Mandl v. Bailey

DEBORAH S. EYLER, Judge. In the Circuit Court for Montgomery County, Sue Bailey, M.D., the appellee, filed a three-count petition to vacate an original arbitration award and a modified arbitration award issued in her contractual dispute with her ex-husband Alexander J. Mandl, the appellant. She alleged that the awards were procured by fraud (count I); that the Arbitrator had refused to hear evidence material to the parties’ controversy (count II); and that the Arbitrator had exceeded his authority in modifying a part of the original award (count III). Mandl moved to dismiss the petition on several grounds, including that it was not timely filed.

Bailey moved for partial summary judgment on count II. After a hearing, the court granted Bailey’s motion, denied Mandl’s motion to dismiss, and dismissed counts I and III for mootness. In a written order memorializing that ruling, the court vacated the Arbitrator’s award and remanded the matter to the Arbitrator for further proceedings. ⁷⁰ On appeal, Mandl raises several questions for review, which we have combined and restated as follows: I. Was the circuit court’s decision to grant summary judgment in favor of Bailey on count II of the petition to vacate arbitration award legally incorrect?

II

Was the circuit court’s decision to deny Mandl’s motion to dismiss legally incorrect?

III

If the circuit court did not err in granting summary judgment on count II of the petition to vacate arbitration award, and in denying the motion to dismiss, was its decision about the scope of the remand to the Arbitrator legally incorrect [1] ? On Question I, we conclude that the circuit court’s decision that the Arbitrator refused to hear evidence pertinent to the parties’ dispute was legally incorrect. On Question II, we conclude that the circuit court correctly denied Mandl’s motion to dismiss in part. We shall vacate the circuit court’s dismissal order as to count I and remand for further proceedings on that count; vacate the court’s summary judgment order as to count II and remand with instructions to the court to enter summary judgment in favor of Mandl on that count; and affirm its dismissal order as to count III.

Our disposition of Question I resolves Question III without the need for further discussion. ⁷¹ FACTS AND PROCEEDINGS Background The parties were married on April 21, 1991, when they both were 48 years old. Each had been married previously and had children from those marriages. 2 The parties’ marriage did not produce any children. They separated on September 15, 1996. The parties are highly accomplished in their respective fields.

Bailey is a medical doctor. During some of the marriage, she held high-ranking positions with the federal government; otherwise, she maintained a successful private practice. She is a sought-after motivational speaker. Mandl is a top-rung corporate executive in the telecommunications sector.

For most of the marriage, he was President and Chief Executive Officer of AT & T. Around the time the parties separated, Mandl left AT & T to start Associated Communications LLC, later renamed Teligent, Inc. (“Teligent”), a telecommunications company based in Vienna, Virginia. At Teligent, Mandl was Chairman and Chief Executive Officer. During their marriage, the parties lived an exceptionally affluent life. They owned several houses, including one in Montgomery County.

On January 17, 1997, the parties executed a Separation and Property Settlement Agreement (“Agreement”) that comprehensively resolved the financial issues arising out of the demise of their marriage. They were divorced sometime later in 1997. 3 In Paragraph 2 of the Agreement, Mandl promised to pay certain sums as modifiable alimony. 4 The Paragraph 2 pay ⁷² ments are in escalating amounts, beginning at $220,000 per year, in equal quarterly payments of $55,000, for one year after execution of the Agreement, and eventually reaching $250,000 per year, in equal quarterly payments of $62,500, for the fourth year after execution of the Agreement. The payments are to continue in that amount until Bailey’s death, Mandl’s death, or Bailey’s receipt of a total sum of $5,000,000 (including payments that might be made pursuant to another provision of the Agreement, or payments made by Mandl voluntarily, outside the requirements of the Agreement). The parties agreed, in Paragraph 7, that the Paragraph 2 payments are subject to modification downward if Mandl suffers a material change in circumstances, “including, but not limited to, reduced compensation, retirement or disability, which affects [Mandl’s] ability to make the payments.” In such a situation, “said payments shall be renegotiated and modified in the light of these changed circumstances.” The parties also agreed, however, that “increases in [Mandl’s] income is [sic] not the substantial change in circumstances contemplated by [Paragraph 7].” The Agreement provided that, in the event Mandl experienced a material change in circumstances that he thought warranted a modification in the Paragraph 2 payments, he was to notify Bailey in writing; the parties would “attempt to resolve the matter through negotiation”; and, if that was not successful, would “submit the matter to binding arbitration in accordance with Paragraph 15” of the Agreement.

