On its third trip to the Hawai`i appellate courts, the decision in Mikelson v. United Services Automobile Assoc., No. 28332 (Haw. Ct. App. March 24, 2010)(opinion here) addressed whether the Circuit Court's confirmation of the arbitration award was appropriate when the insurer had already paid the arbitration award. (Disclosure - our office is involved in this case).
The case involved the insured's injury sustained in 1999 in an accident while riding his motorcycle. After settling with the other driver, the insured sued USAA for underinsured motorist benefits under his policy. Pursuant to the terms of the policy, the dispute went to arbitration to determine the insured's damages. On October 4, 2006, the Arbitrator's Final Award was issued. On October 17, 2006, the insured filed a Motion to Confirm pursuant to Hawai`i's Arbitration Statute. USAA opposed the Motion, arguing the Circuit Court lacked jurisdiction because USAA had paid the entire award, making the Motion moot. The Circuit Court granted the Motion to Confirm and USAA appealed.
Because the Hawai`i Arbitration Statute was virtually identical to the language in the federal arbitration statute, the court looked to federal authority to interpret the pertinent provisions. Many federal cases held that whether an award had been satisfied had no bearing on whether the arbitration award should be confirmed. Further, confirmation was concerned with the propriety of the award itself and was unrelated to enforcement of the award. Other courts, however, did not distinguish between confirmation and enforcement of an arbitration award and, thus, would not confirm an award that had been satisfied.
The Court of Appeals found the former cases demonstrating the need to separate confirmation and enforcement proceedings to be more persuasive. Further, USAA's sole argument was that confirmation was moot. Consequently, because USAA failed to challenge confirmation of the award based upon any of the specified statutory grounds in the Arbitration Statute, the Circuit Court was obligated to confirm the award. Therefore, the Circuit Court did not err and its decision was affirmed.
