APPELWICK, J.

In this action for alleged mismanagement of an investment account, an arbitration panel dismissed virtually all claims against the investment firm and its agent as untimely under state statutes of limitation. The superior court vacated the award, ruling that statutes of limitation in this state do not bar the pursuit of claims in arbitration. Because the superior court correctly interpreted Washington law, and because the rules governing the parties' arbitration proceeding did not allow the arbitrators to apply statutes of limitation that were not applicable to those proceedings, we affirm.

Facts

In September 2005, Michael, Kevin, and Andrea Broom (Brooms) gave notice of a claim for arbitration under their late father's brokerage agreement with Morgan Stanley DW, Incorporated, and Kimberly Anne Blindheim (MS). Alleging that MS mismanaged their father's investment account, the Brooms asserted various causes of action including negligence, breach of contract, breach of fiduciary duties, misrepresentation, failure to supervise, violation of the Washington Securities Act, and violation of the Consumer Protection Act. Because MS was then a member of National Association of Securities Dealers (NASD), the Brooms filed their notice of claim with NASD's alternative dispute resolution program.

MS answered the notice and asserted various defenses, including statutes of limitation and laches. MS then moved to dismiss the notice of claim based on "the applicable statutes of limitations . . . and for other legal deficiencies." Citing the NASD Code of Arbitration Procedure and the NASD Arbitrator's Training Manual, they argued that the arbitrators had authority to dismiss any claims barred by state statutes of limitation.

The Brooms responded that the relevant statutes of limitation had not expired because of the discovery rule, fraudulent concealment, or other considerations affecting the commencement and tolling of the limitations periods. They did not argue that the arbitrators lacked authority to consider statutes of limitation.

The arbitration panel granted the motion to dismiss "as to all claims, with the exception of [the] claim for violation of the Washington Consumer Protection Act, on the grounds that the claims were barred by applicable statutes of limitation." The CPA claim was dismissed on other grounds.

In a motion for reconsideration, the Brooms argued for the first time that the relevant statutes of limitation did not apply to arbitration proceedings because, by their own terms, they applied only to "actions" at law, not arbitrations. MS responded that there was no arbitration rule or other authority allowing reconsideration of the award, and that nothing in the Brooms' motion provided a valid ground for reconsideration in any event. MS further argued that the relevant arbitration rules allowed the arbitrators to consider any "applicable statute of limitations."

In June, 2006, the arbitration panel denied the motion for reconsideration without comment. In its final award, the panel recited that it had also denied a second motion for reconsideration of the dismissal under statutes of limitation, stating: "The Panel concluded that neither the substance of the motion nor its exhibits impacted in any way the Panel's prior decisions in this matter."

The Brooms then filed a complaint and motion to vacate the award in superior court. They argued that the arbitrators committed an error of law in applying the statutes of limitation in the arbitration proceeding.

On May 11, 2007, the superior court granted the motion to vacate and remanded for a hearing before a new arbitration panel. The court ruled that the arbitration panel had applied an "erroneous rule of law" when it "incorrectly concluded that plaintiffs' claims were barred by the statute of limitations." The court concluded that, "in Washington, statutes of limitations do not bar a claimant from pursuing a claim submitted to arbitration."

Decision

The principal issue on appeal is whether the superior court erred in ruling that the arbitrators committed an error of law when they dismissed the Brooms' claims under Washington statutes of limitation. We review a ruling vacating an arbitration award on a question of law de novo. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 947-48, 115 S. Ct. 1920, 131 L. Ed. 2d 985 (1995). For the reasons set forth below, we conclude the court did not err in vacating the arbitrators' award.

Preliminarily, MS contends the Federal Arbitration Act (FAA) controls this case and preempts any state law allowing review of the arbitration ruling for errors of law. This issue has been waived. Preemption based on choice of law is an affirmative defense that cannot be raised for the first time on appeal. MS offers no persuasive argument to the contrary.

We also reject MS's contention that the superior court erred in reviewing the arbitrators' decision for an "error of law." According to MS, that standard is not among the grounds for vacating an arbitration award listed in the Washington Arbitration Act (WAA) or the Revised Uniform Arbitration Act (RUAA). MS concedes that Washington courts have long countenanced review of arbitration awards for such error, but maintains that those cases were implicitly overruled by Malted Mousse Inc. v. Steinmetz, 150 Wn.2d 518, 79 P.3d 1154 (2003). MS is mistaken.