Under Paragraph 15, “[a]ny claim or dispute arising out of or in connection with this Agreement or the interpretation or meaning of any part hereof shall be arbitrated by the parties before an arbitrator acceptable to both parties, who shall be knowledgeable in the area of dispute.” If, within a one-month period after either party requests arbitration, the parties do not select an arbitrator, “the arbitrator shall be selected, at the request of either party, by the American Arbitration Association [“AAA”], and the arbitration shall proceed in accordance with then existing rules of that Association.” The ⁷³ award “shall be final and binding upon both parties, and judgment may be entered thereon in any court having jurisdiction.” Mandl made Paragraph 2 payments to Bailey in 1997, 1998, 1999, and 2000. His last such payment was made on December 3, 2000. By letter of April 5, 2001, Mandl notified Bailey that he had suffered a material change in circumstances warranting a reduction in Paragraph 2 payments. Sometime that month, Mandl was terminated by Teligent, effective May 1, 2001.

Teligent declared bankruptcy on May 21, 2001, seeking reorganization. Bailey disputed Mandl’s claim of a material change in circumstances and claimed she was owed an arrearage. The parties tried to resolve their disputes through negotiation, without success, and also attempted unsuccessfully to select an arbitrator, outside the AAA forum. Ultimately, on October 31, 2001, Bailey submitted a demand for arbitration to the AAA.

Mandl submitted a counterclaim. Arbitration Proceedings Pursuant to the AAA process, the parties chose Bruce S. Lane, Esquire (“Arbitrator”), to arbitrate their dispute. Amy Henthorn Jones served as the AAA’s “ADR Case Manager” for the matter. Throughout the course of the arbitration, Jones was copied on orders and awards issued by the Arbitrator and on letters between counsel and the arbitrator.

The arbitration was conducted under the AAA Commercial Arbitration Rules then in effect (“AAA Rules”). Before the hearing, the issues for decision were defined as whether Mandl had suffered a material change in circumstances affecting his ability to make the Paragraph 2 payments required by the Agreement, so as to warrant a downward modification of those payments and, if so, the amount by which the Paragraph 2 payments would be reduced; and whether Bailey was entitled to an arrearage and, if so, the amount of the arrearage. The Arbitrator determined that Mandl bore the burden of ⁷⁴ proof on the material change in circumstances claim and Bailey bore the burden of proof on the arrearage claim. The arbitration hearing was conducted over four non-consecutive days, beginning on May 7, 2002, and ending on May 29, 2002.

The parties and several expert witnesses testified. Numerous documents were introduced into evidence. Of relevance to the issues on appeal, Mandl testified that he had been unemployed since the demise of Teligent and, though actively seeking employment through executive search firms, had not been able to land a position and was unlikely to do so. He attributed his dismal prospects to a combination of factors: the ongoing economic recession, including the financial aftermath of the September 11 attacks; the “literal [] collapse[]” of “the telecom world”; his age (58), which is beyond the desirable age range for incoming top-level executives; and his reputation for having taken a company into bankruptcy.

Mandl further testified that, despite his job search, he had not received any employment offers. When asked whether he had been interviewed for any positions, Mandl responded that he had had “a couple of conversations with some headhunters about some possibilities,” which “didn’t go anywhere,” and that he had had one interview with a Philadelphia company that “didn’t go anywhere” because “they ended up not hiring a CEO.” He still was actively seeking employment and wanted to find a position, but had “come to realize over the last six months that it is going to be a lot tougher than I thought” and that it “[m]ay not be possible at all.” He characterized his employment search as an “uphill battle.” At the conclusion of the hearing, on May 29, 2002, the Arbitrator announced: “[W]e stand adjourned. The record still remains open until we get the transcript, [one of the expert witness’s] documents, and any briefs that may be required.” On June 20, 2002, Jones advised counsel in writing that, “[p]er the Arbitrator’s direction, no further briefs or memo-rand[a] shall be accepted or necessary and the proceedings were declared closed on June 20, 2002. Therefore, the [A]rbi ⁷⁵ trator(s) shall have thirty (30) days from that date, or until July 20, 2002 to render the award.” A week later, on June 27, 2002, the Arbitrator issued the “Award of Arbitrator” (“June 27 Award”), which was divided into seven sections.

In Sections I through III, the Arbitrator decided the material change in circumstances claim. He found that Mandl had proven, by a preponderance of the evidence, “that there ha[d] been, since the Agreement was entered into, a material change in his circumstances, including, but not limited to, reduced compensation, which affectfed] his ability to make the payments provided for under Paragraph 2 of the Agreement.” He further decided that the “present circumstances of the parties and justice require” that the amount of Paragraph 2 payments be reduced “to the sum of $62,500 per annum, payable in four (4) equal quarterly installments of $15,625.” 5 He also found “that no further memoranda of law or briefs are necessary or appropriate.” In Section IV, the Arbitrator determined that Bailey was entitled to an arrearage because Mandl had not had the authority to unilaterally cease making Paragraph 2 payments without an agreement by the parties to that effect. He then exercised discretion to make the reduction in Paragraph 2 payments retroactive to November 1, 2001, “the date on which the Demand for Arbitration presumably was received by Mr. Mandl’s counsel.” In Section V, the Arbitrator computed the arrearage amounts that were due and owing. Using January 1, 2001, as the starting point, he calculated the arrearage from then until ⁷⁶ September 30, 2001; for October 2001; and for November 2001 through March 31, 2002. .

