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Maryland Court of Special Appeals holds that costs in successfully defending a motion to stay arbitration are not recoverable under CTS. & JUD. PROC. § 3-228(b)

Fraternal Order of Police, Montgomery County Lodge 35 v. Montgomery County
by Wayne C. Heavener, Associate
Semmes, Bowen & Semmes (www.semmes.com)

In Fraternal Order of Police, Montgomery County Lodge 35 v. Montgomery County, Maryland’s intermediate appellate court held that MD. CODE ANN., CTS. & JUD. PROC. § 3-228(b) allowed the award of litigation costs only in situations where an arbitral award has been made. In this case, the Court held that an appellant labor union could not use Section 3-228 (b) to recover costs for successfully defending against an appellee municipality’s motion to stay arbitration. Writing for the Court of Special Appeals, Judge Albert J. Matricciani held that Section 3-228 (b)’s fee shifting scheme pertained only to petitions seeking to confirm, modify, or correct an arbitral award, and, therefore, did not pertain to failed petitions to vacate.

The Fraternal Order of Police, Montgomery County Lodge 35, Inc. (“FOP”) filed a grievance with an arbitrator pursuant to its collective bargaining agreement with Montgomery County (“County”) after the County discontinued certain training practices. The County moved to dismiss the FOP’s grievance, arguing that the arbitration of this issue was preempted under the Law Enforcement Officers’ Bill of Rights. The arbitrator disagreed with the County’s position, and denied the County’s motion to dismiss. Rather than continue with arbitration, the County filed a pleading in the Circuit Court for Montgomery County, stylized as a “Petition to Vacate the Arbitration Award.” The circuit court affirmed the arbitrator’s decision, and granted summary judgment for the FOP. The Court of Appeals eventually affirmed the circuit court’s decision in Montgomery County, Maryland v. Fraternal Order of Police, Montgomery County Lodge 35, Inc. (“FOP I”). The Court of Appeals, in FOP I, noted that the County’s pleading was inartful, as there was no actual award to vacate; the Court of Appeals treated the County’s motion as a motion to stay arbitration. Following FOP I, the FOP filed a Petition for Award of Costs and Disbursements in the Circuit Court, seeking to invoke MD. CODE ANN., CTS. & JUD. PROC. § 3-228(b) to make the County reimburse the FOP for litigation expenses incurred in FOP I. The County opposed the FOP’s petition. The circuit court denied the FOP’s request, and the FOP appealed.

The Court of Special Appeals affirmed, and held that Section 3-228 (b) did not entitle the FOP to recover costs because FOP I held that the County’s original petition sought a stay of arbitration, rather than the vacation of any arbitral award. Section 3-228 (b) provides:

In general:

(a)

(1) If an order confirming, modifying, or correcting an award is granted, a judgment shall be entered in conformity with the order.

(2) The judgment may be enforced as any other judgment.

Costs of petition, proceedings, and disbursements

(b) A court may award costs of the petition, the subsequent proceedings, and disbursements.

MD. CODE ANN., CTS. & JUD. PROC. § 3-228. The FOP argued that Section 3-228 (b) permits a court to enter a fee shifting order for any petition that is filed relative to a proceeding under the Maryland Uniform Arbitration Act; this would include both petitions to vacate arbitration awards and petitions to stay arbitration. The Court rejected the FOP’s argument, reasoning that subsection (b)’s use of the terms “the petition” (emphasis added) refers only to petitions of the variety described in subsection (a), i.e., petitions seeking to “confirm[], modify[], or correct[]” award in arbitration. Therefore, Section 3-228 (b) fee-shifting provision pertained only to petitions filed pursuant to CTS. & JUD. PROC. §§ 3-223 (Modification or Correction of Award by Court), 3-224 (Vacation of Arbitration Award), or 3-227 (Confirmation of Arbitration Award), all of which are filed subsequent to the delivery of an arbitration award. In this case, because no actual arbitral award was made, the circuit court appropriately denied the FOP’s petition.