Court: Massachusetts Appeals Court; March 19, 1987; Massachusetts; State Appellate Court
Judgments were entered in the Superior Court confirming an arbitration award dated August 17, 1982, in favor of Coughlan Construction Company, Inc. Rockport appealed the decision, while Coughlan filed a cross-appeal. The parties had a contract for sewer construction dated April 10, 1978, which included arbitration provisions. A dispute arose, leading Coughlan to file for arbitration on July 30, 1979, with the American Arbitration Association (AAA). In August 1979, AAA provided both parties with a list of arbitrators, but both parties objected to all but one name. Subsequently, AAA appointed three arbitrators not listed, and Rockport failed to demonstrate any prior objection to this appointment before seeking a stay of arbitration in January 1981.
Rockport's complaint alleged that Coughlan did not follow proper procedures for selecting arbitrators and that the contract was abandoned, rendering the arbitration provisions inapplicable. However, a Superior Court judge ordered arbitration on April 14, 1981, and arbitration hearings began on September 28, 1981, concluding with an award to Coughlan for $271,811 in August 1982. Rockport later sought to vacate the award, leading to consolidated actions in the Superior Court.
Coughlan argued that the April 14, 1981, order compelling arbitration was res judicata regarding the validity of the arbitration provisions. The order was not appealable, leaving the issue open on appeal following the confirmation of the award. The contract included a specific arbitration provision that governed the selection of arbitrators under AAA rules, and Rockport's participation in this process without timely objection indicated acceptance of it.
Rockport also claimed the contract, including its arbitration provisions, was abandoned after Coughlan indicated it could not complete the contract due to insurance issues. However, there was no evidence that Coughlan intended to rescind the contract, as it had previously demanded arbitration regarding various disputes.
Coughlan continued work amid a dispute without rescinding the arbitration provision, which has been upheld in similar cases. The trial judge reviewed Rockport's claims of bias against an arbitrator and a tribunal administrator, concluding that neither influenced the arbitration process. Rockport failed to provide sufficient evidence of fraud or partiality. The tribunal administrator was not involved in the hearings and had purely administrative duties. Although the arbitrator had connections to Coughlan's counsel, the trial judge determined these relationships were casual and unrelated to the arbitration, and thus did not need disclosure. The unanimous decision of the arbitrators further supported the judge's findings. Relevant case law was cited to affirm that experienced arbitrators might have ties to the industry, which does not inherently disqualify them from serving in arbitration.
Coughlan's complaint sought confirmation of the arbitrators' award, requesting the awarded amount plus interest and costs, and moved for costs, expenses, and interest under G. L. c. 231.6F in the case brought by Rockport to vacate the award. Coughlan now asserts entitlement to interest under G. L. c. 231.6C. However, the arbitrators awarded no interest and mandated that fees and expenses be shared equally. Since no demand date was established by the arbitrators, Coughlan is not entitled to prejudgment interest. In Reilly v. Local 589, the court indicated that postjudgment interest begins when the award becomes final, which could be the date judgment was entered against Rockport, yet noted the potential for it to commence from when the award was fixed. The court sees no reason to disregard prior cases suggesting that postjudgment interest should run from the award date. Therefore, postjudgment interest will be calculated starting from the award date, August 17, 1982. The arbitrators did not address interest in their award, thus the court affirms the judgments with postjudgment interest from that date. The arbitrators were appointed before December 4, 1979, and Coughlan had notified Rockport of work cessation due to canceled workers' compensation insurance on December 6, 1979. The arbitration clause in the contract mandates that all disputes be resolved by arbitration according to the Construction Industry Arbitration Rules of the American Arbitration Association, making the arbitrators' award final and enforceable.
