Anthony v. Kaplan

Annotate this Case
Robert ANTHONY v. Phil KAPLAN and Kaplan,
Brewer & Maxey, P.A.

95-1270                                            ___ S.W.2d ___

                    Supreme Court of Arkansas
                 Opinion delivered April 1, 1996


1.   Appeal & error -- arguments not raised below not reached --
     arguments unsupported by legal authority not reached. --
     Appellant's estoppel argument was not considered on appeal
     where it had not been raised below; the appellate court will
     not consider arguments for the first time on appeal; nor will
     it consider unsupported arguments that require further
     research. 

2.   Attorney & client -- proof needed to prevail on claim of legal
     malpractice -- proof needed to show damages and proximate
     cause. -- An attorney is negligent if he or she fails to
     exercise reasonable diligence and skill on behalf of the
     client; in order to prevail under a claim of legal
     malpractice, a plaintiff must prove that the attorney's
     conduct fell below the generally accepted standard of practice
     and that this conduct proximately caused the plaintiff
     damages; to show damages and proximate cause, the plaintiff
     must show that but for the alleged negligence of the attorney,
     the result in the underlying action would have been different. 
     
3.   Damages -- proximate cause usually a jury question -- when the
     issue becomes a question of law. -- While the question of
     proximate cause is usually a question for the jury, when the
     evidence is such that reasonable minds cannot differ, the
     issue becomes a question of law to be determined by the trial
     court.

4.   Judgment -- once prima facie entitlement to summary judgment
     established, burden of proof shifts -- opposing party must
     meet proof with proof. -- Once the moving party establishes a
     prima facie entitlement to summary judgment, the opposing
     party must meet proof with proof and demonstrate the existence
     of a material issue of fact; where, to support his motion,
     appellee included a copy of the New York statute on vacating
     arbitration awards, the Uniform Arbitration Act on vacating
     awards, and case law from both New York and Missouri
     supporting his position, for appellant's complaint against
     appellee to have survived summary judgment, appellant was
     required to show that, as a matter of law, the Missouri court
     would have granted his motion to vacate had the motion been
     properly filed.

5.   Arbitration -- burdens of proof and scope of arbitration --
     court's duty to grant relief after arbitration. -- As a matter
     of public policy, arbitration is strongly favored, and is
     looked upon with approval by courts as a less expensive and
     more expeditious means of settling litigation and relieving
     docket congestion; the party attempting to overturn an
     arbitration award, not the party attempting to sustain it,
     bears the burden of proof; the scope of arbitration is defined
     by the contract between the parties, and a party challenging
     the award is not entitled to a resolution on the merits;
     further, it is not for the courts to determine if the
     arbitrators decided the dispute correctly, only that the
     arbitrators acted within their jurisdiction; the failure of
     the arbitration panel to follow the law as a court of law or
     equity would have done, without specific agreement to such in
     the arbitration agreement, does not afford relief through the
     courts. 

6.   Arbitration -- review on appeal -- what is used as precedent.
     -- On appeal, the judiciary's review is limited to vacating an
     arbitration award only on the statutory grounds, unless the
     award is violative of a strong public policy; if there is no
     case law and no compelling policy on an issue, provisions of
     the Uniform Arbitration Act should be construed consistent
     with the decisional law of other states which have adopted the
     Act. 

7.   Arbitration -- legal precedent for challenging arbitration
     award based on allegation arbitrators exceeded their powers or
     authority -- New York considers two basic factors. --   
     New York has had occasion to develop legal precedent for 
     challenging an arbitration award based on an allegation the
     arbitrators exceeded their powers or authority; the New York
     appellate court determined that the following two basic
     factors are to be considered in determining whether an
     arbitrator has acted in excess of his power: (1) whether the
     arbitrator construed the disputed contract in a completely
     irrational way; or (2) whether the arbitration agreement
     itself expressly limited the power of the arbitrator; the
     question is whether the arbitrator merely interpreted the
     disputed contract or did he, in fact, give it a completely
     irrational construction and, thereby, create a new contract
     for the parties. 

8.   Arbitration -- determination as to whether award exceeds
     authority of arbitrator -- general rules. -- The fact that
     parties agree to submit their disputes to arbitration implies
     an agreement to be bound by the arbitration board's decision,
     and every reasonable intendment and presumption is in favor of
     the award; it should not be vacated unless it clearly appears
     that it was made without authority, or was the result of fraud
     or mistake, or misfeasance or malfeasance; unless the
     illegality of the decision appears on the face of the award,
     courts will not interfere merely because the arbitrators have
     mistaken the law, or decided contrary to the rule of
     established practice as observed by courts of law and equity.

