Case Title: Southeast Construction, L.L.C. v. WAR Construction, Inc.

Citation: 

Docket Number: 1101050

State: alabama

Court: Alabama Supreme Court

Date: 2012-11-09T00:00:00Z

Document:
REL: 11/09/2012
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter.  Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2012-2013
____________________
1101050
____________________
Southeast Construction, L.L.C.
v.
WAR Construction, Inc.
____________________
1101137
____________________
Ex parte WAR Construction, Inc.
PETITION FOR A WRIT OF MANDAMUS
(In re: WAR Construction, Inc.
v.
Southeast Construction, L.L.C., et al.)
Appellate Proceedings from the Tuscaloosa Circuit Court
(CV-09-900101)
PER CURIAM.
Southeast Construction, L.L.C. ("SEC"), appeals from the
entry by the Tuscaloosa Circuit Court of judgment on an
arbitration award.  WAR Construction, Inc. ("WAR"), has filed
a cross-appeal –- which we treat as a petition for a writ of
mandamus 
–- 
challenging the circuit court's refusal to enforce
the judgment. 
I.  Facts and Procedural History
On July 12, 2007, SEC and WAR entered into a construction
contract pursuant to which WAR, as the general contractor,
agreed to build a condominium development in Tuscaloosa known
as The Chimes Condominiums ("The Chimes") for SEC, as owner. 
Upon completion of the project, disputes arose between SEC and
WAR concerning performance under the construction contract. 
Pursuant to the contract, those disputes were submitted to
binding arbitration in accordance with the rules of the
American Arbitration Association.  On February 17, 2009, WAR
filed a complaint in the Tuscaloosa Circuit Court against SEC
seeking damages for breach of contract and work and labor
performed and enforcement of a mechanic's and materialman's
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lien on The Chimes.  The circuit court stayed the action
pending the arbitration proceeding between the two parties.  
On February 16, 2011, a three-arbitrator panel ruled in
favor of both SEC and WAR on their respective claims against
one another, resulting in a net award to WAR of $373,929.  SEC
filed a motion for modification of the award.  The arbitration
panel issued a modified award on March 16, 2011, in which it
stated that the net award to WAR was to be paid by SEC
"upon [SEC's] receipt of reasonably appropriate and
adequate releases of liens and claims against [SEC],
its surety and the project involved in this
proceeding 
from 
[WAR] 
and 
all 
of 
[WAR's]
subcontractors/suppliers that filed a lien on the
project; provided that, in lieu of a release from
such subcontractor/supplier, [WAR] may provide an
adequate bond or other adequate security. This shall
occur no later than May 13, 2011."  
Neither party filed an appeal of the award pursuant to
Rule 71B, Ala. R. Civ. P., within 30 days of service of notice
of the modified arbitration award.1
Rule 71B provides, in pertinent part:
1
"(a) Who may appeal. Any party to an arbitration
may file a notice of appeal from the award entered
as a result of the arbitration.
"(b) When filed. The notice of appeal shall be
filed within thirty (30) days after service of
notice of the arbitration award. Failure to file
within thirty (30) days shall constitute a waiver of
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On April 22, 2011, WAR filed in the Tuscaloosa Circuit
Court a "Motion for Clerk's Entry of Arbitration Award as
Final Judgment" pursuant to Rule 71C, Ala. R. Civ. P.   WAR
2
the right to review.
"....
"(f) Procedure after filing. The clerk of the
circuit court promptly shall enter the award as the
final judgment of the court. Thereafter, as a
condition precedent to further review by any
appellate court, any party opposed to the award may
file, in accordance with Rule 59, a motion to set
aside or vacate the judgment based upon one or more
of the grounds specified in Ala. Code 1975, §
6-6-14, or other applicable law. The court shall not
grant any such motion until a reasonable time after
all parties are served pursuant to paragraph (e) of
this rule. The disposition of any such motion is
subject to civil and appellate rules applicable to
orders and judgments in civil actions.
"(g) Appellate review. An appeal may be taken
from the grant or denial of any Rule 59 motion
challenging the award by filing a notice of appeal
to the appropriate appellate court pursuant to Rule
4, Alabama Rules of Appellate Procedure."
Rule 71C provides, in pertinent part:
2
"(a) Who may enforce. Any party to an
arbitration may seek enforcement of the award
entered as a result of the arbitration.
"(b) When filed. If no appeal has been filed
pursuant to Rule 71B within thirty (30) days of
service of the notice of the award, thereby
resulting in a waiver of the right to review, the
party seeking enforcement of the award may at any
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attached a copy of the original arbitration award and the
modified award to its motion.  On April 25, 2011, SEC filed a
