ShareA Massachusetts court has considered whether a member could seek to overturn an arbitration award based on alleged procedural deficiencies in the hearing.
The Berkshire County Board of REALTORS® (“Association”) conducted an arbitration hearing over a commission dispute between Ellen Pollen (“Pollen”) and Franklin Street Realty Associates, Inc. (“Challenger”). Both parties were members of the Association and had agreed to arbitrate these disputes as part of their membership. Pollen was the prevailing party at the arbitration and she was awarded $33,750.
When the Challenger failed to pay the award, Pollen filed a lawsuit seeking to confirm the award. The Challenger then filed a cross claim against Pollen and a third-party action against the Association, seeking to overturn the award due to alleged procedural defects in the Association’s hearing process. Both Pollen and the Association filed motions with the trial court seeking judgment in their favor.
The Superior Court for the Commonwealth of Massachusetts, Berkshire County, ruled in favor of Pollen and the Association, rejecting the arguments made by the Challenger. The Challenger made two arguments against the confirmation of the award: first, the Challenger argued it never had an opportunity to challenge a member of the arbitration panel; and second, the Challenger argued that the 30-day requirement for bringing challenges to arbitration proceedings did not apply because it had not received proper notification of the award from the Association.
The Association had mailed a copy of the decision to the Challenger’s business address on April 28, 2008. Pollen filed the declaratory judgment action seeking confirmation of the award on July 7, 2008. Under Massachusetts law, a court will generally affirm an arbitration award, unless the other party raises objections within 30 days after receiving a copy of the award or within 30 days after a party learns that the arbitration award was secured by “corruption, fraud, or other undue means”.
The Challenger attempted to argue that the 30 day period did not start running on April 28th because the arbitration award decision was not sent by certified mail to their home addresses. The Challenger did not argue that it had not received timely notice of the decision; instead, the Challenger objected to where the notice was sent.
The court rejected this argument, stating that “[r]aising sophistry to an art form…[the Challenger] attempts to obfuscate the issue by claiming that they did not receive the award at home or by certified mail; issues that are not relevant under the [Association]’s rules.” Association staff testified that she had sent a copy of the decision to the Challenger’s business on April 28th, which is the address where she had sent all of the other notices related to the hearing. The court found that because the Challenger had not made a motion to vacate the arbitration award within 30 days after the award’s issuance, the court ruled in favor of Pollen and the Association.
Finally, the court discussed why the Challenger’s substantive argument lacked merit. While it was true that the Association may not have identified the new panel member prior to the arbitration hearing as it should have, the Challenger never objected to this new panel member at the hearing and even agreed at the end of the hearing that it had received a fair hearing. The court stated if the Challenger believed that it had procedural objections, those needed to be made known; the law does not allow a party to sit back and wait. Therefore, the court rejected all of the Challenger’s arguments.
Pollen v. Romeo, No. 08-0176 (Mass. Super. Ct. Dec. 24, 2008). [Note: This opinion was not published in an official reporter and therefore should not be cited as authority. Please consult counsel before relying on this opinion.]