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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Johnson v. The Aleut Corporation (8/23/2013) sp-6813

Johnson v. The Aleut Corporation (8/23/2013) sp-6813

         Notice:  This opinion is subject to correction before publication in the PACIFIC  REPORTER .  

         Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,  

         303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email  

                                                                                   

         corrections@appellate.courts.state.ak.us.  



                   THE SUPREME COURT OF THE STATE OF ALASKA  



TROY JOHNSON,                                        )  

                                                     )        Supreme Court No. S-14632  

                           Appellant,                )  

                                                     )        Superior Court No. 3AN-11-09709 CI  

         v.                                          )  

                                                     )        O P I N I O N  

THE ALEUT CORPORATION,                               )  

                                                     )        No. 6813 - August 23, 2013  

                           Appellee.                 )  

                                                     )  



                  Appeal from the Superior Court of the State of Alaska, Third  

                                                             

                  Judicial District, Anchorage, Mark Rindner, Judge.  



                  Appearances:  Molly C. Brown and Michael D. White, Patton  

                                               

                  Boggs LLP,  Anchorage, for Appellant.  William J. Evans,  

                  Sedor,  Wendlandt,  Evans  &  Filippi,  LLC,  Anchorage,  for  

                  Appellee.  



                  Before:  Fabe, Chief Justice, Winfree, Stowers, Maassen, and  

                                                                                 

                  Bolger, Justices.  



                  FABE, Chief Justice.  

                  STOWERS, Justice, dissenting.  



I.       INTRODUCTION  



                  The Aleut Corporation terminated the employment of its chief executive  



officer, Troy Johnson.  Johnson challenged the termination, and the matter was submitted  



to binding arbitration as required by the employment contract, which contained a broad  



arbitration clause providing that "[a]ny and all disputes . . . arising out of, relating in any  

                                                                                


----------------------- Page 2-----------------------

way to or in connection with this Agreement and/or Executive's employment with or   



termination  of  employment  from   the  Company  .  .  .  shall  be  solely  settled  by  an  



arbitration."  At arbitration, the parties disputed whether The Aleut Corporation had  



violated the employment contract by terminating Johnson and whether Johnson's alleged  



breach  of  contract  justified  the  termination.    After  determining  that  The  Aleut  



                                                 

Corporation had breached the employment contract, the arbitrator awarded damages to  



Johnson.  



                     The   Aleut   Corporation   petitioned   the   superior   court   to   vacate   the  



arbitrator's decision, claiming that the arbitrator had addressed an issue that was never  



                                                                     

submitted to arbitration and was thus not arbitrable.  The superior court vacated the  



                                                                                                       

arbitration award, concluding that the arbitrator had exceeded his authority, and Johnson  



appeals.  Because the dispute was arbitrable, we conclude that the arbitrator did not  



                                                                                                         

exceed his authority, and we therefore reverse the superior court's decision to vacate the  



arbitration award.    



II.        FACTS AND PROCEEDINGS  



           A.        Facts  



                     The  Aleut  Corporation  is  one  of  the  13  regional  Native  corporations  



                                                                                                             1  

established in 1972 under the Alaska Native Claims Settlement Act.   Troy Johnson is  



an  Aleut  Corporation  shareholder  and  a  business  executive.    In  2007  The  Aleut  



                                                                                                             

Corporation hired Johnson as its new chief executive officer (CEO), and the two parties  



negotiated an agreement setting forth the terms of Johnson's employment.  



                                                

                     Paragraph  5  of  the  employment  agreement  established  that  Johnson's  



                                                                           

"Initial Term" as CEO would last three years, ending on March 31, 2010.  Paragraph 5  



                                                                                                                          

also provided for a two-year "automatic extension" of Johnson's term, at The Aleut  



           1         See 43 U.S.C.  1606 (2007).  



                                                                   -2-                                                                6813  


----------------------- Page 3-----------------------

Corporation's option.  To trigger this option term, Paragraph  5 required Johnson to  

                                                                                               



provide a reminder notice to The Aleut Corporation's Board of its ability to cancel the  

                                                                                                



option term.  This notice was to be sent to the Board Chair at least 120 days before  

                                                   



March 31, 2010.  Upon receiving this reminder notice, The Aleut Corporation was to  



have  the  option  to  cancel  the  automatic  extension  of  the  term  by  written  notice  to  



Johnson  at  least  90  days  before  March  31,   2010.    Paragraph  5  of  the  employment  



agreement provided:  



                    Term.  Subject to the provisions for earlier termination set  

                    forth in Paragraph 9, the term of the Executive's employment   

                    hereunder   shall   commence   on   the   Effective   Date   and  

                    terminate (3) years thereafter on March 31, 2010 (the "Initial  

                                                 

                    Term").    Company  shall  have  an  option,  exercisable  in  

                    writing on or before ninety (90) days prior to the expiration  

                                                                             

                    of the Initial Term, to cancel the automatic extension of the  

                    term of this Agreement for an additional two (2) year period  

                                                                                 

                    commencing  on  April  1,  2010,  terminating  on  March  31,  

                    2012 (the "Option Term").  Executive shall notify the Chair  

                                                                                                

                    of the Board, in writing, 120 days before the expiration of the  

                                                                                      

                    Initial Term of the Company's option to cancel, but if he fails  

                                                                                

                    to  so  notify  the  Chair  of  the  Board,  this  Agreement  will  

                                                                  

                    expire at the end of the Initial Term.  The Initial Term and the  

                                       

                    Option Term, if not cancelled by the Company, are herein  

                    called the "Term."  Neither the Company nor Executive will  

                    have  any  obligation  to  renew  or  extend  this  Agreement  

                    beyond the Term.  



(Emphasis in original.)  The employment agreement also contained a broadly drafted  



arbitration clause:  "Any and all disputes between Executive and the Company, however  

                                                             



significant, arising out of, relating in any way to or in connection with this Agreement  

                                                                              



and/or   Executive's   employment   with   or   termination   of   employment   from   the  



Company . . . shall be solely settled by an arbitration . . . ."  



                                                              -3-                                                        6813
  


----------------------- Page 4-----------------------

                    Johnson testified that when he negotiated the employment agreement, he  



sought a longer initial term because he "wanted that security of a five-year contract" for  



                                                                                                                

his family.  He further explained that "having been through the work of changing a  



                  

company  . . . three years is a pretty short period of time."  Johnson and The Aleut  



                                                                                                              

Corporation agreed that the purpose of the reminder notice provision was to ensure that  



the Board would not overlook the option term and inadvertently allow Johnson's contract  



to extend.  



                                

                    In July 2009, as the end of Johnson's initial three-year term approached,  



                                                                                           

Johnson and The Aleut Corporation began negotiations for a new contract.  On July 22,  



2009, Johnson drafted a letter to Sharon Lind, the chair of The Aleut Corporation Board  



                                                                    

of Directors, providing the required notice of The Aleut Corporation's option to cancel  



                                                                                                 

the automatic extension of the term.  Johnson created a fax cover sheet for the letter and  



                                                                                         

attempted to fax the letter to Lind's office.  But a subsequent review of electronic records  



from the fax machine at Lind's office indicated that Lind's machine never received  



                                                                                             

Johnson's fax.  Johnson also claimed that he later gave Lind a hard copy of the letter  



with a packet of other documents.  



