may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1998).
STATE OF MINNESOTA
IN COURT OF APPEALS
Paul Barry, as Father and Natural Guardian
of Kevin Barry, a minor,
Robert L. Telander, et al.,
Filed August 17, 1999
Ramsey County District Court
File No. C69610736
Richard J. Thomas, Bryon G. Ascheman, Burke & Thomas, 3900 Northwoods Drive, Suite 200, St. Paul, MN 55112 (for respondents)
Considered and decided by Halbrooks, Presiding Judge, Schumacher, Judge, and Amundson, Judge.
Appellant Paul Barry, as father and natural guardian of Kevin Barry, a minor, challenges the district court's confirmation of the arbitrator's award, arguing that there was no valid arbitration agreement and that the arbitrator exceeded his power by prohibiting discovery depositions. We affirm.
On May 22, 1995, Kevin Barry was born to Linda and Paul Barry. Immediately after birth, Kevin Barry had trouble breathing. To correct the problem, respondent Dr. Robert L. Telander surgically removed a cystic lesion from the child's trachea.
The surgery required Dr. Telander to move Kevin Barry's laryngeal nerve, a disturbance that caused the child to have trouble swallowing naturally. So that Kevin Barry could be properly nourished during his convalescence, a gastrostomy was scheduled for June 9, 1995. Dr. Telander discussed the gastrostomy at length with the Barrys, but did not obtain consent for a circumcision of Kevin Barry. Despite this omission, the nursing staff scheduled both the gastrostomy and circumcision for June 9, 1995. As Dr. Telander successfully completed the gastrostomy, a nurse informed him that the Barrys had not signed the consent form regarding the circumcision. The nurse then volunteered to speak with the family and went out of the operating room. Five minutes later, the nurse reentered the surgical suite and did not speak to Dr. Telander. Dr. Telander proceeded with the circumcision, apparently interpreting the nurse's silence as evidence of the Barrys' consent. The nurse observed the procedure and subsequently informed Dr. Telander that she had not obtained consent from Kevin Barry's parents. The Barrys did not want their son to be circumcised and had so informed the nursing staff. Kevin Barry's medical charts showed "circumcision desired - no."
On September 18, 1996, Paul Barry commenced this action, alleging battery, negligence, and breach of contract by Dr. Telander and respondents Pediatric Surgical Associates, Ltd. and Children's Health Care, a Minnesota non-profit corporation d/b/a Children's Hospital of St. Paul. At no time did Barry bring a motion to amend his complaint to include a claim for punitive damages.
On March 10, 1997, counsel for Dr. Telander sent a letter to Harry Sieben, counsel for Barry, that stated:
We will agree to a binding arbitration in front of Judge Harold Schultz. We will concede liability so that the only issue is damages.
We would propose that each side pay 50% of the arbitration costs.
On July 3, 1997, Harry Sieben sent a response that stated:
I have authority from my client to go forward with a binding arbitration of this matter with retired Judge Harold Schultz. I believe that your clients have already consented to this agreement. Therefore I have contacted Judge Schultz to see if he will serve in this capacity. I have also notified the court that this matter will be resolved through binding arbitration and that the case should be removed from the court calendar.
On August 18, 1997, Zenas Baer took over the representation of Barry from Sieben. Barry then attempted to place the matter back on the trial calendar. On December 29, 1997, Dr. Telander moved to compel arbitration pursuant to Minn. Stat. § 572.09(a) (1998). On February 6, 1998, the district court granted Dr. Telander's motion to compel arbitration. Barry then sought to depose Dr. Telander and the nurses to develop a punitive damages claim. The arbitrator granted Dr. Telander's motion for a protective order to prevent the depositions.
On June 23-24, 1998, an arbitration hearing was held to determine the issue of damages. On July 30, 1998, the arbitrator awarded Barry $40,000 in compensatory damages and rejected his claim for punitive damages. The arbitrator stated:
Some effort was made by the plaintiff to inject a claim for punitive damages. A hearing was had and the arbitrator carefully reviewed case law and statutory law with respect to the issue of punitive damages. It was determined that there was no foundation for the claim of punitive damages. This matter involved an act of negligence and the damages that flow from that act of negligence.
In October 1998, Barry moved to vacate the arbitrator's award, and Dr. Telander moved to confirm the award. The district court granted Dr. Telander's motion to confirm. Barry appeals.
The scope of judicial review of an arbitration award is extremely narrow. Office of State Auditor v. Minnesota Ass'n of Prof'l Employees, 504 N.W.2d 751, 754 (Minn. 1993). An arbitrator is the final judge of both law and fact, and his award will not be reviewed or set aside for mistake of either law or fact in the absence of fraud, mistake in applying his own theory, misconduct, or other disregard of duty. Cournoyer v. American Television & Radio Co., 249 Minn. 577, 580, 83 N.W.2d 409, 411 (1957); see also Minn. Stat. § 572.19, subd. 1 (1), (2) (1998). A court may also vacate an arbitration award when the arbitrator exceeds his power. State v. Berthiaume, 259 N.W.2d 904, 910 (Minn. 1977); see also Minn. Stat. § 572.19, subd. 1(3). Every reasonable presumption must be exercised in favor of the finality and validity of the arbitration award, National Indem. Co. v. Farm Bureau Mut. Ins. Co., 348 N.W.2d 748, 750 (Minn. 1984).
Barry contends there was no binding agreement to arbitrate the issue of damages. We are not bound by the arbitrator's decision that its actions were within its authority, and we review such a determination de novo. MedCenters Health Care, Inc. v. Park Nicollet Med. Ctr., 430 N.W.2d 668, 672 (Minn. App. 1988), review denied (Minn. Apr. 26, 1989).