In Malted Mousse, the Supreme Court addressed the proper method of reviewing a mandatory arbitration. The court distinguished private arbitrations like the one at issue here, stating:

Parties in private arbitration generally waive their right to a jury. See Godfrey v. Hartford Cas. Ins. Co., 142 Wn.2d 885, 898, 16 P.3d 617 (2001). A party dissatisfied with the arbitrator's decision may move the superior court to vacate, modify, or correct the award. RCW 7.04.150, .160, .170. A vacation, modification, or correction of an award requires a motion to the court by a party to the arbitration proceeding who can demonstrate one of the statutorily defined circumstances warranting the vacation, modification, or correction. When reviewing an arbitrator's decision, the court's review is limited to the grounds provided for in RCW 7.04.160-170. See Barnett [v. Hicks,] 119 Wn.2d [151] at 156, [ 829 P.2d 1087 (1992)]. In Boyd v. Davis, 127 Wn.2d 256, 897 P.2d 1239 (1995), we recognized that every case addressing a court's ability to reverse an arbitrator's error in law was based on a statute repealed by the current arbitration act, and that a reviewing court is limited to the statutory grounds. Boyd, 127 Wn.2d at 267-68. This case, however, deals with mandatory arbitration with an appellate process discussed next.

Malted Mousse, 150 Wn.2d at 526-27 (Emphasis added). According to MS, the emphasized language effectively overrules all prior cases employing the "error of law" standard. We disagree for several reasons.

First, the Malted Mousse court's characterization of the holding in Boyd v. Davis is inaccurate. The court states that "we" recognized the demise of the "error of law" standard in Boyd. But only the four concurring justices in Boyd took that view. After noting that statutory language allowing vacation for "an error in fact or law" was repealed when the WAA was enacted in 1943, the concurring justices held that nothing in the WAA" including language allowing challenges to arbitration awards when "the arbitrators exceeded their powers" "authorizes review of awards for errors of law. Boyd, at 267 (quoting former Rem. Comp. Stat. § 424 (1922)). The Boyd majority, however, equated the "exceeded their powers" language with the error of law standard and reaffirmed prior case law employing that standard. See Boyd, at 263. Thus, contrary to the statement in Malted Mousse, the error of law standard was reaffirmed in Boyd.

The Malted Mousse court also overlooked the Supreme Court's own post-Boyd decisions recognizing the majority holding in Boyd. Davidson v. Hensen, 135 Wn.2d 112, 118, 954 P.2d 1327 (1998) (citing Boyd for rule that "[i]n the absence of an error of law on the face of the award, the arbitrator's award will not be vacated or modified"); Fisher v. Allstate Ins. Co., 136 Wn.2d 240, 252, 961 P.2d 350 (1998) (reading Boyd as holding that "[u]nless the face of the arbitration award shows an error of law, the award will not be modified by the court"). Furthermore, the Supreme Court never overrules binding precedent subsilentio. State v. Studd, 137 Wn.2nd 533, 548, 973 P.2d 1049 (1999). Neither Boyd nor Malted Mousse expressly overrules prior case law.

Finally, the statement in Malted Mousse is not binding. As the Brooms correctly point out, the controversy in Malted Mousse involved mandatory arbitration under chapter 7.06 RCW, not vacation of a private arbitration award under chapter 7.04 RCW. The court expressly recognized that the review standards for private and mandatory arbitration differ and "may not be intertwined." Malted Mousse, 150 Wn.2d at 531-32. The relevant passage in Malted Mousse is therefore nonbinding dicta.

Accordingly, we conclude that this case is governed by the holdings in Boyd, Davidson, and Fischer, not the dicta in Malted Mousse, and that the superior court did not err in applying the error of law standard to the arbitrators' decision.

MS next contends the superior court erred in concluding that the arbitrators committed an error of law by applying statutes of limitation in the arbitration proceedings. Two Washington Supreme Court decisions control this contention.

