|
The Court of Appeals of Tennessee permitted an attorney to seek vacatur of an arbitral award where the arbitrators allegedly exceeded their powers by deciding separate issues not authorized by the arbitration agreement.
In Crain v. Chambers, No. M2005-01236-COA-R3-CV, 2006 WL 3093227 (Tenn. Ct. App. Oct. 31, 2006), Chambers retained attorney Crain to nullify a prenuptial agreement and collect an elective share of her deceased husband’s estate. Chambers agreed to pay a contingency fee for all of Crain’s services, except for those related to collection of a promissory note. When Chambers settled her claim with the estate, she argued that Crain should be compensated by an hourly rate, rather than the 33 percent contingency fee. Crain and Chambers submitted their dispute to arbitration before the Fee Dispute Committee of the Nashville Bar Association (Committee).
The Committee found that Crain was entitled only to an hourly fee, since Chambers’ recovery was based on property, rather than an asset of the estate. Crain moved to vacate the arbitral award, but the trial court dismissed the motion.
On appeal, the Court reversed, finding that Crain had a viable claim for relief based on the argument that the arbitrators exceeded their powers. Tenn. Code. Ann. §29-5-313(a). The Committee was only authorized to determine whether the requested fees were “reasonable” in light of the quantity and quality of Crain’s work. In the eyes of the Court, this determination was more limited than the question of whether or not Chambers’ recovery guaranteed Crain a contingency fee in the first place. Since the arbitrators were not authorized to decide this question under the arbitration agreement, the arbitrators had exceeded their powers and the award could be vacated.
Subscribe to a free weekly update on ADR case law and
legislation
|