Chapter 20 - § 20.8 • SCOPE OF REVIEW

• Jurisdiction: Colorado

§ 20.8 • SCOPE OF REVIEW

In general, the parties cannot agree to expand the grounds of review beyond the statutorily defined appellate review.⁹⁰ For example, an agreement providing for the appellate court to conduct a substantive review of the arbitrator's award is contrary to statute and therefore void and unenforceable.⁹¹

The standards for and scope of appellate review are a part of the jurisdictional limitations and have been defined by case law. South Washington Associates v. Flanagan⁹² involved an arbitration agreement that provided:

[F]or the purpose of any appeal to the Colorado Court of Appeals or the Colorado Supreme Court the arbitrator's award shall be reviewed using the same standards as findings of fact and conclusions of law by a Colorado District Court.

The court of appeals refused to give effect to the agreed-upon term, finding that it had review jurisdiction only over the final judgment of the district court (confirming the arbitration award), and not over the arbitrator's award.

[O]ur review is limited to the order and judgment confirming the award and the standard of review is whether the trial court properly applied and followed the standards for confirmation prescribed by the arbitration statute. . . . [T]his court may not review the substance or procedure underlying the arbitration panel's award, except insofar as the same was reviewed by the trial court.
. . .
[T]he parties, through their agreement, . . . are seeking to define and prescribe the powers of a court of law. This they cannot do. Under Colo. Const. Art. VI, § 1 and § 2, the authority to determine the jurisdiction of this court is vested exclusively in the General Assembly.⁹³

Review of the arbitration award is "exceedingly deferential," and the award must be upheld if it "is rationally inferable from the letter or purpose of the underlying agreement."⁹⁴

§ 20.8.1—Grant Or Denial Of Motion To Compel Arbitration

FAA

An appellate court review of a district court's denial of a motion to compel arbitration is de novo according to the Tenth Circuit: "'We review the denial of a motion to compel arbitration de novo and employ the same legal standard employed by the district court.'"⁹⁵

The Tenth Circuit clarified appealability by specifically holding that a district court order staying the civil action and compelling arbitration is not appealable, citing the prohibition of 9 U.S.C. §§ 16(b)(1) and (2).⁹⁶ The court acknowledged that under Green Tree Financial Corp. v. Randolph,⁹⁷ had the district court compelled arbitration and dismissed the civil action, the order would have been appealable as "a final decision with respect to arbitration" under 9 U.S.C. § 16(a)(3).

The conclusions of law are reviewed de novo and findings of fact for law error. "However, '. . . review is restricted by the great deference accorded arbitration awards. The Eighth Circuit holds the award must be confirmed so long as the arbitrator is even arguably construing or applying the [agreement] even if the court thinks that his interpretation of the agreement is in error.'"⁹⁸

When the issue is whether the dispute was subject to arbitration, which necessarily involves the interpretation of contract, the Colorado appellate court reviews de novo.⁹⁹

CRUAA

The same rule is followed by the Colorado Supreme Court: "Whether an enforceable agreement to arbitrate exists in a case is a question of law we review de novo."¹⁰⁰

Presumably, it is the same standard whether the issue is denial of a motion to compel arbitration or a grant of the motion. However, the latter probably will not be determined on an interlocutory appeal, in state or federal courts.¹⁰¹

The district court's legal conclusions are reviewed de novo.¹⁰²

A Colorado appellate court reviews de novo a trial court's determination of whether an arbitration agreement exists¹⁰³ and whether an arbitration clause is invalid as unconscionable.¹⁰⁴ "In reviewing a district court's confirmation of an arbitration award, we review factual findings for clear error and legal determinations de novo. We are required nevertheless to 'give extreme deference to the determination of the [arbitrator].' 'Once an arbitration award is entered, the Tenth Circuit held the finality of arbitration weighs heavily in its favor and cannot be upset except under exceptional cir-cumstances.'"¹⁰⁵ Whether an agreement to arbitrate exists is a matter of law and reviewed by the Colorado appellate courts de novo.¹⁰⁶ If the arbitration agreement is ambiguous, Colorado courts will exercise a presumption in favor of arbitration and resolve doubts about the scope of the arbitration clause in favor of arbitration.¹⁰⁷

A district court's decision on a motion to compel arbitration is reviewed de novo.¹⁰⁸

§ 20.8.2—Scope Of Review Of Specific Issues

Statute of Limitations Defense

Under federal law, the court of appeals reviews the district court decision de novo.

Intertwining Doctrine Issues

An appellate court's scope of review of a district court's application or rejection of the intertwining doctrine was whether the court abused its discretion.¹⁰⁹ The abuse of discretion standard means that the exercise of discretion on any decision will not be disturbed unless "manifestly arbitrary, unreasonable or unfair."¹¹⁰ However, the intertwining doctrine no longer exists in Colorado.

Order Confirming or Denying Confirmation of an Award (Granting or Denying Motion to Vacate)

The court of appeals' review of the district court's vacating or enforcing of an arbitration award is de novo,¹¹¹ with factual findings reviewed for clear error, giving deference to the determination of the arbitrator.

If an "arbitrator is even arguably construing or applying the contract and acting within the scope of his authority, 'the fact that' a court is convinced he committed serious error does not suffice to overturn his decision."¹¹²

Whether an arbitrator acts within his or her scope of authority is an issue of law reviewed by the appellate court.¹¹³

In reviewing a district court order vacating or confirming an arbitration award, the Colorado Court of Appeals reviews factual findings for clear error and legal conclusions de novo, giving the determinations of the arbitrator extreme deference.¹¹⁴

Waiver

The Tenth Circuit and Colorado appellate courts reviewed de novo a district court's denial of a motion to compel arbitration on the ground of waiver, applying the same...