In Thorgaard Plumbing Heating Co. v. King County, 71 Wn.2d 126, 426 P.2d 828 (1967), the court considered whether county nonclaim statutes, which required the filing of a claim with the county commissioners prior to any action for damages, also applied to arbitrations. Noting that the filing requirement applied only to an "action" against the County, the court held that the word "action" contemplates a prosecution in a court and, therefore, the filing requirement did not apply to arbitrations. Id. at 130-33. The court concluded that the nonclaim statute "is not intended to control the settlement of controversies in which a valid contract to arbitrate is in force." Id. at 133. Significantly, the court cited with approval a federal case holding that a federal statute of limitations was "not . . . a time bar because arbitration is not a `suit' as that term is used in the statute. Instead, it is the performance of a contract providing for the resolution of a controversy without suit." Thorgaard, 71 Wn.2d at 131 n. 4 (citing Son Shipping Co. v. De Fosse 199 F.2d 687 (2d Cir 1952)).

After Thorgarrd, the Supreme Court addressed the application of a statute of limitation to an arbitration in Auburn v. King County, 114 Wn.2d 447, 450, 788 P.2d 534 (1990). The Auburn court summarily rejected the City's argument that a catch-all statute of limitations applied to the parties' arbitration, stating: "The trial court correctly concluded that the statute of limitations by its language does not apply to arbitration. See RCW 4.16.130." Auburn, 114 Wn.2d at 450. The statute at issue stated that "[a]n action for relief not hereinbefore provided for, shall be commenced within two years after the cause of action shall have accrued." RCW 4.16.130 (emphasis added). Given the statute's reference to an "action" and the Supreme Court's prior holding in Thorgaard that "action" applies only to suits filed in court, we read Auburn as an extension of Thorgaard's reasoning to statutes of limitation. Like the statute of limitation in Auburn the statutes of limitation at issue here apply only to an "action." Under Thorgaard and Auburn, the superior court correctly concluded that the statutes did not apply in the arbitration proceeding.

MS argues that Thorgaard and Auburn were undermined and/or limited by the Supreme Court's subsequent decision in International Ass'n of Fire Fighters v. City of Everett, 146 Wn.2d 29, 42 P.3d 1265 (2002). We disagree. Fire Fighters held that whether an arbitration is deemed a judicial "action" depends on the legal context in which the question arises. Id. at 40-41. While that holding does limit cases like Thorgaard and Auburn to their facts, it in no way undermines or abrogates them. In fact, the Fire Fighters court simply distinguished Thorgaard as addressing a "completely different" statutory scheme. Id. at 39. Thus, MS's assertions notwithstanding, Thorgaard and Auburn remain good law and support the superior court's conclusion that Washington statutes of imitation do not bar claims in arbitration proceedings.

MS argues in the alternative that even if statutes of limitation normally apply only to court actions, they may still be applied to claims in arbitration proceedings if the parties' agreement or arbitration rules permit such application. MS contends "the parties agreed to arbitrate under the NASD [National Association of Securities Dealers] Code of Arbitration," and that the Code "expressly directs arbitrators to apply and enforce statutes of limitation." To that end, MS argued below that NASD Code section 10304, which addresses time limits, authorized the arbitrators to apply statutes of limitation in the arbitration

proceedings. In pertinent part, section 10304 states:

10304. Time Limitation Upon Submission

(a) No dispute, claim, or controversy shall be eligible for submission to arbitration under this Code where six (6) years have elapsed from the occurrence or event giving rise to the act or dispute, claim or controversy. The panel will resolve any questions regarding the eligibility of a claim under this Rule.

. . .

(c) This Rule shall not extend applicable statutes of limitations.

NASD Code of Arbitration section 10304 (2005) (emphasis added). MS contends the emphasized language authorized the arbitrators to apply Washington statutes of limitation to the claims in this case. We disagree.

Nothing in section 10304 can reasonably be read as authorizing arbitrators to apply statutes of limitation that, by their express terms, do not apply to arbitration proceedings. In fact, the subsequent history of the section suggests that it is simply a warning that the six-year limit for arbitrations does not extend "applicable statutes of limitation" in court actions. But even assuming it addresses the arbitrators' authority, it does not confer authority to apply statutes of limitation that are not "applicable." A statute is "applicable" either by virtue of the substantive law applied, in this case Washington law, or the arbitration agreement. Neither basis for applying the relevant statutes of limitation is established in this case. We conclude, therefore, that section 10304 did not authorize the arbitrators to apply statutes of limitation to the claims before them, and that the superior court properly vacated their decision.

Affirmed.