O'Rourke v. Lunde and The Housing Group Limited Partnership, 104 A.3d 92

Background

In 1979 parties formed a limited partnership to own a 25‑unit Section 8 apartment; Lunde was general partner and plaintiffs were limited partners. The partnership term expired December 31, 2009, with liquidation required and a 50/50 split of net proceeds.
The partnership agreement contained a broad arbitration clause covering disputes "in connection with the Agreement or in connection with the dissolution of the Partnership."
Lunde failed to promptly liquidate; limited partners sought appointment of a receiver in superior court. The court appointed a receiver, later removed Lunde for noncooperation, and the receiver sold the property.
Lunde demanded arbitration; the court denied a stay of court proceedings but reserved for the court certain claims (fraudulent conveyance and attorney’s fees related to receivership proceedings). An arbitrator awarded distributions and surcharged Lunde’s share for receivership costs, AAA/arbitrator fees, and plaintiffs’ attorney’s fees, leaving determination of the final attorney‑fee amount to the superior court.
The superior court confirmed the arbitration award, denied Lunde’s motion to vacate as untimely under the Vermont Arbitration Act (VAA) (but the Supreme Court held the FAA governed), awarded additional post‑award fees, and entered final judgment. The Supreme Court affirms on the merits but remands to resolve an apparent double‑charge of $53,206.92.

Issues

Issue	Plaintiffs' Argument	Lunde's Argument	Held
Did the superior court have jurisdiction to appoint a receiver despite the arbitration clause?	Arbitration clause did not oust court power; court may appoint receivers.	Arbitration clause required disputes about dissolution to be arbitrated, so court lacked power to appoint receiver.	Court retained inherent equitable power to appoint a receiver; arbitration clause did not divest it.
Which arbitration statute governs timeliness to vacate the award?	VAA orders confirming awards are appealable; Lunde's challenges were untimely.	Agreement predates VAA; FAA governs so three‑month FAA window applied and Lunde’s motion was timely.	FAA applies to this 1979 agreement; trial court erred applying VAA timeliness, but error was harmless on merits.
Could the arbitrator award attorney’s fees (contrary to the American Rule)?	Arbitrator had authority under the parties’ broad submission to decide costs and fee allocation; award proper.	American Rule/absence of contractual fee‑shifting bars award; arbitrator exceeded powers.	Arbitrator had authority under the agreement to allocate costs; court may not vacate award for legal error in arbitrator’s application of law.
Are the attorney’s fees properly accounted for and collectible from Lunde’s share?	Fees (including receiver and plaintiffs’ counsel’s work) were reasonable and avoidable due to Lunde’s conduct; should surcharge Lunde.	Some fees arise from receivership and counsel conflict; potential double‑charging identified.	Court confirmed fees as reasonable but remanded for limited hearing to resolve apparent double‑charge of $53,206.92.

Key Cases Cited

Hewlett‑Packard Co. v. Berg, 61 F.3d 101 (1st Cir.) (order confirming arbitration award is immediately appealable but appeal is permissive)
Bowen v. Amoco Pipeline Co., 254 F.3d 925 (10th Cir.) (waiver of appellate review must be clear and unequivocal)
DiRussa v. Dean Witter Reynolds, Inc., 121 F.3d 818 (2d Cir.) (review for whether arbitrator had power to reach an issue, not correctness of decision)
Kolel Beth Yechiel Mechil of Tartikov, Inc. v. YLL Irrevocable Trust, 729 F.3d 99 (2d Cir.) (FAA limits grounds for modifying or vacating awards)
Vt. Built, Inc. v. Krolick, 969 A.2d 80 (Vt.) (arbitrator’s factual and legal judgments are not subject to full judicial review when within submitted scope)
Lamell Lumber Corp. v. Newstress Int’l, Inc., 938 A.2d 1215 (Vt.) (VAA does not oust superior court’s general jurisdiction over contract suits)