Woodbridge Homes, Inc. v. Lombardy, Unpublished Decision (3-22-2007)
Woodbridge Homes, Inc. v. Lombardy, Unpublished Decision (3-22-2007)
Opinion of the Court
{¶ 1} Appellant/cross-appellee, Woodbridge Homes, Inc. ("Woodbridge"), appeals from the trial court's order, which modified an arbitration award. Appellees/ cross-appellants, David and Mary Ann Lombardy, et al. ("the Lombardys") cross-appeal the same order for its failure to vacate the entire arbitration award.1 Upon review of the record and the arguments of the parties, we affirm in part, reverse in part, and remand to the lower court for further proceedings consistent with this opinion. *Page 3
{¶ 2} This litigation began when Woodbridge filed a foreclosure complaint against the Lombardys on October 21, 2003. The complaint stemmed from unpaid invoices for contracted construction at the Lombardy's home. The Lombardys filed their answer to the complaint along with a counterclaim, which alleged a lack of workmanship and related claims, and a third-party complaint against David Ducas, the owner of Woodbridge.
{¶ 3} The case was set for trial on October 25, 2004, but on that date the parties agreed to dismiss various allegations and to resolve the remaining claims through binding arbitration. The particulars of the agreement were executed, and a stipulation was filed on January 24, 2005. The order implementing the agreement and stipulations imposing binding arbitration on the parties was journalized on February 7, 2005.
{¶ 4} Thereafter the parties chose an arbitrator, and the matter was heard on four separate days spread over several months. On December 22, 2005, the arbitrator issued an award holding that the Lombardys owed Woodbridge $84,019.09 in unpaid invoices, but that the Lombardys were entitled to set-offs in the amount of $24,000 because of improper workmanship by Woodbridge. The arbitration resulted in a total award of $60,019.09 in favor of Woodbridge.
{¶ 5} On December 28, 2005, Woodbridge filed an application for an order to confirm the arbitrator's award of $60,019.09, plus interest. The Lombardys filed an *Page 4 opposition to the application on January 3, 2006, and on January 9, 2006, they filed a motion to vacate, or in the alternative, modify the arbitrator's award. On April 11, 2006, the trial court denied both Woodbridge's motion to confirm and the Lombardy's motion to vacate; however, the trial court granted the motion to modify the arbitrator's award and reduced the award from $60,019.09 to $35,034.09.
{¶ 6} On April 28, 2006, Woodbridge filed a notice of appeal from the trial court's ruling, and on May 8, 2006, the Lombardys filed a notice of cross-appeal.2 *Page 5
{¶ 9} It is well settled that judicial review of an arbitration award is narrowly circumscribed by R.C.
{¶ 10} A trial court has the power to vacate an arbitration award only on certain enumerated grounds. R.C.
{¶ 11} In their cross-appeal, the Lombardys assert three assignments of error arguing that the trial court should have vacated the arbitrator's award. Their focus is on the contention that the award was erroneous because the arbitrator did not appropriately apply contract law; however, this is not a valid reason for the trial court to disturb the arbitrator's award. *Page 7
{¶ 12} Ohio public policy encourages the resolution of disputes through arbitration. Kelm v. Kelm,
{¶ 13} The fact that a trial court may arrive at a different conclusion than the arbitrator is also immaterial. Motor Wheel Corp. v.Goodyear Tire Rubber Co. (1994),
{¶ 14} The arbitrator in this case chose to deal with the improper workmanship by setting off the total award to Woodbridge by the amount of damages incurred by the Lombardys. By entering into binding arbitration, the parties agreed to be bound by such determinations. Therefore, the trial court was correct in not vacating the entirety of the arbitrator's award, and the Lombardy's cross-appeal fails.
{¶ 16} Arbitration awards are presumed valid, and a reviewing court may not substitute its interpretation of a contract provision for that of an arbitrator chosen by the parties. Findlay City School Dist Bd. ofEdn. v. Findlay Edn. Assn. (1990),
{¶ 17} The basis for the trial court's order modifying the arbitrator's award was that it found a mistake in the arbitrator's calculations. The trial court's order read in pertinent part:
{¶ 18} "* * * The court finds material miscalculation on the face of the award, and therefore, modifies the award pursuant to R.C.
