UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

FOULGER-PRATT RESIDENTIAL ) CONTRACTING, LLC ) ) and ) ) TRAVELERS CASUALTY AND ) SURETY COMPANY OF AMERICA ) ) Case No. 1:09-cv-02333 (GK) Applicants, ) ) v. ) ) MADRIGAL CONDOMINIUMS, LLC ) ) Respondent. )

MEMORANDUM OPINION

This matter is presently before the Court on Foulger-Pratt

Residential Contracting, LLC (“Foulger-Pratt”) and Travelers

Casualty and Surety Company of America’s (“Travelers”) Application

to Confirm Arbitration Award [Dkt. No. 1], under

,

pursuant to

against Respondent Madrigal Condominiums,

LLC (“Madrigal”), and Respondent Madrigal’s Cross-Motion to Vacate

Portions of Interim Arbitration Award [Dkt. No. 27]. Upon

consideration of the Application, Motion, Oppositions, Replies,

Surreply, and entire record herein, Foulger-Pratt’s Application to

Confirm Arbitration Award is granted and Madrigal’s Motion to

Vacate is denied in its entirety. I. Procedural Background1

The dispute in this case arises out of a construction contract

(“Contract”), consisting of the Modified General Conditions of the

Contract for Construction, (“Modified Contract Conditions”)[Dkt.

No. 27-4] , as well as the Modified Standard Form Agreement Between

Owner and Contractor, (“Modified Form Agreement”)[Dkt. No. 27-3],

and the Reconciled GMP Set of Specifications (“GMP

Specifications”).2 In 2005, Madrigal entered into these agreements

with Glen Construction Company, Inc. (“Glen”), the-then general

contractor, for the construction of Madrigal Lofts condominiums,

located at 811 4th Street, N.W. in Washington, D.C. Applicant

Travelers acted as Glen’s bonding company, providing the

performance and payment bonds for the project.

The parties’ Contract included an arbitration provision

providing that claims and disputes with a value exceeding $100,000

be submitted to a three-member Panel of arbitrators, and that any

award be considered as final, binding, and conclusive. Modified

Contract Conditions § 4.4.1. The Contract also contained a

provision directing the parties to first attempt mediation of their

1 The undisputed facts included in this section are based upon the parties’ submissions, as well as the entire record in this case. 2 According to Foulger-Pratt and Travelers, and undisputed by Madrigal, Madrigal drafted the Contract. Foulger-Pratt Reply to App. 20 n.4.

-2- dispute, before proceeding to arbitration. Modified Contract

Conditions § 4.5.2.

In June 2007, Glen stopped paying its subcontractors who were

working on the Project. As a result of Glen’s non-performance under

the Contract, Travelers engaged Foulger-Pratt, one of its long-time

bond customers, to assume control over the project. In mid-2007,

Glen assigned the Contract and its accompanying documents to

Foulger-Pratt, which assumed the role of general contractor and

agreed to achieve substantial completion of the project by December

31, 2007. Although Foulger-Pratt allegedly failed to meet this

completion date, it did achieve substantial completion by early

June 2008, as reflected in the Certificate of Substantial

Completion issued by the project’s Architect and Development

Manager, effective as of June 1,2008 [Dkt. No. 30-4].

Beginning in early 2008, a variety of disputes arose between

the parties regarding payments to Foulger-Pratt and various

subcontractor liens on the project. The disputes came to a head in

December 2008, when Foulger-Pratt filed a mechanic’s lien for

$2,636,467 against the project. In response, Madrigal filed an

emergency motion for a temporary restraining order (“TRO”) in D.C.

Superior Court, which resulted in a court order vacating the lien.

Shortly thereafter, in January 2009, the parties engaged in

mediation to resolve several claims and disputes related to their

underlying written agreements and the project. As a result of these

-3- efforts, on February 2, 2009, the parties executed a partial

settlement agreement, (“APS”) [Dkt. No. 27-7], resolving a number

of these issues. As a part of this settlement agreement, the

parties agreed to designate a “Project Neutral,” who would be a

licensed architect and would certify Foulger-Pratt’s completion of

a punch-list of outstanding construction-related items (“Items 1-8

Punch-List”). APS ¶ 5.3. The Punch-List had been previously

designated in an expert report, The Exterior Building Envelope

Review Report (“Gale Report”) [Dkt. No. 27-18]. The parties further

agreed to submit to arbitration their remaining unresolved claims,

with the exception of those items reserved in the APS for the

Project Neutral, as well as any future disputes that might arise

between them. Id. ¶ 11.

During the arbitration proceedings, Madrigal brought ten

claims against Foulger-Pratt, relating to its work as general

contractor. Interim Award ¶¶ 1-10 [Dkt. No. 27-11]. Foulger-Pratt,

in turn, brought three cross-claims: (1) for damages for extended

direct supervision costs due to Madrigal’s alleged failure to

permit final completion of the project; (2) for entitlement to

payment for final completion of the contract or, alternatively, for

recusal from completing the project due to Madrigal’s actions or

inactions; and (3) for payment to Foulger-Pratt of the entire

contract balance, plus pre-award interest. Id. ¶¶ 12-13.

-4- From May to July 2009, the parties participated in hearings on

these issues before the Arbitration Panel, consisting of three

lawyers who were experienced in handling construction contract

disputes (“Panel”). On May 26, 2009, the Panel issued an Order,

(“May 26, 2009 Order”) [Dkt. No. 27-8], resolving several matters

raised by the parties. The Order noted that Madrigal had

potentially discovered and was investigating additional defects in

the project’s exterior skin and that it might wish to bring claims

pertaining to such “potential” defects before the Panel; the Order

stated that such claims were not ripe and the Panel postponed

ruling on those claims if, and when, they became ripe, to a second

hearing. May 26, 2009 Order ¶ 1.

On September 11, 2009, the Panel received post-hearing briefs

and heard post-hearing argument on September 21, 2009. The Panel

issued an “Interim Award” on November 30, 2009. In this award, the

Panel concluded that Foulger-Pratt was obligated to complete Items

4-8 of the Punch-List and to cure certain deficiencies in special

warranties. Interim Award ¶ 14(c)-(d). The Panel also held that

Foulger-Pratt was entitled to final payment as it had either

satisfied, or was excused from performance of, the remaining

obligations alleged by Madrigal. Id. ¶ 14(f). In connection with

this ruling, the Panel ordered Madrigal to pay $1,694,655 to

Foulger-Pratt within 15 business days and to deposit $1,113,000

into an interest-bearing escrow account, for payment to Foulger-

-5- Pratt upon completion of its remaining obligations. Id. ¶ 16. The

Panel also granted some, but not all, of Madrigal’s requests for

attorneys’ fees, although it reserved final determination of the

amount for an “additional Interim Award” regarding such fees. Id.

¶¶ 10, 11. In calculating the amount owed to Foulger-Pratt, the

Panel subtracted $175,920 in damages awarded to Madrigal, and also

permitted Madrigal to retain $30,117, pending the Panel’s issuance

of an interim award regarding Madrigal’s claims to attorneys’

fees.3 Id. ¶¶ 11, 16.

On December 8, 2009, Foulger-Pratt4 filed an Application to

this Court requesting confirmation of the November 30, 2009 Interim

Award (“Foulger-Pratt App.”), and the entering of a judgment

consistent with the findings and determinations of the Panel. The

Panel’s conclusions included: (1) an award to Foulger-Pratt of

$1,694,655 on or before December 21, 2009; (2) a direction to

Madrigal that it must deposit $1,113,000 into an interest-bearing

escrow account to be established by the parties; (3) an

interpretation of the contract documents; and (4) the Panel’s

3 On January 18, 2010, the Panel issued a “Second Interim Award” [Dkt. No. 23-1], addressing the parties’ dispute regarding attorneys’ fees. In this award, the Panel determined Madrigal was entitled to $30,117 in attorneys’ fees, the same amount the Panel had previously ordered Madrigal to retain for such fees pending this further decision. Second Interim Award ¶¶ 3,5. 4 For the remainder of this Memorandum Opinion, references to Foulger-Pratt shall be understood as also constituting reference to Travelers.

-6- rulings limiting Foulger-Pratt’s remaining contractual obligations.

Foulger-Pratt App. 5. Foulger-Pratt also sought pre-judgment

interest, costs, and attorneys’ fees. Id.

On December 22, 2009, Madrigal filed an Opposition to the

Application and Cross-Motion to Enter Scheduling Order for its

Motion to Vacate parts of the arbitration award (“Madrigal Opp’n to

App.”)[Dkt. No. 4]. On January 12, 2010, Foulger-Pratt filed its

Reply brief opposing Madrigal’s attempt to submit a vacatur motion

(“Foulger-Pratt Reply to App.”)[Dkt. No. 8]. Madrigal filed its

Surreply on January 29, 2010 (“Madrigal Surreply”)[Dkt. No. 23].

Briefing on vacatur began in March 2010, with Madrigal filing a

Motion to Vacate parts of the arbitration award on March

15(“Madrigal Mot. to Vacate”). On April 30, 2010, Foulger-Pratt

filed its Opposition to the Motion, (“Foulger-Pratt Opp’n”) [Dkt.

No. 30], with Madrigal submitting its Reply brief on May 26, 2010

(“Madrigal Reply”) [Dkt. No. 37].

The pending Motions raise two main issues: (1) the law

governing judicial review of the arbitration award; and (2) the

substantive merits of the Vacatur Motion. Foulger-Pratt asserts

that the Federal Arbitration Act (“FAA”),

,

applies, while Madrigal claims that the D.C. Revised Uniform

Arbitration Act (“DCRAA”),

- 16-4432, governs

this Court’s consideration of the dispute. Foulger-Pratt also

challenges Madrigal’s claims for vacatur of portions of the

-7- arbitration award, which include: (1) claims that the Panel lacked

jurisdiction to rule on certain issues; (2) allegations that

Madrigal was deprived of a full and fair hearing; (3) claims that

the Panel exceeded its powers; and (4) arguments that the Panel

acted arbitrarily and capriciously in rendering its award.5

II. Jurisdiction

Foulger-Pratt brings its Application for Confirmation under

the federal diversity statute,

The parties do

not challenge the Court’s jurisdiction in this matter, nor is there

any indication that this claim does not satisfy the federal

diversity statute.7

5 In their Joint Praecipe Regarding Arbitration Proceedings (Apr. 21, 2011) [Dkt. No. 42], the parties informed the Court that the Panel has issued the following five orders since the Second Interim Award: (1) Order Regarding Escrow Account and Status Conference (Jan. 21, 2010); (2) Order Regarding Project Neutral (May 12, 2010); (3) First Supplemental Order Regarding Special Warranties (May 20, 2010); (4) Second Supplemental Order Regarding Special Warranties (July 27, 2010); and (5) Order Regarding Motion to Strike (Dec. 10, 2010). 6 Although Foulger-Pratt seeks confirmation of the arbitration award pursuant to Section 9 of the FAA, the FAA is not a jurisdictional statute, “bestowing no federal jurisdiction but rather requiring an independent jurisdictional basis.” Hall St. Assocs. v. Mattel, Inc.,

,

(2008). 7 According to Foulger-Pratt’s Application for Confirmation, Foulger-Pratt is a limited liability company, organized under the laws of Maryland with its principal place of business in that state, while Madrigal is a limited liability company organized under Delaware law conducting business in the District of Columbia. Foulger-Pratt App. ¶¶ 1,3. Travelers is a corporation organized under the laws of Connecticut where its principal place of business (continued...)

