may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1998).
STATE OF MINNESOTA
IN COURT OF APPEALS
North Branch Mutual Insurance Company,
Filed May 11, 1999
Pine County District Court
File No. C7-97-1106
Paul J. Wocken, Willenbring, Dahl, Wocken & Zimmerman, PLLC, Red River at Main, P.O. Box 417, Cold Spring, MN 56320-0417 (for respondent)
Considered and decided by Lansing, Presiding Judge, Kalitowski, Judge, and Harten, Judge.
Appellant insured challenges the denial of his motion to vacate or alter a neutral umpire's award against respondent insurer.
After a 1994 fire destroyed 305 tons of haylage belonging to appellant Daniel Olean, he and his insurer, respondent North Branch Mutual Insurance Company, decided to arbitrate the value of the lost haylage and the cost of its removal. Respondent selected Robert Erickson as its arbitrator; appellant selected Fred Kelling, who had already worked at removing some of the destroyed haylage. The arbitrators could not agree and therefore together selected a neutral umpire, Kevin Carlson.
Kelling, Erickson, and Carlson met in July 1997. The issues of preaward interest and of transportation costs of replacement hay were not addressed at their meeting. The three signed an appraisal verdict awarding appellant $14,352.50 for the "actual cash value of the haylage * * * damaged as a result of said fire." Carlson subsequently said in an affidavit that the award included $2,000 for hay removal and $12,352.50 for haylage, (305 tons at $40.50 per ton).
Appellant moved the district court for an order either vacating the award as fraudulent pursuant to Minn. Stat. § 572.19, subd. 1(1) (1996), or modifying it to correct a miscalculation pursuant to Minn. Stat. § 572.20, subd. 1(1) (1996), or permitting the arbitrators to meet again and correct the award pursuant to Minn. Stat. §§ 572.16 and 572.20, subd. 1 (1996). There is no transcript of the hearing on these motions; appellant claims that he raised the issue of preaward interest and asked that the award be modified pursuant to Minn. Stat. § 572.15(a) (1996). The motions were denied.
Appellant then moved for a new trial pursuant to Minn. R. Civ. P. 59.01 or for relief pursuant to Minn. R. Civ. P. 60.02, arguing, among other things, the failure to grant preaward interest pursuant to Minn. Stat. § 572.15 (1996). These motions were also denied and judgment was entered confirming the arbitration award. Appellant challenges the judgment, arguing that the arbitrators exceeded their authority in failing to modify the award by granting preaward interest, that the amount of the award was the result of fraud, and that appellant was entitled to reopen the arbitration pursuant to Minn. Stat. § 572.16.
Standard of Review
[T]he court shall vacate an [arbitration] award where:
(1) The award was procured by corruption, fraud or other undue means; [or]
* * * *
(3) The arbitrators exceeded their powers;
* * * *
But the fact that the relief was such that it could not or would not be granted by a court of law or equity is not ground for vacating or refusing to confirm the award.
Minn. Stat. § 572.19, subd. 1 (1996) (emphasis added).
1. Preaward Interest
Minn. Stat. § 572.15 (a) provides that an arbitration award must include interest. But appellant did not mention interest in his motion to vacate or modify the award or the memorandum submitted in support of his alternative motion; because there is no transcript, there is nothing in the record to support his claim that he mentioned it at the hearing. An arbitrator's failure to award preaward interest to a party who did not request it does not entitle that party to reopen the arbitration. Lickteig v. Alderson, Ondov, Leonard & Sween, P.A., 556 N.W.2d 557, 562 (Minn. 1996) ("It goes against the purpose of arbitration to allow [a party] to further draw out the process by reopening the hearings to add more evidence, without some justification for its absence at the first hearing. * * * [A party] is not entitled to an additional hearing before the arbitrator to determine costs and interest.").
Appellant alleges that the amount of the award is the result of two instances of misrepresentation by respondent's arbitrator, Erickson. An intentional misrepresentation claim requires
that defendant (1) made a representation (2) that was false (3) having to do with a past or present fact (4) that is material (5) and susceptible of knowledge (6) that the representor knows to be false or is asserted without knowing whether the fact is true or false (7) with the intent to induce the other person to act (8) and the person in fact is induced to act (9) in reliance on the representation (10) that the plaintiff suffered damages (11) attributable to the misrepresentation.
M.H. v. Caritas Family Servs., 488 N.W.2d 282, 289 (Minn. 1992). Neither of Erickson's misstatements supports a claim of fraud or intentional misrepresentation.
First, Erickson told the umpire that respondent had paid appellant directly for removal of some haylage, when in fact respondent had paid the individual who removed the haylage on behalf of appellant. Appellant offers no evidence that Erickson intended the umpire to rely on this misstatement.
Second, Erickson told the umpire that a laboratory had said that the quality of the haylage prior to the fire was not very good, when in fact the laboratory had said that the haylage quality prior to the fire could not be determined. Appellant cannot show that he was damaged by the misrepresentation, since the umpire had a copy of the laboratory report and stated in an affidavit that the value he assigned to the quality of the haylage was "based in part on the report of [the laboratory,] documents of my own, including hay auction reports and my own personal background and knowledge."
3. Reopening the Arbitration
Minn. Stat. § 572.16 provides that, if a party applies within 20 days after delivery of the award, an arbitrator may modify or correct the award
(1) upon the grounds stated in section 572.20, subdivision 1;
(2) for the purpose of clarifying the award; or
(3) where the award is based on an error of law.
Minn. Stat. § 572.20, subd. 1(1), provides for modification or correction if there was "an evident miscalculation of figures or an evident mistake in the description of any person, thing or property referred to in the award[.]"
The umpire's affidavit clarified the award by explaining that the figures were calculated without reference to transportation costs because transportation costs were not at issue during the hearing. This was not "miscalculation" or "mistake." We see no error of law; therefore, there was no basis for reopening the arbitration.
The umpire did not exceed his powers, the award was not procured by fraud, and appellant is not entitled to reopen the arbitration.
 Appellant's attorney acknowledged at oral argument that, on the basis of Lickteig, the failure to award interest would not itself entitle appellant to a remand.