9.    Arbitration -- arbitrators found contract was irrelevant to
     issue of appellant's improper termination -- panel did not
     ignore evidence in excess of their authority. -- Where all
     three arbitrators found the 1984 contract between appellant
     and his former employer was irrelevant to the issue of whether
     he was improperly terminated, and, instead, based their
     opinions solely on the partnership agreement, and the only
     issue before the panel was whether appellant was improperly
     terminated, the panel did not ignore evidence or any claim in
     excess of their authority or power; no evidence existed that
     appellant's monetary claim against his employer was ever
     brought to the panel's attention.

10.  Attorney & client -- appellant failed to establish proximate
     cause -- trial court correct in granting summary judgment. --
     Where appellant's complaint against his attorney did not
     allege the attorney mishandled his case at the arbitration
     hearing, but only that he was negligent in handling the
     appeal; under either the law of Missouri or New York, no basis
     existed upon which the arbitration panel's decision would have
     been vacated based on the panel exceeding its power; and, as
     the one challenging the arbitration award, the burden of proof
     was on appellant and he failed to meet proof with proof;
     therefore, as a matter of law, appellant failed to show he
     would have prevailed in his underlying arbitration action,
     even if his attorney had filed a timely and proper motion to
     vacate; because appellant failed to establish proximate cause,
     the trial court correctly granted summary judgment.
     

     Appeal from Pulaski Circuit Court; Chris Piazza, Judge;
affirmed.
     Ball & Mourton, Ltd., by;  Kenneth R. Mourton and Rayburn W.
Green and James S. Cox & Associates, by:  James S. Cox and Russell
Fowler, for appellant.
     Wright, Lindsey & Jennings, by:  Bettina E. Brownstein, for
appellees.


     Tom Glaze, Justice.  
*ADVREP3*






ROBERT ANTHONY,
                    APPELLANT,

V.

PHIL KAPLAN and KAPLAN, BREWER
& MAXEY, P.A.,
                    APPELLEES.



