The parties to this litigation agreed to submit all of their claims, counterclaims and cross-claims to mediation before Attorney Jerrol Crouter on June 10, 2016. In the mediation, the parties agreed to a settlement which required them to “exchange mutual releases of all claims that exist as of the date of the release.” The settlement term sheet provided that “any disputes as to the language of this Term Sheet or the final settlement documents will be submitted to arbitration” with Attorney Crouter. There was a significant delay in the execution of the releases, and in the interim a leaky dishwasher in the restaurant operated by 3Crow and Hixson caused damage to the property that they leased from Rockwell, and 3Crow terminated its lease before the agreedupon termination date of February 28, 2017. An arbitration hearing was held before Attorney Crouter on December 8, 2016. The essential disagreement between the parties was whether the effective date of the releases should be the date of the mediation or the date the releases were signed [by the date of the hearing no releases had been signed]. In a pair of decisions issued on December 19 and 28, 2016, Attorney Crouter ruled that all of the parties’ claims were released with the exception of three (3) claims that he specifically identified, which arose after the date of the successful mediation. Rockwell then brought suit in Superior Court to vacate the awards.
Plaintiff Rockwell’s argument was that the arbitrator was limited to two choices: (1) the releases should be effective as of the date of the mediation or (2) the releases should be effective as of the date they were signed. Rockwell argued that the arbitrator exceeded his authority by “carving out” claims that arose subsequent to the date of the mediation, from the releases. The Court rejected this argument. Neither side had challenged Crouter’s authority to arbitrate the dispute, the language of the settlement set forth in the Term Sheet gave the arbitrator broad authority to resolve “any disputes,” and the arbitrator’s decision to carve out claims arising after the date of the mediation was not arbitrary or capricious.
Rockwell v. 3Crow, LLC and Joshua Hixson, et al., Business and Consumer Court, BCD-CV-15-62; BCD-CV-16-026 (Murphy, J. May 22, 2017).
About the blogger:
Phil Moss is a member of the State of Maine’s Panel of Mediators, and has been active in alternative dispute resolution since he first entered the legal profession. In 1975, Phil was one of fifty attorneys who volunteered to participate in the pilot mediation program for the Boston Municipal Court, and in subsequent years he volunteered as a participant in pilot mediation projects for the Maine Human Rights Commission and the Maine Superior Court system. As an advocate he participated in well over 100 arbitrations and mediations, involving the hospitality industry, trucking and warehousing, supermarkets and public utilities (including nuclear power), among others. For a number of years prior to his retirement from the active practice of law, Phil was included in New England Super Lawyers, and listed in Chambers USA, America’s Leading Business Lawyers and in The Best Lawyers in America. Phil has worked pro bono publico for a number of organizations, including the Jewish Community Center of Portland, ME, the Pine Tree Council of the Boy Scouts of America and the Maine chapter of NAMI (National Alliance on Mental Illness).