Opinion
No. C5-97-536.
Filed August 26, 1997.
Appeal from the District Court, Stearns County, File No. C6-96-3486.
Maurice W. O'Brien, Nancy J. Miller, Miller O'Brien Bloom, (for Respondent).
Gordon H. Hansmeier, Bridget M. Lindquist, Rajowski Hansmeier Ltd., (for Appellant).
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. §. 480A.08, subd. 3 (1996).
UNPUBLISHED OPINION
Appellant Independent School District No. 742 challenges the district court's confirmation of the August 16, 1995, award and vacation of the February 5, 1996, award, arguing that (1) International Union of Operating Engineers, Local No. 49, procured the confirmed award on behalf of its union member Orville W. McCormick by fraud, and (2) the award was void for lack of certainty and finality. We affirm.
FACTS
Orville W. McCormick, a member of the International Union of Operating Engineers, Local No. 49 (union), was employed as a custodial engineer by Independent School District No. 742 (school district). On July 11, 1994, McCormick pleaded guilty to terroristic threats, a felony offense, and was placed on probation for five years. A week later, the school district terminated McCormick's employment pursuant to the labor agreement between the union and the school district. The union filed a grievance against the school district, challenging McCormick's termination.
An arbitration hearing was held on May 26, 1995. At the hearing, the school district agreed to reinstate McCormick if his felony conviction was reduced to a misdemeanor. McCormick testified that his probation was "coming to an end," and his felony conviction would then be reduced to a misdemeanor. McCormick's testimony was based on a letter from his probation officer, which stated that McCormick would be recommended for discharge from probation in June 1995.
On July 19, 1995, the arbitrator issued an award, which provided that McCormick would be reinstated when his conviction was reduced to a misdemeanor upon successful completion of probation. Soon after the award, on July 31, the school district sought clarification of the July 19 award. Specifically, the school district requested the arbitrator to amend the award to provide that reinstatement without back pay shall not occur until 30 days after the district court has amended McCormick's sentencing from a felony to a misdemeanor. On August 16, the arbitrator granted the school district's request by stating:
[T]he Grievant's reinstatement without back pay shall not occur until 30 days after the District Court has amended the Grievant's sentencing from a felony to a misdemeanor.
Both parties accepted the August 16 award as a valid modification of the initial award.
On January 11, 1996, the school district requested that the arbitrator uphold McCormick's termination because McCormick's conviction was still not reduced to a misdemeanor. On February 5, the arbitrator upheld McCormick's termination on that basis. Subsequently, on April 12, McCormick was discharged from probation and his felony conviction was reduced to a misdemeanor.
The union moved the district court to confirm the July 19, 1995, award, as modified by the August 16, 1995, award. The school district requested that the district court confirm the February 5, 1996, award. The district court held:
[T]he August 16, 1995 award properly modified the July 19, 1995 [award]. 742 [the school district] did not move to vacate or modify the August 16, 1995 award within 90 days. Therefore, this award should be confirmed. As to the February 1996 award, the arbitrator was without jurisdiction to modify the August award because the statutory time periods had elapsed. The February, 1996 award is of no force and effect. McCormick should be reinstated as of May 12, 1996 (30 days after the charge became a misdemeanor).
The school district appealed.
DECISION
The arbitrators make the final determination of all questions submitted to them whether legal or factual. The court will not overturn these conclusions even if it believes the arbitrators made an incorrect conclusion.
Grudem Bros. Co. v. Great Western Piping Corp. , 297 Minn. 313, 316-17, 213 N.W.2d 920, 922-23 (1973). A court will vacate an arbitration award only when it is established that arbitrators have clearly exceeded their powers. State, Office of State Auditor v. Minnesota Ass'n of Prof'l Employees , 504 N.W.2d 751, 754 (Minn. 1993). "Every reasonable presumption must be exercised in favor of the finality and validity of the arbitration award." Id. (citation omitted) "[T]he scope of judicial review of an arbitration award is extremely narrow." Id. at 755.
The school district alleges the July 19, 1995, award was procured by fraud. Specifically, the school district asserts "McCormick explicitly represented that his discharge from probation and reduction in sentence would occur in June, 1995," and the arbitrator relied on this representation in issuing the award. The school district further claims it did not have any reason to suspect fraud until January 11, 1996, when it first discovered that McCormick's felony terroristic threats charge was still not reduced to a misdemeanor.
Under the Uniform Arbitration Act, upon application of a party, the court shall vacate an award where the award was procured by corruption, fraud, or other undue means. Minn. Stat. § 572.19, subd. 1(1) (1996). Further, an application to vacate shall be made within 90 days after delivery of a copy of the award to the applicant, except that, if predicated upon corruption, fraud or other undue means, it shall be made within 90 days after such grounds are known or should have been known.
Minn. Stat. § 572.19, subd.2 (1996). Courts strictly enforce the 90-day time limit for applications to vacate an award. Crosby-Ironton Fed'n of Teachers, Local 1325 v. Independent Sch. Dist. No. 182, 285 N.W.2d 667, 670 (Minn. 1979).
The school district applied for confirmation of the February 5, 1996, award on October 28, 1996, and by so doing, it implicitly applied for vacation of the August 16, 1995, award. To vacate the August 16 award, the school district must comply with Minn. Stat. § 572.19. See Minn. Stat. § 572.16, subd. 3 (1996) (award so modified or corrected under this section is subject to provisions of sections 572.18, 572.19, 572.20). The school district claimed it did not discover the alleged fraud until January 11, 1996. Because the school district did not apply for vacation within 90 days after discovering the alleged fraud, we hold that the district court properly confirmed the August 16, 1995, award. See Wacker v. Allstate Ins. Co. , 312 Minn. 242, 251 N.W.2d 346 (1977) (court confirmed award where parties did not apply for vacation within 90 days); Component Sys. Inc. v. Murray Enter. of Minn., Inc. , 300 Minn. 21, 217 N.W.2d 514 (1974) (same).
Further, the record does not sustain the school district's fraud claim. The school district alleges "McCormick explicitly represented that his discharge from probation and reduction in sentence would occur in June, 1995." However, the arbitrator found:
He [McCormick] also understood that his felony conviction would be reduced to a misdemeanor after he completed probation without any problems. His probation is now coming to an end.
The arbitrator's finding indicates McCormick only testified to what he expected to happen based on the information provided by his probation agent. Therefore, we conclude McCormick did not commit fraud as alleged by the school district.
Finally, the school district argues the August 16, 1995, award should be declared void because it was neither certain nor final. We disagree. The August 16 award conditioned McCormick's reinstatement on his felony conviction being reduced to a misdemeanor. If the district court reduced McCormick's sentence, he would be reinstated; and if not, he would not be reinstated. We hold the award to be sufficiently definitive and final. See 6 C.J.S. Arbitration § 111 (1975) ([a] conditional award may be sufficiently final to be valid).
Affirmed.