Based on the case brief below, what are the : In Case Brief Format, what is/are

Question

Based on the case brief below, what are the :

In Case Brief Format, what is/are the:

1.FACTS

2. LEGAL QUESTION:

3.DECISION:

4.COURT’S RATIONALE:

5.DISSENTING OPINION:

6. SIGNIFICANCE OF THE CASE:

___________________________________________________

ATTORNEYS FOR APPELLANT: William Bock, III, David E. Wright- Indianapolis, Indiana

ATTORNEY FOR APPELLEES: Brent D. Taylor -Indianapolis, Indiana

______________________________________________________________________________

In the Indiana Supreme Court

_________________________________

No. 49S05-0512-CV-637

NATARE CORPORATION,

Appellant (Plaintiff below),

v.

D.S.I., DURAPLASTEC SYSTEMS, INC.,D/B/A D.S.I., STEWART J. “JASON” MART, AND AQUATIC RENOVATION SYSTEMS, INC.,Appellees (Defendants below)

_________________________________

Appeal from the Marion Superior Court, No. 49D02-9704-CP-459

The Honorable Kenneth H. Johnson, Judge

_________________________________

On Petition to Transfer from the Indian

a Court of Appeals, No. 49A05-0408-CV-430

_________________________________

October 31, 2006

Sullivan, Justice.

Natare Corporation filed this lawsuit, cont

ending that an arbitrator had wrongly denied it attorney fees to which it was entitled. Indiana law specifies limited bases upon which an arbitrator’s award may be challenged in a trial court. We agree with the trial court that neither of the bases advanced by Natare is available to it here: the arbitrator did not exceed his authority in denying Natare attorney fees, nor did he make his decision to deny Natare attorney fees before the attorney fee issue was presented to him.

Background:

Appellant Natare Corporation and Appellees D.S.I., Duraplastec Systems, Inc., d/b/a D.S.I., Stewart J. “Jason” Mart, and Aquatic Renovation Systems, Inc. (collectively, “D.S.I.”)

compete against each other in business. They settled two pending lawsuits against each other in 1998 by agreeing not to disseminate disparaging information about each other. They also agreed to submit to arbitration in the event of a future dispute “arising out of or relating to” the agree-ment. Lastly, they agreed that if one party breached the settlement agreement, the non-breaching party would be entitled to a minimum of $5,000 inliquidated damages, actual damages if shown,and reasonable attorney fees, costs, and other expenses incurred in pursuit of the claim.

In 2002, Natare sought but failed to receive a contract from a potential customer in Colorado. Natare complained that it had lost the contract because of disparagement on D.S.I.’s part,and that it had suffered $45,000 in actual damages. The parties entered into arbitration based ontheir settlement agreement.After a hearing, arbitrator Jerry Pitt found that although D.S.I. had breached its agree-ment with Natare by disparaging Natare while Natare was seeking the Colorado contract, Natare had failed to show actual damages. The arbitrator awarded Natare $5,000 in liquidated damages for the breach, but no actual damages. The arbitrator further found that neither party was entitled to attorney fees or costs in the matter.

Natare sought judicial review of the arbitrator’s decision, specifically challenging the ar-bitrator’s failure to grant Natare attorney fees. The trial court upheld the arbitration award, finding that the arbitrator had not exceeded his power and that Indiana law did not justify modification or correction of the award.The Court of Appeals reversed the trial court’s decision, holdingthe arbitrator had indeed exceeded his authority,and remanded the case to the arbitrator for con-sideration of reasonable attorney fees.Natare Corp. v. D.S.I., Duraplastec Sys., Inc., 833 N.E.2d276, 80-84 (Ind. Ct. App. 2005). D.S.I. sought, and we granted, transfer.Natare Corp. v. D.S.I.,Duraplastec Sys., Inc., 841 N.E.2d 192 (Ind. 2005) (table).

Discussion:

Arbitration is a long-established method of dispute resolution in Indiana.PSI Energy,Inc. v. AMAX, Inc., 644 N.E.2d 96, 98 (Ind. 1994). We have consistently supported an Indiana policy that favors both arbitration as a means of dispute resolution and the enforcement of arbitration agreements.MPACT Constr. Group, LLC v. Superior Concrete Constructors, Inc., 802 N.E.2d 901, 905 (Ind. 2004); PSI Energy, Inc., 644 N.E.2d at 98-99. But it is statute and not common law that provides the legal infrastructure for arbitration in Indiana. The Legislature’s prescription in this regard is contained in the Uniform Arbitration Act (“the Act”), Indiana Code sections 34-57-2-1 to -22 (2005).1 We have held that an arbitration award should not be set aside unless grounds specified in the Act have been shown, and appellate review of an arbitration award is limited to the determination of such a showing.Sch. City of E. Chi., Ind. v. E. Chi.Fed’n of Teachers, Local No. 511, A.F.T., 622 N.E.2d 166, 168 (Ind. 1993).

