Opinion
Nos. 58329-8-I; 59565-2-I.
March 17, 2008.
Appeals from a judgment of the Superior Court for Whatcom County, No. 05-2-02549-9, Steven J. Mura, J., entered May 12, 2006.
Affirmed by unpublished per curiam opinion.
Clarence Orr appeals superior court orders denying his motions to reconsider confirmation of arbitration awards in favor of MBNA America Bank and Chase Manhattan. Because the statutory time limits for modifying, vacating or correcting the awards had passed, the superior court correctly concluded that Orr's challenges came too late. We affirm.
FACTS
In 2005, MBNA America Bank served Orr with a notice of intent to arbitrate, Page 2 claiming he had failed to make required payments on his MBNA credit card. Representing himself, Orr disputed the claim before the arbitrator, but did not attempt to stay or challenge the arbitration process in court. The arbitrator entered an award against Orr for the outstanding debt and interest. Orr was served with the award and did not file a motion to vacate, correct or modify it.
After more than three months passed, MBNA moved for confirmation of the award in superior court. Counsel for Orr appeared at the hearing on the motion and orally objected to confirmation, contending that confirmation was in the nature of summary judgment and asserting that Orr disputed that there was a valid contract to arbitrate. The court nonetheless confirmed the award.
Orr moved to reconsider, arguing alternatively that MBNA had failed to prove an agreement to arbitrate, that MBNA was not the real party in interest because it had probably sold the debt, and that the National Arbitration Forum, which conducted the arbitration, was biased. Agreeing with MBNA that Orr's claims were time-barred under the arbitration statute, the trial court denied the motion. Orr appeals the denial of reconsideration.
The circumstances in the Chase Manhattan case are similar. Chase filed a notice of arbitration for unpaid credit card debt, also before the National Arbitration Forum. Orr attempted to respond before the forum but did not challenge the arbitration process in court. Thereafter an award was entered and served on Orr. After three months passed without Orr attempting to vacate or modify the award, the superior court granted Chase's motion to confirm the award. Orr moved to reconsider through counsel, raising similar arguments as in the MBNA case. The court denied his motion. Orr appeals the denial.
Some procedural facts regarding the motions to reconsider differ in the two cases. Because we do not resolve the cases on the basis of MBNA and Chase's alternative arguments that Orr's renoted or rescheduled motions to reconsider were themselves untimely, we need not discuss those differences here.
We have linked the two appeals for purposes of this opinion.
ANALYSIS
Orr contends that the superior court erred in confirming the awards against him. He argues that the plaintiffs failed to prove a contract to arbitrate, that he raised a factual issue that the plaintiffs were not real parties in interest, and that any agreement designating the National Arbitration Forum as arbitrator is unconscionable. MBNA and Chase respond that Orr's arguments are time-barred under the applicable arbitration statutes, contained in former chapter 7.04 RCW (2004). MBNA and Chase are correct.
RCW 7.04 has since been repealed and replaced by RCW 7.04A. The parties agree that the confirmations here at issue are governed by the former statute.
Arbitration in Washington is a special proceeding in which the parties' rights are defined and controlled by the statute. Price v. Farmers Ins. Co., 133 Wn.2d 490, 496, 946 P.2d 388 (1997). Judicial scrutiny of an arbitration award is strictly limited to grounds contained in the statute. Barnett v. Hicks, 119 Wn.2d 151, 153-54, 829 P.2d 1087 (1992). When, as here, arbitration is initiated by an extrajudicial notice of intention to arbitrate, the statute provides parties with two opportunities to challenge the proceedings in court.
The first is through a motion to stay arbitration. Former RCW 7.04.040(4) provides that to raise an issue as to the existence or validity of the arbitration agreement, a party must file a motion for a stay of the arbitration in court within 20 days of the service of the notice of intention to arbitrate. See Wooh v. Home Ins. Co., 84 Wn. App. 781, 784, Page 4 930 P.2d 337 (1997).