                    The contract negotiations that followed led Johnson to believe that Lind had  



                                                               

received  his  reminder  notice  letter.                 In  August  2009,  Johnson  watched  The  Aleut  



                                                                            

Corporation's attorney, Thomas M. Daniel, give a presentation to the full Board on the  



                                           

status of their negotiations.  During the presentation, Daniel provided charts describing  



the terms of Johnson's current contract and contract proposals.  The "term" section of  



                                                                                                       

the chart stated that Johnson's contract "automatically extended for 2 more years unless  



[The Aleut Corporation] gives notice of cancellation 90 days before expiration."  The  



                                                                

chart did not mention Johnson's obligation to provide notice.  Johnson later testified that  



because Daniel's chart did not mention the requirement for him to provide the reminder  



                                                              -4-                                                        6813
  


----------------------- Page 5-----------------------

notice, he assumed that Lind had received his letter reminding The Aleut Corporation of  



its option to cancel the automatic extension of the term.   



                   Under Paragraph 5, notice from Johnson would have triggered The Aleut  



                                                                                                  

Corporation's responsibility to notify Johnson before December 31, 2009 if the company  



                                                                                                

decided to cancel the automatic extension. The Aleut Corporation did not provide notice  



to Johnson of its decision to cancel the automatic extension of his term by that date.   



                   Throughout  the  contract  renewal  negotiations,  Board  Chair  Lind  sent  



                                

inquiries  to  Daniel,  The  Aleut  Corporation's  attorney,  regarding  the  employment  



                                    

agreement.  Early in the negotiations, Lind asked Daniel a question about the automatic  



extension  provision  in  Johnson's  contract.    Daniel  confirmed  that  according  to  the  



provision, Johnson's contract would "automatically renew" for an additional two years  



                                                                                  

"unless the board affirmatively cancels the extension at least 90 days before the current  



contract expires."  (Emphasis in original.)  Later, in February 2010, Daniel replied to an  



                                              

additional question from Lind, remarking that the "notice provisions" in the employment  



                                                                 

agreement were "mostly meaningless - the result of last minute changes that were made  



when we negotiated the contract."  Meanwhile, the contract negotiations between The  



Aleut Corporation and Johnson continued into March 2010 without success.  



                    On March 21, 2010, The Aleut Corporation's Board informed Johnson that  



                                                                                        

it would allow Johnson's contract to expire at the end of the month.  The following day,  



                                                                                                

Johnson and a member of the Board discussed how Johnson might save his job.  Johnson  



                                                                                    

later testified that the Board member's comments led him to believe that he might retain  



his job if he fired Eric Waterman, The Aleut Corporation's director of operations.  After  



the  meeting,  Johnson  terminated  Waterman  and  signed  a  severance  and  release  



agreement with him.  



                                                       

                    On  March  30,  2010,  Johnson's  lawyer  sent  a  letter  to  The  Aleut  



                                   

Corporation declaring that The Aleut Corporation had improperly terminated Johnson's  



                                                             -5-                                                       6813
  


----------------------- Page 6-----------------------

contract because Johnson had faxed the reminder notice to Lind and the Board had not  



timely  cancelled  the  option.               The  next  day,   Johnson   completed  his  last  day  of  



                    

employment at The Aleut Corporation.  On April 9, 2010, Johnson's attorney sent a  



second letter to The Aleut Corporation, proposing a settlement and advising that Johnson   



would proceed to arbitration if the parties could not agree on a settlement.  



         B.        Arbitration Proceedings  



                   The arbitration clause of the employment agreement required that "[a]ny  



and all disputes . . . arising out of, relating in any way to or in connection" with the  



                                                                                    

employment  agreement  "shall  be  solely  settled  by  an  arbitration"  conducted  in  



accordance with the American Arbitration Association rules.  Accordingly, Johnson  



                                                      

submitted a statement of claims to the American Arbitration Association on October 15,  



2010.  



                   Johnson's  statement  of  claims  argued  that  The  Aleut  Corporation  had  



                                                                                                  

breached the employment agreement when it terminated his contract. Johnson explained  



                                                                                           

that he had provided timely notice to the Board reminding it of its option to cancel the  



automatic extension and that the Board had failed to provide timely notice that it was  



                      

cancelling the automatic extension.  Johnson's statement of claims concluded with a  



request  that  "the  arbitrator  find  the  Company  failed  to  timely  exercise  its  option  to  



                                                                       

terminate the automatic two-year extension of Mr. Johnson's Contract beyond March 31,  



                                                                    

2010," and "that the Company['s] termination of Mr. Johnson's employment as CEO  



effective March 31, 2010, constituted a breach by the Company of the Contract."  



                   The Aleut Corporation responded that Johnson had not in fact provided the  



                                                                                        

required reminder notice and thus the employment agreement had expired on March 31,  



2010.  The Aleut Corporation also claimed, as an "[a]ffirmative [d]efense," that Johnson  



had breached the employment agreement by terminating Waterman and obligating The  



Aleut Corporation to a severance agreement without the proper authority.  



                                                           -6-                                                     6813
  


----------------------- Page 7-----------------------

                   The parties submitted a joint statement of uncontested facts to the arbitrator.  



That statement provided that "Paragraph 5 [of the employment agreement] required  



Johnson to notify the Chair of [The Aleut Corporation's] Board, Sharon Lind, of [The  



                                                                                                            

Aleut Corporation's] option to cancel the 'Option Term' 120 days prior to March 31,  



                                  

2010, or December 1, 2009."  Their statement described the negotiations of Johnson's  



              

contract renewal, Johnson's letter to Lind, Daniel's statements concerning the option  



term,  Johnson's  firing  of  Waterman,  and  The  Aleut  Corporation's  termination  of  



Johnson's contract.  



                                                                                                       

                    On April 12 and 13, 2011, Arbitrator Thomas P. Owens, Jr. conducted the  



                                                                                                      

arbitration hearing.  The parties disputed whether Johnson's decision to fire Waterman  



constituted  a  breach  of  contract.    Johnson  argued  that  The  Aleut  Corporation's  



                                                                                                            

termination of the employment agreement "had no valid basis" and was a "breach of the  



                                                                                                     

Contract."  He presented evidence that he had provided the requisite reminder notice to  



                                                                                  

trigger the automatic extension of the term.  The Aleut Corporation contended that the  



                           

"issue in the case is whether or not Mr. Johnson's contract automatically extended" and  



                                                                      

that "at the end of this arbitration hearing there will be no evidence in this case . . . that  



Ms. Lind received that required notice. . . .  And that's the entire case."  



                                          

                   The arbitrator heard testimony from Johnson, Board Chair Lind, Daniel,  



The  Aleut  Corporation's  chief  financial  officer,  and  a  member  of  the  Board.    The  



testimony covered a variety of topics, including the parties' intent surrounding the initial  



                                                                                                                       

negotiation of the option term of the employment agreement, Johnson's decision to fire  



Waterman, Johnson's performance as CEO, the recent contract-renewal negotiations, and  



the termination of Johnson's contract.  In particular, Johnson testified that Daniel had  



                                             

proposed the reminder notice language "so that the board, whoever was in the board at  



that time, would be aware that . . . you can cancel this automatic two-year extension."  



