Aetna Bridge Company v. State of Rhode Island Department of Transportation

Summary

The Supreme Court of Rhode Island reviewed a Superior Court judgment confirming an arbitration award in favor of Aetna Bridge Company against the Rhode Island Department of Transportation. The court held that the record was insufficient to determine whether Aetna's claim was an impermissible pass-through claim under the Severin doctrine and that substantive arbitrability was subject to de novo review. It vacated the judgment and remanded for a new evidentiary hearing on confirmation and vacatur of the award.

Holdings

1. A party may preserve a substantive-arbitrability challenge for later judicial determination even if it participates in the arbitration after raising the issue; DOT was not required to object at the outset of arbitration because substantive arbitrability is treated as equivalent to subject-matter jurisdiction and may be raised at any time.
2. The issue whether a dispute is substantively arbitrable is a question of law subject to de novo review, rather than the usual deferential review applied to an arbitrator's merits decision.
3. Rhode Island adopts the Severin doctrine: if a general contractor's claim against an owner is a pass-through claim brought on behalf of a subcontractor and the general contractor has no concomitant liability to that subcontractor, the claim is not arbitrable.
4. When the arbitration record is unavailable and the arbitrator's award does not reveal the issues considered or the basis for the decision, the Superior Court must conduct a new evidentiary hearing to determine substantive arbitrability rather than simply confirm the award.

Questions Presented

1. Whether DOT preserved its challenge to the substantive arbitrability of Aetna's alleged pass-through claim by participating in the arbitration.
2. Whether substantive arbitrability is subject to de novo judicial review rather than the deferential review ordinarily applied to an arbitrator's merits decision.
3. Whether an alleged pass-through claim by a general contractor is arbitrable when the contractor has no concomitant liability to the subcontractor.
4. Whether the Superior Court could properly confirm or vacate the arbitrator's award when the arbitration record was unavailable and the arbitrator issued only a bare two-sentence award.

Disposition

vacated