He added those figures to arrive at a final arrearage sum of $234,374. Of particular significance to the issues on appeal, the Arbitrator stated: In the event of any disagreement by any party regarding the foregoing calculation, the party shall immediately submit his or her calculation (based on Sections III and IV of this Award) to the Arbitrator, who will resolve any such disagreement promptly. The record of this matter will be kept open for fifteen (15) days solely for this purpose. In addition, Mr. Mandl is reminded that a quarterly payment in the amount of $15,625 for the period April—June, 2002, is, or soon will be, due and owing.

Finally, in Section VI, the Arbitrator determined and assessed the administrative fees and costs of the AAA and decided they would be borne equally by the parties, and in Section VII, he concluded that each party would bear the cost of his or her own. legal fees. In the last paragraph of the award, the Arbitrator stated: “This award is in full settlement of all claims submitted to this Arbitration.” On July 12, 2002, Mandl filed a motion to modify, challenging two findings respecting the arrearage, on the ground that they were miscalculations. First, he asserted that the starting date for calculating the arrearage was March 3, 2001, not January 1, 2001, because under the Agreement his obligation to pay began 45 days after the January 17, 1997 execution date. He asserted that the December 3, 2000 payment thus covered the period through March 2, 2001, but the June 27 Award incorrectly included part of that already-paid sum in the arrearage.

Second, Mandl argued that the arrearage should be calculated based on a retroactive modification date of April 1, 2001, not November 1, 2001, because Bailey’s own conduct in failing to agree to the selection of an arbitrator, and ultimately changing counsel, had delayed the arbitration process from April 1, 2001, until November 1, 2001. By letter of July 18, 2002, Bailey contested Mandl’s motion, arguing that he was attacking the substance of the June 27 ⁷⁷ Award, not merely the calculation of the arrearage, and further arguing that his arguments lacked merit in any event. There followed a series of letters by counsel further debating their positions. On August 2, 2002, the Arbitrator held a conference with counsel.

In “Interim Post-Award Order No. 1,” issued on August 6 (“the August 6 Award”), the Arbitrator stated that, “[a]fter extensive discussion, counsel for the parties and the Arbitrator agreed that Paragraph 2 is ambiguous as to the period of time with respect to which each quarterly alimony payment (and especially the payment of December 3, 2000) applies,” and the ambiguity created two plausible interpretations that “if resolved one way will result in a greater amount due Dr. Bailey then [sic] if resolved in another way.” The August 6 Award went on to set forth a procedure, to which the parties had agreed, for gathering documents and information from prior counsel, in an effort to determine the parties’ original intentions “concerning the payments due under Paragraph 2,” which would be submitted to the Arbitrator by August 26, 2002. After that, the Arbitrator would “make a final determination and award regarding the arrearage and w[ould] modify Section V of the Award accordingly.” Also in the August 6 Award, the Arbitrator rejected, implicitly, Mandl’s argument that the reduction in Paragraph 2 payments should have been made retroactive to April 1, 2001. The award stated that the full $234,374 arrearage payment required by Section V of the June 27 Award was “temporarily suspended,” pending resolution of the time of commencement issue, and directed Mandl to pay, in lieu thereof, $125,000, representing the total of quarterly Paragraph 2 payments in the original, unmodified amounts, for the March 3, 2001, and June 3, 2001 quarters, which “as a result of the June 27, 2002 Award, are no longer in dispute ” (emphasis added). The award concluded: “In all other respects, the AWARD of June 27, 2002 is hereby reconfirmed and remains in full force and effect.” Thus, the retroactivity date remained November 1, 2001. ⁷⁸ On August 26, 2002, the parties submitted, through counsel, written memoranda and exhibits addressing the commencement date for the Paragraph 2 payments under the Agreement (the “time of commencement” issue).

That was the posture of the arbitration when, on August 30, 2002, the Washington Post and the Wall Street Journal reported that Mandl had been named Chief Executive Officer of Gemplus International SA (“Gemplus”), a major French technology company. The next day, Saturday, August 31, 2002, Bailey hand-delivered to the Arbitrator a motion to reopen the hearing for “limited, targeted discovery directed to Mr. Mandl’s communications with his new employer and the terms of his employment.” A copy of the Washington Post article was attached. Bailey argued that Mandl must have been in discussions with Gemplus by May, when he testified at the arbitration hearing, but did not disclose that fact in response to questions calling for it. Bailey accused Mandl of concealing material facts about his relationship with Gemplus and making representations about his unemployability that were, “at best, wildly exaggerated, if not deliberately false.” She maintained that the allegedly concealed information and misrepresentations were relevant to the material change in circumstances claim, and suggested that the Arbitrator should re-decide that claim, based on evidence she anticipated would be generated in discovery.

