Dart Bank v. Pollicella Pllc

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to revision until final publication in the Michigan Appeals Reports. STATE OF MICHIGAN COURT OF APPEALS DART BANK, UNPUBLISHED August 13, 2025 Plaintiff-Appellee, 10:57 AM v No. 368841 Ingham Circuit Court POLLICELLA PLLC, LC No. 23-000495-CB Defendant-Appellant. Before: K. F. KELLY, P.J., and MARIANI and ACKERMAN, JJ. PER CURIAM. Defendant, Pollicella PLLC, was the victim of an advance-fee scam. The money it lost came out of its account with plaintiff Dart Bank. When defendant’s account balance became negative, plaintiff invoked the mediation and arbitration provisions of the agreement governing the account. The arbitrator ruled in favor of plaintiff, and the trial court confirmed the award. We affirm. I. BACKGROUND Defendant is a law firm, and a significant portion of its clients are marijuana businesses. When defendant opened an account with plaintiff, the parties executed a marijuana-related business (MRB) addendum, which included a provision that required arbitration for disputes arising out of the agreement. In 2021, defendant was contacted by a person posing as a client who wanted defendant to broker a sale of heavy machinery. Acting in accordance with its correspondence with this supposed client, defendant deposited several Canadian checks into its account with plaintiff and then wired funds to a New York bank account, which in turn sent the money to an entity in Lagos, Nigeria. Defendant wired approximately $650,000 in total before the first check was rejected as fraudulent. Once the checks were rejected, and accounting for the outgoing wire transfers, defendant’s account had a deficit of $372,859.19. The parties attempted mediation, but it was unsuccessful. They then entered binding arbitration as required by the MRB addendum. The arbitrator awarded $372,859.19 to plaintiff— -1- in effect, holding defendant responsible for the entire loss. When defendant did not pay the award, plaintiff brought an action in the trial court for a judgment against defendant in the amount of the arbitrator’s award as well as attorney’s fees, expert witness costs, and other costs incurred. Plaintiff moved to modify the arbitrator’s award, confirm the award as modified, and enter a corresponding judgment. Defendant moved to vacate the award. The trial court granted plaintiff’s motions and denied defendant’s motion. This appeal followed. II. ANALYSIS “We review de novo a trial court’s decision to enforce, vacate, or modify a statutory arbitration award.” Tokar v Albery, 258 Mich App 350, 352; 671 NW2d 139 (2003). However, “[a] court may not review an arbitrator’s factual findings or decision on the merits.” Police Officers Ass’n of Mich v Manistee Co, 250 Mich App 339, 343; 645 NW2d 713 (2002) (citation omitted). “Instead, a court may only review an arbitrator’s decision for errors of law.” TSP Servs, Inc v Nat’l-Standard, LLC, 329 Mich App 615, 620; 944 NW2d 148 (2019). As a result, notwithstanding our de novo review of the trial court’s decision, “[a] court’s power to modify, correct, or vacate an arbitration award . . . is very limited.” Gordon Sel-Way, Inc v Spence Bros, Inc, 438 Mich 488, 495; 475 NW2d 704 (1991). Defendant raises two arguments, but both rest on the premise that plaintiff had an obligation to protect defendant from its own mistakes and that the arbitrator erred in failing to recognize that obligation. Defendant’s arguments have no merit. A. ARBITRATOR’S AUTHORITY Defendant first argues that the arbitrator exceeded his authority by failing to address the MRB addendum. “The scope of an arbitrator’s remedial authority is limited to the contractual agreement of the parties.” Nordlund & Assoc Inc v Hesperia, 288 Mich App 222, 228; 792 NW2d 59 (2010) (quotation marks and citation omitted). “Arbitrators exceed their power when they act beyond the material terms of the contract from which they primarily draw their authority, or in contravention of controlling principles of law.” Id. (cleaned up). This Court therefore “must apply the same legal principles that govern contract interpretation to the interpretation of an arbitration agreement.” Beck v Park West Galleries, Inc, 499 Mich 40, 45; 878 NW2d 804 (2016). Our primary task in construing a contract is