Massachusetts Counsel Achieves Dismissal of a Petition to Compel Arbitration

Boston-area counsel Nora R. Adukonis recently achieved dismissal with prejudice of a petition to compel arbitration, arising from a dispute among the owners and trustees of a three-unit condominium concerning,  generally, the right to initiate a claim with the master insurance policy, and use of common funds to pay a deductible.

Plaintiffs, the dissenting unit owners, initiated arbitration under the Commercial Rules of the American Arbitration Association (AAA) in August of 2019. Shortly after filing, the plaintiffs/petitioners sought an order from the AAA requiring our clients to reimburse them for half of the filing fee. The arbitrators declined to do so, instead ruling that costs would be allocated in the final award, per G.L. c. 251 § 10.

Shortly thereafter, the AAA requested each party provide deposits. Largely due to the petitioners’ procedural choices and elections, including panel arbitration, a reasoned decision, and use of the Commercial Rules, the deposits required to proceed to hearing exceeded the amount in controversy by a factor of ten. Without indemnity from the condominium association, our clients could not advance these costs. In accordance with longstanding practice and published rules, the AAA sought the entire cost of arbitration from plaintiffs/petitioners. Despite this, the plaintiffs/petitioners requested that the arbitration panel issue an order compelling our clients to advance costs. The arbitrators again declined to do so, and, once more, ruled that costs would be allocated in the final award.

Dissatisfied with this determination, the plaintiffs filed a lawsuit styled as a “petition to compel arbitration” in Suffolk County Superior Court, seeking an order compelling our clients to advance the costs associated with arbitration, i.e., the exact same relief the AAA declined to provide. Following the filing of the petition, Nora moved to dismiss the action on the basis that G.L. c. 251 §§ 1 et. seq., the Massachusetts Uniform Arbitration Act for Commercial Disputes, does not provide for the court to issue an order compelling pre-payment of costs, or overruling the arbitration panel or administrator’s interpretation of their procedural rules.

Justice Kenneth W. Salinger granted the motion to dismiss with prejudice, reasoning that, “refusal to advance half the anticipated costs of arbitration does not constitute a complete refusal to arbitrate that could support an order compelling arbitration,” and held that the Court had no power to review or alter the arbitration panel’s preliminary determinations.

Nora Adukonis focuses her practice in the areas of liability involving construction, products and premises, and employment. She defends contractors, tradesmen, manufacturers and distributors in actions alleging injuries or property damage from fires, floods, defective products or chemical exposure. Nora has a background in insurance coverage and subrogation, and has a particular interest in cases involving overlapping issues of first-party coverage, property damage and consumer law.