On September 3, 2002 (the day after Labor Day), before receiving a response from Mandl, the Arbitrator issued “Interim Post-Award Order No. 2” (“the September 3 Award”), granting Bailey’s motion to reopen the arbitration hearing. He determined, based on press reports about Mandl’s hiring, that “fairness and justice require [the Arbitrator] to reopen the hearing (on a limited basis) and to reconsider his Award.” He further stated: The Arbitrator intends to ascertain whether [Mandl] failed at any time during this proceeding to disclose material information concerning his income and employment which ⁷⁹ information might have had a significant effect on the Arbitrator’s Award. The September 3 Award stated that an expedited schedule for resolving the issue of whether Mandl had failed to disclose information material to his income and employment would be established; in the meantime, Mandl was to continue making Paragraph 2 payments in accordance with the June 27 Award. He (the Arbitrator) would “rule on the proper calculation of the arrearage as part of his reconsideration of the Award.” By letter of September 10, 2002, Mandl vigorously objected to the Arbitrator’s decision to reopen the hearing.

(His counsel had received the September 3 Award and the August 31 motion to reopen the hearing the same day). He argued that the Arbitrator lacked authority, under the AAA Rules, to reopen the hearing to re-decide the claims decided in the June 27 Award; rather, his authority was limited to correcting computational errors and clerical mistakes in that award. Bailey responded, on September 17, arguing that the Arbitrator in fact had the authority to reopen the hearing and modify the June 27 Award because the record was not closed; that Mandl had waived his right to challenge the Arbitrator’s authority to act by seeking a substantive modification to the arrearage portion of the June 27 Award that did not merely challenge the Arbitrator’s calculations; and that the Arbitrator had continuing authority to modify the June 27 Award because it pertained to alimony (an argument she later abandoned). On October 7, 2002, the Arbitrator issued a “Modification to Award and Final Order” (“October 7 Award”), vacating the September 3 Award.

He stated that, upon receiving the information about Mandl’s employment by Gemplus, he had been “of the view that the hearing should be reopened for the limited purpose of hearing evidence, pro and con, as to whether Mr. Mandl failed to disclose material information concerning his income and employment which information might have had a significant effect on the Arbitrator’s Award.” He noted that, in finding, in the June 27 Award, that Mandl had proved ⁸⁰ that there was a material change in circumstances affecting his ability to make Paragraph 2 payments and warranting a substantial reduction in those payments, he had given “great weight” to Mandl’s testimony about the loss of his job, his “fruitless search for comparable employment,” and his dismal prospects of ever finding comparable employment. After the June 27 Award was issued, the matter had “remained open, principally for the purpose of ascertaining the correct computation of certain alimony arrearages.” After issuing the September 3 Award, however, he had consulted the AAA and was advised that the AAA Rules “prohibit[ed] him from reopening the Hearing unless a court of competent jurisdiction so direct[ed].” Accordingly, adopting the AAA’s interpretation of its rules as his own, the Arbitrator decided to vacate the September 3 Award reopening the hearing. 6 The Arbitrator then proceeded to decide the time of commencement issue, ruling in Mandl’s favor. The parties had not found any documents or information pertaining to the issue. The Arbitrator determined from the plain language of the Agreement that Paragraph 2 payments were to begin on March 3, 1997, for the quarter then starting.

Therefore, the arrearage properly was to be calculated on an “Alimony Year” starting March 3, not January 1. The Arbitrator modified Section V of the June 27 Award in accordance with that determination. Finally, the Arbitrator commented that he had selected the November 1, 2002 retroactivity date with full awareness of Mandl’s contention that Bailey had acted to delay the starting date for arbitration of the parties’ dispute. ⁸¹ Action to Vacate in Circuit Court On November 6, 2002, in the Circuit Court for Montgomery County, Bailey filed, pursuant to Md.Code (2002), section 3-224 of the Courts and Judicial Proceedings Article (“CJ”), a three-count petition to vacate the June 27 Award and the October 7 Award. In count I, she alleged that Mandl had “concealfed] ..., or fail[ed] to disclose, his putative employment relationship with Gemplus and compensation he will or has received therefrom,” and therefore both awards had been procured by “corruption, fraud, or other undue means.” In count II, Bailey alleged that the Arbitrator had refused to hear evidence material to the parties’ controversy, that is, evidence bearing on when Mandl first took part in the process that resulted in his being hired by Gemplus, and whether he had concealed or failed to disclose such information; and on that basis sought vacation of the June 27 and October 7 awards.

