Court Invalidates Modified Arbitration Award Because It Exceeded Panel's Authority Under The Functus Officio Doctrine

An insured and its insurer were fighting over whether the insured's settlement payment in separate litigation was a covered loss and whether there was a duty to defend in the separate litigation. During arbitration, the parties agreed the panel would issue an immediate decision on the insurer's liability under the policies and subsequently determine the amount of defense costs. The panel issued a "partial final award" finding the insured was entitled to defense and indemnification on the claims at issue in the separate litigation, but also finding the settlement payment itself was not a covered loss; thus, the panel ordered an evidentiary hearing on the calculation of defense costs. The insured requested reconsideration of the partial final award and the panel issued a "corrected partial final award." The insurer sought relief in court to vacate the corrected award and confirm the original award, and while that proceeding was pending the panel issued a "final" award