Flores v. Barretto9/24/2002
treatments. Once the arbitrator's decision was issued, HRS § 658-11 (1993) required that " notice of a motion to vacate, modify, or correct award . . . be served . . . within 10 days after the award made and served." Failure to bring a timely motion to vacate, modify, or correct an arbitration award precludes a party from challenging the award. Excelsior Lodge Number One v. Eyecor, Ltd., 74 Haw. 210, 222-23, 847 P.2d 652, 658 (1992). Because neither party moved to vacate, modify, or correct the arbitrator's decision in the present case, neither could challenge the award at the time of trial. Moreover, neither party moved to confirm the arbitration award pursuant to HRS § 658-8, thereby waiving their right to judicial review of the arbitrator's decision. See generally Arbitration of Bd. of Directors of Ass'n of Apartment Owners of Tropicana Manor, 73 Haw. 201, 213, 830 P.2d 503, 510 (1992). Thus, the arbitrator's decision was neither tentative nor subject to change. Accordingly, I would hold that, under the facts of this case, the arbitrator's decision was final for purposes of collateral estoppel.
C. Essential to the Final Judgment
The sole issue in the arbitration was whether the treatment prescribed under the December 1993 Plan was compensable. Therefore, that determination was clearly essential to the arbitrator's final award.
D. Parties in Privity
Regarding privity, this court noted:
As the preclusive effects of judgments have expanded to include nonparties in more and more situations[,] . . . it has come to be recognized that the privity label simply expresses a conclusion that preclusion is proper. As to privity, current decisions look directly to the reasons for holding a person bound by a judgment. Bush v. Watson, 81 Hawaii 474, 480, 918 P.2d 1130, 1136, reconsideration denied, 81 Hawaii 474, 918 P.2d 1130 (1996) (citation omitted).
Under certain circumstances, an insurer and its insured may be deemed to be in privity for purposes of collateral estoppel based upon the obligations created by the insurance contract. See, e.g., Medeiros v. First Ins. Co., 50 Haw. 401, 403, 441 P.2d 341, 343-44, reh'g denied, 50 Haw. 468, 441 P.2d 341 (1968). Generally speaking, an insured and his or her insurer share a common interest, that is, to limit liability in a tort action to within the policy limits. The common interest diverges where liability exceeds the policy limits, thus, exposing the insured to personal liability. However, as we noted in Medeiros, factors other than the obligations created by the insurance contract may influence whether parties should be deemed in privity:
We do not believe [holding that the insurer and the insured are in privity is] an unjust application of collateral estoppel in view of the alternative of embarrassment engendered by possible contradictory findings with respect to [the insured's] negligence in the tort suit against him and the one against the alleged insurer. . . . The Insurance Company is not a complete stranger to the relationship between the plaintiffs herein and [the insured]. Its liability, if any, would be vicarious in the sense that it would be held liable to the plaintiffs only if, in the first place, [the insured] is found liable to the plaintiffs, and secondly, only if the factual basis of this liability brings him within the coverage of the policy. Id. at 403-04, 441 P.2d at 344.
Similarly, in Tradewind Insurance Co., Ltd. v. Stout, 85 Hawaii 177, 938 P.2d 1196 (App.),cert. denied, 85 Hawaii 81, 937 P.2d 922 (1997), the Intermediate Court of Appeals (ICA) considered the following equitable factors before precluding litigation based on collateral estoppel:
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