-8- III. Analysis

A. Governing Law

Foulger-Pratt and Madrigal dispute whether the FAA or the

DCRAA applies to judicial review of the arbitration award.

As noted above, Foulger-Pratt originally filed its Application

to Confirm the Arbitration Award pursuant to the FAA. In response

to Madrigal’s Opposition to Confirmation and Cross-Motion to

Vacate, Foulger-Pratt argues that the FAA applies to the Vacatur

Motion, as well as its confirmation application, based upon the

statute’s purported preemption of state law, as well as the

parties’ Contract.

Madrigal counters, however, that the parties expressly agreed

to have all matters respecting “[t]his [a]greement to arbitrate

. . . specifically enforceable pursuant to and interpreted under

the laws of the District of Columbia,” thereby making the FAA

inapplicable in this instance. Modified Contract Conditions §

4.4.1.

As the analysis below demonstrates, Madrigal is correct that

District of Columbia law applies to this Court’s review of the

arbitration award.8 In response to Foulger-Pratt’s alternative

(...continued) is also located. Id. ¶ 2. In this case, the arbitration award in question exceeds the diversity statute’s $75,000 minimum. Id. ¶ 4. 8 The relevant parts of the parties’ underlying construction (continued...)

-9- argument that this Court should apply the previous District of

Columbia arbitration statute, the D.C. Uniform Arbitration Act

(“D.C. Uniform Act”),

- 16-4319, Madrigal also

correctly argues that the DCRAA, which became fully effective on

February 27, 2008, governs this dispute.

1. The FAA and the D.C. Arbitration Statute

The FAA applies to the review of arbitration disputes

involving interstate commerce and maritime matters.

-

2. The statute reflects a federal policy “favoring arbitration” and

supersedes any state laws that conflict with this preference. See

Preston v. Ferrer,

,

(2008) (“When

parties agree to arbitrate all questions arising under a contract,

the FAA supersedes state laws lodging primary jurisdiction in

another forum, whether judicial or administrative.”).

The Supreme Court’s decisions in Volt Information Sciences,

Inc. v. Board of Trustees of the Leland Stanford Junior University,

,

(1989) and Mastrobuono v. Shearson

Lehman Hutton, Inc.,

,

(1995) directly

address the issue of whether a contract’s choice of law provision

trumps the FAA with respect to arbitration agreements. According to

(...continued) agreements, which are also cited in their briefs, are as follows: Modified Contract Conditions §§ 4.4.1, 4.6.3, 4.6.4, 4.6.5, and 4.6.6.

-10- Volt, the FAA “‘create[s] a body of federal substantive law of

arbitrability, applicable to any arbitration agreement within the

coverage of the Act,’ which requires that ‘questions of

arbitrability . . . be resolved in favor of arbitration.’”

(quoting Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp.,

,

(1983)). The federal policy

underlying the FAA “is simply to ensure the enforceability,

according to their terms, of private agreements to arbitrate

. . . . Arbitration under the [FAA] is a matter of consent, not

coercion, and parties are generally free to structure their

arbitration agreements as they see fit.” Volt,

.

Volt firmly establishes that the FAA does not preempt state

arbitration laws if freely chosen by the parties. See Ekstrom v.

Value Health, Inc.,

(D.C. Cir. 1995) (relying

on Volt in deciding that the FAA does not preempt parties’ choice

of state rules of arbitration that are consistent with the FAA’s

goals of protecting private arbitration agreements). See also Hall

St. Assocs. v. Mattel, Inc.,

,

(2008) (noting in dicta that the “FAA is not the only way into

court for parties wanting review of arbitration awards: they may

contemplate enforcement under state statutory or common law, for

example, where judicial review of different scope is arguable”).

-11- In Mastrobuono, the Court further described the circumstances

in which either state arbitration rules or the FAA may apply to

parties’ arbitration agreements. Mastrobuono involved a contract,

with a general choice of law provision selecting New York law, as

well as an arbitration provision setting forth certain procedural

rules governing future arbitration proceedings.

.

Petitioner sought a ruling that the FAA preempted a New York common

law rule, which prohibited arbitration awards of punitive damages.

. Emphasizing its continued support for Volt, the

Supreme Court found that the contract at issue did not evince the

parties’ specific intent to exclude punitive damage awards.

Moreover, the parties’ selection of New York state law conflicted

with their simultaneous selection of specific arbitration rules

governing the arbitration proceeding.

. Relying on

principles of contract construction as well as its decision in

Volt, the Court concluded that the resulting ambiguity demanded

that it interpret the contract so as to permit the arbitration

Panel’s award of punitive damages.

.

As noted in Jung v. Association of American Medical Colleges,

(D.D.C. 2004), “[n]umerous courts of

appeals have concluded that Mastrobuono requires that the intent of

the contracting parties to apply state arbitration rules or law to

arbitration proceedings [] be explicitly stated in the contract and

that . . . a general choice of law provision does not evidence such

-12- intent.”9 Cf. Roadway Package Sys., Inc. v. Kayser,

,

298 n.6 (3d Cir. 2001), overruled on other grounds by Hall St.

Assocs.,

.

In Jung, the District Court concluded that Mastrobuono stands

for the proposition that the FAA trumps a general choice of law

provision.

. Other D.C. District Court

decisions have also agreed with this interpretation of Mastrobuono.

See Contech Const. Prods., Inc. v. Heierli, Nos. 09-01483, 09-

02204,

at *7 (D.D.C. Feb. 4, 2011)(citing to

Mastrobuono in holding that FAA and not D.C. arbitration law

applied to arbitration because reference in arbitration clause to

Washington, D.C. merely constituted agreement as to location of

arbitration proceedings); Khan v. Parsons Global Servs., Ltd.,

(D.D.C. 2007), rev’d on other grounds,

(D.C. Cir. 2008)(relying on Mastrobuono and a line of

9 See Sovak v. Chugai Pharmaceutical Co.,

(9th Cir. 2002)(citing to Mastrobuono in holding that a general choice of law clause does not trump the presumption favoring the FAA’s application); Roadway Package Sys., Inc. v. Kayser,

(3d Cir. 2001), overruled on other grounds by Hall St. Assocs.,

(same); UHC Mgmt. Co. v. Computer Scis. Corp.,

, 996-97 (8th Cir. 1998)(referencing Mastrobuono in holding that the court would not “interpret an arbitration agreement as precluding the application of the FAA unless the parties’ intent that the agreement be so construed is abundantly clear”); Ferro Corp. v. Garrison, Indus., Inc.,

(6th Cir. 1998)(relying on Mastrobuono in concluding that contract’s general choice of law provision selecting Ohio law did not evidence parties’ unequivocal selection of Ohio law to determine the scope of their arbitration agreement).

-13- circuit court cases in holding that “a generic choice-of-law

clause, by itself, is insufficient evidence to prove that the

parties intended to opt out of the default federal standards”).10

This case, however, presents a different scenario from those

cases, following Mastrobuono, holding that a generic choice of law

clause is insufficient to displace the FAA’s default rules. In this

case, even though there is a general choice of law provision

applying to the Contract as a whole, Modified Contract Conditions

§ 13.1.1, the parties included a specific clause stating that

“[t]his [a]greement to arbitrate shall be specifically enforceable

pursuant to and interpreted under the laws of the District of

Columbia.” Id. § 4.4.1.

As Volt made clear, the FAA demands that private agreements to

arbitrate be upheld and that the parties’ choice of substantive law

governing those arbitrations generally be respected. Despite

Foulger-Pratt’s claims to the contrary, the choice of law clause

contained in the parties’ Contract, Modified Contract Condition §

10 In Ekstrom, our Court of Appeals held that the parties’ general choice of law provision selecting Connecticut law did apply to the arbitration. However, that holding is not relevant to this case because the parties in Ekstrom did not challenge the general applicability of Connecticut law to their arbitration agreement, but rather disagreed as to whether a particular provision within that law was applicable to the arbitration. 69 F.3d at 1395-96. See Jung,

(noting that Ekstrom decision was in line with Mastrobuono, as parties in Ekstrom did not challenge general applicability of Connecticut law to their arbitration agreement). But see Int’l Techs. Integration, Inc. v. Palestine Liberation Org.,

(D.D.C. 1999).

-14- 4.4.1, specifically and unambiguously evidences their clear choice

of D.C. law rather than the FAA to govern their agreement to

arbitrate. It is an axiom of contract interpretation that, in

interpreting a contract, the court should determine “what a

reasonable person in the position of the parties would have thought

the disputed language meant.” Steel Founds., Inc. v. Clark Constr.

Group, Inc.,

(D.C. 2007) (internal quotations and

citations omitted). In pursuing this inquiry, the court should

“tak[e] into account the contract as a whole, so as to give effect,

if possible, to all of the provisions in the contract.”

(quoting Akassy v. William Penn Apartments, Ltd. P’ship,

(D.C. 2006)). Moreover, there is nothing in the D.C.

arbitration law that conflicts with the policy behind the FAA.

Masurovsky v. Green,

, 204 n.3 (D.C. 1996).

Foulger-Pratt’s argument that D.C. law applies only to the

actual agreement to arbitrate (in other words, only to the issue of

arbitrability) is not persuasive. Foulger-Pratt Reply to App. 13-

14. As Madrigal correctly argues, a reasonable reading of the

provision would apply D.C. law to all aspects of the arbitration,

and not just to the act of entering into the arbitration agreement

itself.11

11 Foulger-Pratt also argues that, under the Contract, the party seeking confirmation of an arbitration award has the right to determine the applicable law. In making this claim, Foulger-Pratt (continued...)