A written agreement to submit a controversy to arbitration "is valid, enforceable, and irrevocable, save upon such grounds as exist at law or in equity for the revocation of any contract." Minn. Stat. § 572.08 (1998). The purpose of construing a contract is to give effect to the intention of the parties as expressed in the language they used in drafting the whole contract. Art Goebel, Inc. v. North Suburban Agencies, Inc., 567 N.W.2d 511, 515 (Minn. 1997). The intent of the parties is ascertained from a process of synthesis in which the words and phrases are given a meaning in accordance with the obvious purpose of the contract as a whole. Republic Nat'l Life Ins. Co. v. Lorraine Realty Corp., 279 N.W.2d 349, 354 (Minn. 1979).
A contract requires the making of an offer by one party to the contract and the acceptance of that offer by the other party to the contract. In re Hennepin County 1986 Recycling Bond Litigation, 540 N.W.2d 494, 507 (Minn. 1995) (Coyne, J., dissenting). In this case, Barry concedes that the letter of March 10, 1997, from counsel for Dr. Telander to counsel for Barry constituted an offer to arbitrate the dispute.
We must therefore determine whether that offer was accepted by Barry. The test for mutual assent is objective and examines whether the offeree's behavior leads the offeror to reasonably assume that he assents to the terms of the offer. Bergstedt, Wahlberg, Bergquist Assocs. v. Rothchild, 302 Minn. 476, 479, 225 N.W.2d 261, 263 (1975). The July 3, 1997 letter sent by counsel for Barry to Dr. Telander's counsel shows Barry's intent to accept the offer of March 10. Nowhere in the July 3 letter does Barry or his counsel contradict any of the terms in the offer. For these reasons, we conclude the letters of March 10 and July 3, 1997, created a binding arbitration agreement.
Barry argues that this analysis is complicated by the fact that he did not repeat verbatim the terms of the offer in his letter of acceptance. "An acceptance need not repeat the terms of the offer." Knaus Truck Lines v. Donaldson, 235 Minn. 453, 457, 51 N.W.2d 99, 102 (1952) (citation omitted). The letter of July 3 did not contradict the terms of the offer. Accordingly, the letter of July 3 constituted an acceptance of the offer to arbitrate the issue of damages.
Barry also argues that no contract was formed because the parties did not agree on the meaning of the term "damages." Specifically, Barry contends that he understood the term to include both compensatory and punitive damages whereas Dr. Telander understood the term to mean only compensatory damages. If an alleged contract is so uncertain as to any of its essential terms that it cannot be consummated without new and additional stipulations between the parties, it is not a valid agreement. Triple B & G, Inc. v. City of Fairmont, 494 N.W.2d 49, 53 (Minn. App. 1992). The intent of the parties is ascertained by interpreting contract language in accordance with the obvious purpose of the contract as a whole. Republic Nat'l Life, 279 N.W.2d at 354.
In this case, the obvious purpose of the agreement was to arbitrate the claims brought by Barry in Ramsey County District Court. At the time that the arbitration agreement was executed, Barry had not attempted to amend his complaint to include a claim for punitive damages. See Minn. Stat. § 549.191 (1998) (stating that plaintiff may not claim punitive damages in original complaint, but may be granted leave to amend complaint upon showing of legal basis for punitive damages). Because the contract's obvious purpose was to arbitrate Barry's existing claims and those claims did not include a claim for punitive damages, we conclude the term "damages" meant only compensatory damages at the time the arbitration agreement was executed.
For each of the foregoing reasons, it appears that district court correctly concluded that Barry and Dr. Telander entered into a binding agreement to arbitrate the sole issue of compensatory damages.
Barry also argues that the arbitrator exceeded his powers by refusing to allow the discovery depositions of Dr. Telander and the nurses present during the surgery. In the context of an arbitration proceeding, the principles governing depositions are statutory. Minn. Stat. § 572.14(b) (1998) states:
On application of a party and for use as evidence, the arbitrators may permit a deposition to be taken * * * of a witness who cannot be subpoenaed or is unable to attend a hearing.
Nowhere does the Uniform Arbitration Act indicate that arbitrators must allow discovery depositions before the hearing. Minn. Stat. § 572.08-.30 (1998).
In this case, Barry does not explain why the arbitrator's issuance of the protective order preventing the depositions of Dr. Telander and the nurses exceeded his power as an arbitrator. Specifically, Barry did not allege that the arbitrator refused to subpoena any witnesses for the arbitration hearing, including any of the nurses. In addition, the arbitrator was not compelled by the Uniform Arbitration Act to allow the discovery depositions of Dr. Telander and/or hospital personnel. Accordingly, we conclude the arbitrator did not exceed his powers.
It should also be noted that the arbitrator did not preclude Barry from pursuing his claim for punitive damages at the hearing. Barry had ample opportunity to cross-examine Dr. Telander at the hearing regarding the events leading to the circumcision, the nature of the procedure and the effects of the procedure on Kevin Barry's current and future health and lifestyle. As the arbitrator's memorandum indicates, he considered Barry's claim for punitive damages and rejected the claim on its merits.
For each of the foregoing reasons, the arbitrator did not exceed his powers by preventing Barry from deposing Dr. Telander or hospital personnel. Accordingly, the district court did not err in confirming the arbitration award.
 If Barry's claims had not been dismissed pursuant to the arbitration agreement, the district court's scheduling order would have prevented Barry from deposing Dr. Telander or seeking punitive damages. The scheduling order required discovery to be completed by July 1, 1997, and required non-dispositive motions such as a motion to amend to be heard by August 1, 1997.