Johnson also testified about his performance as CEO, his firing of Waterman, the 2009  



                                                             -7-                                                       6813
  


----------------------- Page 8-----------------------

contract negotiations, and his attempts to send the notice letter to Lind.  Lind reported  

                                                                                                



that she had never received Johnson's notice letter.  The arbitrator also heard testimony  

                                                                                  



from Daniel describing both the initial negotiations of the option term in Johnson's  



employment agreement and the contract renewal negotiations.  



                   In  June  2011  Arbitrator  Owens  issued  his  decision  and  award.                                He  



summarized Johnson's claim:  "Claimant claims that Respondent prematurely ended his   



employment,  in  violation  of  the  Contract,  and  that  he  is  entitled  to  compensatory  



damages as a result of the breach."  The arbitrator determined that to resolve the parties'  



dispute, he was required to answer three questions:  



                    1.       Did     the    termination         of    Claimant[]        [Johnson's]  

                                            

                   employment by Respondent [The Aleut Corporation] breach  

                   the Contract?  



                   2.        Was      the    termination        of    Claimant[]        [Johnson's]  

                   employment justified by [Johnson's] subsequent breach of  

                   the Contract?  



                                                              

                   3.        What damages, if any, should be awarded in this case?  



                                                                            

The arbitrator further explained that "[r]esolution of the issues in this case requires that  



the  arbitrator  interpret  the  Contract,"  and  that  in  light  of  Alaska  contract  law  



jurisprudence,  the  primary  goal  was  to  "enforce  the  reasonable  expectations  of  the  



parties."  



                                                  

                   The arbitrator made detailed findings about the parties' expectations.  He  



found "Troy Johnson's testimony concerning the negotiation of  5 of the Contract to be  



credible and un-contradicted."  He further found "that the reasonable expectations of the  



parties regarding the term" of the employment agreement were:  



                   (1) the initial term of the Contract would be three years; (2)  

                                    

                   the  initial  term  would  be  automatically  extended  for  two  

                                                             

                   additional years unless [The Aleut Corporation] exercised its  

                                                                                          

                   option to cancel the automatic extension at least ninety days  



                                                            -8-                                                      6813
  


----------------------- Page 9-----------------------

                    before  the  scheduled  expiration  of  the  initial  term;  (3)  an  

                                                     

                    extension of the Contract would not accidentally occur on  

                    account  of  [The  Aleut  Corporation's]  lack  of  information  

                    about its right to cancel the automatic extension.  



The  arbitrator  also  found  that  the  reminder  notice  clause  was  not  inserted  into  the  

                                                                                                                    



contract "to create an unrelated, arbitrary pre-requisite that could operate to negate the  



automatic extension, regardless of the state of [The Aleut Corporation's] knowledge  



about its rights."  Rather, "the primary intent and expectation of the parties with regard  

                                                                                               



to the term of the Contract was that the initial three-year term of the Contract would be  

                                                                                                     



automatically extended for two years, unless [The Aleut Corporation] notified Johnson  

                                                                                                        



by December 31, 2009, that it was cancelling the extension."    



                    The arbitrator found that The Aleut Corporation was independently "well  

                                                                                            



aware"  of  the  existence  of  the  option  term  during  the  summer  and  fall  of  2009,  as  



                                                                             

evidenced by Daniel's correspondence with Lind.  The arbitrator found that although  



Lind  had  never  received  the  fax  of  Johnson's  letter,  this  issue  was  of  "secondary"  



                                                                                                                

importance in light of the conclusion that Johnson's reminder notice was "not a pre- 



                                                                                       

requisite, the non-occurrence of which would excuse [The Aleut Corporation] from the  



obligation  to  affirmatively  notify  Johnson  of  a  cancellation  in  all  circumstances,  



                                         

regardless  of  the  state  of  its  knowledge  about  its  right  to  cancel."    Accordingly,  



Johnson's  failure  to  provide  the  reminder  notice  "did  not  extinguish  [The  Aleut  



                                                                                  

Corporation's] obligation to timely notify Johnson of a decision to cancel the automatic  



extension."  Therefore, the arbitrator determined that by terminating Johnson without  



providing  timely  notice,  The  Aleut  Corporation  had  "breached  the  Contract."    The  



                                                                  

arbitrator concluded that "[t]o find otherwise would exalt form over substance and betray  



the expectations of the parties to the Contract."  



                                 

                    Finally, the arbitrator relied on the employment agreement's definition of  



"cause" for termination, finding that "the conduct of Johnson with regard to Waterman['s  



                                                             -9-                                                        6813
  


----------------------- Page 10-----------------------

termination  and  severance  package]  did  not  constitute  willful,  reckless  or  grossly  



                                                                                   

negligent  misconduct  that  would  justify  termination  of  his  employment  for  cause."  



                                                                        

Because the arbitrator decided that The Aleut Corporation had breached the contract  



                                                      

while Johnson had not breached it, the arbitrator awarded damages to Johnson for lost  



salary and benefits.  



          C.        The Superior Court's Decision  



                                                                                                        

                    Arguing that the arbitrator exceeded his authority, The Aleut Corporation  



                                                                                            

petitioned the superior court to vacate the arbitration award.  The superior court vacated  



the  arbitrator's  award,  concluding  that  the  arbitrator  had  exceeded  his  authority  by  



                                               

deciding an issue that was not submitted to arbitration and that the award was therefore  



                                                                                              

"procedurally unfair."  The superior court reasoned that it was "not reasonably possible  



                                                                                                                

that the scope of the arbitration required the arbitrator to interpret the CEO Contract and  



                                                    

determine if the Reminder Notice was a condition precedent to the automatic renewal."  



                                                         

It  further  noted  that  "[t]his  finding  is  emphatically  supported  by  the  fact  that  the  



arbitrator ruled on an issue in a manner contrary to concessions that both parties had  



           

made;  namely,  the  CEO  Contract  would  not  renew  unless  Johnson  provided  the  



Reminder Notice."  As a result, the superior court awarded partial attorney's fees and  



costs to The Aleut Corporation.  



                    Johnson  moved  for  reconsideration,  but  the  superior  court  denied  the  



                                                                                                                  

motion.  Johnson now appeals, arguing that the superior court erred when it vacated the  



arbitration award.  



                                                              -10-                                                         6813
  


----------------------- Page 11-----------------------

III.      STANDARD OF REVIEW  



                    A superior court's decision reviewing an arbitration award is subject to de  



                    2                                                                                   3  

                       "An arbitrator's decision is accorded great deference"  because "[b]oth  

novo review.                                                                    



the  common  law  and  Alaska  statutes  evince  a  strong  public  policy  in  favor  of  

       

arbitration."4  To effectuate this public policy, we follow an approach of "minimal court  

                                                                                      

interference  with  arbitration,"5  and  "[t]his  deference  extends  to  both  the  arbitrator's  



factual findings and the arbitrator's interpretation and application of the law."6  We have  

                                                      



remarked that "as a matter of both policy and law, we are 'loath to vacate an award made  

                                                                                                             

by an arbitrator,' "7 and that "we will interfere with the decision of an arbitrator only in  

                                                                                                 

the most egregious instances."8  

                                                 



                    "There are no statutory grounds for review of an arbitrator's determination  



as  to  the  meaning  of  contract  provisions  which  do  not  pertain  to  the  issue  of  



          2         See  Kinn v. Alaska Sales & Serv., Inc. , 144 P.3d 474, 482 (Alaska 2006)   



(citing Marathon Oil Co. v. ARCO Alaska, Inc. , 972 P.2d 595, 600 (Alaska 1999)).  