-15- Foulger-Pratt also fails in its claim that the Contract’s lack

of specific reference to the D.C. arbitration statute demonstrates

that the parties did not contemplate application of D.C.

arbitration laws. As observed by the Third Circuit Court of Appeals

in Roadway, parties may employ various means of evidencing their

clear and unambiguous intent to apply state arbitration laws and

are not limited in this respect to specifically invoking the

state’s arbitration provision.

n.5.

Given the emphasis in Mastrobuono and Volt on upholding

private agreements to arbitrate and the parties’ clear choice of

law governing arbitration in this case, the Court concludes that

D.C. law governs its review of the arbitration award.

2. The DCRAA and the D.C. Uniform Act

The DCRAA went into effect in the District of Columbia on

February 27, 2008, although full repeal of the D.C. Uniform Act did

(...continued) relies upon language found in Modified Contract Conditions §§ 4.4.1 and 4.6.6. Section 4.4.1 states that, “[t]he award rendered by the arbitrator(s) shall be final, binding and conclusive on all parties involved, and judgment may be entered upon it in accordance with the applicable law in any court having jurisdiction thereof.” Similarly, Section 4.6.6 states that “[t]he award rendered by the arbitrator or arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof.” Foulger-Pratt’s claim that the Modified Contract Conditions “contemplates that the party seeking confirmation of an award is given the right to select the forum and concomitantly, the governing body of law,” Foulger-Pratt Reply to App. 9., is simply not in accord with established case law. Volt,

; Steel Founds. Inc.,

.

-16- not take place until July 1, 2009. In brief footnotes, Foulger-

Pratt argues that should the Court apply D.C. law then it is the

D.C. Uniform Act, and not the DCRAA, which should be applied.

Foulger-Pratt Reply to App. 13 n.1, 20 n.4.

Section 16-4403 of the DCRAA generally governs its

applicability. According to this section, the statute applies to

“an agreement to arbitrate made on or after February 27, 2008” as

well as to “an agreement to arbitrate made before February 27, 2008

if all the parties to the agreement or to the arbitration

proceeding so agree in a record.”

(a)-(b). The

provision goes on to state, however, that “[o]n or after July 1,

2009, this chapter governs an agreement to arbitrate whenever

made.”

(e)(emphasis added). The statute also

contains a Savings Clause, stating that the DCRAA “does not affect

an action or proceeding commenced or right accrued before the

effective date of this chapter. Subject to § 16-4403, an

arbitration agreement made before the effective date of this

chapter is governed by §§ 16-4301 to 16-4319 [the D.C. Uniform

Act].”

.

While there are few federal or D.C. cases that discuss the

DCRAA in any significant depth, the D.C. Court of Appeals recently

examined the import of this new statute in Menna v. Plymouth Rock

Assurance Corp.,

(D.C. 2010). According to Menna,

after July 1, 2009, the DCRAA repealed the D.C. Uniform Act in its

-17- entirety. Thus, any arbitration agreement entered into before or

after that date, as well as any pending arbitration hearing, would

be governed by the DCRAA.

. Quoting commentary on the

Revised Uniform Arbitration Act, on which the DCRAA is based, the

court in Menna observed that the DCRAA’s “savings clause is

‘subject to’ the provision that, after the date on which the old

Act is repealed, the revised Act governs all arbitration agreements

whenever made.”

at 463 n. 14 (citation omitted).

It is well-settled that on issues of D.C. law, this Court

defers to the rulings of the D.C. Court of Appeals. Williams v.

Martinez,

(D.C. Cir. 2009). Morever, the Menna

court’s reading of the DCRAA is persuasive and utilizes traditional

tools of statutory construction. Arlington Cent. Sch. Dist. Bd. of

Educ. v. Murphy,

,

(2006) (“We

have stated time and time again that courts must presume that a

legislature says in a statute what it means and means in a statute

what it says there. When the statutory language is plain, the sole

function of the courts - at least where the disposition required by

the text is not absurd - is to enforce it according to its

terms.”)(internal quotations and citations omitted).

Furthermore, federal as well as D.C. law regarding statutory

retroactivity establish that where the legislature has made clear

that a law shall apply retroactively, the court shall uphold such

effect, even in cases involving private, contractual rights. See

-18- Landgraf v. USI Film Prods.,

,

(1994)(“When a case implicates a federal statute enacted after the

events in suit, the court’s first task is to determine whether

Congress has expressly prescribed the statute’s proper reach. If

Congress has done so, of course, there is no need to resort to

judicial default rules.”); District of Columbia v. Beretta USA

Corp.,

(D.C. 2008)(“‘When a new law makes clear

that it is retroactive, an appellate court must apply that law in

reviewing judgments still on appeal that were rendered before the

law was enacted and must alter the outcome accordingly.’”)(quoting

Plaut v. Spendthrift Farm Inc.,

,

(1995)).

It is true that under D.C. law legislatively-mandated

retroactivity will be limited where “manifest injustice” would

occur or “substantial due process concerns” are raised. Menna,

n.15. In order to evaluate whether a litigant is likely

to suffer manifest injustice from the retroactive application of a

law, courts must consider “(1) the nature and identity of the

parties, (2) the nature of their rights, and (3) the nature of the

impact of the change in law upon those rights.” Holzsager v.

District of Columbia Alcoholic Beverage Control Bd.,

(D.C. 2009), citing Bradley v. Richmond Sch. Bd.,

,

(1974). Foulger-Pratt’s decidedly brief

challenge to application of the DCRAA does not raise a due process

-19- challenge to the law’s application or any claims that manifest

injustice would occur as a result of its use in this case. Nor does

anything included in Foulger-Pratt’s motion papers or in the DCRAA

raise such concerns.

For all the forgoing reasons, the Court concludes that the

DCRAA applies to this case.12

B. Vacatur of the Arbitration Award

Pursuant to DCRAA § 16-4423(a)-(b), Madrigal moves to vacate

five portions of the November 30, 2009 arbitration award.13 Motion

accompanying Madrigal Mot. to Vacate 1. Under Section 16-4423, a

court can vacate an arbitration award on seven general grounds,

three of which are invoked here: (1) denial of a full and fair

hearing - “an arbitrator refused to postpone the hearing upon

showing of sufficient cause for postponement, refused to consider

evidence material to the controversy, or otherwise conducted the

hearing contrary to § 16-4415, so as to prejudice substantially the

12 Because the DCRAA applies to this case, the Court will not address parties’ arguments regarding whether the arbitration award is interim or final in nature. As reflected in the parties’ briefs, this dispute would be material only if the Court concluded that the FAA was the applicable law. Madrigal Opp’n to App. 8-10; Foulger- Pratt Reply to App. 29-32; Madrigal Surreply 8-10. As both parties agree, under the DCRAA, the Court may review an arbitration award, regardless of whether it is interim or final. Madrigal Opp’n to App. 9 n.9; Foulger-Pratt Reply to App. 29-32. 13 In the alternative, Madrigal moves to vacate portions of the award pursuant to FAA § 10(a)(3) –(4). Motion accompanying Madrigal Mot. to Vacate 1.

-20- rights of a party to an arbitration hearing” (§ 16-4423(a)(3)); (2)

exceeding its authority - “[a]n arbitrator exceeded the

arbitrator’s powers” (§ 16-4423(a)(4)); and (3) other reasonable

ground - ”[t]he court may vacate an award made in the arbitration

proceeding on other reasonable ground”(§ 16-4423(b)).

Pursuant to those subsections of the DCRAA, Madrigal

challenges the following five portions of the award: (1) the

portion of the award dealing with the building’s “Exterior Skin”14

(Interim Award ¶ 17);15 (2) the Panel’s decision to grant pre-award

14 The “Exterior Skin” of the building “comprises the brick masonry walls, metal panels on the balconies and window assemblies, aluminum window, door and balcony storefronts, roofing, rooftop and penthouse screen walls, and exterior sealant joints between various building components.” Madrigal Mot. to Vacate 15-16. 15 Because of its central importance to this case, the Panel’s holding in Paragraph 17 is set out in full below:

Among the Items 1-8 Punch List Work, Paragraph 15 of the APS provides that the Panel is to determine Foulger- Pratt’s obligation to perform Gale report items that Foulger-Pratt contends are not required by the Contract Documents. This is a specific-carve out agreed [to] by the parties to what would otherwise be the Project Neutral’s responsibilities. There are three such issues that were identified by Foulger-Pratt: a) whether Foulger-Pratt is responsible for extending beyond the windows the .090 aluminum flashing over certain exterior windows, or providing an end-dam therefore; b) whether Foulger-Pratt is responsible for correcting the gap between the bottom of the exterior metal panels at the roof level and the building structure at the 12th floor; and c) whether Foulger-Pratt needs to install thermal insulation between the panel and edge of the concrete floor slab at each floor. Madrigal has requested that the Panel defer ruling on these issues, but the Panel rejects (continued...)

-21- interest to Foulger-Pratt (Id. ¶ 14(g)); (3) the Panel’s decision

to excuse Foulger-Pratt from its obligation to provide certain

warranties and close-out requirements for the building (Id. ¶

14(d),(f)); (4) the Panel’s decision to deny Madrigal’s claims for

estimated costs for expected Condominium Association and Unit Owner

Punch-Lists (Id. ¶ 4(c)-(d)); and (5) the Panel’s denial of some of

Madrigal’s claims for attorneys’ fees (Id. ¶ 10).

Madrigal’s challenge to the Panel’s decision on the Exterior

Skin claims is based on the Panel having exceeded its jurisdiction

in considering the issue and having prevented Madrigal from

receiving a fair hearing on the matter. Madrigal challenges the

Panel’s decision on the remaining four claims under the DCRAA

provisions on “excess authority” and “other reasonable ground.”

1. The Judicial Standard of Review for Arbitration Awards

As both the Supreme Court and our Court of Appeals have

recognized, judicial review of arbitration awards is extremely

limited. Major League Baseball Players Ass’n v. Garvey,

(...continued) this request, noting that all parties have been heard on these issues (indeed, considerable hearing time was expended on these issues), and APS Paragraph 15 also contemplates a ruling on these issues in advance of the Project Neutral’s involvement. The Panel concludes that Foulger-Pratt has no contractual responsibility to perform the three identified items from the Gale report. Additionally, the Panel finds that Specifications Section 08911 (Glazed Aluminum Curtain Wall) is not applicable to the exterior metal panels. (emphasis added).

-22- 504, 506,

(2001); Kurke v. Oscar Gruss and Son,

Inc.,

(D.C. Cir. 2006). Because of this

“extremely limited” standard of review, the court will not sit “to

hear claims of factual or legal error by an arbitrator as [it

would] in reviewing decisions of lower courts.” Kurke,

)(internal quotations and citations omitted).

