Opinion
No. 12–P–340.
2013-02-6
Timothy J. SHEEHAN, Jr., & another v. Helen MILLER & another.
By the Court (GRASSO, KAFKER & MEADE, JJ.).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The plaintiffs appeal from a decision and order of the Appellate Division of the District Court Department, and the resulting judgments, which reduced the arbitrators' award for loss of use damages from $120,000 to $4,500, and dismissed the action as to Liberty Mutual Insurance Company (Liberty), leaving judgment to enter against only Helen Miller (collectively, defendants). At this stage of the complex procedural history of this case, the dispute boils down to two issues: whether the award for loss of use was within the arbitrators' authority, and whether Liberty should be bound by the award. We answer both in the affirmative, and therefore reverse.
Our review of the arbitrators' award is “quite narrow.” Scott v. Commerce Ins. Co., 62 Mass.App.Ct. 416, 420 n. 8 (2004). “Even a grossly erroneous decision is binding.... Courts inquire into an arbitration award only to determine if the arbitrator has exceeded the scope of his authority, or decided the matter based on ‘fraud, arbitrary conduct, or procedural irregularity.’ “ Plymouth–Carver Regional Sch. Dist. v. J. Farmer & Co., 407 Mass. 1006, 1007 (1990) (citations omitted). The issue of loss of use damages was before the arbitrators by consent of the parties, as stated in the 1998 District Court judgment and reinforced by this court in 2004 in a memorandum and order pursuant to our rule 1:28. See Liberty Mut. Ins. Co. v. Sheehan, 60 Mass.App.Ct. 1112 (2004). Contrary to the defendants' suggestion that the arbitrators based their award on matters not before them, the award by its own terms is limited to loss of use. The defendants argue that the arbitrators exceeded their authority under G.L. c. 251, § 12( a )(3), because loss of use damages generally extend only for the time reasonably necessary to repair a damaged automobile. See Antokol v. Barber, 248 Mass. 393, 396 (1924); Guaranty–First Trust Co. v. Textron, Inc., 416 Mass. 332, 336–338 (1993). The plaintiffs sought and were awarded damages for an increased period of time based on the situation “where an injured party is unable to finance repairs and a defendant refuses to pay.” Guaranty–First Trust Co., supra at 337. It suffices to say that this relief was not “prohibited by statute,” Superadio Ltd. Partnership v. Winstar Radio Prod., LLC, 446 Mass. 330, 340 (2006), nor otherwise “prohibited by law.” Plymouth–Carver Regional Sch. Dist., supra. See Guaranty–First Trust Co., supra, citing Urico v. Parnell Oil Co., 552 F.Supp. 499, 501 (D.Mass.1982), aff'd, 708 F.2d 852 (1st Cir.1983). The defendants' argument therefore amounts to no more than an assertion of error of law or fact, which is insufficient. See Scott, supra, and cases cited.
The Appellate Division held that Liberty had not been party to the arbitration and therefore should not have been subject to the judgment. We disagree. The stipulation of dismissal did not remove Liberty from the case, but instead dismissed “any claims in this action not disposed of by the binding arbitration,” meaning that the arbitration proceeding was fully preserved. At a hearing in 1998, an attorney representing both defendants agreed that the loss of use issue had been sent back to the arbitrators, and gave no indication that Liberty no longer considered itself a party despite Timothy J. Sheehan, Jr.'s description of his “adversary” as “the insurance company.” The resulting judgment entered against both Liberty and Miller and noted the parties' acknowledgment that “the arbitration panel has been requested to consider an additional claim for damage for loss of use,” and Liberty neither moved to amend the judgment nor appealed from it. Instead, Liberty brought an action in Superior Court in 2000 in its own name, seeking to enjoin the arbitration, without mentioning its present contention that it had no part in the arbitration. We held nearly a decade ago that this suit was an impermissible collateral attack, that Liberty “expressly acknowledged the pendency of the [plaintiffs'] loss of use claim before the arbitration panel,” and that therefore the arbitration could proceed. Liberty Mut. Ins. Co., supra. See Charlette v. Charlette Bros. Foundry, Inc., 59 Mass.App.Ct. 34, 44 & n. 8 (2003) (res judicata). The time for Liberty to raise its claim that it was not bound by the arbitration is long past. See Dalton v. Post Publishing Co., 328 Mass. 595, 598–599 (1952) (law of the case); Safety Ins. Co. v. Day, 65 Mass.App.Ct. 15, 23 (2005) (estoppel); Aronovitz v. Fafard, 78 Mass.App.Ct. 1, 8 (2010) (waiver).
The decision and order of the Appellate Division and the resulting January 26, 2012, judgments are vacated, and a new order shall enter affirming the April 15, 2011, amended judgments against both defendants jointly and severally, in the amount of $120,000, and with the following amendment: interest is to be calculated from November 7, 1994, to the date of the judgments.
We apply the interest calculation used by the Appellate Division, which the plaintiffs accept and the defendants have not challenged in this court.
So ordered.