          3         State v. Alaska Pub. Emps. Ass'n, 199 P.3d 1161, 1162 (Alaska 2008)  

                                                     

(citing Alaska State Emps. Ass'n/AFSCME Local 52 v. State , 74 P.3d 881, 882 (Alaska  

                                                                                

2003)).  



          4  

                                                                  

                    Id. (quoting Baseden v. State , 174 P.3d 233, 237 (Alaska 2008)) (internal  

quotation marks omitted).  



          5         Id. (quoting Dep't of Pub. Safety v. Pub. Safety Emps. Ass'n , 732 P.2d  



1090, 1093 (Alaska 1987)) (internal quotation marks omitted).  



          6  

                                                                                                  

                    Id.  (citing  OK Lumber Co. v. Alaska R.R. Corp., 123 P.3d 1076, 1078  

(Alaska 2005)).  



          7         Ahtna, Inc. v. Ebasco Constructors, Inc. , 894 P.2d 657, 660 (Alaska 1995)  

                                                                                                        

(quoting Pub. Safety Emps. Ass'n , 732 P.2d at 1093).  



          8         Bd. of Educ., Fairbanks N. Star Borough Sch. Dist. v. Ewig , 609 P.2d 10,  

                                                                     

13 (Alaska 1980) (internal citations and quotation marks omitted).  



                                                              -11-                                                         6813
  


----------------------- Page 12-----------------------

                     9 

                                                                             

arbitrability."   And "[w]here one party alleges that the arbitrator has exceeded his or her  



                                                                                   

authority, we will affirm the arbitrator's conclusion as to the scope of his or her powers  



                                                                                       10  

if  'the  arbitrator's  conclusion  is  reasonably  possible.'  "                             Thus,  "[c]laims  that  the  



                                                 

arbitrator construed the contract in a manner exceeding his or her powers are reviewable,  



                                                      

but  will  only  be  reversed  'if  all  fair  and  reasonable  minds  would  agree  that  the  



                                                            

construction  of  the  contract  made  by  the  arbitrator(s)  was  not  possible  under  a  fair  

interpretation of the contract.' "11  



IV.       DISCUSSION  



          A.        The Arbitrator Did Not Exceed His Authority.  



                    Alaska's Revised Uniform Arbitration Act provides that "the court shall  



vacate an award made in the arbitration proceeding if . . . an arbitrator exceeded the  



                                 12  

arbitrator's  powers."                 Johnson  argues  that  the  arbitrator's  interpretation  of  the  



employment agreement to determine whether it had been breached was not only within  



                          

the scope of his powers but was also "well-supported by the arbitration filings and the  



                                                                                       

evidence presented at the arbitration hearing."  The Aleut Corporation responds that the  



                                                                                                     

arbitrator  exceeded  his  authority  by  rendering  a  decision  on  an  issue  that  "was  not  



                                                                   

submitted or contested due to the agreement between the parties."  But "if the arbitrator's  



          9         Ahtna , 894 P.2d at 661 (quoting                  Alaska State Hous. Auth. v. Riley Pleas,  



Inc. , 586 P.2d 1244, 1247 (Alaska 1978)) (internal quotation marks omitted).  



          10        Kinn v. Alaska Sales & Serv., Inc. , 144 P.3d 474, 482-83 (Alaska 2006)  



(quoting Marathon Oil Co. v. ARCO Alaska, Inc. , 972 P.2d 595, 600 (Alaska 1999)); see  

                                                        

also Ahtna , 894 P.2d at 661-62 (citing Breeze v. Sims , 778 P.2d 215, 217 (Alaska 1989);  

        

Univ. of Alaska v. Modern Constr., Inc., 522 P.2d 1132, 1137 (Alaska 1974)).  



          11        Kinn , 144 P.3d at 487 (quoting Modern Constr. , 522 P.2d at 1137).  



          12  

                           

                    AS 09.43.500(a)(4).  Alaska's Revised Uniform Arbitration Act governs  

agreements to arbitrate made on or after January 1, 2005.  See AS 09.43.300(a).  The  

employment agreement provides that the agreement shall be governed by Alaska law.  



                                                              -12-                                                         6813
  


----------------------- Page 13-----------------------

determination of arbitrability is a reasonably possible one that can seriously be made in  

                                                                                                          

the context in which the contract was made, then the court should affirm that finding."13  

                                                            



Because we defer to the arbitrator's interpretation of the dispute submitted and because  

                                  



the arbitrator had the authority to resolve the arbitrable dispute on a different basis than  



                                                                                                                                  14  

asserted by the parties, we conclude that the arbitrator did not exceed his powers.                                                   



                      1.	       The arbitrator reasonably interpreted the dispute submitted for  

                                                          

                                arbitration and that dispute was arbitrable.  



                     We do not review an arbitrator's interpretation of a contract provision for  

                                                    

ordinary error.15  Instead, we consider an arbitrator's interpretation of the contract issues  

                                                                                                              



                                                                                                            16  

only  in  the  context  of  reviewing  the  arbitrability  of  the  dispute.                                      An  arbitrator's  

determination of the issues submitted for arbitration is "entitled to significant weight."17  



Moreover, "an arbitrator's interpretation of the question presented for arbitration, like  

an  arbitrator's  contract  interpretation,  should  not  be  subjected  to  plenary  review."18  

                                                                                                             



Although  we  have  held  that  arbitrators  may  exceed  their  authority  by  addressing  a  

                                                 



           13        Ahtna ,  894  P.2d  at  662  (quoting  Modern  Constr. ,  522  P.2d  at  1137)  



(internal citations and quotation marks omitted).  



           14        See id.; Dep't of Pub. Safety v. Pub. Safety Emps. Ass'n                                  , 732 P.2d 1090,  



 1096-97 (Alaska 1987) (giving deference to arbitrator's interpretation of the questions       

submitted to arbitration).  



           15	       See Kinn, 144 P.3d at 487 n.38 (citing Ahtna , 894 P.2d at 660-61).  



           16        See id. (citing Ahtna , 894 P.2d at 661).  



           17  

                               

                     Pub. Safety Emps. Ass'n , 732 P.2d at 1097 (quoting Anchorage Med. &  

Surgical  Clinic  v.  James,  555  P.2d  1320,  1324  (Alaska  1976),  overruled  on  other  

grounds by Ahtna , 894 P.2d at 662) (internal quotation marks omitted).  



           18        Id. at 1096.  



                                                                  -13-	                                                           6813
  


----------------------- Page 14-----------------------

dispute not submitted to arbitration,19 we have emphasized that "[a]rbitrators need not  



                                                                                                                                20  

                                                                                                                                     As long as  

be bound by the narrowest interpretation of the issue presented to them." 



the arbitrator's interpretation of the question posed for arbitration is reasonable in light  

of the circumstances, we will not interfere with the bargained-for arbitration award.21  



                                                                                    

There are two reasons for such great deference to the arbitrator on questions submitted  



for arbitration:  



                                                                                

                       First, subjecting interpretations of arbitration submissions to  

                                                                                 

                       plenary review would [weaken] our intent to foster recourse  

                                                                                                                   

                       to arbitration proceedings for dispute resolution. . . .  Second,  

                                               

                       a deferential standard of review of submission interpretation  

                        forecloses the possibility that Alaska's courts will become  

                       mired  in  numerous  disputes  involving  the  exact  scope  of  

                                                                                           [22] 

                        submission in arbitration proceedings.  