The local D.C. courts have similarly held that “‘[j]udicial

review of an arbitrator’s decision is extremely limited, and a

party seeking to set it aside has a heavy burden.’” Bolton v.

Bernabei & Katz, PLLC,

(D.C. 2008), quoting

Lopata v. Coyne,

(D.C. 1999). See Celtech, Inc.

v. Broumand,

(D.C. 1991)(“[T]he burden on a

party seeking to set aside the result of an arbitration proceeding

remains a formidable one.”); Lopata,

(“[T]his court

[] will not review an arbitration award on the merits.”)(internal

quotations and citations omitted). Such extremely limited review

“serves to attain a balance between the need for speedy,

inexpensive dispute resolution, on the one hand, and the need to

establish justified confidence in arbitration among the public, on

the other.” Bolton,

(internal quotations and

citation omitted).

Thus, the Supreme Court, the D.C. Circuit, and the D.C. Court

of Appeals have all concluded that the standard of review for

arbitration awards is extremely limited.

-23- 2. Claims

a. The Exterior Skin Claims - Jurisdiction/Excess Authority

Madrigal initially relies on the principle of “excess

authority” to argue that the Panel was barred from hearing claims

related to the building’s Exterior Skin. Madrigal Mot. to Vacate

16-17. However, as Madrigal subsequently admits in its briefs, it

is arguing that, in fact, the Panel lacked jurisdiction to hear

these claims. See e.g. id. at 20 (“The Panel’s Rulings in [Interim

Award] Paragraph 17 Fall Outside Its Jurisdiction”); Madrigal Reply

7-11. In essence, Madrigal claims that the Panel decided issues

that were expressly reserved in the APS for consideration by the

Project Neutral. Madrigal Mot. to Vacate 16-22; Madrigal Reply 7-

11.16

The parties do not disagree that the Panel’s jurisdiction is

based upon the APS, although they disagree as to the scope of

jurisdiction given to the Panel by this agreement. Madrigal Mot. to

Vacate 16-22; Foulger-Pratt Opp’n 9-10.17 Paragraph 11 of the APS

16 Although the D.C. Circuit has noted that “[b]y necessary implication, an arbitral award regarding a matter not within the scope of the governing arbitration clause is one made in excess of authority,” it has nonetheless analyzed the issue as a jurisdictional one. Davis v. Chevy Chase Fin. Ltd.,

(D.C. Cir. 1981). 17 While Foulger-Pratt appears to agree that Madrigal’s claim is jurisdictional, it attempts to interpret Madrigal’s allegations as a challenge to procedural, rather than substantive, arbitrability. (continued...)

-24- sets forth the parties’ agreement to arbitrate certain matters left

unresolved by the APS, stating, in part, that “[b]y February 2,

2009, Madrigal shall provide to Foulger-Pratt and Travelers an

updated list of the Madrigal Claims. The Parties agree that the

Madrigal Claims shall be submitted to arbitration. . . . The

arbitration shall also cover claims of the Parties that arise after

the date of this APS.” Paragraph 15 of the APS further clarifies

the Panel’s jurisdiction:

Foulger-Pratt shall complete by April 30, 2009, the items in the Gale report that are within the scope of the existing Contract Documents and required by the Contract. By the close of business on February 3, 2009, Foulger- Pratt shall deliver to Madrigal a list of those items in the Gale report it contends are not required by the Contract Documents and the Contract. Any dispute regarding the Contract requirements or Foulger-Pratt’s obligation to perform any item shall be addressed during the arbitration . . . .

Both the parties and the Panel refer to Paragraph 15 as the

“Gale Report Carve-Out,” a provision that essentially removed Item

17 (...continued) Foulger-Pratt Opp’n 14-15, 30-31. The Supreme Court has described procedural arbitrability as including “prerequisites such as time limits, notice, laches, estoppel, and other conditions precedent to an obligation to arbitrate.” Howsam v. Dean Witter Reynolds, Inc.,

,

(2002)(emphasis in original). Foulger-Pratt claims that Madrigal’s challenge amounts to a procedural claim that Foulger-Pratt waived its right to bring some of the Paragraph 17 issues to the Panel’s attention, as it did not submit these claims until after the February 3, 2009 date contained in APS ¶ 15. However, Madrigal’s briefs clearly demonstrate that its challenge is to the Panel’s substantive jurisdiction over the Paragraph 17 issues. Given this conclusion, the issue must be considered under the extremely limited standard of review discussed above.

-25- 6 from the Items 1-8 Punch-List otherwise assigned to the Project

Neutral. May 26, 2009 Order ¶ 3.3; Madrigal Mot. to Vacate 18-19.

Madrigal does not dispute that Paragraph 15 created such a carve-

out. In fact, in its Motion papers, Madrigal acknowledges that the

Panel’s jurisdiction “to adjudicate exterior skin issues [is]

encompassed by Item 6.” Madrigal Mot. to Vacate 19. However,

Madrigal also claims that the items contained in Paragraph 17 of

the Interim Award were not covered by this carve-out because they

were submitted by Foulger-Pratt to Madrigal after the February 3,

2009 date noted in APS ¶ 15. Id. 20-21.

In order to determine whether Madrigal can bring this

jurisdictional challenge, the Court must analyze whether Madrigal

first brought its jurisdictional objections to the arbitration

Panel.

As the D.C. Circuit has held, “[a]bsent excusable ignorance of

a predicate fact, a party that does not object to the arbitrator’s

jurisdiction during the arbitration may not later do so in court.”

Howard Univ. v. Metro. Campus Police Officer’s Union,

(D.C. Cir. 2008). This rule serves two key functions. First,

“arbitration is a matter of consent; if a party submits to

arbitration without objecting to the arbitrator’s jurisdiction,

then it may fairly be said to have consented to the arbitration,

and the other party, having gone forward with the proceeding, may

fairly be said to have relied upon that consent.”

(citation

-26- omitted). Second, “requiring a party to object to the arbitrator’s

jurisdiction during the arbitration conserves resources. If a party

objects to the arbitrator’s jurisdiction and the arbitrator

sustains the objection, then the parties can go directly to court

and, if the court affirms, avoid an unnecessary arbitration

proceeding.”

.

In order to preserve an objection to an arbitrator’s

jurisdiction, a party must raise it “clearly and explicitly,” and

at a minimum before a decision or award is issued. Envt’l Barrier

Co. v. Slurry Sys, Inc.,

(7th Cir. 2008). As long

as a party “has presented its objection to arbitrability to the

arbitrator and has not thereafter clearly indicated its willingness

to forego judicial review . . . the issue is sufficiently preserved

for [] subsequent judicial inquiry.” Davis,

(citation omitted).

To corroborate its claim that it did in fact object to the

Panel’s consideration of the Paragraph 17 items, Madrigal has

submitted to the Court excerpts from the arbitration hearing

transcripts. These excerpts demonstrate that Madrigal did resist

the Panel’s consideration of at least some of the Paragraph 17

issues, namely subsections 17(a) and (b):18

18 Madrigal’s jurisdictional objection to the Panel did not cover all Paragraph 17 items. As reflected in footnote 15, supra, Paragraph 17 decided four issues. Subsections (a),(b), & (c) relate (continued...)

-27- Under the [APS] it required a statement of problems with – that they had with the Gale Report to be submitted and that is a February 2nd or 3rd 2009 letter from Mr. Brasco, okay, and that is what I understand this witness ought to be talking about. If he’s now going to quarrel with other aspects of the Gale Report, costs or whatever, that’s not an issue that’s here. That should go to the Project Neutral. That’s the procedure.

Parties’ Arbitration Hearing (July 24, 2009)[Dkt. No. 37-1], Arb.

Tr. 2944:7-18. See id. Arb. Tr. 2952:21-2953:22, 2970:5-21(during

discussion of issues relating to February 3, 2009 letter, Madrigal

objects to items being addressed that were not included in that

document).

(...continued) to Gale Report items, while the fourth issue concerns “Specifications Section 08911" (“Section 08911”).

First, Madrigal concedes that it does not bring a jurisdictional challenge with respect to 17(c), although it does argue that the award should be vacated because it is in essence an Exterior Skin matter. Madrigal Mot. to Vacate 20 n.11. Second, while Madrigal’s hearing transcript excerpts demonstrate its jurisdictional objections to the remaining Gale Report items (i.e. ¶ 17(a)-(b)), they do not evidence Madrigal’s objection to the Panel’s jurisdiction over the Section 08911 issue. Madrigal Mot. to Vacate 21-22. In fact, it appears that Madrigal did present evidence on Section 08911 during the hearing, although it attempts to couch it as “an incidental presentation of evidence” that “cannot plausibly be deemed a waiver of its right to insist that the Panel lacked jurisdiction to decide an issue that was specifically reserved for the Project Neutral.” Madrigal Reply 10 n.12. However, as case law discussed below establishes, where a party participates fully on an issue in an arbitration hearing and does not register its objection to the Panel’s jurisdiction over the matter, the party is deemed to have waived its right to later bring a judicial challenge to the Panel’s jurisdiction over that issue.

-28- In addition, Foulger-Pratt’s claim that Madrigal “presented

extensive evidence on the Exterior Skin Contact Disputes . . .

without any reservation” also fails. While Foulger-Pratt presents

case law demonstrating that jurisdiction over a matter is

established where a party fully participates in an arbitration

without raising any jurisdictional objection, it proffers no

authority to support the view that a party waives its properly

raised jurisdictional challenge to a matter by merely submitting

evidence which is related to the issue. Foulger-Pratt Opp’n 13, 21-

28. See Davis v. Prudential Secs., Inc.,

(11th Cir. 1995)(submission of some evidence relating to attorney’s

fees alone was insufficient to demonstrate that party had submitted

issue of his entitlement to such fees to arbitrators).

Where a jurisdictional objection has been so preserved, the

courts are empowered to determine the question of arbitrability,

unless there is “clea[r] and unmistakabl[e]” evidence that the

parties intended the arbitrator to determine it. First Options of

Chicago, Inc. v. Kaplan,

,

(1995)(internal quotations and citations omitted). To rule

otherwise, “might too often force unwilling parties to arbitrate a

matter they reasonably would have thought a judge, not an

arbitrator, would decide.”

.

Where there is no clear and unmistakable evidence that the

parties intended the arbitrator to resolve the issue, “courts

-29- generally . . . should apply ordinary state-law principles that

govern the formation of contracts” to determine the jurisdictional

issue.

