record reflects disagreement sufficient to implicate the obligation to arbitrate, nothing in that record indicates that the parties had agreed upon NAM as the arbitration agency or that either had resorted to court action under G. L. c. 251, § 2,3 for an order compelling arbitration, or under G. L. c. 251, § 3,4 for the appointment of an arbitrator. Also, while it is clear that the plaintiff invited C.U. to join in the NAM arbitration, there is no evidence that C.U. accepted that invitation or that the plaintiff applied to the Superior Court under G. L. c. 251, § 2A,5 to consolidate the underinsurance arbitration with the NAM arbitration of the bodily injury claim. Whether C.U. acted reasonably in not accepting the invitation is irrelevant to this litigation.

It is arguable that, had an arbitrator been chosen by statute or [402]*402by a method agreed upon by the parties, the provisions of G. L. c. 251, § 5,6 would have permitted that arbitrator to conduct an ex parte proceeding and render a binding award. Here, there is no indication that the NAM arbitrator was appointed or accepted with respect to C.U.’s underinsurance coverage or, as previously indicated, that the arbitrator, in his award, treated C.U. as a party. While the intendment of our arbitration statutes is to validate and efficiently enforce arbitration agreements and awards, the fundamental dictates of due process nevertheless must be observed. The possible absence of prejudice from late notice of the plaintiff’s claim does not work to make C.U. a party to the NAM arbitration. In the circumstances, any award purporting to bind C.U. would have been in excess of the arbitrator’s powers.

Relying on Local 589, Amalgamated Transit Union v. Massachusetts Bay Transp. Authy., 397 Mass. 426 (1986), the judge ruled that C.U. was barred from seeking to avoid the NAM award because of its failure to timely move to vacate the award pursuant to G. L. c. 251, § 12.7 In Local 589, the court held that the defendant employer, which had participated in an arbitration hearing, was precluded from attacking the award on jurisdictional grounds because it did not move to vacate the award within thirty days of delivery of a copy of the award pursuant to a cognate labor arbitration provision (G. L. c. 150C, § 11(h)). The policy underlying the strict enforcement of the thirty-day statutory rule “would seem to condemn the conduct of the defendant who ignored an award disfavorable to it, failed to move to vacate the award, and then sought to be given its day in court when the plaintiff brought suit in frustration to [403]*403have the arbitration award enforced.

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Bluebook (online)
753 N.E.2d 840, 52 Mass. App. Ct. 398, 2001 Mass. App. LEXIS 845, Counsel Stack Legal Research, https://law.counselstack.com/opinion/woods-v-commercial-union-insurance-massappct-2001.