Finally, in count III, Bailey alleged that, if the court did not vacate the June 27 Award, under counts I or II, it should vacate that portion of the October 7 Award modifying the arrearage, on the ground that the Arbitrator had exceeded his authority in so doing. Before Mandl filed a responsive pleading or initial motion, Bailey moved for summary judgment on count II and requested a hearing. The next day, Mandl filed a motion to dismiss the petition on a number of grounds, including that it was not timely filed as a matter of law. After the parties filed oppositions and reply memoranda, the court scheduled all motions for a single hearing, which took place on May 22, 2003.

At the conclusion of the hearing, the court announced that it was granting summary judgment in favor of Bailey on count II, and gave its reasons, which we shall discuss below. The court also announced that it was dismissing counts I and III as moot, because of its ruling on count II, and was denying Mandl’s motion to dismiss. On June 11, 2003, the court issued an Order and Final Judgment granting summary judgment in favor of Bailey on count II of the complaint; vacating the October 7, 2002 ⁸² Award; directing that, in accordance with CJ section 3-225(b), the Arbitrator or his successor “shall conduct further arbitration proceedings consistent with” the court’s oral ruling, a transcript of which was attached; dismissing counts I and III as moot; and denying Mandl’s motion to dismiss. STANDARD OF REVIEW Upon motion of a party, the circuit court may grant summary judgment when there is no genuine dispute of material fact and, on the undisputed material facts, the moving party is entitled to judgment as a matter of law.

Md. Rule 2-501 (e) (2004); Wajer v. Baltimore Gas and Elec. Co., 157 Md.App. 228, 240 , 850 A.2d 394 (2004). A material fact is a fact that, depending on how it is decided by the trier of fact, will affect the outcome of the case. Arroyo v. Bd. of Educ. of Howard County, 381 Md. 646, 654 , 851 A.2d 576 (2004).

Both prongs of the summary judgment ruling are legal determinations. Salamon v. Progressive Classic Ins. Co., 379 Md. 301, 307 , 841 A.2d 858 (2004). For that reason, we review a circuit court’s decision to grant summary judgment de novo.

Id.; Phillips v. Allstate Indemn. Co., 156 Md.App. 729, 740 , 848 A.2d 681 (2004). DISCUSSION I. (A) Arbitration is the process by which parties voluntarily agree to substitute a private tribunal for an otherwise available public tribunal to decide specified disputes.

Cheek v. United Healthcare of the Mid-Atlantic, Inc., 378 Md. 139, 146 , 835 A.2d 656 (2003) (citing Gold Coast Mall, Inc. v. Larmar Corp., 298 Md. 96, 103 , 468 A.2d 91 (1983)). Arbitration is encouraged in Maryland because it provides an informal, expeditious, and inexpensive alternative to conventional litiga ⁸³ tion. RTKL Assocs., Inc. v. Baltimore Co., 147 Md.App. 647, 656 , 810 A.2d 512 (2002). The obligation to arbitrate is a creature of contract.

Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83 , 123 S.Ct. 588 , 154 L.Ed.2d 491 (2002); Cheek, supra, 378 Md. at 147 , 835 A.2d 656 ; C.W. Jackson & Assocs., Inc. v. Brooks, 289 Md. 658, 666 , 426 A.2d 378 (1981). A party cannot be compelled to submit a dispute to arbitration unless he has agreed to do so. Wells v. Chevy Chase Bank, F.S.B., 363 Md. 232, 249 , 768 A.2d 620 (2001); Curtis G. Testerman Co. v. Buck, 340 Md. 569, 579 , 667 A.2d 649 (1995). Whether parties have agreed to arbitrate a particular dispute is a threshold question of law that is for the court to decide.

Testerman, supra, 340 Md. at 579 , 667 A.2d 649 (quoting Holmes v. Coverall North Am., Inc., 336 Md. 534 , 649 A.2d 365 (1994)). Also, because private arbitration is a matter of contract, an arbitrator derives his power from the arbitration agreement itself. MCR of Am., Inc. v. Greene, 148 Md.App. 91, 111-12 , 811 A.2d 331 (2002). The parties delineate the extent of the arbitrator’s authority by the scope of their agreement to arbitrate and submission to arbitration.

Id. at 112 , 811 A.2d 331 ; Barclay Townhouse Assocs. v. Stephen L. Messersmith, 67 Md.App. 493, 497 , 508 A.2d 507 (1986). Maryland law does not restrict arbitration to issues of fact. Soc’y of Am. Foresters v. Renewable Natural Res.

Found., 114 Md.App. 224, 235 , 689 A.2d 662 (1997) (quoting Contract Constr., Inc. v. Power Technology Ctr. Ltd. P’ship, 100 Md.App. 173, 185 , 640 A.2d 251 (1994)). Unless the parties agree otherwise, issues of fact and law are submitted to the arbitrator for decision. Soc’y of Am.