{¶ 19} A review of the arbitrator's award and exhibits reveals that there is not a clear miscalculation on the face of the award. The trial court's modification correctly added all the figures explicitly listed in the arbitration award, and in calculating those *Page 10 numbers, the trial court arrived at the conclusion that the arbitrator's award was off by $24,985. However, in paragraphs 4 and 5 of the award, the arbitrator speaks of further changes that should justifiably have been considered in adjusting the contract price, and he cites to figures cited in Section 1 of plaintiff's exhibit 26. That document articulates a sum of $24,985 — the exact amount the trial court articulated as a "material miscalculation."
{¶ 20} While it may not be clear from a review of the arbitrator's award that the calculated award is correct in its arithmetic, it is not unambiguously incorrect; thus, it should not be modified by a reviewing trial court. The fact that the arbitrator's award does not clearly connect the dots in articulating its findings is not fatal to the validity of the award. Ohio law does not require an arbitrator to issue findings of fact or conclusions of law at all. The validity of an arbitration award is unaffected by the lack of written findings of fact and conclusions of law. Ford Hull-Mar Nursing Home, Inc. v. Marr Knapp,Crawfis Assoc, Inc. (2000),
{¶ 21} A review of the record indicates that there is a plausible basis for the original calculations of the arbitrator's award. Therefore, the trial court erred in finding a material miscalculation on the face of the award. The trial court's modification of the arbitrator's award is reversed, and this matter is remanded for confirmation of the original arbitrator's award.
{¶ 22} Woodbridge also argues in its appeal that the trial court should have awarded statutory interest from the date of the arbitrator's award. In support of this contention, Woodbridge cites to MarraConstructors, supra at 566-567, and Hellmuth Obata Kassabaum v.Ratner (1984),
{¶ 23} damages was clearly at issue throughout the litigation. Thus, Woodbridge was not entitled to interest, and its second assignment of error is without merit.
{¶ 24} The trial court's denial of the motion to vacate and the application for interest are affirmed; however, its order to modify the arbitrator's award is reversed, and this matter is remanded for confirmation of the original award. *Page 12 It is ordered that appellant/cross-appellee and appellees/cross-appellants share the costs herein taxed.
The Court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the common pleas court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure.
JAMES J. SWEENEY, J., CONCURS; SEAN C. GALLAGHER, J., CONCURS IN PART AND DISSENTS IN PART (SEE SEPARATE OPINION)
Dissenting Opinion
{¶ 25} I agree with the majority opinion that there is no basis to vacate the arbitration award in this matter. However, I disagree with the determination that the matter should be returned to the trial court for a confirmation of the arbitration award.
{¶ 26} As the majority indicates, the trial court determined that there was a miscalculation in the arbitration award and chose to modify the award. However, the exact amount of the articulated miscalculation of $24,985 was reported in plaintiff's exhibit 26, and the arbitrator referenced this exhibit in the award. Because the record lacks clarity as to whether the arbitrator intended to include this amount in its *Page 13 calculation, I believe the trial court should have remanded the matter to the arbitrator for clarification. A remand for clarification has been held to be a permissible vehicle in arbitration under Ohio law. SeeZarkovic Constr. Co. v. Mijic (Oct. 19, 1990), Trumbull App. No. 89-T-4252. *Page 14
APPENDIX Appellant/Cross-Appellee's Assignments of Error
I. The trial court erred in modifying the arbitrator's award.II. The trial court erred in not awarding statutory interest from the date of the arbitrator's award.
Appellees'/Cross-Appellants' Assignments of Error:
I. The trial court erred when it failed to vacate the arbitration award which had no rational nexus to the contract between Woodbridge and the Lombardy Defendants.II. The trial court erred when it failed to vacate the arbitration award which was the result of the arbitrator so imperfectly executing his powers that a mutual, final and definite award was not made.
III. The trial court erred when it failed to vacate the arbitration award which contained a material mistake of law by awarding damages to Woodbridge despite Woodbridge's breach of the implied obligation to perform under the contract in a workmanlike manner using ordinary care. *Page 1
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