Stephens v. Applejack Art Partners, Inc., 2011 VT 40 (mem.).
In this recent opinion discussing the enforcement of arbitration awards, the SCOV very quickly and concisely upholds the trial court’s order enforcing an arbitration award and entering judgment in plaintiff’s favor.
corporation that produced and sold artwork, employed Plaintiff, who subsequently invested over a million dollars in the company in exchange for stock shares. In 2008, Applejack terminated Plaintiff’s employment, and Plaintiff filed suit. Applejack subsequently counterclaimed and sought an order enforcing its right to repurchase Plaintiff’s stock shares. Vermont
The parties engaged in arbitration, resulting in a finding by the arbitrator that Applejack had the right to repurchase Plaintiff’s shares pursuant to the stockholder’s agreement. The agreement identified the specific formula for valuing the shares. The arbitrator ordered Plaintiff to transfer his stock to an escrow account pending full performance of all payment obligations, which would total $1,538,164.50. The arbitrator’s award was confirmed by the superior court and final judgment was entered requiring specific performance that the parties attend a closing no later than Nov. 14, 2009, at which time Applejack would convey a promissory note to repurchase the shares.
Applejack did not meet its first payment obligation, so Plaintiff brought an enforcement action in court. The court found that Applejack’s default went to the essence of the Arbitrator’s award and ordered judgment against Applejack for the full amount of $1,538,164.50 plus interest.
Applejack appealed the court’s order, arguing instead that this case should have been remanded to the arbitrator for clarification. The SCOV disagreed. Arbitration awards are remanded only when the award is incomplete or ambiguous, and there was no ambiguity in the arbitrator’s award in this case, there was no need for a remand. In so holding, the SCOV reiterated the general rule that “once an arbitration panel decides the submitted issues, it becomes functus officio and lacks any further power to act.” Ottley v. Schwartzberg, 819 F.2d 373, 376 (2d Cir. 1987).
Judgment is upheld, and Stephens will presumably now get his bite of the apple.