Foresters, supra, 114 Md.App. at 235 , 689 A.2d 662 . Arbitration’s contractual nature is the basis for a mainstay principle of the substantive common law of arbitration: “functus officio,” a Latin phrase meaning “a task performed.” Black’s Law Dictionary 682 (7th ed.1999); Brzowski v. Md. Home Imp. Comm’n, 114 Md.App. 615, 636 , 691 A.2d 699 (1997). This principle holds that once the arbitrator has fulfilled the function and purpose of his office, ⁸⁴ by making a final award, he has no more official authority and can do nothing more in regard to the subject matter of the arbitration.

Thus, an arbitrator may not revisit the merits of an award after it has been issued. Brzowski, supra, 114 Md.App. at 636, 691 A.2d 699 (quoting LaVale Plaza, Inc. v. R.S. Noonan, Inc., 378 F.2d 569, 572 (3d. Cir.1967)). “ ‘The policy which lies behind [the functus officio principle] is an unwillingness to permit one who is not a judicial officer and who acts informally and sporadically, to re-examine a final decision which he has already rendered, because of the potential evil of outside communication and unilateral influence which might affect a new conclusion.’ ” Id. (quoting McClatchy Newspapers v. Cent.

Valley Typographical Union No. 46, 686 F.2d 731 , 734 (9th Cir.1982)). There are well-settled exceptions to the functus officio principle. First, an arbitrator has the power to correct a mistake evident on the face of the award. See Martin Domke, Domke on Commercial Arbitration § 26:1 (3d ed.2003) (citing Colonial Penn Ins.

Co. v. Omaha Indem. Co., 943 F.2d 327 , 332 (3d Cir.1991)); see also Baltimore Teachers Union, Am. Fed’n of Teachers, Local 340, AFL-CIO v. Mayor and City Council of Baltimore, 108 Md.App. 167, 180 , 671 A.2d 80 (1996). Second, when an award is not complete because it does not adjudicate an issue submitted to the arbitrator for decision, then as to that issue, the arbitrator has not exhausted his function, and that issue remains open for determination.

See Domke, supra, § 26:1 (citing Colonial Penn, supra, 943 F.2d at 332, and LaVale, supra, 378 F.2d at 573 ). Finally, when an award, although seemingly complete, leaves doubt about whether the submission has been fully executed, the arbitrator has the power to clarify the ambiguity. See Domke, supra, § 26:1; see also McClatchy Newspapers, supra, 686 F.2d at 734 n. 1. When an arbitrator’s authority is exhausted, under the functus officio doctrine, the parties may by written agreement reinstate that authority.

See Domke, supra, § 26:1. See also Glass, Molders, Pottery, Plastics and Allied Workers ⁸⁵ Intern. Union, AFL-CIO, CLC, Local 182B v. Excelsior Foundry Co., 56 F.3d 844, 848 (7th Cir.1995); Arbitration of the Board of Directors of the Ass’n of Apartment Owners of Tropicana Manor, 73 Haw. 201, 207 , 830 P.2d 503 (1992). The Maryland Uniform Arbitration Act (“MUAA”), codified at CJ sections 3-201 to 234, recognizes the validity and enforceability of written agreements to submit disputes to arbitration, and governs such agreements.

CJ § 3-206. 7 The MUAA embodies a legislative policy favoring arbitration as an alternative method of dispute resolution. Snyder v. Berliner Constr. Co., Inc., 79 Md.App. 29, 34 , 555 A.2d 523 (1989) (citing Bel Pre Med. Ctr., Inc. v. Frederick Contractors, Inc., 21 Md.App. 307 , 320 A.2d 558 (1974), rev’d on other grounds, 274 Md. 307 , 334 A.2d 526 (1975)).

To further that policy, the General Assembly has severely restricted the role the courts play in the arbitration process. Id.; Bd. of Educ. of Prince George’s County v. Prince George’s County Educators’ Ass’n, Inc., 309 Md. 85, 98 , 522 A.2d 931 (1987). To prevent the possibility that a reviewing court will substitute its judgment for the decision of the arbitrator, thereby frustrating the purpose of arbitration, the General Assembly has narrowly confined, in CJ section 3-224, the circumstances in which the court has the power to vacate an arbitral award. The grounds for vacating an arbitral award are: (1) [The] award was procured by corruption, fraud, or other undue means; (2) There was evident partiality by an arbitrator appointed as a neutral, corruption in any arbitrator, or misconduct prejudicing the rights of any party; (3) The arbitrators exceeded their powers; (4) The arbitrators refused to postpone the hearing upon sufficient cause being shown for the postponement, refused to hear evidence material to the controversy, or otherwise so conducted the hearing, contrary to the ⁸⁶ provisions of § 3-213, as to prejudice substantially the rights of a party; or (5) There was no arbitration agreement as described in § 3-206, the issue was not adversely determined in proceedings under § 3-208, and the party did not participate in the arbitration hearing without raising the objection.

