This case arose when, under the terms of an operating agreement between the parties, BST Corporation initiated binding arbitration in Cuyahoga County Common Pleas Court involving actions of Wolgang, alleging mismanagement of a warehouse property run by a company jointly owned by BST and Wolgang, and Wolgang’s counterclaim accusing BST of not meeting certain payment obligations. After considerable arbitration proceedings, a nine-day hearing and several rounds of briefing, the arbitrator awarded equitable and monetary relief.
The same day of the arbitrator’s award, BST applied to the Cuyahoga County Common Pleas Court to confirm the award. The next day, Wolgang filed a petition to vacate or correct the award in the Superior Court of California, County of Los Angeles. However, Wolgang did not assert that the California case has any bearing on the issues in this case.
The trial court scheduled a hearing on the confirmation and Wolgang filed a motion to stay or continue the hearing, arguing it had not received sufficient notice, that its California petition was pending, and that under R.C. 2711.13, it had three months to move to vacate, modify, or correct the award. At no time before the trial court confirmed the arbitration award did Wolgang move to vacate, modify, or correct the arbitration award in Ohio. The trial court judge believed regardless of the three-month limitation, Wolgang should have generated a response in some form to the filing of the application to confirm the arbitration award.
The trial court confirmed the arbitration award. Wolgang appealed to the Eighth District Court of Appeals, which concluded that when read together R.C. 2711.09 and R.C. 2711.13 require that a court accord a party intending to vacate, modify, or correct an arbitration award a full three months in which to move. Therefore, it determined confirmation of the arbitration award in this case was issued prematurely.
The Ohio Supreme Court accepted the appeal and reversed the judgment of the Eighth District. In its discussion, the court stated that even though R.C. 2711.09 requires a court to confirm an arbitration award on an application to confirm that is filed within a year of the award, an opposing party may still move that the award be vacated, modified, or corrected, within three months of the award pursuant to R.C. 2711.13.
The court noted that it is important to this analysis that in R.C. 2711.13, the General Assembly specifically addressed the discretionary power of the trial court to stay proceedings in the interest of fairness to both parties. Accordingly, the court views the limitation period in R.C. 2711.13 as an upper limit that may be shortened by another party’s filing a pleading or motion to which a response is required. Nothing in R.C. 2711.09 through 2711.13 required the trial court to stay the action or wait for the R.C. 2711.13 three-month period to expire before confirming the award.
The court said, in other words, the three-month period set forth in the statute is not a guaranteed time-period in which to file such a motion but is instead the maximum time available to an aggrieved party that wishes to vacate, modify, or correct an arbitration award. When a party to an arbitration applies to confirm the award before the expiration of the three-month period after the award, any party that wishes to oppose confirmation must, within the three-month period, respond with a motion to vacate, modify, or correct the award, on the date of or before the hearing on the application to confirm. Failing to do so may result in the award being confirmed.
This decision indicates that if an arbitrator issues an award, it would be best to file the application to confirm the award well within the three-month period. If another party did not wish that the award be confirmed, it should respond as soon as possible with its motion to vacate, modify, or correct the award, preferably before the date of the hearing on the application to confirm. The decision further points out the importance of good calendaring systems to enter deadline and response dates to allow ample time to prepare and file responsive pleadings. The situation in this case occurred over a holiday period. How the firm will respond during such hectic times should also be anticipated and coordinated.