Young v. Community Hospital , 2001 MT 32N ( 2001 )

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No. 00-504
IN THE SUPREME COURT OF THE STATE OF MONTANA
2001 MT 32N
MERRIE G. YOUNG,
Plaintiff/Appellant,
v.
COMMUNITY HOSPITAL AND
NURSING HOME OF ANACONDA,
Defendant/Respondent.
APPEAL FROM: District Court of the Third Judicial District,
In and for the County of Deer Lodge,
The Honorable Ted L. Mizner, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Brian T. Atcheson, Atcheson Law Office, Butte, Montana
For Respondent:
K. Kent Koolen, William J. Speare, Moulton, Bellingham, Longo & Mather, Billings,
Montana
Submitted on Briefs: January 11, 2001
Decided: February 22, 2001
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Filed:
__________________________________________
Clerk
Justice Patricia Cotter delivered the Opinion of the Court.
¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court 1996 Internal Operating
Rules, the following decision shall not be cited as precedent but shall be filed as a public
document with the Clerk of the Supreme Court and shall be reported by case title,
Supreme Court cause number and result to the State Reporter Publishing Company and to
West Group in the quarterly table of noncitable cases issued by this Court.
¶2 Merrie Young brought this action seeking to overturn an arbitration award under the
provisions of § 27-5-312, MCA, or § 27-5-313(2), MCA, claiming that she was never
made aware that the arbitration award would be final and binding. The District Court of
the Third Judicial District, Deer Lodge County, dismissed her claim. We affirm.
¶3 The dispositive issue on appeal is whether the District Court erred in denying the
appellant's application to vacate the arbitration award.
Factual and Procedural Background
¶4 The appellant, Merrie G. Young, was employed by the Community Hospital and
Nursing Home of Anaconda (Community Hospital) as its Director of Human Resources
and Risk Management. Until sometime in 1997, the Community Hospital also retained
outside counsel to handle labor relations and union contract negotiations. When outside
counsel informed the hospital in September of 1997 that he intended to retire, Community
Hospital decided to create a new in-house position combining the duties of labor relations
and Human Resources. According to Community Hospital, this position could not be filled
by Young, as she had no labor relations training or experience. Community Hospital
informed Young that her position was being eliminated and offered her a severance
agreement. Young was told she would not be considered for the new position and that
there was not another position available.
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¶5 Young did not accept or reject the severance agreement, but instead took sick leave,
citing stress as a cause of her health problems. She remained employed by the Community
Hospital and received sick leave pay until February 20, 1998, at which point her
accumulated sick leave ran out. On March 19, 1998, Community Hospital offered a new
position to Young in a different area, at the same pay rate she had received as personnel
director. She did not accept or reject the new position. She did not return to work but was
still paid, using the remainder of her vacation pay, until April 7. On April 8, she was
placed on unpaid leave of absence, continuing until she negotiated a severance package or
returned to work at Community Hospital.
¶6 In August of 1998, Young advised Community Hospital, through her attorney, that she
had decided to reject the offer of continuing employment. Her termination was then
processed by Community Hospital as a voluntary resignation effective August 21, 1998.
¶7 On November 20, 1998, Young filed suit against Community Hospital in District
Court, alleging that she had been wrongfully terminated. Later, the parties entered into an
agreement to arbitrate Young's claims pursuant to § 39-2-914, MCA, and the parties filed
a stipulation to dismiss the District Court case, with prejudice.
¶8 The case was heard by an arbitrator who issued his Findings of Fact and Conclusions of
Law on February 15, 2000. The arbitrator determined that Young had not been wrongfully
discharged and found in favor of Community Hospital. Young filed an Application to
Vacate or Modify the Arbitration Award. She contended that she was never apprised by
her attorney, or during the arbitration proceedings below, that the award to be made in the
arbitration would be final and binding.
¶9 The District Court denied Young's application. From that order, Young appeals.
Standard of Review
¶10 This Court reviews the refusal of a district court to vacate, modify or correct an
arbitration award under an abuse of discretion standard. Duchscher v. Vaile (1994), 269
Mont. 1, 5, 887 P.2d 181, 184. The scope of judicial review of an arbitration award is
strictly limited to the statutory provisions governing arbitration. Duchscher, 269 Mont. at
4, 887 P.2d at 183. Montana's statutes establishing the grounds to modify, correct or
vacate an arbitration award generally limit the district court's review to allegations of
fraud, partiality, misconduct, excess of power, or technical problems in the execution of
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the award. Duchscher, 269 Mont. at 4, 887 P.2d at 183.
Discussion
¶11 Judicial review of an arbitration award is strictly limited by statute. Duchscher, 269
Mont. at 4, 887 P.2d at 183. The sole grounds for vacating an arbitration award on
application of a party are specified in § 27-5-312(1), MCA:
(a) the award was procured by corruption, fraud, or other undue means;
(b) there was evident partiality by an arbitrator appointed as a neutral or corruption
in any of the arbitrators or misconduct prejudicing the rights of any party;
(c) the arbitrators exceeded their powers;
(d) the arbitrators refused to postpone the hearing upon sufficient cause being shown
therefor or refused to hear evidence material to the controversy or otherwise so
conducted the hearing, contrary to the provisions of 27-5-213, as to prejudice
substantially the rights of a party; or
(e) there was no arbitration agreement and the issue was not adversely determined in
proceedings under 27-5-115 and the party did not participate in the arbitration
hearing without raising the objection.
¶12 Section 27-5-313(1), MCA, further provides:
Upon application made within 90 days after delivery of a copy of the award to the
applicant, the district court shall modify or correct the award if:
(a) there was an evident miscalculation of figures or an evident mistake in the
description of any person, thing, or property referred to in the award;
(b) the arbitrators awarded upon a matter not submitted to them and the award may
be corrected without affecting the merits of the decision upon the issues submitted;
or
(c) the award is imperfect in a matter of form not affecting the merits of the
controversy.
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¶13 The burden of proof in establishing a statutory basis for vacating an arbitration award
is on the party attacking the award. May v. First Nat. Pawn Brokers, Ltd. (1994), 269
Mont. 19, 25, 887 P.2d 185, 189. Young has not cited to the District Court or to this Court
any statutory basis for vacating the award made by the arbitrator. Moreover, it is clear
from the record that none of the statutorily enumerated grounds exists.
¶14 Young contends that the award should have been vacated under § 27-5-313(1)(c),
MCA, in that the award is imperfect in a matter of form not affecting the merits of the
controversy. The purpose of this provision, however, is to act as a remedy for technical
difficulties in executing an otherwise meritorious award.
¶15 Young's complaint that she was not properly advised by her attorney about the
binding nature of the proceedings is a matter between the two of them. He had apparent
authority to sign the arbitration agreement on her behalf, and was evidently aware of the
binding nature of the proceedings. "[K]nowledge of facts by an attorney is knowledge by
the client, regardless of whether the attorney actually communicated the information to the
client." Kaeding v. W.R. Grace & Co.-Conn. (1998), 289 Mont. 343, 351, 961 P.2d 1256,
1261. Further, Young's participation in the arbitration serves as a ratification of her
attorney's authority to sign the agreement.
¶16 We cannot find that the District Court erred in dismissing Young's application to
vacate the award. The decision of the District Court is affirmed.
/S/ PATRICIA COTTER
We Concur:
/S/ TERRY N. TRIEWEILER
/S/ JIM REGNIER
/S/ W. WILLIAM LEAPHART
/S/ JAMES C. NELSON
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