                                               

The scope of a demand for arbitration should not be subjected to the same strict standards  



                                                                                                                     23  

of construction that would be applied in formal court proceedings.                                                       



                       Not  only  do  we  defer  to  the  arbitrator's  interpretation  of  the  question  



                                                                                                                

presented, we "apply a presumption in favor of arbitrability," resolving all doubts in  



            19         See Sea Star Stevedore Co. v. Int'l Union of Operating Eng'rs, Local 302                                                        ,  



769 P.2d 428, 431-32 (Alaska 1989) (holding that the arbitrator exceeded his authority     

by addressing a question that was not submitted to arbitration and actually emerged six           

weeks after the original issue arose).  



            20         Pub. Safety Emps. Ass'n , 732 P.2d at 1096.  



            21         See id.  



            22  

                                                                                      

                       Id. at 1097 (citing Mobil Oil Corp. v. Indep. Oil Workers Union , 679 F.2d  

299, 302 (3d Cir. 1982)).   



            23  

                                                                           

                       Id. (quoting Kurt Orban Co. v. Angeles Metal Sys. , 573 F.2d 739, 740 (2d  

Cir. 1978)).  



                                                                        -14-                                                                   6813
  


----------------------- Page 15-----------------------

                                24  

          

favor of arbitrability.             We will affirm the arbitrator's determination of arbitrability if  



                                        25  

it is "reasonably possible."                  



                    Here, the arbitrator found that the parties had presented a dispute consisting  

                              



of three questions:  



                    1.        Did  the  termination  of  Claimant's  employment  by  

                    Respondent breach the Contract?  



                    2.        Was   the   termination   of   Claimant's   employment  

                                                                  

                    justified by Claimant's subsequent breach of the Contract?  



                    3.        What damages, if any, should be awarded in this case?  



We conclude that the arbitrator's interpretation of the arbitrable dispute was reasonable  

                                                                                                            



and  supported  by  the  expansive  arbitration  clause  in  the  employment  agreement,  

                                                                                  



Johnson's broad claim for breach of contract in his statement of claims, and the full  



                                                        

evidence submitted to the arbitrator. We also hold that the arbitrator's determination that  



                                                                                                                  26  

the dispute was arbitrable clearly meets our "reasonably possible" standard.                                          



                              a.        The arbitration clause of the employment agreement  



                    First,  Johnson  and  The  Aleut  Corporation  agreed  in  their  employment  

                                            



contract  to  refer  to   an   arbitrator  "[a]ny  and  all  disputes"  regarding  Johnson's  

                                        



employment contract and termination.  The language and scope of the negotiated binding  

                                                          



arbitration  clause  of  the  employment  agreement  was  quite  broad:  "Any  and  all  

                                                                                                 



          24        Ahtna, Inc. v. Ebasco Constructors, Inc. , 894 P.2d 657, 662 (Alaska 1995)  



(citing Univ. of Alaska v. Modern Constr., Inc., 522 P.2d 1132, 1138 (Alaska 1974)); see  

                                      

also  United  Steelworkers  v.  Warrior  &  Gulf  Navigation  Co.,  363  U.S.  574,  582-83  

(1960).  



          25  

                                                                                  

                    Marathon Oil Co. v. ARCO Alaska, Inc. , 972 P.2d 595, 600 (Alaska 1999)  

(quoting Pub. Safety Emps. Ass'n Local 92 v. State , 895 P.2d 980, 984 (Alaska 1995),  

aff'd on reh'g, 902 P.2d 1334 (Alaska 1995)) (internal quotation marks omitted).  



          26        See id.  



                                                              -15-                                                        6813
  


----------------------- Page 16-----------------------

disputes . . . arising out of, relating in any way to or in connection with this Agreement     



and/or    Executive's    employment    with    or    termination    of    employment    from   the  



Company . . . shall be solely settled by an arbitration . . . ."  Thus, as the arbitrator   



concluded, this dispute, which focused on whether the termination of Johnson constituted  



                                                         

a breach of contract, fell squarely within the scope of the contract's arbitration clause.  



                                 b.         Johnson's statement of claims  



                      Moreover, in submitting the dispute to arbitration, Johnson's claim was  



broadly framed:  He contended that The Aleut Corporation had breached the employment  



                                                       

agreement by failing to provide timely notice of its decision to terminate him.  In his  



statement of claims, Johnson requested that "the arbitrator find the Company failed to  



                                                                                                                        

timely exercise its option to terminate the automatic two-year extension of Mr. Johnson's  



Contract beyond March 31, 2010, [and] that the Company termination of Mr. Johnson's  



                                                                                                    

employment as CEO effective March 31, 2010, constituted a breach by the Company of  



                                                                                                                   

the Contract."  Johnson's claim was based on the "company's breach of the Contract."  



The arbitrator evidently understood Johnson's claim in this manner, as the arbitrator  



summarized the issue before him in similarly broad terms:  whether "the termination of  



                                                                                               

Claimant's  employment  by  Respondent  breach[ed]  the  Contract."    And  in  order  to  



determine whether a contract has been breached, it is predictably necessary to interpret  



                                                                                                                                    

the language and meaning of the contract that is alleged to have been breached.  As the  



                                                                           

superior court recognized, "the parties do not appear to have explicitly limited the issues  



                                                                                                        

submitted to the arbitrator."  Although Johnson acknowledged that he "was required to  



                                                                          

notify the Chair of the Board in writing 120 days before the initial term expired of the  



                                                                       

Company's option to cancel the automatic extension," the arbitrator ultimately had the  



                                                                                                                    

authority to rely on his "interpretation of . . . [the contract] provisions and his findings  



regarding  .  .  .  contractual  obligations"  to  determine  whether  the  contract  had  been  



                                                                    -16-                                                              6813
  


----------------------- Page 17-----------------------

                27  

breached.              Therefore,  Johnson's  statement  of  claims  indicates  that  the  arbitrator's  



interpretation of the arbitrable dispute was reasonable.  



                                  c.         The evidence presented at the arbitration hearing  



                       Finally, as Johnson correctly observes, the arbitration briefs and hearing  



"encompassed much more than the discussion [of] the notice provision."  In light of the  



                                                            

evidence presented, the arbitrator reasonably interpreted the dispute as whether The  



                                 

Aleut Corporation breached the employment agreement by terminating Johnson.  Over  



                                                                                                                   

the course of the two-day hearing, the arbitrator heard evidence not only on the narrow  



factual  issue  of  Lind's  receipt  of  Johnson's  notice  letter,  but  also  on  the  initial  



                                                      

negotiation of the employment agreement, the parties' intent surrounding the provision  



                                                                                                     

for automatic extension of the term, the recent negotiations, and Johnson's performance  



                                           

as CEO.  And The Aleut Corporation explained that the motivation behind Paragraph 5  



                                           

was  a  concern  that  the  provision  for  terminating  Johnson  "could  be  inadvertently  



forgotten," so the attorney decided to include "a 'triggering' notice that would remind  



       

the  Board  of  its  90  day  notice  obligation."    And  it  was  uncontested  that  The  Aleut  



                       

Corporation  was  actually  aware  of  its  option  to  cancel  the  automatic  extension  of  



                   

Johnson's term.  In sum, the arbitrator reasonably interpreted the nature of the dispute  



                                                                                          

based on the scope of the evidence presented, and  the  arbitrator's determination on  



                                                                   28  

arbitrability was "reasonably possible."                               



