This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2002).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

C6-02-1713

 

 

Ignacio Hernandez Flores, petitioner,

Appellant,

 

vs.

 

Travelers Insurance Company,

Respondent.

 

 

Filed April 22, 2003

Affirmed

Toussaint, Chief Judge

 

Hennepin County District Court

File No. CT027862

 

Douglas E. Schmidt, 200 Fazendin Building, 1421 Wayzata Boulevard, Wayzata, MN 55391 (for appellant)

 

Stephen D. Garrison, John G. Ness & Associates, 6465 Wayzata Boulevard, Suite 450, St. Louis Park, MN 55426 (for respondent)

 

 

            Considered and decided by Toussaint, Chief Judge, Lansing, Judge, and Huspeni, Judge.*


UNPUBLISHED OPINION

TOUSSAINT, Chief Judge

Appellant received an arbitration award for his no-fault claim and moved the district court to confirm the award, the amount of which appellant claimed exceeded the no-fault policy limits.  Because the award did not exceed the policy limits and because it did not contain an error requiring correction, we affirm the district court’s denial of appellant’s motion.

F A C T S

Appellant Ignacio Hernandez Flores was involved in a motor-vehicle collision on January 12, 2001.  Flores submitted an application for no-fault benefits to respondent Travelers Insurance Company (“Travelers”), which later paid him $15,792.36 in medical expenses.  Travelers subsequently suspended further benefits to Flores, basing its decision upon the results of an independent medical examination.

On December 7, 2001, the matter was arbitrated pursuant to Minn. Stat. § 65B.525 (2002).  In conference preceding the arbitration, the arbitrator and both counsel discussed the policy’s limits, agreeing that medical benefits were limited to $20,000.  At that time, neither counsel knew which medical expenses Travelers had already paid.  Both parties agreed that if the arbitrator were to find for Flores, the arbitrator’s award would be a listing of all applicable expenses, and the parties would later calculate the difference between the amount that Travelers had already paid and the policy’s $20,000 limit.  Accordingly, the policy’s limit for medical benefits was not brought before the arbitrator as an issue to be decided.

On December 31, 2001, the arbitrator found for Flores and issued an award that listed expenses totaling $32,142.68, though the award did not contain this lump-sum figure.  The award is silent as to the $20,000 policy limit; it merely delineates the types and amounts of the damages incurred.  The arbitrator later clarified his intent in a letter recounting the parties’ pre-arbitration agreement and confirming that “[i]t was not my intent to make an award in excess of no-fault policy limits of $20,000.00 dollars.”

Shortly after the arbitrator issued his award, Travelers’ counsel advised Flores’s counsel of the amount that Travelers had already paid and that $4,207.64 remained under the policy.  Travelers made several follow-up telephone calls and letters dated January 30, February 19, and March 22—none of which were returned or answered by Flores’s counsel.  Accompanying Travelers’ March 22 letter was a $4,207.64 check as satisfaction of Travelers’ obligation to pay medical benefits up to $20,000.  Travelers did not receive any response until April 18, 2002, more than 90 days after the arbitrator’s award was issued.  In that letter, postmarked April 17 (but dated February 21), Flores advised Travelers that it owed the balance of the $32,142.68 award.

On May 15, 2002, Flores filed in Hennepin County District court a petition to affirm the arbitration award.  Flores argued that the 90-day period to appeal the award had expired and moved the district court to affirm the $32,142.68 amount.  At the hearing, the court asked Flores’s counsel why he did not return Travelers’ telephone calls and letters.  The court concluded that Flores’s reliance “on a procedural technicality” was “a little bit disingenuous at best.”  The district court denied Flores’s petition, ruling that Travelers had reached the $20,000 policy limit by issuing the $4,207.64 check thereby satisfying the arbitration award.  This appeal follows.

DECISION

An appeal from an arbitration decision is subject to limited review, and the reviewing court must exercise “[e]very reasonable presumption” in favor of the arbitration award’s finality and validity.  State, Office of State Auditor v. Minn. Ass’n of Prof’l Employees, 504 N.W.2d 751, 754 (Minn. 1993) (citations omitted).  “[I]n the area of automobile reparation, arbitrators are limited to deciding issues of fact, leaving the interpretation of the law to the courts.”  Johnson v. Am. Family Mut. Ins. Co., 426 N.W.2d 419, 421 (Minn. 1988).  A court must vacate an award where the arbitrator has clearly exceeded his or her powers.  Nat’l Indem. Co. v. Farm Bureau Mut. Ins. Co., 348 N.W.2d 748, 750 (Minn. 1984).

An arbitrator’s award may not exceed the policy’s limits.  Thommen v. Illinois Farmers Ins. Co., 437 N.W.2d 651, 655 (Minn. 1989) (reversing district court’s confirmation of arbitrator’s award over coverage limits); see Schons v. State Farm Mut. Auto. Ins. Co., 621 N.W.2d 743, 747 (Minn. 2001) (holding that party could not reasonably expect to recover more than policy limits).  The record demonstrates that the arbitrator here did not issue an award exceeding the $20,000 policy limit; the award merely listed Flores’ outstanding bill amounts without addressing the issue of policy limits.  Even if the arbitrator had exceeded its power by issuing an award in excess of $20,000, the district court would have been within its discretion to vacate or reduce the award.

Flores argues that the district court should have granted his petition solely on the ground that the limitations period to correct or appeal the award had expired.  He argues that if no party seeks correction from the arbitrator in 20 days, Minn. Stat. § 572.16 (2002), or from the district court in 90 days, Minn. Stat. § 572.19, subd. 2 (2002), the court is statutorily mandated to uphold the arbitrator’s award, regardless of either the merits of the award or the arbitrator’s authority.  See Wacker v. Allstate Ins. Co., 312 Minn. 242, 249, 251 N.W.2d 346, 349-50 (1977) (denying challenge not made within 90 days of award).

Under these facts, we disagree with Flores’s argument.  We view the issue as not whether Travelers failed to timely challenge the arbitrator’s award, but whether the award required any correction.  For the limitations period to apply, the arbitrator’s decision must contain an alleged error requiring correction.  See, e.g., Crosby-Ironton Fed’n of Teachers, Local 1325 v. Indep. Sch. Dist. No. 182, 285 N.W.2d 667, 669 (Minn. 1979) (untimely argument that arbitrator’s award should have included salary increase); Helmerichs v. Bank of Minneapolis & Trust Co., 349 N.W.2d 326, 327 (Minn. App. 1984) (untimely motion arguing against arbitrability of contract), review denied (Minn. Dec. 20, 1984).

For the same reasons that we conclude the arbitrator did not exceed his powers, we also conclude the award contained no error.  The arbitrator’s award here contained no error when viewed in light of the pre-arbitration conference regarding the $20,000 policy limit for medical benefits.

The arbitrator’s letter recalling the content of the parties’ discussion and stating his intent not to exceed the $20,000 limit further demonstrates that the arbitrator’s award contained no error requiring modification or correction within the 20- or 90-day limitations period.  The letter clarifies that the award was not a mandate to exceed the policy’s limit, but was a listing of bills that were to be paid until the $20,000 limit was reached.  As such, the district court’s decision to limit liability to $20,000 fulfilled the requirement that the district court modify an award “so as to effect its intent.”  Minn. Stat. § 572.20, subd. 2 (2000).

Because the arbitrator’s award contained no error requiring correction and did not exceed the policy limits, we affirm the district court’s denial of Flores’s motion and its ruling that medical benefits under the policy are properly limited to $20,000.

Affirmed.



* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.