. See Howsam v. Dean Witter Reynolds, Inc.,

,

(2002)(“[T]he presumption is that a

court, not an arbitrator, will ordinarily decide an ‘arbitrability’

question.”); Masurovsky, 687 A.2d at 204 (relying on First Options

in holding that presumption in favor of arbitration is reversed

when considering question of arbitrability). However, where

resolution of the arbitrability issue is within the Panel’s

jurisdiction, “a court must defer to an arbitrator’s arbitrability

decision.” First Options,

.

Based on the parties’ APS, as well as the Panel’s May 26, 2009

Order, there is clear and unmistakable evidence that the parties

intended the Panel to decide issues of arbitrability relating to

the Item 6 Carve-Out. As noted in the May 26, 2009 Order ¶ 3.1:

Paragraph 11 of the APS specifically provides that ‘the arbitration [i.e., this arbitration] shall also cover claims of the parties that arise after the date of this APS, which encompasses disputes regarding the interpretation or application of the APS. Additionally, all parties agreed at the hearing, in response to the Panel’s question, that this Panel has plenary jurisdiction to determine all disputes among the parties relating to this contract, other than whatever disputes were agreed to be determined by the Project Neutral per the APS (emphasis added).

The May 26, 2009 Order ¶ 3.3 goes on to say:

Item 6 of the Items 1-8 Punch-List Work, which relates to the Exterior Skin and Roof, includes among other references, a reference that reads: “See Gale Reports

-30- dated 10/02/2007 and 11/18/2008.” This is significant because Paragraph 15 of the APS specifically confers upon this arbitration the responsibility to determine “any dispute regarding the Contract requirements or Foulger- Pratt’s obligation to perform any item [in the Gale reports that Foulger-Pratt contends is not required].” As such, disputes on that subject are for the Panel, effectively creating a carve-out from the Project Neutral’s responsibility under Paragraph 5.3 for that portion of Item 6.

Madrigal has not objected to the Panel’s rulings in its May

26, 2009 Order. Moreover, in its Motion papers, Madrigal implicitly

suggests that its challenge to the Paragraph 17 issues amounts to

a dispute regarding the scope of the Item 6 Carve-Out.19 See

Madrigal Reply 5 (“The parties . . . disagree about the scope of

this ‘carve out.’”). Contrary to Madrigal’s claim, questions about

the Project Neutral’s jurisdiction over these issues do not place

them beyond the purview of the Panel.

at 6 n.8. According to

the clear language of the May 26, 2009 Order, disputes concerning

Item 6 are not to be resolved by the Project Neutral, since the

item is not one that is “to be determined by the Project Neutral

per the APS.” As such, whether the Panel had jurisdiction over the

Paragraph 17 claims is an issue for the Panel itself to decide

based upon its authority “to determine all disputes among the

parties relating to this contract.” May 26, 2009 Order ¶ 3.1.

19 While the Item 6 Carve-out does not include the Section 08911 issue, Madrigal has waived its jurisdictional challenge with respect to this claim and cannot now raise it for the first time before this Court.

-31- Foulger-Pratt also correctly argues that Madrigal’s statements

during the course of the arbitration proceedings demonstrated its

belief that the Panel had jurisdiction over these issues. Lopata,

(concluding that “it [was] unmistakable that the

parties agreed to submit all claims between them to arbitration,

not only from their agreement, but also from the positions taken by

them during arbitration). See Parties’ Arbitration Hearing (May 20,

2009)[Dkt. No. 31-1], Arb. Tr. 50:22 - 51:4 (“[I]n order for the

exterior Project Neutral to evaluate whether item 6 of the punch

list work has been completed, we have to have a ruling from the

Panel as to what those obligations are.”); Madrigal Pre-Hearing

Brief 18 (May 14, 2009)[Dkt. No. 30-19] (“[I]n accordance with

Section 15 of the APS, the Panel must determine the scope of

Foulger-Pratt’s obligation under the Contract to correct systemic

deficiencies identified by the Gale Reports (i.e. the Panel must

clarify the scope of the punch-list work identified in Outstanding

Item No. 6) prior to submitting the ‘Items 1-8 Punch-List Work’ to

the Development Manager and Architect and/or the Project Neutral

for certification of completion.”); Parties’ Arbitration Hearing

(May 20, 2009), Arb. Tr. 64:20-65:3 (“The Project Neutral was not

supposed to go out and make determinations whether or not this item

would be in or out of the contract, whether it was a contract

obligation, yes or no, but to determine simply is it done.”) See

also Interim Award ¶ d (“The Panel’s interpretation of [the

-32- Contract and APS] is that its jurisdiction under the [Contract] and

the APS encompasses all disputes arising under either of these

agreements, and the parties have confirmed that they all share this

same understanding.”).

Since the question of arbitrability was properly before the

Panel for resolution, this Court may not disturb the Panel’s

jurisdictional decision on the merits. Lopata,

.

Therefore, Madrigal’s jurisdictional challenge is denied.

b. Denial of Full and Fair Hearing Claim

In addition to its jurisdictional challenge, Madrigal claims

it was denied a full and fair hearing on its Exterior Skin claims,

based on DCRAA § 16-4423(a)(3). Madrigal argues that the Panel,

after expressly delaying consideration of issues relating to the

Exterior Skin to a later hearing, ruled on some of the issues

relating to those claims in its Interim Award. Madrigal Mot. to

Vacate 22. In essence, Madrigal claims that by ruling on the

Paragraph 17 issues, the Panel disregarded “the clear mandate of

its own May 26 [,] [2009] Order bifurcating the proceedings and

reserving all exterior skin issues for a subsequent phase of the

arbitration . . . .” Id. at 24. Madrigal also argues that the

Panel’s consideration of these issues deprived it of “an

opportunity to present all of its evidence relevant to these

issues,” evidence which it planned to present during the second

-33- hearing. Id. at 26.20 As is demonstrated below, Madrigal’s arguments

on these points largely fail, as the May 26, 2009 Order does not

contemplate postponing all Exterior Skin issues to a second

hearing.

In general, courts accord deference to an arbitrator’s

decision regarding postponement or adjournment of matters, except

when the decision prevents a party from presenting “pertinent and

material evidence.” Naing Int’l Enterp., Ltd. v. Ellsworth Assocs.

(D.D.C. 1997)(internal quotations and citations

omitted). Madrigal is correct that the Panel’s May 26, 2009 Order

¶ 1 reserved certain Exterior Skin issues for adjudication during

a later hearing “if needed.” (emphasis added):

Both Claimant Madrigal and Respondents Foulger-Pratt and Travelers agree that the potential issue regarding potential defects in the building exterior is not ripe for determination at this time. Investigation of the issue is underway by Madrigal, and the issue will be ripe for determination, if needed, only after Madrigal completes its investigation and discloses the results of that investigation to Respondents. If a dispute exists once the investigation is completed and disclosed, that dispute will accordingly be the subject of a separate hearing to be scheduled as promptly as possible after the current hearing concludes. The Panel is sensitive to the fact that any award issued and relief granted in advance of the follow-on hearing will need to take this potential open issue into consideration.

20 Madrigal does not deny that it submitted “significant” evidence to the tribunal on these issues. Madrigal Mot. to Vacate 23; Madrigal Reply 13. Rather, it contends that it was prevented from presenting evidence “critical” to the matters decided in Paragraph 17 of the Interim Award. Madrigal Mot. to Vacate 23; Madrigal Reply 13.

-34-

(emphasis added).

While Madrigal repeatedly asserts that this clause postponed

consideration of all Exterior Skin issues, Foulger-Pratt argues

that only some issues, namely those that were not yet “ripe” for

consideration were covered by this provision. Foulger-Pratt Reply

32-33. In its brief, Foulger-Pratt argues that “[h]ad the Panel

actually bifurcated the hearing as to all Exterior Skin Contract

Disputes as Madrigal now suggests, there would be no question that

a second hearing would necessarily occur, and the May 26, 2009

Order would not have equivocally discussed the possibility of such

a hearing.” Foulger-Pratt Opp’n 32.

Foulger-Pratt’s reading of this clause is correct and accords

with the Item 6 Carve-Out. First, Madrigal does not contest the

Panel’s jurisdiction in the initial hearing over at least one of

the Exterior Skin issues included in Paragraph 17, namely

subsection (c). Second, Madrigal does not deny that this issue was

ready and ripe for review before the May 26, 2009 Order. Third, the

Panel never issued any Order to “bifurcate” the hearing or to hold

a “Phase II” hearing. The “Bifurcation Order” to which Madrigal

refers in its Motion papers is simply a figment of a legal

imagination. Madrigal Mot. to Vacate 24-26; Madrigal Reply 11-18.

As to the “Phase II hearing,” noted supra, the Panel made it clear

that certain Exterior Skin issues were not ripe, that Madrigal was

-35- investigating those issues, that no claim had yet been made by

Madrigal, and that a hearing would be held only “[i]f a dispute

exists once the investigation is completed and disclosed.” May 26,

2009 Order ¶ 1. The unsubstantiated and misleading claims about the

Panel’s alleged bifurcation of the hearing made in the affidavit of

Dennis Davison, Madrigal’s attorney during the arbitration, cannot

undo the plain language of the Panel’s May 26, 2009 Order.21 See

21 The Davison Declaration contains a number of vague and conclusory statements. See e.g. ¶ 4. Paragraph 5 of the Declaration simply misstates what is contained in the Panel’s May 26, 2009 Order. As discussed supra, that Order made no reference to a “Phase I” and “Phase II” hearing nor did it specifically divide the arbitration. In Paragraph 7 of his Declaration, Davison describes the Panel’s May 26, 2009 Order as “bifurcat[ing] [the] hearing, with the exterior skin issues reserved for Phase II.” Again, this is a misrepresentation of the Panel’s May 26, 2009 Order, which did not rule that there would definitively be a second hearing on the Exterior Skin issues or that all the Exterior Skin issues would be addressed in that hearing. In Paragraph 8, Davison claims that “the Panel chair stated that each witness should testify only one time during the course of the proceedings for the sake of efficiency, and that while there may be some overlap between the two phases, the Panel would wait and rule on the reserved issues until Phase II.” (emphasis in original). The Davison Declaration does not, however, contain citations to the hearing transcripts or any other part of the record to substantiate this statement. Moreover, an affidavit from Foulger-Pratt’s attorney, Christopher Brasco, clearly contradicts this claim. See Affidavit of Christopher J. Brasco ¶ 6 (Apr. 30, 2010) [Dkt. No. 34](“At no time did the Panel issue a statement or ruling that required the parties to present witness testimony or other evidence during the initial phase of the arbitration proceedings relating to unripe exterior skin claims that were reserved for any potentially-subsequent proceedings. Likewise, at no time did the Panel issue a statement or ruling that precluded witnesses who had already testified in the initial phase of the proceedings from being re-called to testify regarding reserved exterior skin claims in any potentially-subsequent proceedings.”). Significantly, Madrigal never filed an affidavit (continued...)