95-1270

Opinion Delivered:  4-1-96

APPEAL FROM THE CIRCUIT COURT
OF PULASKI COUNTY, ARKANSAS,
NO. CV 95-3232, HON. CHRIS
PIAZZA, CIRCUIT JUDGE



AFFIRMED




                  TOM GLAZE, Associate Justice

     This is a legal malpractice action based on a question
involving vacation of an arbitration decision.  Following his
termination as a partner at KPMG Peat Marwick (KPMG), appellant
Robert Anthony employed the legal services of appellees Phil Kaplan
and his firm, Kaplan, Brewer & Maxey, P.A.  On Anthony's behalf,
Kaplan filed a complaint against KPMG in federal district court,
alleging wrongful termination, and breach of contract based on a
partnership agreement and a 1984 contract.  The federal court
dismissed Anthony's complaint and ordered the parties to arbitrate
their dispute.  Subsequently, Anthony and KPMG entered an
arbitration agreement wherein they agreed the arbitration was to be
conducted under the law of New York state, but that circuit court
in Jackson County, Missouri was to have exclusive jurisdiction.
     An arbitration hearing was held in December, 1992, at which
time, the arbitration panel, by a two-to-one vote, held in KPMG's
favor.  Finding KPMG's partners had complied with the partnership
agreement in terminating Anthony by a two-thirds vote, the majority
panel held the partnership vote was the deciding factor and the
1984 contract was irrelevant to that issue.  
     Anthony filed a motion to vacate the panel's decision in the
federal district court, and KPMG filed a motion to dismiss based on
the forum selection clause in the arbitration agreement.  On April
15, 1993, the district court dismissed Anthony's motion to vacate. 
The dismissal order was entered after the time had lapsed
preventing Anthony from filing a motion to vacate the arbitration
decision in the correct forum, the Missouri circuit court.
     After obtaining his file from Kaplan, Anthony filed suit in
the Pulaski County Circuit Court against Kaplan and his firm,
alleging (1) legal malpractice and (2) breach of an oral contract
for legal services.  Thereafter, Kaplan filed a motion for summary
judgment, asserting Anthony had failed to show proximate cause by
establishing that a timely and properly filed motion to vacate the
decision of the arbitration panel would have been granted by the
Missouri court.  Following a hearing, the Pulaski County Circuit
Court granted Kaplan's summary judgment motion.
     On appeal, Anthony argues two points which we do not reach. 
First, Anthony contends Kaplan's signature on the improperly filed
motion is evidence of Kaplan's belief that the motion to vacate was
tenable pursuant to Ark. R. Civ. P. 11.  Therefore, Anthony argues
Kaplan is estopped from now taking a position inconsistent to the
one expressed earlier in his motion before the federal district
court.  This estoppel argument, however, was not raised below, and
we will not consider it for the first time on appeal.  See Collins
v. Heitman, 225 Ark. 666, 284 S.W.2d 628 (1955).  Second, Anthony
failed to cite any supporting legal authority for his contention
that the trial court improperly dismissed his claim for breach of
the oral contract for legal services.  As this court has held many
times, we will not consider unsupported arguments that require
further research.  Fayetteville Sch. Dist. v. Ark. State Bd. of
Ed., 313 Ark. 1, 852 S.W.2d 122 (1993).
     For his third and final point on appeal, Anthony argues the
trial court erred in granting summary judgment on his malpractice
claim because issues of fact remained as to whether the decision of
the arbitration panel would have been vacated, even if a timely
appeal in the proper court had been filed.  For support, Anthony
cites the dissenting panel member's opinion as evidence that a
properly filed motion to vacate the panel's decision would have
been granted.  Additionally, Anthony points out that, under his
1984 contract with KPMG, he had a monetary claim for compensation
and retirement benefits, and claims his continuation with KPMG was
to depend on maintaining a satisfactory level of performance.  In
sum, Anthony argues that, because his claims pursuant to the 1984
contract were totally ignored by the panel, the panel exceeded its
powers in violation of the Uniform Arbitration Act.  
     An attorney is negligent if he or she fails to exercise
reasonable diligence and skill on behalf of the client.  In order
to prevail under a claim of legal malpractice, a plaintiff must
prove that the attorney's conduct fell below the generally accepted
standard of practice and that this conduct proximately caused the
plaintiff damages.  Callahan v. Clark, 321 Ark. 376, 901 S.W.2d 843
(1995); Vanderford v. Penix, 39 F.3d 209 (8th Cir. 1994); Ronald E.
Mallen et al., Legal Malpractice  8.12, at 601-608 (4th ed. 1996).
To show damages and proximate cause, the plaintiff must show that
but for the alleged negligence of the attorney, the result in the
underlying action would have been different.  Callahan; Vanderford.
     While the question of proximate cause is usually a question
for the jury, when the evidence is such that reasonable minds
cannot differ, the issue becomes a question of law to be determined
by the trial court. Skinner v. R.J. Griffin & Co., 313 Ark. 430,
855 S.W.2d 913 (1993).  To support his motion, Kaplan included a
copy of the New York statute on vacating arbitration awards, the
Uniform Arbitration Act on vacating awards, and case law from both
New York and Missouri supporting his position.  Once the moving
party establishes a prima facie entitlement to summary judgment,
the opposing party must meet proof with proof and demonstrate the
existence of a material issue of fact.  Renfro v. Adkins, 323 Ark.
288, ___ S.W.2d ___ (1996).  Thus, for Anthony's complaint against
Kaplan to have survived summary judgment, Anthony was required to
show that, as a matter of law, the Missouri court would have
granted his motion to vacate had the motion been properly filed.
     Though the parties differ on whether New York or Missouri law
applies, both New York and Missouri have adopted the Uniform
Arbitration Act with only slight variances in the wording of the
statutes.  The New York statute in relevant part provides that an
