|
The Ohio Court of Appeals reversed vacatur of an alleged sham arbitration award because the party challenging the award submitted no evidence in support of its motion.
In Citibank South Dakota, N.A. v. Wood, No. 2005-CA-120, 2006 WL 3095744 (Ohio Ct. App. Oct. 27, 2006), Wood initiated arbitration before an entity known as BlueRidge Arbitration (BlueRidge). The arbitrator issued an award finding that Wood and Citibank had fully settled Wood’s credit card account.
Citibank filed a motion to vacate the award. Wood filed a counterclaim requesting confirmation of the award. The trial court vacated the award on the ground that BlueRidge was not among the arbitration administrators specified in the parties’ agreement.
Wood alleged several errors on appeal. Most notably, he argued that the trial court erred by vacating the award when Citibank had not submitted any evidence in support of its motion.
The Court agreed. Specifically, the Court discussed the lack of evidence that Citibank’s motion was timely. Under the Ohio Arbitration Act, a motion to vacate “must be served upon the adverse party . . . within three months after the award is delivered” as measured by the post-mark, not the date of receipt. As the Court noted, Citibank’s motion appeared untimely on its face because Citibank did not serve its motion to vacate until July 9, 2005, but the award indicated that it was mailed to Citibank on April 4, 2005, which would make July 4, 2005 the deadline.
The Court also noted that Citibank failed to present any evidence that would justify vacating the award. In support of its motion, Citibank argued that BlueRidge was not among the designated arbitration administrators, but apart from the unsworn statements of Citibank’s attorney, there was no evidence of that fact. By the same token, there was no evidence to justify dismissal of Wood’s request for confirmation of the award, since an arbitration award must be confirmed if it is not vacated or modified.
Given the dearth of evidence, the Court reversed the trial court’s ruling and remanded the case with instructions to allow Citibank and Wood to present evidence on the timeliness and merits of Citibank’s motion to vacate.
Courts routinely condemn bogus arbitration proceedings. For example, in Chase Bank USA, N.A. v. Dispute Resolution Arbitration Group, No. 2:05 CV 1208, 2006 WL 1663823 (D. Nev. June 9, 2006), the court ordered several entities to cease “their alleged sham arbitration hearings” because the lender was likely to prevail on its claim for tortious interference with contractual relations. However, as this case demonstrates, a party must still be prepared to satisfy its burden of proof no matter how dubious the claims of its adversary.
Subscribe to a free weekly update on ADR case law and
legislation
|