Jordan v. Hubbard
1 CA-CV 16-0060
| Ariz. Ct. App. | May 4, 2017Background
- Grace Roddick created the Roddick Family Trust naming a $200,000 distribution to her hairdresser Barbara Middleton if Barbara was living when the distribution was made; otherwise the gift would lapse and remaining separate property would go to Grace's brother, James Hubbard (Trustee).
- Barbara survived Grace but died before receiving the $200,000; Barbara’s estate sued Hubbard (2009) seeking the distribution; Hubbard compelled arbitration under the Trust/Integrity Agreement and an Addendum selecting private arbitrator Mark Lassiter.
- Lassiter issued a Notice of Decision (Nov. 2014) and later a Final Award (Feb. 2015) finding Barbara’s right vested, awarding $200,000 plus interest, costs and fees; Lassiter also rejected a purported January 1, 2015 “Modification by Protector” in which Trust Protector Richard Durfee attempted to void the special-beneficiary gift.
- Durfee (acting as Trust Protector) and Hubbard sought to derail Lassiter’s award by (1) asserting a prior “binding interpretation” (2009) and the 2015 Modification, (2) appointing a second arbitrator (Les Raatz) who ruled for Hubbard, and (3) seeking vacatur of Lassiter’s award in superior court.
- The superior court confirmed Lassiter’s award, denied motions to vacate it, denied Durfee’s late motion to intervene, and refused to confirm the Raatz award; the Court of Appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the superior court properly confirmed the Lassiter arbitration award | Jordan (Barbara’s estate) argued the arbitrator acted within the parties’ agreement and correctly awarded the vested $200,000 to the estate | Hubbard argued Lassiter exceeded powers, manifestly disregarded the Trust and law, and ignored the Trust Protector’s binding interpretation/Modification | Affirmed: arbitrator’s legal/factual rulings are final absent exceeding the scope of submission; Lassiter did not exceed powers and decision stands |
| Whether arbitrator Lassiter showed evident partiality | Estate: Lassiter remained neutral and addressed improper attempts by Durfee to usurp the process | Hubbard: Lassiter’s critical findings about Hubbard and Durfee show bias | Affirmed: record does not show disqualifying partiality; court reasonably found Lassiter acted appropriately |
| Whether Durfee could intervene as Trust Protector in the superior court action | Estate: intervention not necessary; parties’ interests were adjudicated in arbitration and protected | Durfee (proposed intervenor): claimed interest in enforcing Grantor’s intent and Trust administration | Denied: motion untimely, prejudicial, and Durfee’s interests were adequately represented by existing parties; permissive intervention also denied |
| Whether competing Raatz award should be confirmed / Lassiter award vacated | Durfee/Hubbard sought to confirm Raatz and vacate Lassiter based on Protector’s actions and alternative arbitration | Estate argued Raatz award came from a nonparticipatory second proceeding and could not override the binding Lassiter award | Affirmed: Lassiter award confirmed; Raatz award not given effect and motions to vacate denied |
Key Cases Cited
- RS Indus., Inc. v. Candrian, 240 Ariz. 132 (App. 2016) (judicial review of arbitration awards is narrowly limited)
- Smitty's Super-Valu, Inc. v. Pasqualetti, 22 Ariz. App. 178 (App. 1974) (arbitrator powers are defined by parties' agreement; courts defer to arbitrators unless they exceed submission)
- Wages v. Smith Barney Harris Upham & Co., 188 Ariz. 525 (App. 1997) (party challenging an award bears burden to prove grounds to vacate, including evident partiality)
- Woodbridge Structured Funding, LLC v. Ariz. Lottery, 235 Ariz. 25 (App. 2014) (standards for intervention under Rule 24)
- Forszt v. Rodriguez, 212 Ariz. 263 (App. 2006) (appellate court may affirm trial court for any correct reason appearing in record)
- Dowling v. Stapley, 221 Ariz. 251 (App. 2009) (de novo review of intervention-of-right; factors for permissive intervention)
- Weaver v. Synthes, Ltd. (U.S.A.), 162 Ariz. 442 (App. 1989) (timeliness required for permissive intervention)