The statutory grounds on which Natare seeks attorney fees are sections 34-57-2-13(a) and

34-57-2-14(a) of the Act. They provide:

Upon application of a party, the court shall vacate an award where:

(1)the award was procured by corruption or fraud;

(2)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;

(3)the arbitrators exceeded their powers and the award can not be corrected without affecting the merits of the decision upon the controversy submitted;

(4)the arbitrators refused to postpone the hearing upon sufficient cause being shown therefor or refused to hear evidence

1As its name suggests, the Indiana Uniform Arbitration Act is based on a national model developed by the National Conference of Commissioners on Uniform State Laws, an organization consisting of judges,law professors, and other legal experts from throughout the country, including Indiana. Many states have adopted the Uniform Arbitration Act.Prefatory Note to Uniform Arbitration Act, 7 U.L.A. 2 (2000). Among the advantages of uniformity is that the decisions of the courts in other adopting states are available to help us decide questions that arise under our Act.See I.C. § 34-57-2-21.3 material to the controversy or otherwise so conducted the hearing,contrary to the provisions of section 6 [I.C. § 34-57-2-6] of this chapter, as to prejudice substantially the rights of a party; or (5)there was no arbitration agreement and the issue was not adversely determined in proceedings under section 3 [I.C.§ 34-57-2-3] of this chapter (or IC34-4-2-3 before its repeal), and the party did not participate in the arbitration hearing without raising the objection; but the fact that the relief was such that it could not or would not be granted by a court of law or equity is not ground for vacating or refusing to confirm the award.

I.C. § 34-57-2-13(a).

Upon application made within ninety (90) days after mailing of a copy of the award to the applicant, the court shall modify or correct the award where:                                              (1)there was an evident miscalculation of figures or anevident mistake in the description of any person, thing, or propertyreferred to in the award;

(2) the arbitrators have 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

(3)the award is imperfect in a matter of form, not affecting the merits of the controversy.

I.C. § 34-57-2-14(a).

We set forth these statutes in full primarily to emphasize the extremely limited scope that the Legislature has given courts in reviewing arbitration awards. Natare’s argument under thefirst of these subsections is that “the arbitrator exceeded his authority by refusing to apply the attorney fees and costs provision of the [settlement agreement] and the portion of the award ad- dressing attorneys fees and costs should be vacated pursuant to [Indiana Code section] 34-57-2-13(a)(3).” Appellant’s Br. at 16. Its argument under the second of these subsections is that “[b]ecause the attorneys fees issues had not yet been submitted to him, . . . the arbitrator’s award may also be corrected pursuant to [Indiana Codesection] 34-57-2-14(a)(2).” Appellant’s Br. at 15 n.4.

As to whether the arbitrator exceeded his authority such that Natare is entitled to relief under section 13(a)(3), the arbitrator clearly had the authority not to award attorney fees under 4 the terms of the settlement agreement if the arbitrator concluded that the amount of “reasonable attorney fees” to which Natare was entitled was zero. As such, Natare’s real argument here is that the arbitrator ignored or overlooked his responsibility under the settlement agreement to make a determination of what amount of attorney fees, if any, was reasonable in these circumstances.

In the trial court, Judge Kenneth H. Johnson analyzed this argument and concluded as follows:

The court finds that the Arbitrator did not exceed his power in making this award. Natare argues that the contract language mandates an award of attorney fees, the arbitrator having found that a contractual breach occurred such that the liquidated damages provision was applicable. Natare hypothesizes that the arbitrator either did not consider the contract language or when making his award, a result of this, the second round of arbitration between these parties, forgot to takethe language into consideration.As the parties readily recognize, the disputes between these parties have been ongoing and drawn out over many years. As a matter of fact, as noted above, the arbitration award that forms the basis of the instant motion, is the result of a second arbitration between these parties and before the same arbitrator. The argument that after such protracted proceedings resulting in two detailed reasoned awards such as these, that this arbitrator did not take into account what Natare has characterized as mandatory contract language, is simply not persuasive. Natare is not entitled to a correction o[r] modification of the arbitration award pursuant to [Indiana Code section] 34-57-2-13.

App. at 26-27.

We see little in Judge Johnson’s analysis that we can improve upon. The facts and circumstances of this arbitration clearly point to the arbitrator having exercised his responsibility to consider whether the award of any attorney fees was reasonable here. Without indulging in speculation as to any particular reason or reasons, it is enough to say that there are a number of plausible explanations for why the arbitrator could conclude that the reasonable amount of attorney fees in this circumstance was zero.