The second opportunity for judicial intervention is a motion to vacate or modify the award after it is entered. Under former RCW 7.04.160, a party may move to vacate an award if there was corruption, fraud, partiality, arbitrator misconduct, arbitrator action exceeding his or her powers, or if there was no valid submission or arbitration agreement and the proceeding was instituted without notice. Former RCW 7.04.170 also allows courts to modify or correct an award where there was miscalculation, mistake, an imperfection of form or the award was on a matter not submitted to the arbitrator. Under former RCW 7.04.180, however, any motion to vacate or modify an arbitration award must be brought within three months of service of the award. This time limit is considered a statute of limitations. Dougherty v. Nationwide Ins. Co., 58 Wn. App. 843, 848, 795 P.2d 166 (1990). The purpose of the limit "'is to expedite finality of the arbitration process . . . consistent with the overall objective of speedy resolution of disputes.'" MBNA Am. Bank, NA v. Miles, 140 Wn. App. 511, 514, 164 P.3d 514 (2007) (quoting Dougherty, 58 Wn. App. at 849).
The parties also discuss the law of Delaware and the Federal Arbitration Act, but Orr does not argue that any choice of law issue is material to the resolution of this appeal. In any event, the Delaware and federal statutes contain a similar three-month limitation to former RCW 7.04.180, as does the current Washington statute, RCW 7.04A.230(2).
It is uncontroverted that Orr's objections were not timely under former RCW 7.04.040 or .180. Orr nonetheless maintains that without proof of a valid contract for arbitration between the real parties in interest, the superior court lacked subject matter Page 5 jurisdiction, which he may challenge at any time. See RAP 2.5(a); Skagit Surveyors Eng'rs, LLC v. Friends of Skagit County., 135 Wn.2d 542, 556, 958 P.2d 962 (1998). But Orr misunderstands subject matter jurisdiction, both generally and as specifically applied in the setting of arbitration.
"Subject matter jurisdiction is the authority to hear and determine the class of action to which a case belongs, not the authority to grant the relief requested, or the correctness of the decision." Bour v. Johnson, 80 Wn. App. 643, 647, 910 P.2d 548 (1995). In the specific setting of arbitration, through former chapter 7.04 RCW, "[t]he Legislature . . . invested the superior courts with subject matter jurisdiction to confirm, vacate, modify or correct arbitration awards." Federated Servs. Ins. Co. v. Estate of Norberg, 101 Wn. App. 119, 123, 4 P.3d 844 (2000). The superior court here possessed subject matter jurisdiction to confirm the awards because MBNA and Chase filed the awards and petitioned for confirmation under former RCW 7.04.150. Nothing else was required.
Orr cites out-of-state cases for the general proposition that only courts may determine arbitrability. But these cases do not involve untimely objections and arise out of dissimilar statutory schemes. See MBNA Am. Bank, N.A. v. Credit, 281 Kan. 655, 132 P.3d 898 (2006); Smith v. Cumberland Group, 455 Pa. Super. 276, 687 A.2d 1167 (1997); Bank One Del. N.A. v. Mitchell, 70 Pa. D. C. 4th 353 (2005). More importantly, the general rule that courts rather than arbitrators decide arbitrability is a rule of contractual authority, not a rule of jurisdiction. Unlike the authority to resolve questions of subject matter jurisdiction, which cannot be conferred by agreement, see In re Marriage of Furrow, 115 Wn. App. 661, 667, 63 P.3d 821 (2003), arbitrability may be properly decided by the arbitrator where the parties have clearly and unmistakably provided authority to do so in the contract. Mount Adams Sch. Dist. v. Cook, 150 Wn.2d 716, 724, 81 P.3d 111 (2003); ATT Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 649, 106 S. Ct. 1415, 89 L. Ed. 2d 648 (1986).
Alternatively, Orr contends that the confirmation process is a summary judgment proceeding. He argues remand for trial is required because he raised material issues of Page 6 fact to preclude judgment as a matter of law.
But confirmation under RCW 7.04.150 is not summary judgment; it is a special statutory proceeding in which judicial review is "exceedingly limited." Davidson v. Hensen, 135 Wn.2d 112, 119, 954 P.2d 1327, P.2d 1327 (1998). "Although a party may apply to the court to confirm an arbitration award, that is not the same as bringing an original action to obtain a monetary judgment." Price, 133 Wn.2d at 497. Even when a challenge to an award is timely, grounds for vacation are limited to those in the statutes and must appear on the face of the award. Westmark Properties., Inc. v. McGuire, 53 Wn. App. 400, 402, 766 P.2d 1146 (1989). The court does not consider the merits of the case. Davidson, 135 Wn.2d at 119. Orr's analogy to summary judgment fails.
MBNA and Chase request attorney fees. Because their credit card agreements with Orr provide for fees, MBNA and Chase are entitled to fees on appeal, subject to compliance with RAP 18.1. Miles, 140 Wn. App. at 515.
Affirmed.