           27          See Ahtna, 894 P.2d at 663 (affirming the arbitrator's decision based on the   



arbitrator's interpretation of various joint venture agreement provisions and his findings             

on contractual obligations).  



           28          See Marathon Oil, 972 P.2d at 600; Ahtna , 894 P.2d at 663.  The Aleut  



                                                              

Corporation relies on International Association of Machinists & Aerospace Workers,  

District 776 v. Texas Steel Co. , 639 F.2d 279 (5th Cir. Unit A Mar. 1981). But that  

decision supports our deference to arbitration awards and stands for the proposition that  

                                                                                                                           (continued...)  



                                                                      -17-                                                               6813
  


----------------------- Page 18-----------------------

                                                                                     

                    2.	       The arbitrator had the authority  to provide a different basis  

                              than the parties for resolving the dispute.  



                    "[A]n  arbitrator's  misconstruction  of  a  contract  is  not  open  to  judicial  



                                                                  29  

                                                                                                           

review, except on questions of arbitrability."                       We have explained "that the arbitrator's  



                                                                                       

reasons for the award will not be scrutinized by the court, so long as he has resolved an  



                             30  

                                                                                                            

arbitrable dispute."             The question presented in this case is whether the arbitrator was  



          28(...continued)  



arbitrators have broad authority "to decide just what the issue was that was submitted to  

                                                                                                               

it  and  argued  by  the  parties,"  resolve  procedural  questions,  and  fashion  appropriate  

           

remedies.  See id. at 283 (quoting  Waverly Mineral Prods. Co. v. United Steelworkers  

of Am., 633 F.2d 682, 685 (5th Cir. 1980)).  The Aleut Corporation also claims that the  

superior  court  properly  decided  that  Johnson's  concessions  on  the  meaning  of  

Paragraph 5 limited the issues before the arbitrator.  Though the parties' statement of  

uncontested facts provided that "Paragraph 5 required Johnson to notify the Chair of  

[The Aleut Corporation's] Board . . . of [The Aleut Corporation]'s option to cancel,"  

                   

Johnson's mere interpretation of the agreement does not constitute a concession.  See  

Kingery v. Barrett , 249 P.3d 275, 282 (Alaska 2011) (" 'A judicial admission, to be  

                                                     

binding, must be one of fact and not a conclusion of law or an expression of opinion.' "  

                                                                                                             

(quoting Hayes v. Xerox Corp. , 718 P.2d 929, 931 (Alaska 1986))); Pugliese v. Perdue ,  

                                                                                                                  

988  P.2d  577,  580-81  (Alaska  1999)  (concluding  that  statements  were  not  binding  

admissions because they were not the clear, deliberate, and unequivocal statements of  

fact required for a judicial admission).  More importantly, the fact that Johnson focused  

                                                                                       

on one basis for decision - the argument that he had provided actual notice - cannot  

preclude the arbitrator from relying on a different basis for decision.  See discussion infra  

                                          

Part A.2.; Ahtna, 894 P.2d at 662-63.  



          29  

                                                                             

                    OK Lumber Co. v. Alaska R.R. Corp., 123 P.3d 1076, 1078 (Alaska 2005)  

(quoting Ahtna , 894 P.2d at 661) (internal quotation marks omitted).  



          30        Ahtna , 894 P.2d at 663 (upholding arbitrator's award because arbitrator had  



                                                                    

not exceeded scope of authority by relying on a different basis than the parties put forth);  

                                                                                                         

see also Kinn v. Alaska Sales & Serv., Inc. , 144 P.3d 474, 488 (Alaska 2006) (affirming  

                                                                                               

arbitrator's award because the arbitrator was not so obviously wrong that all fair and  

reasonable minds would find it impossible under the contract); OK Lumber, 123 P.3d at  

                                                                                                            (continued...)  



                                                             -18-	                                                       6813
  


----------------------- Page 19-----------------------

             

free to resolve an otherwise arbitrable dispute on a different basis than argued by the  



parties.  



                     We answered that question in Ahtna, Inc. v. Ebasco Constructors, Inc. ,  



where we concluded that arbitrators do have the authority to resolve an arbitrable dispute  



                                                                                                                                 31  

                                                                                                                                      In  

on a basis that "differs from that which . . . was initially argued by the claimant." 



that  case,  Ahtna  and  Ebasco  entered  into  a  joint  venture  agreement  to  prepare  



                                                                                                               32 

                                                                                                                    After learning  

construction proposals for a federal radar project that was later canceled. 



                                

of the cancellation, Ebasco instructed Ahtna to prepare a claim showing its preparation  



                                          

expenses  so  that  Ebasco  could  submit  the  claim  to  the  federal  government  to  seek  



                                                                                      33  

                                                                                                                                      

remuneration for Ahtna's significant preparation costs.                                   Although Ahtna submitted  its  



                                                                                                    

claim to Ebasco, Ebasco failed to submit Ahtna's claim to the federal government in a  

                        34   Ahtna argued that because Ebasco had failed to submit a timely claim  

                                                                                                                      

timely manner.  



on behalf of Ahtna, it had therefore breached the joint venture agreement and owed  



                                                    35  

damages for the resulting losses.                        



                     Relying on provisions of the agreement that had not been cited or relied on     



by the parties, the arbitrator concluded that Ebasco had breached a different provision   



           30(...continued)  



1078-79 (concluding that arbitrator had not exceeded powers by resolving a matter of  

                                                                                                                         

disagreement under the lease); Dep't of Pub. Safety v. Pub. Safety Emps. Ass'n , 732 P.2d  

                                                                       

1090, 1097 (Alaska 1987) (deciding that the arbitrator had properly interpreted the issues  

                                                                

submitted and that the arbitrator had not exceeded his authority).  



           31        Ahtna , 894 P.2d at 663.  



           32        See id. at 658.  



           33        See id. at 659.  



           34        See id.  



           35        See id.  



                                                                 -19-                                                            6813
  


----------------------- Page 20-----------------------

of the joint venture agreement by failing to reimburse Ahtna directly for its expenses   



                                                                                                       36  

under the reimbursement clause of the joint venture agreement.                                             Ebasco disputed the  



arbitration award, claiming that Ahtna had not presented this "reimbursement rationale"  

                                                                           



to the arbitrator but rather had argued that Ebasco had failed to timely submit a claim on  

                                                                    



                                                                                   37  

behalf of Ahtna stemming from their joint venture.                                     Ebasco contended that "the only  

                                                                      



issue before the arbitrator in this case was Ebasco's alleged failure to timely file Ahtna's  

                                                                    



claim, and that by partly basing his award on a separate theory - the reimbursement  

                                

rationale - the arbitrator exceeded his jurisdiction."38  

                                                                                           



                      In Ahtna , we upheld the arbitrator's award, concluding that the arbitrator  

                                                                                                                        



had "merely given a  basis  for the award which differs from that which, according to  



