462 F. App'x 517
6th Cir.2012Background
- MCD and Tiburon contracted to implement an integrated public safety system; disputes were privately arbitrated.
- Arbitrator found MCD failed to terminate for cause and awarded Tiburon damages and costs.
- MCD moved to vacate the award; district courtvacated under Michigan law, remanding for new arbitration.
- Choice-of-law: contract expressly applies Michigan law and Michigan Arbitration Act governs post-award proceedings.
- District court concluded arbitrator exceeded powers by misallocating DRP burden and by treating Section 13 as exclusive remedy; remanded.
- This court affirms vacatur and remand to a new arbitrator for all contract claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did arbitrator exceed powers by placing DRP burden on MCD? | MCD: DRP burden mutual; arbitration exceeded contract terms. | Tiburon: DRP burden properly analyzed as procedural matter within arbitrator's discretion. | Affirmed vacatur; arbitrator exceeded powers. |
| Was Section 13 improperly treated as exclusive remedy for breach? | MCD: Section 13 not exclusive; other contract claims exist. | Tiburon: arbitrator correctly construed remedies within contract terms. | Affirmed vacatur; merits review required by remand. |
| Should remand be to a new arbitrator or the original one? | MCD favored new arbitrator to avoid functus officio concerns. | Tiburon preferred original arbitrator unless functus officio prevented. | Remand to a new arbitrator; efficiency and functus officio concerns warrant new umpire. |
Key Cases Cited
- Gavin v. Detroit Automobile Inter-Insurance Exchange, 331 N.W.2d 430 (Mich. 1982) (arbitrator may exceed powers by misapplying contract terms)
- Green v. Ameritech Corp., 200 F.3d 967 (6th Cir. 2000) (narrow review of arbitrator decisions; functus officio considerations)
- Mead Corp. v. ABB Power Generation, Inc., 319 F.3d 790 (6th Cir. 2003) (remedies may be pursued independently unless contract limits them)
- Hall Street Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576 (U.S. Supreme Court 2008) (court may not modify arbitration exemptions beyond FAA framework)
- Lynder v. S.S. Kresge Co., 45 N.W.2d 319 (Mich. 1951) (termination rights and contract remedies; implied terms)
- Convergent Grp. Corp. v. County of Kent, 266 F. Supp. 2d 647 (W.D. Mich. 2003) (termination remedies may coexist with other contract claims)
- Morley v. Auto. Club of Mich., 581 N.W.2d 237 (Mich. 1998) (implied terms and mutual obligations in contracts)
- Maclean v. Fitzsimons, 45 N.W. 145 (Mich. 1890) (what is plainly implied from contract language)