Re Arbitration of Cent. 21 Jack Associates v. Realty World: Vermont Supreme Court Reviews Board's Arbitration Appeal Procedure

Note: This case is not published in an official reporter and may not be cited as authority. Consult with counsel before relying on this case.

The Supreme Court of Vermont addressed the validity of a Board arbitration award. The court upheld the award, as it found that the Board's handling of the appeal and affirmation of the award did not violate due process.

Century 21 Jack Associates asserted that it was the procuring cause of a real estate sale. Realty World Four Seasons disputed this assertion and filed a Request for Board Arbitration. The parties executed an agreement to arbitrate and were provided with materials which outlined the Board's arbitration procedure.

Subsequently, Century 21 made a request that the Northwestern Vermont Board of REALTORS® (NWVBR), the intervenor, decline to arbitrate the matter on the basis that the issues were of a legal nature, rather than a factual one. In reviewing Century 21's request, NWVBR sought an opinion from legal counsel, which drafted and forwarded a set of Standards and Considerations to use when arbitrating "procuring cause" disputes. Upon review of these documents, NWVBR decided to arbitrate the matter, despite Century's objection.

Shortly thereafter, notice of the arbitration was provided to the parties. Neither of the parties objected to the hearing going forward. All of the parties were present at the arbitration hearing, participated in the hearing and, at the conclusion, expressed an opinion that they felt the hearing had been conducted fairly. The arbitration panel issued an award in favor of Realty World. Century 21 disagreed with the panel's decision and appealed to NWVBR's Board. The Board reviewed the proceedings and concluded that no substantial errors were present.

NWVBR later discovered that the NATIONAL ASSOCIATION OF REALTORS® had previously amended certain sections of the manual used in arbitration proceedings. The changes were not substantive in nature, and they related solely to post arbitration award procedures. These changes required a formal hearing by NWVBR's Board in reviewing an appeal from the arbitration award procedure.

The vote of the Board sustaining the arbitration award was by less than a majority of the Board. It was believed that two of the five members abstained from this procedure. One member of the panel testified that she did not feel constrained to "apply the law," but rather should follow the manual. However, the court noted that there was nothing in the record to suggest the application of any incorrect legal principles in the determination of this dispute.

The Supreme Court of Vermont cited R.E. Bean Construction Co. v. Middlebury Associates, 139 Vt. 200, 428 A.2d 306 (1980), which, in effect, stated that Vermont has a strong tradition of upholding arbitration awards whenever possible. The court concluded that the scope of judicial review of arbitration awards in Vermont is very narrow. (See Matzen Construction, Inc. v. Leander Anderson Corp., 152 Vt. 174, 565 A.2d 1320 (1989)). Therefore, an arbitration award must be confirmed unless the party seeking to overturn the award established grounds to vacate or modify it.

The Supreme Court of Vermont reasoned that Century 21 failed to meet that burden, and ruled that an award could not be vacated on an issue of law unless it was demonstrated that the arbitrator manifestly disregarded the law. (See In re Robinson/Keir Partnership, 154 Vt. 50, 573 A.2d 1188 (1990); Mussy v. General Motors Corp., slip op. at 6 (Vt. Dec. 1, 1989)). Likewise, there was no showing that the Board disregarded changes in their arbitration manual. As a matter of fact, the evidence was clear that the panel was unaware of the changes to the arbitration manual.

The Supreme Court of Vermont ruled that Century 21's appeal did not give rise to a denial of due process. As a result of this finding, the court denied their motion to vacate the arbitration award and dismissed the case.

In Re Arbitration of Century 21 Jack Associates vs. Realty World, Docket No. S910-89CnC (Vt. 1989). [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.]