CJ § 3-224(b). The party challenging the arbitration award bears the burden of proving the existence of one of the grounds for vacating it. MCR, supra, 148 Md.App. at 117 , 811 A.2d 331 ; Choice Hotels Int., Inc. v. Felizardo, 278 F.Supp.2d 590, 594 (D.Md.2003). When the petition to vacate has been timely filed and the burden of proof has been met, the court shall vacate the award.

CJ § 3-224(b). However, the court “shall not vacate the award ... on the ground that a court of law or equity could not or would not grant the same relief.” CJ § 3-224(c). A court’s authority to modify or correct an arbitral award is likewise limited by the MUAA. Under section 3-223(b), upon petition, a court shall modify or correct an award if: (1) There was an evident miscalculation of figures or an evident mistake in the description of any person, thing, or property referred to in the award; (2) The arbitrators have awarded upon a matter not submitted to them and the award may be corrected without affecting the merits of the decision upon the issues submitted; or (3) The award is imperfect in a matter of form, not affecting the merits of the controversy.

Upon granting a petition to modify or correct, the court shall modify or correct the award to effect its intent and then confirm the award as modified; otherwise, it shall confirm the award as made. CJ § 3-223(c). Several provisions of the MUAA concern the conduct of arbitration proceedings. When parties to an arbi ⁸⁷ tration knowingly and voluntarily agree upon the rules of procedure that will govern the arbitration of their disputes, Maryland courts will recognize the validity of such procedures, so long as they comport with basic requirements of due process.

Kovacs v. Kovacs, 98 Md.App. 289, 304-05 , 633 A.2d 425 (1993) (holding that parties may waive their procedural rights under the MUAA but noting that if the arbitration proceedings do not conform to “notions of basic fairness or due process,” a court may refuse to confirm an award). When parties to an arbitration agreement have not established rules of procedure to govern the arbitration, the procedural provisions of the MUAA control. See Blitz v. Beth Isaac Adas Israel Congregation, 115 Md.App. 460, 477 , 694 A.2d 107 (1997), rev’d on other grounds, 352 Md. 31 , 720 A.2d 912 (1998) (noting that because the parties to an arbitration agreement did not provide for the recovery of attorney’s fees, the court would look to the MUAA to see if awarding attorney’s fees was authorized). Included among them is CJ section 3-222, which allows a party to apply to the arbitrator to modify or correct his award.

The application to modify must be filed within 20 days after delivery of the award to the applicant, and written notice and an opportunity to object within 10 days must be given the opposing party. CJ §§ 3-222(a) and (b). The arbitrator may modify or correct the award on any ground stated in CJ section 3-223(1),(2), or (3), or for the purpose of clarity. CJ § 3-222(c).

Also under CJ section 8-222(d), the arbitrator shall modify or correct an award consistent with an order of court issued pursuant to a petition to the court to correct or modify (CJ section 3-223), to vacate (CJ section 3-224), or to confirm (CJ section 3-227). Under CJ § 3-222(e), the modified or corrected award is subject to court correction or modification, under CJ section 3-223; to vacation, under CJ section 3-224; or to confirmation, under CJ section 3-227. In this case, under Paragraph 15 of the Agreement, the parties agreed that an arbitration in the AAA forum would be conducted “in accordance with then existing rules” of the ⁸⁸ AAA. When the demand for arbitration was submitted to the AAA, on October 31, 2001, the AAA Rules then in effect were the Commercial Arbitration Rules as amended and effective on September 1, 2000.

Our references to the AAA Rules in this opinion are to that set of rules, unless otherwise noted. 8 We shall briefly review the pertinent provisions of the AAA Rules. 9 Parties whose agreement provides for AAA arbitration are “deemed to have made the[][AAA] rules a part of their arbitration agreement.” R-l. By written agreement, the parties may vary the procedures set forth in the AAA Rules. Id. In addition to a final award, the arbitrator may make other awards, including interim, interlocutory, or partial awards.

R-45(b). Any award made must be in writing. R-44. In a final award, the arbitrator must assess the fees, expenses, and compensation for the arbitration.

R-45(c). At the arbitration hearing, the arbitrator determines the admissibility, relevance, and materiality of the evidence offered. R~33(b). If at the conclusion of the hearing the parties agree or the arbitrator directs that documents or other evidence be submitted to the arbitrator after the hearing, those items must be filed with the AAA, which transmits them to the arbitrator.

R-34(b). In that circumstance, and if the date set by the arbitrator for receipt of the materials is later than the date for receiving briefs, then, under R-37, the later date serves as the closing date for the hearing. The award shall be made no later than 30 days from the date of closing of the hearing, unless the parties agree otherwise or the law requires. R-43. “The hearing may be reopened on the arbitrator’s initiative, or upon application of a party, at any time before the award is ⁸⁹ mads. ” R-38 (emphasis added).