-36- Declaration of Dennis A. Davison in Support of Madrigal

Condominiums, LLC’s Motion to Vacate (“Davison Declaration”) (Mar.

15, 2010) [Dkt. No. 27-2].

In light of those positions, Foulger-Pratt is correct in

arguing that, if the Panel intended to postpone all Exterior Skin

issues to a second phase, it would have used more definitive

language, as Paragraph 17 (c) was already ripe for consideration.

Because Madrigal’s argument rests squarely on its claim that

the Panel deferred all Exterior Skin issues to the second phase,

its claim to being deprived of a full and fair hearing must fail.

A far more accurate and reasonable reading of the alleged

“bifurcation” language in the May 26, 2009 Order is that the Panel

delayed hearing those Exterior Skin issues which were raised in

Madrigal’s May 13, 2009 letter to the tribunal [Dkt. No. 27-9], but

did not postpone consideration of those Exterior Skin issues which

were ripe, contained in the Gale Report, and covered by the Item 6

Carve-Out.22

21 (...continued) contradicting Brasco’s statement. 22 The Panel’s statement during post-hearing argument, set forth below, further supports the conclusion that it did not definitively “bifurcate” the proceeding and postpone all Exterior Skin issues to a second hearing. The Panel’s statement also belies Madrigal’s claim that the Panel had not made “clear to the parties that they consider[ed] [the] issue to be under submission . . . .” Madrigal Mot. to Vacate 33:

(continued...)

-37- With regard to its second argument, Madrigal fails to

demonstrate that it was prejudiced by the Panel’s failure to

consider “critical evidence” about Paragraph 17(a)-(c). In deciding

whether the Panel denied Madrigal a fair hearing, the Court is

“neither required nor authorized to comb the record for technical

errors in the receipt or rejection of evidence by arbitrators.”

Bolton,

(internal quotations and citations

omitted). Rather, the Court’s review is “restricted to determining

whether the procedure was fundamentally unfair.”

See Lessin v.

Merrill Lynch, Pierce, Fenner, & Smith, Inc.,

(D.C. Cir. 2007)(“[E]very failure of an arbitrator to receive

relevant evidence does not constitute misconduct requiring

vacatur.”); Tempo Shain Corp. v. Bertek, Inc.,

(2d

Cir. 1997)(“[E]xcept where fundamental fairness is violated,

arbitration determinations will not be opened up to evidentiary

22 (...continued) Arbitrator Ness: I think both sides addressed from an evidentiary standpoint, I think there were three exceptions to the Gale report that you’re talking about and both sides addressed those in some detail and I remember we noted your request to not rule on those three pending, the CSC report, and dealing with it in phase II and we agreed that we would take those under consideration. We may rule on those we may not rule on those. That’s where that stands.

Parties’ Arbitration Hearing (Sept. 21, 2009)[Dkt. No. 31-8 ], Arb. Tr. 3659:12-22. (emphasis added).

-38- review.”).23

In general, it is within the arbitrator’s discretion to decide

whether or not “additional evidence is necessary or would simply

prolong the proceedings.” Tempo Shain,

. However,

“although not required to hear all the evidence proffered by a

party, an arbitrator must give each of the parties to the dispute

an adequate opportunity to present its evidence and argument.”

(internal quotations and citation omitted). Courts may vacate an

award “only if the Panel’s refusal to hear pertinent and material

evidence prejudices the rights of the parties to the arbitration

proceedings.” Lessin,

(internal quotations and

citations omitted).

Madrigal’s claim focuses on several pieces of evidence which

it asserts were central to its allegations regarding the Exterior

Skin issues, but which it was prevented from submitting to the

Panel. They are: (1) an expert report; (2) rebuttal expert

witnesses on the Section 08911 issue; (3) fact witnesses with

personal knowledge of Exterior Skin issues; and (4) general

evidence on how the Exterior Skin claims were interrelated.

23 The Court of Appeals for the District of Columbia has noted that federal court decisions construing and applying the FAA may be regarded as “persuasive authority in construing and applying the corresponding provisions of the District of Columbia arbitration act . . . .” Bolton,

n.5 (D.C. 2008)(internal quotations and citations omitted). Although this case involved the D.C. Uniform Act, the DCRAA also shares a number of identical provisions with the FAA.

-39- Madrigal Mot. to Vacate 25-26; Madrigal Reply 12.

Madrigal fails to demonstrate how these evidentiary materials

are “pertinent and relevant” to the Panel’s consideration of the

specific, ripe Gale Report items contained in Paragraph 17.

Instead, Madrigal offers rather vague and conclusory statements

that “[a]ll of this testimony would be highly relevant to the

issues addressed in Paragraph 17 of the Interim Award” and that the

evidence would “show that none of the elements [of the Exterior

Skin] can be understood without reference to the others . . . in

order for the Contract to be properly interpreted.”24 Madrigal Mot.

to Vacate 26. Such statements alone, however, do not demonstrate

sufficient prejudice, if any at all, to justify vacating the

Panel’s decision.

Similarly, Madrigal has not established how it was prejudiced

24 By and large Madrigal’s argument on the evidentiary issue boils down to a claim that because it had evidence it believes related to the items contained in Paragraph 17 and because it did not have an opportunity to present this evidence, it is therefore a foregone conclusion that Madrigal was prejudiced in the hearing of its case. See Madrigal Reply 13-14 (“Had the Panel advised Madrigal that it had changed its mind regarding the deferral of exterior skin issues and that it would, notwithstanding its May 26, 2009 Order, proceed to decide the exterior skin issues addressed in Interim Award ¶ 17, Madrigal would have presented the testimony of its expert and other witnesses on these issues during Phase I. Thus, the Panel’s disregard of the procedural ground rules it established resulted in a denial of fundamental fairness to Madrigal.”). However, as noted in case law above, arbitration Panels are empowered to exclude evidence and the mere fact that such evidence may have been relevant is insufficient on its own to trigger judicial vacatur of an award.

-40- by the Panel’s failure to consider this purportedly relevant

evidence during the hearing that was held. Madrigal does not

challenge the Panel’s substantive holding on the three Gale Report

items or demonstrate how its decision would have been altered by

the pieces of evidence the Panel did not consider. Instead,

Madrigal’s claim appears to be that the Panel’s decisions on

Paragraph 17 “significantly undercut Madrigal’s ability to pursue

its exterior claims in Phase II.” Id. at 27. See id. at 28 (“[T]he

Panel’s rulings in Paragraph 17 eliminating Foulger-Pratt’s

obligations to perform the disputed Gale Report items and stating

that Section 08911 does not apply to the exterior metal Panels will

significantly undermine Madrigal’s ability to prevail on its

exterior skin claims in Phase II.”). Madrigal had no reason or

right to assume, for the reasons already discussed, that there

would be a Phase II hearing. Its concerns about the results of a

second hearing which was not even guaranteed to occur are not

sufficient to justify vacatur under DCRAA § 16-4423(a)(3), and

Madrigal does not present any case law that would suggest

otherwise.25 In the absence of a showing that the evidence excluded

25 In fact, the Panel’s statement in the Interim Award suggests that it would be sensitive to Madrigal’s concerns about the impact of a first hearing award on any subsequent hearing before the Panel: “[N]othing in this Interim Award is intended to affect Madrigal’s ability to assert the Reserved Exterior Skin Claim.” Interim Award ¶ 14(a). Although Madrigal argues that the Panel’s Paragraph 17 findings directly contradict this statement, it offers vague and (continued...)

-41- from the first hearing prejudiced Madrigal’s case, vacatur under

this provision is not merited with respect to the Gale Report items

contained in Paragraph 17.

Madrigal does, however, make a stronger showing regarding the

relationship between the Panel’s ruling on the Section 08911 issue

and evidence related to this issue which was excluded from the

hearing. The Panel’s decision on the Section 08911 issue

specifically states that “Specification Section 08911 [] is not

applicable to the exterior metal panels.” Interim Award ¶ 17. In

its Motion, Madrigal alleges that it planned to call a rebuttal

witness in the second hearing, who “would rebut the claims by

Foulger-Pratt . . . that Specification Section 08911 does not apply

to the exterior metal spandrel panels, column and slab covers at

the Project.” Madrigal Mot. to Vacate 26.

In Tempo Shain, the Second Circuit held that an arbitration

Panel had denied a party a full and fair hearing by refusing to

hear testimony from a rebuttal witness.

. The

witness in question was the “only person who could have testified

in rebuttal” to the opposition’s claims, and the documentary

evidence before the Panel “did not adequately address such

testimony.”

. While Foulger-Pratt points to places in the

25 (...continued) unspecific arguments as to how the Panel’s decisions on the Gale Report items will adversely impact Madrigal’s ability to pursue its Reserved Exterior Skin Claims. Madrigal Mot. to Vacate 27-28.

-42- record where Madrigal incidentally raised Section 08911 in

connection with its arguments on other issues, Foulger-Pratt does

not point to any place in the record, which demonstrates that

Madrigal had been given the chance to rebut Foulger-Pratt’s claim

regarding Section 08911's inapplicability to the exterior panels.

Foulger-Pratt Opp’n 27-28.

While this may suggest that Madrigal has been denied a full

and fair hearing on the Section 08911 issue, Madrigal does not meet

its burden on this claim, as it has failed to demonstrate that the

Panel definitively postponed this issue to a second hearing.

Madrigal has not presented any other credible grounds for its

assertion that the Panel took actions affirmatively denying it an

opportunity to rebut Foulger-Pratt’s argument on this point.26

The Court, therefore, denies Madrigal’s claim that it did not

receive a full and fair hearing on the Paragraph 17 issues.

c. Remaining Claims

Madrigal grounds its other claims for vacatur of portions of

26 For example, Madrigal states that during the first hearing the Panel accepted its expert report on those Exterior Skin issues reserved for the second hearing, but expressly stated that it would not consider the report in rendering its first award. Madrigal Mot. to Vacate 25 n.14. While Madrigal claims that the Panel’s refusal to consider the expert report in Phase I was fundamentally unfair, Madrigal at no point suggests that the Panel’s consideration of this report, which contained determinations regarding Section 08911, during the first hearing would have specifically rebutted Foulger-Pratt’s claims on the Section 08911 issue.

