Osg Ship Management, Inc. v. Sisto Andrew
75477-7
| Wash. Ct. App. | Jul 3, 2017Background
- Andrew, a seaman, was injured in 2009; OSG paid medical costs and maintenance but Andrew sued for additional compensation.
- Four days before trial the parties mediated; Andrew presented medical and vocational expert testimony and claimed permanent inability to work at sea.
- OSG offered a larger settlement conditioned on a "No Sail" provision: Andrew would surrender his merchant mariner credentials and not seek mariner work in the U.S. for 25 years; they reduced the agreement to writing and OSG paid $525,000.
- Months later Andrew repudiated the agreement, later regained credentials, and OSG initiated arbitration claiming material breach.
- The arbitrator found Andrew materially breached, and because he had spent nearly all settlement funds, ordered equitable relief (injunction and specific performance) requiring Andrew to relinquish credentials. Superior court confirmed the award and awarded fees; Andrew appealed.
Issues
| Issue | Andrew's Argument | OSG's Argument | Held |
|---|---|---|---|
| Whether arbitrator exceeded powers by ordering equitable relief | The No Sail remedy offends public policy (merchant marine staffing; unlawful restraint of trade) and thus exceeds arbitrator authority | Arbitrator had power to grant equitable remedies for breach; enforcement prevents unjust enrichment and respects settlement finality | The award did not show on its face that the arbitrator exceeded powers; confirmed |
| Whether the No Sail provision is an unlawful restraint of trade under RCW 19.86.030 | Provision strips worker of right to work and is an illegal restraint of trade | Provision is a bargained-for settlement term without anti-competitive market effect; not covered by statute | Arbitrator reasonably concluded it was not an unlawful restraint of trade |
| Whether a dominant public policy (filling merchant marine billets) invalidates the No Sail clause | Public policy requires filling billets; clause conflicts with that policy | No explicit, well-defined statutory or precedential policy that prohibits such settlement terms; freedom of contract and arbitration finality weigh against vacating award | No explicit dominant public policy shown; argument fails |
| Entitlement to attorney fees (below and on appeal) | Contesting fees as prevailing party award | OSG prevailed at arbitration and confirmation; RCW and contract permit fees | Trial court and appellate court awarded fees to OSG; fees on appeal granted subject to RAP compliance |
Key Cases Cited
- Salewski v. Pilchuck Veterinary Hosp., Inc., P.S., 189 Wn. App. 898 (Wash. Ct. App. 2015) (party seeking to vacate arbitration award bears burden; courts may only vacate when error appears on the face of the award)
- Intl Union of Operating Eng'rs, Local 286 v. Port of Seattle, 176 Wn.2d 712 (Wash. 2013) (limits on judicial review of arbitration awards and policy favoring finality of arbitration)
- Sea-Land Serv., Inc. v. Sellan, 231 F.3d 848 (11th Cir. 2000) (upholding enforceability of settlement containing no-sail/no-work provision and applying equitable estoppel to prevent unjust enrichment)