One Court of Justice

In 36^th District Court v Michigan American Federation of Sate, County and Municipal Employees, the Court of Appeals decided several issues arising out of arbitration between the 36^th District Court and AFSCME over the chief judge’s decision not to re-appoint four judicial officers.  First, the Court of Appeals held that the trial court, and not the arbitrator, should have determined whether the contract containing an arbitration clause had been terminated, thereby eliminating the contractual duty to arbitrate.  The Court of Appeals reasoned its holding was consistent with the common law in Michigan that requires the court, not an arbitrator, to decide whether a contract to arbitrate exists.   Second, the Court of Appeals determined that in this case, the 36^th District Court did not terminate the collective bargaining agreement because the 36th District Court only gave notice of its intent to terminate or modify the agreement.  The 36th District Court’s notice preserved its right to terminate, but it did not effectuate that right.  Third, the Court of Appeals concluded that the arbitrator exceeded its authority by ordering the chief judge to re-appoint court officers to their former positions.  The collective bargaining agreement stated that the arbitrator would be without authority to require the employer to delegate any power or responsibility which by State law the employer could not delegate.  Under Michigan Court Rules, the only the chief judge has the authority to make reappointment decisions, and the judicial branch is constitutionally accountable for those who provide court services.  Accordingly, under the collective bargaining agreement, the arbitrator exceeded his authority by requiring the chief judge to re-appoint the judicial officers. 

The Michigan Court of Appeals issued a per curiam opinion in AFSCME v. Hamtramck Housing Comm’n, No. 293505 (Nov. 18, 2010), holding that the trial court erred when it dismissed the complaint for arbitration on the basis of waiver and laches.  When the parties have contractually agreed to arbitrate, all doubts regarding the proper forum should be resolved in favor of arbitration.  Accordingly, the arbitrator should decide the issue of whether the grievance was timely filed.

In AFSCME Council 25 v County of Wayne, No. 290273, the Court of Appeals held that a collective bargaining agreement, which contained contractual language limiting the right of arbitration to disputes arising “during the term of [the] Agreement,” did not govern a dispute arising after the collective bargaining agreement expired and, thus, the dispute was not arbitrable. Read more »

In May 2007, Salvatore moved to amend the trial court’s award of spousal support or property award to his ex-wife Mary, or to make installment payments.  The trial court referred the case to the Friend of the Court for an evidentiary hearing.  However, the parties then agreed to submit to binding arbitration.  In September 2008, the arbitrator’s final award orderd Salvatore to pay Mary $485,155, for Mary’s interest in a company, in installments, without interest, and terminated his spousal support obligation effective May 2007.  The arbitrator granted Salvatore credit for the spousal support that he had paid Mary between May 2007 and September 2008, and ordered that he would continue to pay $5,500 a month until he paid the remaining $391,655 to satisfy the award.

In December 2008, the trial court issued an order confirming the arbitrator’s award and denied Mary’s motions to vacate, modify, or correct the arbitration award.  Salvatore filed a motion to reduce his monthly payments, and in June 2009 after a hearing on the matter, the trial court reduced his monthly payments to $3,870 without modifying the total amount that was awarded.  Mary appealed both orders.  In Cipriano v. Cipriano, Nos. 291377 and 292806, a per curiam opinion, the Court of Appeals affirmed the first order and reversed the second order.  Even though Salvatore had ex parte communication with the arbitrator, the Court of Appeals determined that it did not violate the Domestic Relations Arbitration Act (DRAA) because it did not violate the procedures for the arbitration in Mary and Salvatore’s arbitration agreement. Parties are required under the DRAA to sign an agreement for binding aribtration that delineates the powers and duties of the arbitrator.  Unlike the required formality of courts, arbitration allows parties to determine the procedures of their proceeding.  Despite the ex parte communication, the Court of Appeals held that the trial court did not err in confirming the arbitrator’s award.  The Court of Appeals reversed the second order because under MCR 3.602(K)(1), since there was no pending action between the parties, a complaint to modify the arbitration award must have been filed within 21 days (Salvatore filed his complaint several months after), and neither Salvatore nor the trial court referred any provisions in MCR 3.602(K)(2), the grounds for modification of an arbitration award, to justify modification.

The Court of Appeals published its per curiam opinion in Jaguar Trading Ltd Partnership v. Presler, Case No. 290972 on August 3, 2010.  Here, a plaintiff sought to confirm an arbitration award in circuit court by filing the arbitration award with the court.  The defendant sought summary judgment on the ground that a required complaint had not been filed.  Defendant further argued that because a complaint was not filed within the applicable one-year limitations period, confirmation of the award would be time-barred.  Based on its reading of MCR 3.602, the Court of Appeals concluded that this request for circuit court relief must occur within a civil action, and thus is subject to the requirements of a civil action, including the filing of a complaint.  The Court of Appeals, however, declined to find that any subsequent request for confirmation would be time-barred because the rule only required the filing of the award within one year (which plaintiff did).

Yesterday, the Michigan Supreme Court granted the application for leave to appeal in Yvletel-Rivard v. Rivard, No. 140065, and directed the parties to address three questions:

1. Whether MCL § 600.5078(1) and (3) contemplate no more than two arbitration awards (the initial written award and any modified award following a motion to correct errors and omissions);
2. Whether MCL § 600.5078(3) does not permit the filing of more than one motion to correct errors and omission; and
3. Whether the defendant’s motion to vacate the award was untimely.

The Court also asked the parties in Brown v. Taubman Co., No. 140385, to address whether indicia of a potentially slippery condition are sufficient to make so-called “black ice” open and obvious.

The Court also peremptorily reversed three Court of Appeals decisions in lieu of granting the application for leave to appeal and denied 10 applications for leave to appeal.  The peremptory reversals are discussed after the jump.

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The Michigan Court of Appeals published a unanimous decision on October 15, 2009 in Vyletel-Rivard v. Rivard, No. 285210, in which the court held that a motion to vacate a domestic relations arbitration award must be filed either 1) within 21 days after delivery of the initial written arbitration award; or 2) if a motion to correct errors or omissions is filed, within 21 days after delivery of the decision on that motion.  The defendant filed a second motion to correct errors or omissions after receiving the decision on his first such motion, but the Court held that a second motion was not authorized by the statute.  He then filed a motion to vacate only after receiving a decision on his second motion.  Because his motion to vacate was filed more than three months after the decision on the first motion to correct errors, it was untimely.

Yesterday, in NSK Corp. v. Robert Bosch Corp., No. 283048, the Michigan Court of Appeals in an unpublished opinion reaffirmed the strong public policy in favor of arbitrability.  NSK and Bosch entered into a settlement agreement and incorporated Bosch’s standard terms and conditions.  Those terms included an arbitration provision.  The court affirmed that the parties’ dispute arising out of the settlement agreement was arbitrable, noting that any doubts about whether a dispute is arbitrable must be resolved in favor of arbitration.  Disclaimer:  WNJ represented the prevailing defendant in this appeal.