Waseca County District Court File No. F4-01-102.
Considered and decided by Klaphake , Presiding Judge; Harten , Judge; and Stoneburner , Judge.
In an arbitration agreement, absent a valid waiver of the right to hearing mandated by Minn. Stat. § 572.12 (2002), an arbitrator must conduct an adversarial hearing to allow the parties to be heard, present evidence, and cross-examine witnesses.
The opinion of the court was delivered by: Harten, Judge
The judgment in the dissolution of the parties' marriage reserved two issues, and the parties entered into binding arbitration to resolve them. The arbitrator met separately with each party but not with both parties together. Appellant moved to vacate the award and the district court denied the motion. We reverse and remand.
Appellant Sallie A. Volkmann and respondent Norman Jerry Volkmann agreed to enter into binding arbitration of the two issues reserved in their marriage dissolution judgment. Correspondence between the parties' respective counsel identified the arbitrator and stated that the parties agreed to arbitrate "unrepresented." The correspondence did not indicate that the parties waived their right to the hearing prescribed by Minn. Stat. § 572.12 (2002).
The arbitrator did not conduct a hearing, but instead met with each party separately. Shortly before the arbitrator was scheduled to issue his award, appellant's counsel notified the arbitrator that appellant had decided to withdraw from arbitration. Nonetheless, the arbitrator issued his award, holding that neither party was entitled to any relief. The district court denied appellant's motion to vacate the award. Appellant challenges that denial.
Did the arbitrator's failure to conduct the hearing required by Minn. Stat. § 572.12 (2002) substantially prejudice the rights of the parties?
Arbitrators must conduct a hearing unless otherwise provided by agreement. Minn. Stat. § 572.12(a) (2002). At the hearing, "[t]he parties are entitled to be heard, to present evidence material to the controversy and to cross-examine witnesses." Minn. Stat. § 572.12(b). A court must vacate an award where the arbitrator "so conducted the hearing, contrary to the provisions of section 572.12, as to prejudice substantially the rights of a party." Minn. Stat. § 572.19, subd. 1(4) (2002). Whether challenged ...