A two-day hearing was conducted before a panel of three arbitrators. On August 25, 2014, a majority of the arbitrators issued a decision that found in favor of Argonaut; one arbitrator dissented from the decision. The majority found Mr. Lorello liable for the April 14, 2010 accident. The majority also found that:

(1) Mr. Lorello's insurer, Liberty Insurance Company, had paid Mr. DiSano $25,000, the policy limit;

(2) Mr. DiSano's insurer, Metropolitan Property and Casualty Insurance Company, had paid Mr. DiSano $25,000, the underinsured motorist coverage policy limit; and

(3) The workers' compensation insurer for PWSB, Liberty Mutual, had paid Mr. DiSano $258,303 in workers' compensation benefits.

Consequently, the majority determined that Argonaut was entitled to an offset of $308,303 from any damages awarded to Mr. DiSano in the arbitration, which it calculated by adding the aforementioned insurance payments and workers' compensation benefits received by Mr. DiSano.

The majority further found that Mr. DiSano "had significant pre-existing hip and low back conditions which pre-dated the subject accident[,]" and that the accident had marginally aggravated these conditions. The majority determined that the medical testimony demonstrated that the accident had exacerbated Mr. DiSano's low-back condition for approximately three months, and that hip replacement surgery that he had after the accident "was not causally related to the accident." The majority concluded that Mr. DiSano was entitled to damages for three months with respect to reasonable pain and suffering, medical expenses, and lost wages.

However, because the majority also found that Mr. DiSano's damages were less than the $308,303 offset amount to which it had determined Argonaut was entitled, judgment was entered in favor of Argonaut.

On September 16, 2014, Mr. DiSano filed a petition in a Rhode Island trial court to vacate the arbitration award, pursuant to G.L. 1956 Section 10-3-12.

Argonaut objected to Mr. DiSano's petition and brought a cross-petition to confirm the arbitration award, pursuant to Section 10-3-11.

The trial judge found the majority's decision to be "rational and logical." The trial judge stated that the majority found Mr. DiSano's injuries to be minor, and accordingly had decided that the offset amount exceeded his damages. The trial judge noted that, although the majority had not specified the amount of Mr. DiSano's damages, it was "clearly because the arbitrators did not believe it was necessary to get to that point." He stated:

While [Mr. DiSano] says he should be able to recover his losses here disregarding the workers' compensation award, not even that is clear. He received $50,000 in liability. There's no evidence that he incurred special damages, lost pay, and wages above that or that he suffered pain and suffering above that.

Further, the trial judge noted that it was not necessary for the arbitrators to quantify the amount of damages, nor should arbitrators be required to do so.

The dispute reached the Rhode Island Supreme Court, where Mr. DiSano argued that the arbitrators had miscalculated the amount due him because they had not subtracted from his workers' compensation benefits the amount that was attributable to his hip replacement. Mr. DiSano contended that "a substantial portion of that $308,[303] . . . included the hip replacement surgery [and] the lost wages incurred as a result of the hip replacement surgery."

Rhode Island Law

G.L. 1956 Section 10-3-12 provides:

In any of the following cases, the court must make an order vacating the award upon the application of any party to the arbitration:

(1) Where the award was procured by corruption, fraud or undue means.

(2) Where there was evident partiality or corruption on the part of the arbitrators, or either of them.

(3) Where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in hearing legally immaterial evidence, or refusing to hear evidence pertinent and material to the controversy, or of any other misbehavior by which the rights of any party have been substantially prejudiced.

(4) Where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.

The Rhode Island Supreme Court's Decision

The court affirmed.

In its decision, the court explained that it would vacate an arbitration award only if it was irrational, if the arbitrator manifestly disregarded the law, or if one of the statutory grounds set forth in Section 10-3-12 applied. Mr. DiSano relied on the basis provided in Section 10-3-12(4), maintaining that the majority had imperfectly executed their powers by miscalculating the offset amount.

The court was not persuaded, reasoning that it could not say that the majority of the arbitrators had "so imperfectly executed [their powers] that a mutual, final, and definite award upon the subject matter submitted was not made."

Moreover, the court added, even if the arbitrators had erred by failing to subtract the amount of workers' compensation benefits attributable to Mr. DiSano's hip replacement from the offset amount, "[a]n arbitrator's award will not be overturned for mere errors of law."

The court concluded that the majority's arbitration award did "not rise to the level necessary to vacate such an award." Accordingly, it affirmed the trial court's decision denying Mr. DiSano's petition to vacate the arbitration award.

The case is Disano v. Argonaut Ins. Co., No. 2016-309 (R.I. Feb. 28, 2018). Attorneys involved include: For Plaintiff: Thomas R. Ricci, Esq., Michael S. Pezzulo, Esq. For Defendant: John J. Cloherty, Esq.