If the hearing is reopened, the arbitrator must make an award within 30 days of the closing of the reopened hearing. Id. The parties by mutual agreement may modify any period of time set by the rules, and the AAA or arbitrator may for good cause extend any time period set by the rules, except the time period for making an award. R-40.

R-48 governs modification of an award. “Within 20 days after the transmittal of an award, any party, upon notice to the other parties, may request the arbitrator, through the AAA, to correct any clerical, typographical, or computational errors in the award.” R-48. In modifying the award, “[t]he arbitrator is not empowered to redetermine the merits of any claim already decided.” Id. (emphasis added). Under R-39, entitled “Waiver of Rules,” a party who “proceeds with the arbitration after knowledge that any provision or requirement of these rules has not been complied with and who fails to state an objection in writing shall be deemed to have waived the right to object.” Finally, R-55, captioned “Interpretation and Application of Rules,” states that “[t]he arbitrator shall interpret and apply these rules insofar as they relate to the arbitrator’s powers and duties.” “Additionally, [a]ll other rules shall be interpreted and applied by the AAA.” Id.

(B) As explained above, count II of Bailey’s petition, founded on CJ section 3-224(b)(4), alleged that the Arbitrator had “refus[ed] to hear evidence material to the controversy,” namely the evidence of the circumstances leading up to Mandl’s employment by Gemplus. The circuit court granted summary judgment in favor of Bailey on that count based on the arguments she advanced. It determined that there was no genuine dispute of material fact, and further concluded that Bailey was entitled to judgment as a matter of law. The court reasoned that the June 27 Award never was a final award and therefore the Arbitrator was free to re-decide ⁹⁰ the material change in circumstances claim.

Its reasoning on this issue was two-fold. First, it concluded that the Arbitrator’s statement, in the June 27 Award, that he would decide any disagreement submitted by a party about the calculation of the arrearage, and that he was keeping the record open for fifteen days for that purpose, was a “reservation of jurisdiction” to decide further substantive issues relating to the arrearage claim, which made the June 27 Award non-final. Second, and alternatively, the court concluded that, in his motion to modify, Mandl had sought a re-decision of two “substantive” issues—the Paragraph 2 starting date and the reduction retroactivity date—and that, by doing so, he had acknowledged the non-finality of the June 27 Award, and under principles of waiver and estoppel could not assert a contrary position. In short, the court concluded that the June 27 Award was in fact not final and was by law not final.

From that premise—that the June 27 Award was not final— the court further reasoned that, as of the time of Bailey’s motion to reopen the hearing (August 31), the Arbitrator had authority to hear additional evidence, including evidence about the material change in circumstances claim, and to re-determine that claim. In the October 7 Award, the Arbitrator expressly recognized that evidence that might exist about Mandl’s relationship to Gemplus at the time of the May 2002 arbitration hearing could be relevant to the material change in circumstances controversy. Therefore, as a matter of law, by refusing to reopen the proceedings to hear whatever that evidence that might be, the Arbitrator refused to hear evidence material to the parties’ controversy, within the meaning of CJ section 3-224(b)(4). On appeal, Mandl contends the circuit court correctly determined that there was no genuine dispute of material fact but incorrectly determined that Bailey was entitled to judgment as a matter of law.

He argues that the June 27 Award was final. The Arbitrator’s reservation of jurisdiction merely reminded the parties that they could move to modify the arrearage under R-48, and notified them to do so, if at all, within 15, not 20, days. Mandl’s July 12 motion challenged the calculation of ⁹¹ the arrearage award, under R-48. Under that same rule, and under the functus officio doctrine, the Arbitrator did not have the power to re-decide the material change in circumstances claim.

In addition, Mandl argues that, even if the June 27 Award was not final as to all claims, it was final as to the material change in circumstances claim, and therefore the Arbitrator was without authority to re-decide that claim. In either situation, when Bailey filed her motion to reopen the hearing, the Arbitrator had no authority to re-decide the material change in circumstances claim. The Arbitrator’s authority was governed by the AAA Rules, which the Arbitrator, in consultation with the AAA, interpreted as not permitting him to hear new evidence on the material change in circumstances claim. The circuit court erred by failing to defer to the Arbitrator’s interpretation of the AAA rules.

Finally, by filing his July 12 motion, Mandl did not waive his right to oppose reopening the hearing or become estopped to oppose reopening the hearing. Although Bailey agrees that the circuit court properly decided that there was no genuine dispute of material fact, she disagrees that the court’s ruling was legally incorrect, for the same reasons the court gave in making its ruling. She also asserts that Mandl did not raise below, and therefore cannot argue on appeal, that the court owed deference to the Arbitrator’s interpretation of the AAA Rules. (C) We agree with the parties that the