Commercial Union Insurance Co. v. Maine Employers' Mutual
Insurance Co.
2002 ME 56 04/08/2002
DANA
Arbitrator's decision on apportionment upheld where he did not exceed his scope of authority. Court has narrow review of arbitration decisions, even if the decision includes an error of fact or law.
The Court vacates the Superior Court's decision on apportionment.
In 1993, the employee suffered two work injuries -- one while the employer was insured by Commercial Union Insurance Company, the second while Maine Employers' Mutual Insurance Company was on the risk. In 1996, he filed petitions for compensation. At mediation, the insurers agreed in writing that Maine Employers' would pay 70% of the benefits and Commercial Union 30%.
In 1998, Maine Employers' filed a demand for arbitration of the apportionment. The parties filed other petitions as well. In a 1999 decree, the hearing officer refused to adjust the apportionment, finding that there was "no procedural vehicle" for the Board to make such an adjustment. She added that there was no evidence that a different apportionment would be more appropriate.
The arbitrator, appointed by the Bureau of Insurance pursuant to §354, stayed the arbitration until all Workers' Compensation Board proceedings had concluded.
In arbitration, Maine Employers' submitted to the arbitrator that 50/50 would be a more proper allocation. Commercial Union argued that the mediation agreement was binding on the arbitrator, but conceded that if it was not binding, then a 50/50 apportionment was supported by the current medical evidence. By statute, the arbitrator was required to choose among the submissions of the parties. The arbitrator ruled that the mediation agreement was not binding "for all time" and found a 50/50 allocation reasonable.
Commercial Union appealed to the Superior Court, as review of final agency action. It contended that the mediation agreement should have been upheld or the case should be remanded to the Bureau of Insurance to determine if the evidence supported a different allocation. The Superior Court vacated the arbitrator's award, finding that it had been "improper" to appoint an arbitrator on the apportionment issue where there "no dispute for him to act on," as the parties had agreed to an allocation at mediation. Thus, the mediation apportionment of 70% payment by Maine Employers' and 30% by Commercial Union was reinstated.
Maine Employers' then appealed to the Law Court, which vacated the Superior Court and reinstated the arbitrator's decision. Justice Dana rejected the contention that the arbitrator acted outside his authority by changing an agreed-upon apportionment. He stated that a mediation agreement is as binding on the parties as a formal decree would be. He added, however, that agreements and decrees may be modified if there are "changed circumstances." He found such a change here where Commercial Union had conceded that a 50/50 apportionment was supported by the current medical evidence.
Justice Dana stated that the Court has very narrow review of arbitrators' decisions. The Court will uphold arbitration awards as long as the arbitrator acts within the scope of his or her authority, even if the decision involves an error of law or fact. For example, the Court upheld the decision of an arbitrator who relied on one party's proposal, even though that proposal contradicted the findings of the hearing officer in the case, Livingstone v. A-R Cable Sevs. of Maine (746 A.2d 901, 2000, COMP Vol. 16, No.1).