; Madrigal Reply 13.

-43- the Interim Award upon the DCRAA’s provisions on “excess authority”

and “other reasonable ground.” According to Madrigal, the “other

reasonable ground” provision includes review for “arbitrary and

capricious” action by the arbitration Panel. Foulger-Pratt

challenges application of this evidentiary standard, while also

arguing that, in any event, Madrigal fails to demonstrate anything

arbitrary or capricious about the Panel’s rulings.

As with the D.C. Uniform Act, the DCRAA’s provision on “excess

authority” is accorded “the narrowest of readings.” Kanuth v.

Prescott, Ball & Turben, Inc.,

(D.C. Cir.

1991). The provision does not “confer on courts a general equitable

power to substitute a judicial resolution of a dispute for an

arbitral one; rather, where the interpretation of a contract is at

issue, it is the arbitrator’s construction which was bargained for,

and not that of the courts.” Chevy Chase Fin.,

.

(internal quotations and citation omitted). In order to obtain

relief under this provision, claimant “must clear a high hurdle.”

Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp.,

(2010).

An arbitrator’s decision may be unenforceable only when she or

he “strays from interpretation and application of the agreement and

effectively dispenses [her or his] own brand of industrial

justice.”

Because arbitration is a matter of contract,

arbitrators are “permitted to decide only those issues that lie

-44- within the contractual mandate. . . . [A]n arbitral award regarding

a matter not within the scope of the governing arbitration clause

is one made in excess of authority, and a court is precluded from

giving effect to such an award.” Chevy Chase Fin.,

.

As the D.C. federal and local courts have held, an arbitration

award can only be set aside or vacated on clearly specified

statutory grounds. Stern v. Stern Co. of Washington, D.C.,

(D.C. Cir. 1952). See Shaff v. Skahill,

(D.C. 1992)(dismissing motion to vacate arbitration award for

failure to raise statutory grounds for vacatur). While there is

little case law addressing the scope of judicial review under the

DCRAA’s “other reasonable ground” provision, D.C.’s highest court

recently held that the subsection does not substantially expand

judicial authority to vacate an arbitration award beyond what

existed under the D.C. Uniform Act. A1 Team USA Holdings, LLC v.

Bingham McCutchen, LLP,

(D.C. 2010). In that

case, the court concluded that this subsection does not

dramatically expand the court’s review powers and that de novo

review of an arbitrator’s award remains prohibited.

.

As a result, the court’s review of an arbitration award is still

“extremely limited.”

.

In reaching these conclusions, the court in A1 Team engaged in

an extensive review of the DCRAA’s legislative history and found

no evidence to suggest that the drafters intended the statute to

-45- alter the existing judicial standard for reviewing an arbitration

award.

. Rather, the court concluded that the DCRAA’s

creation was prompted by limitations under the previous code, which

“no longer provided answers to many modern-day issues in the

arbitration process . . . such as . . . the use of electronic

information and other modern means of technology . . . .”

. Because of the decided absence of explicit language in the

statute, as well as in the legislative history, defining the scope

of “other reasonable ground,” the court held that the DCRAA did not

expand established D.C. law for judicial review of arbitration

awards.

.

In light of A1 Team, Madrigal’s expansive reading of the

DCRAA’s “other reasonable ground” clause must be rejected. Given

that Madrigal has failed to raise any other plausible statutory

basis for applying the arbitrary and capricious standard, vacatur

cannot be granted based on this erroneous standard of review.

i. Pre-Award Interest

Madrigal challenges the Panel’s decision to grant Foulger-

Pratt pre-award interest on its final three payment applications:

Payment Applications 27, 28, and 29. In awarding Foulger-Pratt

$2,837,772 on these outstanding invoices, the Panel calculated the

unpaid amount for the three payment applications while also adding

-46- $171,31227 in pre-award interest assessed at a rate of 6% from June

15, 2008 until the award date. Interim Award at ¶¶ 13, 14(g).

Madrigal charges that the Panel “manifestly exceeded its

authority by acting contrary to the unambiguous provisions of the

APS . . . regarding the Payment Applications.” Madrigal Mot. to

Vacate 29. As already noted, during the arbitration, the Panel

found in favor of Foulger-Pratt on its claim that Madrigal had

breached the parties’ Contract by delaying final completion of the

project. Interim Award ¶ 12. The Panel also sustained most of

Foulger-Pratt’s claim that it was “entitled to Final Payment, or

alternatively that any outstanding prerequisites for Final Payment

have been excused, waived, or prevented by Madrigal’s action or

inaction.” Id. ¶ 13. It was in connection with these findings of

contractual breach that the Panel awarded Foulger-Pratt payment on

its three outstanding payment invoices, including pre-award

interest. Madrigal’s “excess authority” argument centers on its

contention that the pre-award interest awards violate APS ¶¶ 2-5.2.

Madrigal Mot. to Vacate 29.

As to Payment Application 29, Madrigal’s claim focuses on APS

¶ 5.2, which sets out the parties’ agreed payment schedule as to

27 The Panel divided the interest payment between the three payment applications as follows: (1) $2,294.53 in interest with respect to Payment Application 27; (2) $26,005.96 in interest with respect to Payment Application 28; and (3) $143,011.78 in interest with respect to Payment Application 29. Interim Award ¶ 14(g).

-47- the Items 1-8 Punch-List. In Paragraph 5.2, the parties agreed to

a price of $1,194,000 for this work, payable to Foulger-Pratt upon

completion, provided that it otherwise complied “with all other

terms of this APS.”28

As is clear from APS ¶ 11, the Panel was empowered to decide

issues relating to Foulger-Pratt’s right to payment under the APS

and the parties’ underlying agreements:

The arbitration shall determine the Madrigal Claims and

28 Paragraph 5.2 of the APS states, in part:

Upon the execution of a Certification of Completion of the Items 1-8 Punch-List Work by the Development Manager, Project Architect and Lender Architect, and Foulger- Pratt’s delivery of all of the close-out documents specified and required in Agreement Section 12.2.6 and General Conditions Section 9.10.2 . . . Foulger-Pratt shall submit an Application for Payment for said Items 1- 8 Punch-List Work. Foulger-Pratt and Madrigal agree that the “retainage value” of the Items 1-8 Punch List Work is set as $1,064,000. The Parties further agree that upon Completion of the [I]tems 1-8 Punch-List Work and Foulger-Pratt’s compliance with its obligations set forth above, Foulger-Pratt shall submit an Application for Payment for the sum of $1,194,000, inclusive of the $130,000 adjustment provided for in paragraph 12 of this APS (i.e. $1,064,000, “retainage value” of Madrigal Outstanding Items 1-8 plus the $130,000 reduction from Outstanding Items 9-10). Provided that Foulger-Pratt and Travelers have complied with all other terms of this APS, Madrigal shall certify said Application for Payment and shall process it for payment in accordance with the Contract procedure . . . offset by any amount awarded to Madrigal in the arbitration as provided in paragraph 11 of this APS. Madrigal shall pay the sum of $1,194,000, as it may be adjusted pursuant to paragraph 11, to Foulger- Pratt for the Application for Payment for Items 1-8 Punch-List Work in accordance with the Contract terms and the provisions of this APS.

-48- the claims of Foulger-Pratt and Travelers that, upon satisfaction of its obligations under this APS, Foulger- Pratt is entitled to full payment of the balance of the Contract Sum and Madrigal’s contention that Foulger- Pratt’s right to such payment is subject to: (a) the provisions of the Contract; (b) compliance with this APS, including, without limitation, the provisions in paragraph 5; (c) the Madrigal Claims set forth in the February 2, 2009 “Madrigal Outstanding Items” list; (d) Foulger-Pratt’s performance of the Condo Association and Unit Owners Punch-Lists; and (e) submission of the Contract close-out documents.

In light of APS ¶ 11, Madrigal fails to demonstrate how APS

¶ 5.2 has been violated by the Panel’s decision to grant pre-award

interest on Payment Application 29. That award was based on the

Panel’s conclusion that “any outstanding prerequisites” for final

payment to Foulger-Pratt had been voided by Madrigal’s contractual

breach. Madrigal does not dispute the Panel’s overall ruling on the

issue, nor can it under the terms of the APS.29 The Panel operated

within its authority under Paragraph 11 of the APS by holding that

Madrigal’s behavior nullified some of the prerequisites, including

those found in Paragraph 5, for final payment to Foulger-Pratt.

Furthermore, nothing in Paragraph 5.2 appears to prevent the

Panel from granting pre-award interest. Paragraph 5.2 primarily

serves to establish the value of the Items 1-8 Punch-List. It says

nothing about, and certainly does not restrict, interest awards on

29 Indeed, APS ¶ 17 states that “[t]he Parties further agree that this APS extends only to those disputes expressly addressed herein and the Parties expressly reserve their rights pertaining to any disputes not covered by this APS.”

-49- amounts arising from a party’s breach of the contract.

As to Payment Application 28, Madrigal’s use of “excess

authority” to challenge the pre-award interest also fails for

similar reasons.30 Madrigal argues that pre-award interest granted

on this application conflicts with the terms of APS ¶ 4. Paragraph

4 establishes Application 28’s payment price ($131,693), as well as

certain prerequisites to payment, such as Foulger-Pratt’s release

of a mechanic’s lien on the property. However, as with Paragraph

5.2, this provision does not prevent the Panel from awarding

interest on Paragraph 4’s pre-set payment amount, based on the

Panel’s findings regarding the parties’ conduct vis a vis the

underlying agreements.

In fact, Madrigal’s claims regarding pre-award interest for

both Payment Applications 28 and 29 appear to focus more on the

merits of the Panel’s decision than on any conflict with the

Contract or the APS. See Madrigal Mot. to Vacate 30 (“By ordering

payment of the entire amount of Application 29 before Foulger-Pratt

had satisfied the requirements under APS ¶ 5.2 for even a partial

payment, the Panel nullified the parties’ settlement agreement

embodied in the APS.”); Id. at 32 (“Indeed, to this day, Foulger-

30 As to Payment Application 27, Madrigal’s “excess authority” challenge appears only in a short footnote. Madrigal Mot. to Vacate 32 n.22. As with Applications 28 and 29, Madrigal’s claims regarding Application 27 fail to demonstrate that the Panel’s award conflicted with the APS or the parties’ underlying agreements or otherwise exceeded its authority in any way.

-50- Pratt still has failed to meet the lien release requirements for

[payment of] Application 28.”)(emphasis in original).

