Opinion
No. 11–P–854.
2012-08-29
William T. BRODERICK v. Michael J. LOMBARDI & another.
By the Court (MILLS, BROWN & SIKORA, JJ.).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
Michael J. Lombardi, defendant and counterclaimant in the underlying Superior Court lawsuit, appeals from a judgment denying his motion to modify an arbitrator's award under authority of G.L. c. 251, § 13. We affirm the judgment for the following reasons.
Background. Michael J. Lombardi and William T. Broderick collaborated during the period of 2002 into 2007 in a venture attempting to develop a tract of approximately thirty acres in Westwood (property). Both men were attorneys and long-time friends. The venture and their relationship became contentious and turbulent over that period. In June of 2007, their differences generated a civil action in Superior Court over proper title to the property and over financial obligations between them. In early 2009, they agreed to an interim arrangement for ownership of the property as tenants in common. They agreed also to submit their damages claims to binding arbitration.
All financial claims went forward to arbitration. Both sides had representation by counsel. The process occupied four days of evidentiary hearing. The arbitrator received posthearing briefs. He rendered a detailed decision comprised of findings and rulings of law upon each discrete claim or counterclaim. Lombardi does not dispute the statement of the arbitrator that “[b]oth parties agreed that the claims and counterclaims were arbitrable.”
Lombardi has pursued the present appeal unilaterally. We have no brief from Broderick. The record submitted by Lombardi does not contain a copy of the arbitration agreement.
The arbitrator found and ruled as follows. He sustained a G.L. c. 93A, § 11, claim by Broderick, to the effect that Lombardi in 2002 and in his capacity as counsel to Broderick had unfairly or deceptively executed deeds to the property so as to transfer ownership to himself and so as to represent himself and an entity under his control, High Rock Village LLC, as true owners of the property. Broderick sought as damages his cumulative attorney's fees generated by the Superior Court litigation and by the arbitration as the cost of his effort to rectify the attempted misappropriation of ownership of the property. Lombardi responded (a) that he had not in substance attempted to misappropriate ownership of the property but held it always for the benefit of Broderick and himself as joint venturers, and (b) that he had not executed the deed as an attorney for Broderick but rather as a joint venturer in the Westwood development project. He emphasized that c. 93A did not apply to the business relationship of joint venturers and that in this matter he had not been acting as attorney for Broderick in the rendition of professional services in the open market.
The arbitrator found and ruled in favor of Broderick. He determined that Lombardi had acted as an attorney, and not a joint venturer; that his action had breached the duty of an attorney providing services in the open market to a client; and that the resulting litigation fees and costs accruing to Broderick amounted to $325,000. He found the violation of c. 93A, § 11, to be wilful so as to require doubling to a total of $650,000. He added costs of litigation in the amount of $25,000, for a total award to Broderick in the amount of $675,000.
The arbitrator then resolved five counterclaims by Lombardi against Broderick. (1) He found that Broderick owed Lombardi $102,408, upon six personal loans, inclusive of accrued interest and reasonable attorney's fees and costs of collection. (2) He found that Broderick owed Lombardi legal fees in the amount of $43,146, inclusive of prejudgment interest. (3) He found also that Broderick owed Lombardi $122,249, in compensation for Lombardi's payment of a Federal tax lien on the property resulting from Broderick's failure to pay certain Federal income taxes for the calendar year 2000. Lombardi negotiated a reduction of the Federal tax lien with the Internal Revenue Service. With appropriate prejudgment interest, the obligation amounted to the indicated sum of $122,249. (4) The arbitrator found further that Broderick had accumulated a joint venture capital account deficiency resulting in a debt to Lombardi in the sum of $301,591. The arbitrator did not award interest upon that amount. (5) Finally, the arbitrator assessed Broderick the sum of $150,911, as his share of responsibility for vendor accounts payable and legal fees accrued by the joint venture. Again, he did not award interest upon that amount for the benefit of Lombardi. Lombardi's accrued counterclaim damages amounted to $720,305.
The arbitrator set off the c. 93A award of $675,000 against the $720,305, and made a final net award to Lombardi of $45,305.
Analysis. Lombardi unsuccessfully sought modification of the award from the arbitrator. Pursuant to G.L. c. 251, § 13, he then appealed to the Superior Court. In both proceedings, he argued (a) that the c. 93A award in favor of Broderick rested upon the invalid grounds (i) that he had been serving as Broderick's attorney furnishing services in the open market, and (ii) that the true relationship of the parties as joint venturers precluded application of c. 93A liability; and (b) that the arbitrator had wrongly failed to award him prejudgment interest of approximately $84,500 upon the $301,591 capital deficiency of Broderick. The Superior Court judge concluded that these contentions did not fall within the narrow grounds for modification of an arbitral award. Lombardi has pursued those arguments on appeal.
Scope of judicial review. We occupy the same position as the Superior Court judge. We examine the record and test the appellant's arguments against the grounds allowed by c. 251, § 13. That provision does not authorize courts to modify or vacate for reasons of incorrect factfinding or erroneous application of law. Review is stringently restricted. “When parties agree to arbitrate a dispute, courts accord their election great weight. The strong public policy favoring arbitration requires us to uphold an arbitrator's decision even where it is wrong on the facts or the law, and whether it is wise or foolish, clear or ambiguous.” Boston v. Boston Police Patrolmen's Assn., 443 Mass. 813, 818 (2005). See Boston v. Salaried Employees of N. America, Local 9158, 77 Mass.App.Ct. 785, 788 (2010). We are “not authorized to reconsider the merits of an award even though it is wrong on the facts and the law.” School Dist. of Beverly v. Geller, 435 Mass. 223, 228 (2001). Rather, our review confines itself to determinations (1) whether the arbitrator has committed any error itemized in G.L. c. 251, § 13( a )(1)-(3), such as miscalculation of figures, misidentification of persons or property, or action upon a matter not submitted to him, or defects of form; (2) whether the arbitrator has delivered an award totally devoid of factual and legal support in the record, see Concerned Minority Educators of Worcester v. School Comm. of Worcester, 392 Mass. 184, 190 (1984); and (3) whether the arbitrator has rendered a result in violation of public policy, Superadio, Ltd. Partnership v. Winstar Radio Prods., LLC, 446 Mass. 330, 334 (2006).
Upon the present record we find none of these exceptional grounds to be present. Lombardi does not claim that the arbitrator travelled beyond the bounds of the arbitration agreement. He does not argue that the result violates a public policy as distinguished from his private interests. Finally, he does insist that the challenged elements of the arbitrator's decision lack support in evidence and law. The role of Lombardi in the treatment of the disputed property deeds was arguable. We cannot modify even though we may have concluded differently from the arbitrator. The refusal of the arbitrator to award interest upon the joint venture capital account deficit accumulated by Broderick is arguable also. While the arbitrator could have rendered a more explicit explanation of that decision, the record does permit us to infer that the volume and complexity of dealings between the two parties over the course of the years left the calculability of interest indefinite and unreliable.
Conclusion. We therefore affirm the judgment denying modification of the arbitrator's award.
So ordered.