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Williams v. Richey

May 29, 2008

JOHN E. WILLIAMS, APPELLANT,
v.
AGNESM. RICHEY, ET AL., APPELLEES.



Appeal from the Superior Court of the District of Columbia. (CA1612-98). (Hon. Judith Bartnoff, Trial Judge).

The opinion of the court was delivered by: Fisher, Associate Judge

Argued January 31, 2006

Before FARRELL and FISHER, Associate Judges, and PRYOR, Senior Judge.

This protracted litigation relates to the winding up of a general partnership that was formed in 1984. Its sole asset -- a residential property -- has been sold, and the proceeds of that sale have been placed in escrow. The issue which divides the parties is how to distribute that money, which amounted to approximately $270,000 in September of 2002. It seems likely that the entire sum will have been dissipated by attorneys' and accountants' fees before this litigation ends.

At an earlier stage of this dispute, the parties had agreed to binding arbitration. In an award dated December 7, 1999, the arbitrator ordered that certain amounts "be added to the partnership accounts of plaintiffs Forsberg and Richey." The sum of $78.22 was to be added "to plaintiff Forsberg's partnership account for a payment made on behalf of the Partnership in response to a delinquent real property tax notice from the District of Columbia." Plaintiff Forsberg was also entitled to $2,310.00 "for payments made to Mr. B. G. Tosi for performing necessary repairs to the Partnership property." The arbitrator ordered that $810.00 be added "to plaintiff Richey's partnership account for payments made to Mr. B. G. Tosi for necessary repairs to the Partnership property."

Because the parties later disagreed about what had been determined in the arbitration, the court sought clarification, posing two questions to the arbitrator:

1. In the arbitration, you ordered certain adjustments to the parties' capital accounts. In ordering those adjustments, did you adjudicate the capital accounts, and did you accept the accounting presented by Mr. Murphy as a proper accounting of the capital accounts?

2. Did you decide whether the plaintiffs were entitled to have their attorneys' fees and expenses paid by Mr. Williams or from his share of the Partnership?

The court emphasized: "In remanding this matter to you for clarification, I am in no way reopening the arbitration proceedings." We discuss the arbitrator's replies in later sections of this opinion.

On August 19, 2003, the Superior Court filed an order granting the plaintiffs' (appellees') petition for distribution of proceeds. The court ordered that "[t]he Partnership funds that currently are being held in escrow shall be distributed in accordance with the parties' capital accounts, as determined in the binding arbitration. The accounting fees of Murphy & Murphy, CPA, LLC shall be considered liabilities of the Partnership." The court also awarded to the plaintiffs attorneys' fees and expenses in the amount of $98,160.98, "to be paid to counsel for the plaintiffs from [Mr. Williams'] share of the Partnership." After a motion for reconsideration was denied, this appeal followed. We affirm in part, reverse in part, and remand for further proceedings.

I. The Remand to the Arbitrator

We are not persuaded by appellant's argument that the trial court lacked authority to seek clarification from the arbitrator. The court's instructions made clear that it was "in no way reopening the arbitration proceedings." Rather, the court sought to clarify the award it was being asked to enforce. When the arbitrator ordered adjustments to partnership accounts, he might simply have been ruling that plaintiffs Forsberg and Richey were entitled to be reimbursed for payments they had made on behalf of the partnership. He might also have gone further and ruled, essentially, that the capital accounts would be accurate once these adjustments had been made -- in other words, he might have adjudicated the capital accounts. The arbitrator's response clarified that he had done the latter, "accept[ing] the accounting presented by Mr. Murphy as a proper accounting of the capital accounts."

There is ample authority for seeking a clarification (as opposed to a reopening) of an arbitrator's award. See, e.g., U.S. Energy Corp. v. Nukem, Inc., 400 F.3d 822, 831 (10th Cir. 2005) ("When there is more than one reasonable interpretation of an arbitration award, a remand for clarification is appropriate."); Hyle v. Doctor's Assocs., Inc., 198 F.3d 368, 370 (2d Cir. 1999) ("[A] district court can remand an award to the arbitrator for clarification where an award is ambiguous."); Colonial Penn Insurance Co. v. Omaha Indemnity Co., 943 F.2d 327, 334 (3rd Cir. 1991) ("Because of the limited purpose of [a remand for clarification] . . ., there is not even a theoretical inconsistency with the functus officio doctrine."); American Postal Workers Union, AFL-CIO v. United States Postal Service, 254 F. Supp. 2d 12, 15 (D.D.C. 2003) ("Because of a remand's limited purpose, remand to clarify an ambiguity does not run afoul of the common-law doctrine of functus officio.") (footnote omitted).*fn1 Contrary to appellant's suggestion, this authority is not limited to cases involving the federal law of labor arbitration contracts.

Jaffe v. Nocera, 493 A.2d 1003 (D.C. 1985), does not hold that the Superior Court lacked the authority to remand for clarification.*fn2 In Jaffe, the arbitrators had entered an award against "Ronald Mickey Nocera d/b/a Papermill Associates, and Columbine, Ltd., General Partner . . . ." When it became clear that Mr. Jaffe intended to enforce the award against Nocera in his personal capacity, the Superior Court remanded the case to the arbitrators for clarification of the identity of the respondent. The arbitrators replied that they had not decided that question because neither party had raised it. Id. at 1007. The court then directed the arbitrators to decide the matter. They responded that the demand was filed against Nocera personally and that they accordingly had ...


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