                                                                               39  

Ebasco,  was  initially  argued  by  the  claimant."                                 We  recognized  that  although  the  



arbitrator's rationale for the decision may have differed from that argued by the parties,  



there were "not two disputes, but one:  whether Ebasco breached the [Joint Venture  



                      40  

Agreement]."               We reasoned that the arbitrator's reliance on the reimbursement clause  

                                                        



"to resolve a dispute arising under the contract . . . was clearly within the arbitrator's  

                                                                                             



power, given [the Joint Venture  Agreement's] command that '[a]ll disputes arising out  

                                                                                                     

                                                                                         41   We also concluded that the  

of this Agreement shall be resolved by arbitration.' "  

                                                                                                                                



arbitrator's decision "rest[ed] on the arbitrator's interpretation of various [Joint Venture  

                                                                                                     



           36         See id.  



           37         See id. at 662.  



           38        Id. at 663.  



           39        Id. (emphasis in original).  



           40        Id.  



           41        Id. at 662 (second alteration in original).  



                                                                   -20-                                                             6813
  


----------------------- Page 21-----------------------

                    

Agreement]  provisions  and  his  findings  regarding  Ebasco's  contractual  obligations  



                                                              

during the life of the Joint Venture.  As such, it resolve[d] a dispute that [arose] out of  



the contract, constitute[d] a proper basis for the award, and convince[d] us to reverse the  

superior court's decision."42  



                     Similarly,   the   arbitrator's   decision   here   relied   on   the   arbitrator's  



                                                                                             

interpretation of Paragraph 5 of the employment agreement and his findings regarding  



                                 

the  parties'  intent.          Even  though  his  rationale  for  determining  that  the  employment  



agreement was breached differed from that asserted by Johnson, the arbitrator had the  



broad authority to interpret the provisions of the employment agreement in deciding  



                                             43  

whether it had been breached.    Because the arbitrator resolved an arbitrable dispute -  



                                                                                                            

whether the employment agreement had been breached - and because the arbitrator had  



                                           

the authority to resolve that question on a different theory than that argued by the parties,  



                                                                                                                   44  

we conclude that the superior court erred in vacating the arbitrator's award.                                           



          42        Id.  



          43        See id. at 662-63; see also  OK Lumber Co. v. Alaska R.R. Corp., 123 P.3d  



1076, 1078-79 (Alaska 2005) (holding that the arbitrator did not exceed his authority  

because it was necessary to interpret the contract to resolve the parties' dispute).  



          44  

                                                                                         

                    The  Aleut  Corporation  further  claims  that  the  superior  court  correctly  

                                                                          

"recognized  the  inherent  unfairness  resulting  from  Arbitrator  Owens's  decision  to  

                                                                     

disregard the parties' agreed upon position."  The superior court noted that, "[a]lthough  

not controlling . . . allowing an arbitrator to rule on an issue in a manner contrary to what  

the  parties  agreed  upon  in  their  filings  violates  basic  tenets  of  due  process  because  

neither party receives notice that the issue is under consideration or an opportunity to be  

                                                                    

heard."  But here the superior court noted that "the arbitration was procedurally unfair"  

                                                       

for precisely the same reasons as its decision that the arbitrator exceeded his authority.  

                                                                                                  

Because the arbitrator reasonably addressed the issue presented and did not exceed his  

                                                                                   

authority,  we  conclude  that  the  arbitration  did  not  violate  principles  of  procedural  

                                                                                                               

fairness.  



                                                               -21-                                                         6813
  


----------------------- Page 22-----------------------

         B.        Attorney's Fees  



                   Because we reverse the superior court's decision to vacate the arbitration     



award, the award of attorney's fees and costs must be vacated.  



V.        CONCLUSION  



                   The arbitrator resolved an arbitrable dispute, and we therefore REVERSE  



                                                                                                

the superior court's order vacating the arbitration award.  The case is REMANDED with  



                                                                                              

direction to the superior court to confirm the arbitration award.   The superior court's  



award of attorney's fees and costs is VACATED.   



                                                          -22-                                                     6813
  


----------------------- Page 23-----------------------

STOWERS, Justice, dissenting.  



                                                             

                    In Sea Star Stevedore Co. v. International Union of Operating Engineers,  



                                                                                                                  

Local 302 , we held that arbitrators "are given broad powers to fashion  remedies on  



                                                                                                                        

submitted issues.  However, an arbitrator does not have the power to reach the merits of  

                                                     1   Here, from the initiation of the arbitration process  

                                                        

a grievance not submitted to him." 



to its close, Johnson repeatedly averred that he was required to provide notice to The  



                                                             

Aleut Corporation in order to trigger his contract extension.  Similarly, from the initiation  



                                                                                                        

of the arbitration process to its close, The Aleut Corporation agreed. When the arbitrator  



                                                                                           

nevertheless reached the issue of whether such notice was required - concluding that  



it was not required - he reached an issue not submitted to him by the parties and thereby  



                                 2  

                                        

exceeded his powers.   I therefore dissent from the court's opinion today and would  



uphold the decision of the superior court vacating the arbitration award.   



                    In the first paragraph of Johnson's statement of claims initiating arbitration,  



                                                                                                                                

he stated the following:  "Johnson was required to notify the Chair of the Board . . . of  



                                                                                           

the Company's option to cancel the automatic extension; if he failed to give this notice,  



                                                                    

then the automatic extension of the Contract would terminate at March 31, 2010, without  



                                                                                                        

the Company needing to exercise its option to cancel the automatic extension."  Here it  



is clear that among the myriad issues Johnson might be submitting to the arbitrator, he  



was explicitly not submitting the issue of whether he was required to provide notice.  



Rather, at the outset, he conceded that such notice was required.  Johnson reiterated this  



                                     

concession in the joint statement of uncontested facts that the parties submitted to the  



arbitrator prior  to the arbitration hearing.  There, both parties agreed that Johnson's  



          1          769 P.2d 428, 431 (Alaska 1989) (citing                        Hughes Aircraft Co. v. Elec. &  



Space Technicians, Local 1553, 822 F.2d 823, 827 (9th Cir.1987)).  



          2         See AS 09.43.500(a)(4) (providing that "the court shall vacate an award  

                                                                            

made in the arbitration proceeding if . . . an arbitrator exceeded the arbitrator's powers").  

                                                              



                                                               -23-                                                             6813  


----------------------- Page 24-----------------------

employment   agreement   "required   Johnson   to   notify   the   Chair   of   [The   Aleut  



                                                                                                      

Corporation's] Board, Sharon Lind, of [The Aleut Corporation's] option to cancel the  



                             

'Option Term.' "  Again, it is clear that both parties agreed Johnson was required to  



provide notice.  If both parties agree on a particular fact, there is no dispute between  



them as to that fact - and thus no issue for the arbitrator to decide.  



                                                                                                                        

                    Further, at the arbitration hearing Johnson said and did nothing to call into  



question his concession that he was required to provide notice.  On the contrary, he  



                                                                                            

repeatedly affirmed that he was required to provide notice.  For example, in Johnson's  



                              

cross-examination   of  Thomas  Daniel,  Johnson's  attorney  stated  that  The  Aleut  



                                                                                                  

Corporation's "obligation to provide the notice to Mr. Johnson . . . was only triggered  



                                                                                                                       

if Mr. Johnson provided a notice."  Similarly, in Johnson's closing argument he stated  



                                                                                     

that "[t]he only way [The Aleut Corporation] was ever obligated to provide notice that  



it intended to cancel Mr. Johnson's two-year automatic extension was if Mr. Johnson  



first provided his notice of [The Aleut Corporation's] obligation."  