arbitration award shall be vacated if the rights of the complaining
party were prejudiced inter alia where "an arbitrator ... exceeded
his power[.]"  N.Y. Civ. Prac. L. & R. 7511(b)(iii) (Consol. 1980). 
The Missouri statute lists the grounds for vacating an arbitration
award to include where "[t]he arbitrators exceeded their powers[.]" 
Mo. Ann. Stat.  435.405.1(3) (Vernon 1992).  Neither statute
defines the arbitrator's power.
     As a matter of public policy, arbitration is strongly favored,
and is looked upon with approval by courts as a less expensive and
more expeditious means of settling litigation and relieving docket
congestion.  Lancaster v. West, 319 Ark. 293, 891 S.W.2d 357
(1995); Estate of Sandefur v. Greenway, 898 S.W.2d 667 (Mo. App.
W.D. 1995).  The party attempting to overturn an arbitration award,
not the party attempting to sustain it, bears the burden of proof. 
Lancaster; R.L. Hulett & Co. v. Barth, 884 S.W.2d 309 (Mo. App.
E.D. 1994).  The scope of arbitration is defined by the contract
between the parties, and a party challenging the award is not
entitled to a resolution on the merits.  Estate of Sandefur, 898 S.W.2d 667.  Further, it is not for the courts to determine if the
arbitrators decided the dispute correctly, only that the
arbitrators acted within their jurisdiction.  Id.  The failure of
the arbitration panel to follow the law as a court of law or equity
would have done, without specific agreement to such in the
arbitration agreement, does not afford relief through the courts. 
Id.; Stifel, Nicolaus & Co. v. Francis, 872 S.W.2d 484 (Mo. App.
W.D. 1994); Maross Const. Inc. v. Central N.Y. Regional Transp.
Authority, 488 N.E.2d 67 (N.Y. 1985).
     On appeal, the judiciary's review is limited to vacating an
arbitration award only on the statutory grounds, unless the award
is violative of a strong public policy.  Stifel, Nicolaus & Co.,
872 S.W.2d 484; Maross Const. Inc., 488 N.E.2d 67; Lieberman v.
Lieberman, 566 N.Y.S.2d 490 (Sup. 1991).  If there is no case law
and no compelling policy on an issue, provisions of the Uniform
Arbitration Act should be construed consistent with the decisional
law of other states which have adopted the Act.  Heineman v.
Charno, 877 S.W.2d 224 (Mo. App. W.D. 1994).  
     Unlike Missouri, New York has had occasion to develop legal
precedent for challenging an arbitration award based on an
allegation the arbitrators exceeded their powers or authority.  In
Pavilion Central Sch. Dist. v. Pavilion, 380 N.Y.S.2d 387 (App.
Div. 1976), the New York appellate court found the following two
basic factors are to be considered in determining whether an
arbitrator has acted in excess of his power: (1) whether the
arbitrator construed the disputed contract in a completely
irrational way; or (2) whether the arbitration agreement itself
expressly limited the power of the arbitrator.  In other words, the
question is whether the arbitrator merely interpreted the disputed
contract or did he, in fact, give it a completely irrational
construction and, thereby, create a new contract for the parties. 
Id.  See also Matter of Riverbay Corp. v. Local 32-E, 456 N.Y.S.2d 378 (App. Div. 1982).  
     Arkansas, too, has had occasion to decide whether an award
exceeded the authority of the arbitrator.  In McLeroy v. Waller, 21
Ark. App. 292, 731 S.W.2d 789 (1987), our court of appeals reduced
an arbitration award where the panel awarded punitive damages in a
dispute over a lease agreement.  Finding the panel had exceeded its
authority by making an award which was invalid on its face, and
thus illegal, the appellate court modified the award by eliminating
the punitive damages.  By modifying rather than vacating the award,
the McLeroy court recognized the general rules set out by this
court where it was stated as follows:
          The fact that parties agree to submit their disputes
     to arbitration implies an agreement to be bound by the
     arbitration board's decision, and every reasonable
     intendment and presumption is in favor of the award; it
     should not be vacated unless it clearly appears that it
     was made without authority, or was the result of fraud or
     mistake, or misfeasance or malfeasance.  Unless the
     illegality of the decision appears on the face of the
     award, courts will not interfere merely because the
     arbitrators have mistaken the law, or decided contrary to
     the rule of established practice as observed by courts of
     law and equity.
Id.; Chrobak v. Edward D. Jones & Co., 46 Ark. App. 105, 878 S.W.2d 760 (1994) [citing Alexander v. Fletcher, 206 Ark. 906, 175 S.W.2d 196 (1943); Kirsten v. Spears, 44 Ark. 166 (1884)]. 
     In the present case, all three arbitrators found the 1984
contract between Anthony and KPMG was irrelevant to the issue of
whether Anthony was improperly terminated, and, instead, based
their opinions solely on the partnership agreement.  As
demonstrated by the record, the only issue before the panel was
whether Anthony was improperly terminated.  Contrary to Anthony's
allegation, the panel did not ignore evidence or any claim in
excess of their authority or power.  At the end of the hearing,
the panel asked if any claims remained and Kaplan offered no
response.  Thus, no evidence exists that Anthony's monetary claim
against KPMG was ever brought to the panel's attention.
     In conclusion, we note that Anthony's complaint against Kaplan
does not allege Kaplan mishandled his case at the arbitration
hearing, but only that Kaplan was negligent in handling the appeal. 
Under either the law of Missouri or New York, no basis exists upon
which the arbitration panel's decision would have been vacated
based on the panel exceeding its power.  As the one challenging the
arbitration award, the burden of proof was on Anthony and he failed
to meet proof with proof.  Therefore, as a matter of law, Anthony
failed to show he would have prevailed in his underlying
arbitration action, even if Kaplan had filed a timely and proper
motion to vacate.  Because Anthony failed to establish proximate
cause, the trial court correctly granted summary judgment.
     For the foregoing reasons, we affirm.

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