In the most direct challenge to the merits of the Panel’s

award, Madrigal attacks the Panel’s decision to calculate pre-award

interest from June 15, 2008 (a few days after the June 1, 2008 date

for which the project was certified as “substantially complete”) to

the date of the award on November 30, 2009. Madrigal claims, in

part, that interest could not have accrued before February 3, 2009,

as the parties had “expressly” agreed in the APS that, as of

February 2, 2009, Foulger-Pratt had not met the pre-requisites for

payment on all three applications. Madrigal Reply 18-19. However,

in deciding whether and to what extent Madrigal was responsible for

delays in the project’s final completion, the Panel in its merits-

based determination as to when breach occurred, and when final

payment in effect became due, would be fully authorized to decide

the interest issue. And, indeed, nothing in the APS prevents the

Panel from doing otherwise.

This Court, therefore, denies Madrigal’s claim for vacatur of

the Panel’s decision on pre-award interest in its entirety.

ii. Warranties and Close-Out Requirements

Madrigal also challenges the Panel’s decision to excuse

Foulger-Pratt from some of its obligations to cure remaining

deficiencies in subcontractor/supplier warranties. Madrigal Mot. to

Vacate 36-41. In urging vacatur of this portion of the Panel’s

-51- award, Madrigal argues that the Panel exceeded its authority by

rendering a decision that conflicts with the APS and the parties’

underlying agreements. Id. Based on these claims, Madrigal urges

this Court to “partially vacat[e] [Paragraph 14(d)] and remand[]

for further consideration in accordance with the requirements that

Foulger-Pratt provide all warranties.” Id. at 41.

Madrigal also contests the Panel’s conclusion that Foulger-

Pratt’s obligations to provide certain close-out documents and “any

other contract deliverables” have “either been satisfied or

excused, and Foulger-Pratt has no further obligations to provide

any such items.” Interim Award ¶ 14(f). Specifically, Madrigal

claims that Foulger-Pratt was to provide “As Built” Drawings, as

part of the “close-out documents” it was required to produce under

the APS and the Contract. Madrigal Mot. to Vacate 41-42.

While Madrigal concedes that Foulger-Pratt previously provided

such drawings, it claims that the Project Architect rejected those

documents in August 2009 “because of various deficiencies, such as

a failure to ‘mark up’ the drawings.” Id. at 42. Based on this

rejection, Madrigal argues that the Panel exceeded its authority by

absolving Foulger-Pratt from providing these documents and thereby

nullifying Foulger-Pratt’s obligations under the APS and the

Contract.31 Id.

31 The Panel’s full ruling on this issue is as follows: (continued...)

-52- Madrigal also asserts that the Panel’s ruling with respect to

“other contract deliverables” effectively “nullified Foulger-

Pratt’s contractual obligation to deliver extra materials” for the

building. Id. Again, Madrigal claims that Foulger-Pratt was

contractually required to provide these items and that the Panel

exceeded its authority in failing to enforce this obligation. Id.

at 42-43

As with its claims regarding pre-award interest payments,

Madrigal’s arguments for vacatur of the Panel’s decisions on

warranties and close-out documents are essentially an attack on the

merits of the Panel’s award. Much of Madrigal’s proffered claims on

the warranties issue focuses on the manner in which Madrigal and

the unit owners in the project building would be adversely affected

by deficient or missing warranties. See Madrigal Mot. to Vacate 36

(“Anyone who has paid for [an] expensive car or home repairs knows

just how valuable an enforceable warranty can be.”).

31 (...continued)

With respect to all other items alleged by Madrigal to be incomplete or deficient and to preclude Final Completion and/or Final Payment(including other close-out documents, certified Cost of the Work, future Unit Owner Punchlists, Condo Association Punchlist(s) and any other contractor deliverables alleged by Madrigal), the Panel concludes that all such requirements have either been satisfied or excused, and Foulger-Pratt has no further obligation to provide any such items.

Interim Award ¶ 14(f).

-53- Madrigal’s arguments about the close-out documents similarly

emphasize the importance of these materials to Madrigal and the

unit owners. See id. at 42 (“Having proper As-Built Drawings is

particularly important to the unit owners and the Condominium

Association because the drawings are most likely to become

necessary years into the future.”); Id. at 43 (“Although these

[extra materials] might appear to be relatively insignificant, they

are in fact important to ongoing repairs in both the common areas

and individual units. Because creating a color match with custom-

mixed paint is nearly impossible, having paint on hand for touch-

ups is important.”).

Again, in assessing the breach of contract claims brought by

Madrigal and Foulger-Pratt, the Panel was fully authorized to

determine the parties’ continuing contractual obligations or lack

thereof. Madrigal fails to point to any provision of the APS or the

parties’ agreements that restricts the Panel on this issue.

Consequently, and in light of its extensive efforts to

convince this Court of its demonstrated need for these items,

Madrigal’s claims regarding warranties and close-out documents

amount to little more than an attempt to re-litigate these issues

on the merits and thereby fail to justify vacatur under the

applicable case law. Stolt-Nielsen,

; A1 Team USA

Holdings, LLC,

; Kanuth,

; Chevy

Chase Fin.,

. Madrigal’s claims on these issues are,

-54- therefore, denied.

iii. Costs Associated with Punch-Lists

Madrigal also urges vacatur of the Panel’s decision to award

Foulger-Pratt fees for Punch-List work it failed to complete.

Madrigal Mot. to Vacate 43-44. Madrigal claims that the Panel’s

decision on this matter exceeded its authority, because Madrigal is

entitled to retain these amounts under the APS and because the

award reduced Foulger-Pratt’s scope of work under the parties’

Contract. Id. at 44.

Specifically, Madrigal contends that the parties agreed in the

APS ¶ 12 that it was entitled to hold back a total of $530,000 from

the contract price until Foulger-Pratt completed work associated

with Condo Association and Unit-Owners Punch Lists. Id. at 43.

Moreover, Madrigal argues that “[t]wo of the significant disputes

regarding Madrigal’s Outstanding Items List that were resolved in

the APS were the parties’ disputes regarding the Condominium

Association Punch List and the Unit-Owners Punch List.” Id.

Foulger-Pratt, however, is correct in noting that the APS

expressly reserved a number of specific disputes about the Punch-

Lists for arbitration. See APS ¶ 12 (“It is Madrigal’s position

that Foulger-Pratt shall complete the [Punch-Lists] Work in

accordance with the Contract terms, whether the cost of the Work is

greater than or less than these hold-back values. Foulger-Pratt

contends that its obligation to complete said Work is not unlimited

-55- in time. The Parties hereby agree that these issues shall be

decided as part of the arbitration process . . . .”)(emphasis

added); Id. ¶ 11 (noting the parties’ disputes concerning Foulger-

Pratt’s performance of the Condo Association and Unit Owners Punch-

Lists, in specifying the subjects covered by the arbitration). In

light of this clear language, Madrigal’s claim that the Panel’s

decision on the two Punch-Lists violates APS ¶ 12’s “express

completion requirements” lacks merit.32 Madrigal Mot. to Vacate 44.

Consequently, Madrigal’s claims regarding the Punch-Lists fail as

an attack on the merits of the award and are denied.

iv. Attorneys’ Fees

Madrigal objects to the Panel’s denial of its request for

attorneys’ fees relating to the December 2008 TRO action it brought

in D.C. Superior Court. Id. at 34-35. Madrigal claims that under

the Contract it is entitled to fees that result from Foulger-Pratt

“filing a lien or failing to bond off a Subcontractor lien.” Id. at

34 (internal quotations and citation omitted). The Contract,

however, contains an exception to this prohibition for liens filed

by Foulger-Pratt “for amounts certified for payment by the

Development Manager and Architect and which remain unpaid by the

Owner.” Id. (internal quotations and citation omitted) (emphasis in

32 In addition to establishing the parties’ intention to arbitrate matters associated with the Punch-Lists, Paragraph 12 sets out payment prices for this work. Madrigal does not allege that the Panel’s decision altered these prices in any way.

-56- brief). Madrigal asserts that Foulger-Pratt’s December 2008 lien of

$2,636,469 was not covered by this exception, because it was based

primarily on Payment Application 29, which “was never certified for

payment.” Id. Consequently, Madrigal claims entitlement to

attorneys’ fees of $62,840 relating to its efforts in D.C. Superior

Court to remove the lien. Id. Madrigal argues that the Panel’s

failure to grant its request for attorneys’ fees contradicts the

“express terms of the Contract” and was therefore in excess of its

authority. Id. at 35

Again, Madrigal’s claim appears to simply relitigate the

underlying merits issue. The parties disagreed over whether

Foulger-Pratt’s December 2008 lien fell into the exception noted

above, and therefore submitted the issue to the Panel for

resolution. Madrigal’s challenge to the Panel’s decision on this

matter, once again, focuses on its disagreement with the merits of

the Panel’s award. Madrigal Reply 20 (“[T]he parties expressly

agreed in Paragraphs 3,4,and 5.2 of the APS that Foulger-Pratt had

not yet met the terms required for any of these payments as of the

execution of the APS. . . . Thus, there was no basis for the Panel

to conclude that Madrigal had wrongfully failed to certify Payment

Applications 28 and 29 in December 2008, when Foulger-Pratt filed

the mechanic’s lien against the Project.”)(emphasis in original).

There is nothing in any of the APS provisions cited by Madrigal

that would prevent the Panel from considering claims that Madrigal

-57- had wrongfully failed to certify final payment applications and,

for that reason, denying its request for attorneys’ fees in the

Superior Court case. Consequently, this Court denies Madrigal’s

claim that the Panel exceeded its authority by declining to award

attorneys’ fees on this issue.

III. Conclusion

According to DCRAA § 16-4423(e), “[i]f the court denies a

motion to vacate an award, it shall confirm the award unless a

motion to modify or correct the award is pending.” Having denied

Madrigal’s Motion to Vacate portions of the arbitration award, this

Court will confirm the Interim Award in its entirety.

In response to Foulger-Pratt’s request, the Court will grant

Foulger-Pratt “reasonable attorney’s fees and other reasonable

expenses of litigation incurred in a judicial proceeding after the

award is made to a judgment confirming, vacating without directing

a rehearing, modifying, or correcting an award,” pursuant to DCRAA

§ 16-4425 (c). Foulger-Pratt Opp’n 44 n.21. Furthermore, the Court

orders that funds deposited by the parties into the Registry of

this Court, pursuant to its March 3, 2010 order [Dkt. No. 26], be

disbursed according to the terms of the Interim Award. An Order

will accompany this Memorandum Opinion.

-58- April 27, 2011 /s/ Gladys Kessler United States District Judge

Copies via ECF to all counsel of record

-59-