                                                

                    In short, Johnson consistently affirmed throughout the arbitration process  



that his employment agreement required him to provide notice in order to trigger the  



                                                                                                      

contract extension.  The superior court was therefore correct when it concluded that "it  



     

is  not reasonably possible that the scope of the arbitration required the arbitrator to  



interpret  the  CEO  Contract  and  determine  if  the  Reminder  Notice  was  a  condition  



                                                                                                    

precedent to the automatic renewal. . . .  [T]he Court cannot find that where the parties  



                                                                               

both agree that a particular outcome will occur if certain conditions are not met, the  



                                                                                                 

arbitrator is free to disregard that agreement.   That is exactly what happened in this  



                                                                            

case."  Consequently, the superior court correctly ruled that the arbitrator "exceeded his  



                                         

power when he concluded that his authority included the power to interpret the contract"  



with respect to the issue of whether Johnson was required to provide notice.  



                                                              -24-                                                         6813
  


----------------------- Page 25-----------------------

                                                                                                                   

                    In support of its decision today that the arbitrator did not exceed his powers,  



                                                                               

the  court  points  to  three  sources  of  evidence:                          (1)  the  arbitration  clause  of  the  



employment agreement; (2) Johnson's statement of claims; and (3) the evidence provided  



at the arbitration hearing.  Each of these sources of evidence, however, fails to show that  



Johnson submitted the issue of whether he was required to provide notice.  



                                                  

                    First, it is true that Johnson's contract included a broad arbitration clause.  



It is also true that if Johnson had chosen to submit to arbitration the issue of whether he  



                                                                                                                          

was required to provide notice, such issue would have been within the scope of the  



arbitration clause and within the arbitrator's authority to decide.  But, regardless of the  



                                                

scope of the arbitration clause, the arbitrator is empowered to decide only those issues  



                                       3  

                                                                                           

that are submitted to him.   Here, despite the breadth of the arbitration clause, Johnson  



                                                                                                          

chose to narrow the scope of the arbitration and concede that at least one aspect of his  



employment agreement - whether he was required to provide notice - was not in  



dispute.  



                    Second, the court observes that Johnson's statement of claims was "broadly  



                                                                          

framed" and generally based on the "company's breach of the Contract."  However, the  



                                        

next-to-last paragraph of Johnson's statement of claims summarized his claim in the  



following terms:  "For the foregoing reasons, Mr. Johnson requests the arbitrator find  



[The Aleut Corporation] failed to timely exercise its option to terminate . . . [and] that  



[the]  termination  .  .  .  constituted  a  breach  by  the  [Corporation]  of  the  Contract."  



                                                                                                 

Nowhere in the foregoing paragraphs of Johnson's statement of claims did he argue that  



                                                                     

he was not required to provide notice; rather, he clearly and explicitly stated that he was  



required to provide notice (and argued that he had, in fact, provided such notice).  



          3  

                                                                                                       

                    See, e.g., Advanced Micro Devices, Inc. v. Intel Corp., 885 P.2d 994, 1006  

(Cal.  1994)  ("Even  where  the  parties'  original  contract  included  a  broad  arbitration  

                                                                              

clause, the arbitrator's powers may be restricted by the limitation of issues submitted.").  



                                                              -25-                                                             6813  


----------------------- Page 26-----------------------

                    Finally, the court cites the range of evidence presented at the arbitration  



hearing in support of the conclusion that the issue submitted to the arbitrator was broader  



                                                               

than simply the question of whether Lind received Johnson's notice.  But the evidence  



Johnson introduced during the hearing was introduced for the purpose of supporting his  



                                                                       

argument that he had, in fact, provided notice.  As the superior court found, "Johnson  



                                                                                                   

never used the evidence he introduced to put the Reminder Notice provision's intent at  



issue."  



                                                                                            

                    In support of its decision today, the court also relies on our decision in  



                                                                                             

Ahtna, Inc. v. Ebasco Constructors, Inc. , in which we held that an arbitrator may resolve  

                                                                                                 4  But we did not hold  

a contract dispute on grounds that are not submitted by the parties. 



that an arbitrator may resolve a dispute on grounds that both parties conceded were not  

                                                                                   



in controversy.   In other words, in Ahtna the claimants (Ahtna) may have failed (by  

                              



omission) to argue that they were entitled to "reimbursement" under their contract with  

                                                                   



Ebasco,  but  they  never  affirmatively  stated  that  they  were  not  entitled  to  such  



                       5  

                          Here, by contrast, Johnson did not merely fail to raise the question of  

reimbursement.                                                                                  



whether The Aleut Corporation might have been obligated to extend his contract even  



                                                         

if he did not provide notice; rather, he affirmatively and repeatedly stated that The Aleut  



                                               

Corporation  was  obligated  to  extend  his  contract  (or  provide  timely  notice  of  non- 



extension) only if Johnson first provided his notice.  



                    The court today also cites our decision in Department of Public Safety v.  



                       

Public  Safety  Employees  Association ,  explaining  that  we  grant  great  deference  to  



                                                                                                              

arbitrators on questions submitted to arbitration in order to foster recourse to arbitration  



          4         894 P.2d 657, 662-63 (Alaska 1995).  



          5         Id. at 659-60.  



                                                             -26-                                                           6813  


----------------------- Page 27-----------------------

                   6  

proceedings.      This  same  policy,  however,  underlies  our  responsibility  to  vacate  



decisions when arbitrators have clearly reached issues not submitted to them.  As the  



                       

superior court points out, arbitration is "inherently a matter of agreement among the  



                                 

parties."  It stands to reason that parties will be wary of having recourse to arbitration  



                                                                       

proceedings if there is the danger that arbitrators will decide issues that both parties have  



agreed not to submit to the arbitrator.  Further, as The Aleut Corporation argues, "[a]n  



                                                                                                     

arbitrator exceeding his or her authority is fundamentally different than an arbitrator  



getting the facts or law of a case wrong" for "when an arbitrator exceeds his or her  



                                                                                                  

authority by deciding an issue undisputed by the parties, the parties do not have even the  



opportunity to present their case on that issue."  



                   In  sum,  despite  Alaska's  strong  public  policy  in  favor  of  upholding  



arbitration decisions, I agree with the superior court that this case "presents the rare  



scenario  where  the  arbitrator  goes  beyond  the  reasonably  foreseeable  scope  of  his  



authority such that the Court must vacate his award."  This court has created a line of  



precedent  that  gives  great  -  virtually  unreviewable  -  deference  to  arbitrators'  



decisions, even where those decisions are factually and legally erroneous.  Today's  



                                                                                       

decision extends that deference to also permit an arbitrator to determine what the issue  



                                                                                                 

is to be decided, even where both parties agreed they intended the arbitration to resolve  



                                         

a different issue.  I fear this court has abrogated its responsibility to review virtually any  



                                                                                                  

error in arbitration, and I cannot agree with this decision because I believe the court has  



a duty to ensure that - at the least - an arbitrator does not exceed the limits of his  



authority.  I therefore respectfully dissent.  



          6         732 P.2d 1090, 1097 (Alaska 1987).  



                                                            -27-                                                          6813  

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