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Beacon Towers Condominium Trust v. Alex

Supreme Judicial Court of Massachusetts, Suffolk

January 7, 2016

Beacon Towers Condominium Trust
v.
George Alex

Argued October 5, 2015.

Civil action commenced in the Superior Court Department on November 14, 2013.

The case was heard by Frances A. McIntyre, J.

The Supreme Judicial Court on its own initiative transferred the case from the Appeals Court.

J. Mark Dickison ( Ryan A. Ciporkin with him) for the defendant.

Mark A. Rosen for the plaintiff.

Present: Gants, C.J., Spina, Cordy, Botsford, Duffly, Lenk, & Hines, JJ.

OPINION

[42 N.E.3d 1145] Gants, C.J.

Under G. L. c. 251, § 10, attorney's fees may not be awarded in arbitration proceedings " [u]nless otherwise provided in the agreement to arbitrate." The issue presented in this case is whether an arbitration panel applying the commercial arbitration rules of the American Arbitration Association (AAA rules), having found that the arbitration agreement did not authorize an award of attorney's fees, nonetheless may award attorney's fees based on its finding that " substantially all of the defenses were wholly insubstantial, frivolous and not advanced in good faith." The appellant, George Alex, contends that the arbitration panel may award attorney's fees in these circumstances for either of two reasons: first, because AAA rule 47(a)[1] authorizes an arbitrator to " grant any remedy or relief that the arbitrator

Page 473

deems just and equitable and within the scope of the agreement of the parties" ; or second, because AAA rule 47(d)(ii) provides that an arbitrator may award attorney's fees if " it is authorized by law," and the award of attorney's fees in these circumstances is authorized by G. L. c. 231, § 6F. We conclude that an arbitrator lacks the authority to award attorney's fees based on a finding that all the claims or defenses were wholly insubstantial, frivolous, and not advanced in good faith unless the parties have agreed that an arbitrator may award attorney's fees in these circumstances. We therefore affirm the Superior [42 N.E.3d 1146] Court judge's order vacating the arbitration panel's award of attorney's fees.

Background.

The appellee, Beacon Towers Condominium Trust (trust), is the unit owners' organization for the Beacon Towers Condominium (condominium), an entity created pursuant to G. L. c. 183A, § 17. The condominium is comprised of three adjacent buildings in the Back Bay section of Boston, with the addresses of 479, 481, and 483 Beacon Street. The board of trustees for the trust (trustees) is the governing body of the trust, responsible for operating, maintaining, and managing the common areas and facilities of the condominium and the business of the trust. Alex was the owner of two units -- one at 479 Beacon Street and one at 481 Beacon Street.

In 2010, a major electrical fire occurred at 483 Beacon Street that caused substantial damage throughout the building, rendering it uninhabitable. The other two buildings were not affected. Under G. L. c. 183A, § 17, and the trust's bylaw, the trustees were obligated to certify whether the fire damage exceeded ten per cent of the value of the condominium prior to undertaking any rebuilding. If the damage exceeded ten per cent of the condominium's value, the trustees were required under § 17 to submit their restoration plan to a vote and obtain the approval of seventy-five per cent of the unit owners before proceeding with the repairs.

The trustees undertook the repairs without certifying that the fire damage was less than ten per cent of the value of the condominium and without obtaining the approval of seventy-five per cent of the unit owners, and charged each unit owner his or her share of the costs in a special common expense assessment. The trustees ...


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