As to whether the arbitrator “awarded upon a matter not submitted” to him such that Natare is entitled to relief under section 14(a)(2), we note that this argument is advanced on appealin a single-sentence footnote without supporting argument or authority in apparent contravention of Indiana Appellate Rule 46(A)(8)(a). Appellant’s Br. at 15 n.4. Nevertheless, Judge Johnsonspecifically addressed this contention and again we find his analysis dispositive:

In fact, although finding that Natare was entitled to an award of $5000 under the liquidated damages clause of the Settlement Agreement (Paragraph 2 of the Award dated January 14, 2004) the arbitrator also found th[at] Natare’s claim for actual damages was denied (Paragraph 1of the Award). He further found that neither party was entitled to recover attorney fees (Paragraph 3), that the parties would bear their own costs with respect to this matter (Paragraph 4) and . . . all other claims that were not specifically addressed were denied (Paragraph 5.).

It is clear that the issue of attorney fees was submitted to the arbitrator and that he clearly understood that it had been as he made a specific finding to that effect. It is also clear that Mr. Pitt, in light of his other determinations as set forth above, determined that neither party, as a matter of law, [was] entitled to an award of attorney fees and that no further proceedings were necessary to complete this arbitration. Natare is not entitled to a correction or modification of the arbitration award pursuant to [Indiana Code section] 34-57-2-14(a)(2).

App. at 27-28.

Conclusion:

Having previously granted transfer, we now affirm the judgment of the trial court.

Shepard, C.J., and Dickson, Boehm, and Rucker, JJ., concur.

Explanation / Answer

1. Facts of the case: There are two parties to this case - one being, Natare Corporation, hereafter known as 'Natare' and the other party being, Duraplastec Systems, Inc, hereafter known as 'D.S.I. These two parties have a long standing history of disputes between them. After settling two lawsuits, they entered into a Settlement Agreement, whereby, they agreed not to disclose or distribute any disparaging information about the other. And, the parties agreed that, in the event of a dispute between the parties relating to this Settlement Agreement, such dispute shall be referred to arbitration. The Settlement Agreement further provided that, if a party is found to be in breach of the Settlement Agreement, the non-breaching party would be entitled to a minimum of $5,000 in liquidated damages, actual damages if shown and reasonable attorney fees, costs, and other expenses incurred in pursuit of the claim. In 2002, Natare sought but failed to receive a contract from a potential customer in Colorado. Natare complained that it had lost the contract because of disparagement on D.S.I.’s part, and that it had suffered $45,000 in actual damages. The parties entered into arbitration based on their Settlement Agreement. The arbitrator found that, although D.S.I. had breached the Settlement Agreement with Natare by disparaging Natare while Natare was seeking the Colorado contract, Natare had failed to show actual damages. The arbitrator awarded Natare $5,000 in liquidated damages for the breach, but no actual damages. The arbitrator further found that neither party was entitled to attorney fees or costs in the matter.

Natare sought judicial review of the arbitrator’s decision, specifically challenging the arbitrator’s failure to grant Natare attorney fees. The trial court upheld the arbitration award. The Court of Appeals reversed the trial court’s decision.

2. Legal Question: The legal question here is, whether the arbitrator exceeded his authority in denying attorney fees to Natare and whether as per Indiana law this decision of the arbitrator justifies modification or correction of the award.

3. Decision: The Indiana Supreme Court has upheld the decision of the trial court which stated that, the arbitrator had not exceeded his power and that Indiana law did not justify modification or correction of the award.

4. Court’s rationale: As to whether the arbitrator exceeded his authority such that Natare is entitled to relief under Section 13(a)(3) of the Uniform Arbitration Act, the arbitrator clearly had the authority not to award attorney fees under the terms of the Settlement Agreement if the arbitrator concluded that the amount of “reasonable attorney fees” to which Natare was entitled was zero.

As to whether the arbitrator “awarded upon a matter not submitted” to him such that Natare is entitled to relief under Section 14(a)(2) of the Uniform Arbitration Act, it is clear that the issue of attorney fees was submitted to the arbitrator and that he clearly understood that it had been as he made a specific finding to that effect. It is also clear that the arbitrator determined that neither party, as a matter of law, was entitled to an award of attorney fees and that no further proceedings were necessary to complete this arbitration. Therefore, Natare is not entitled to a correction or modification of the arbitration award pursuant to [Indiana Code section] 34-57-2-14(a)(2).

5. Dissenting Opinion: There is no dissenting opinion in this case before the Indiana Supreme Court.

6. Significance of the case: The significance of the case is that an arbitrator’s award shall not be set aside unless the statutory grounds listed in the Uniform Arbitration Act is satisfied. This case re-affirms the faith in alternate dispute resolution system.

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