Facts: Petitioner Michael Broom filed a notice of claim against respondent Morgan Stanley D.W., Inc. which alleged that Morgan Stanley had breached its fiduciary and contractual duties, made numerous misrepresentations and omissions, and violated Washington’s Consumer Protection Act (Washington Revised Code §19.86) in managing his father’s investment account prior to his death. The dispute was submitted by the parties to arbitration by the National Association of Securities Dealers, which resulted in the arbitration panel dismissing all of Broom’s claims on grounds that the statute of limitations had expired. Broom subsequently petitioned the Superior Court for King County to vacate the arbitration panel’s decision, asserting that the decision had been based upon a facial legal error insofar as the state’s statute of limitations does not apply to arbitration. The trial court agreed and vacated the arbitration panel’s decision. Upon appeal, the Washington Court of Appeals affirmed the trial court’s decision. Morgan Stanley appealed this decision to the Supreme Court of Washington.
Question(s): Is facial legal error sufficient basis for vacating an arbitration panel’s decision?
If so, does the statute of limitations apply to arbitration?
Conclusion: Justice Charles W. Johnson’s opinion for the Court concluded that as the Washington Arbitration Act (Washington Revised Code §7.04) authorizes courts to vacate the decisions of arbitration panels in instances in which arbitrators exceed their powers, facial errors of law are sufficient grounds for vacation. Thus, as the language of statutes of limitations clearly indicates that they were not intended to apply to arbitration, the Court affirmed the trial court’s vacation of the arbitration panel’s decision.
Docket No. 82311-1 (from Court of Appeals Division I Case No. 60115-6)
Petitioner: Morgan Stanley D.W., Inc.
(Counsel: Michael T. Garone, Thomas Vincent Dulcich, and Stephanie Pennix Berntsen)
Respondent: Michael Broom
(Counsel: Kevin Patrick Sullivan and Michael T. Schein)
Briefs:
- Amicus of Agc of Wa
- Amicus of Sifma
- Answer
- Answer to Amicus
- Appellant Brief
- Errata to Petitoner's Supplemental Brief
- Petition for Review
- Petitioners 3rd Statement of Additional Auth
- Petitioners 4th Statement of Additional Auth
- Petitioners' 2nd Statement of Additional Auth
- Petitioners' Answer to Amicus
- Piaba Amicus
- Reply
- Respondent's Revised 2nd Statement of Additional Auth
- Respondents Brief
- Sifma Amicus
- Statement of Additional Auth
- Statement of Additional Authority Dated 1-19-10
- Supplemental Brief of Petitioners
- Supplemental Brief of Respondents Broom
- Wsajf Amicus
Argument: Thursday, January 28, 2010 9:00am
[Source: TVW, http://tvw.org]
Audio: Washington Supreme Court
Decided: Thursday, July 22nd, 2010
Prevailing Party: Michael Broom (Respondent)
Vote: 5-4
Citation: Pending
Court: Madsen1 Court (2010-)
Madsen
(Dissent)
Johnson
(Majority)
Alexander
Sanders
Chambers
Owens
Fairhurst
Johnson
Stephens
Note: We post only slip opinion(s) as published at the time of the decision. Please consult Washington Reports printed volumes for the opinion(s) in their final form. Each opinion should appear next to the Justice who authored it.