response in opposition to WAR's motion in which it stated that
WAR had not fulfilled its obligation of providing SEC with
releases of liens and claims held by WAR and by subcontractors
on The Chimes construction project.  
time thereafter seek enforcement of the award in the
appropriate 
circuit 
court 
as 
set 
forth 
in
paragraph (c) of this rule.
"(c) Where filed. The motion for entry of
judgment shall be filed with the clerk of the
circuit court where the action underlying the
arbitration is pending or if no action is pending in
the circuit court, then in the office of the clerk
of the circuit court of the county where the award
is made.
"(d) What filed. A party seeking enforcement of
an award shall file a motion for entry of judgment,
and shall attach to the motion a copy of the award,
signed by the arbitrator, if there is only one, or
by a majority of the arbitrators.
"....
"(f) Procedure after filing. The clerk promptly
shall enter the award as the final judgment of the
court.  After service pursuant to paragraph (e) of
this rule, the prevailing party may seek execution
on the judgment as in any other case."
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On April 27, 2011, the circuit court entered an order in
which it declined to have the award entered as a judgment at
that time.  The order explained:
"After a further review of the materials, it appears
the awards are not ready for enforcement under
Rule 71C for two reasons. First, enforcement of a
portion of the award is subject to a time frame that
has not yet occurred, i.e., May 13, 2011.  Second,
and most importantly, the arbitrators used language
in 
crafting 
the 
award 
that 
is 
subject 
to
interpretation 
and 
dispute, 
e.g., 
'reasonably
appropriate' and 'adequate' releases, 'adequate'
bond or other security. If the court used such
language in a judgment (as contrasted to language
used by parties in settlement negotiations), it is
likely that an appellate court would hold that a
final judgment has not been entered.  Likewise by
analogy, it is not clear whether there is even a
final award that would support an appeal from the
arbitration awards based on the language used. 
Since the parties chose to remove the case from the
judicial process by their agreement and subject it
to resolution in an alternative forum, it will be
the responsibility of the arbitrators to rule on
what is 'reasonably adequate' or 'appropriate' as
expressed in their own order if the parties do not
agree."
On April 29, 2011, WAR filed a "Motion for Emergency
Hearing" in which it contended that the award "complies with
the requirements to constitute a 'final award' for purposes of
entering a judgment" and that Rule 71C, Ala. R. Civ. P.,
required the circuit court to immediately enter the award as
a judgment.  In its motion, WAR made a distinction between
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"[t]he entry of judgment by the clerk" and "the subsequent
enforcement of judgment."  WAR also "acknowledge[d] that SEC
is entitled to the lien releases as required by the award" and
confirmed that it had not yet provided SEC with a release of
its lien.  WAR explained that it did "not want to release its
lien or SEC's surety bond until payment of the monetary award
is secured.  Otherwise, WAR loses its security ensuring
payment."  To that end, WAR requested that the circuit court,
if necessary, "enter an order to modify and correct the award,
so as to effect the intent thereof and promote justice between
the parties."  WAR cited 9 U.S.C. § 11(c) of the Federal
Arbitration Act, 9 U.S.C. § 1 et seq. ("the FAA"), as
authority for the circuit court to modify the award so that
WAR would not be forced to provide a release of its lien
before SEC paid the amount due WAR pursuant to the award.   
3
Section 11 of the FAA provides:
3
"In either of the following cases the United States
court in and for the district wherein the award was
made may make an order modifying or correcting the
award upon the application of any party to the
arbitration--
"(a) 
Where 
there 
was 
an 
evident 
material
miscalculation of figures or an evident material
mistake in the description of any person, thing, or
property referred to in the award.
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SEC filed a response in opposition to WAR's motion in
which it argued that "Rule 71C[, Ala. R. Civ. P.,] applies
only to the enforcement of final arbitration awards" and that,
because "the arbitrators' 'award' is contingent," it is "not
ready for enforcement under Rule 71C."  SEC contended that
WAR's motion amounted to asking the circuit court "to relieve
WAR of its obligations under the 'award' and only enforce
SEC's contingent obligations."  It also denied that the
circuit court had the authority under § 11 of the FAA to
modify the arbitration award in the manner requested by WAR.
Notwithstanding its order of April 27, 2011, on May 9,
2011, following a hearing, the circuit court did enter an
order based upon the arbitration award.  That order states:
"(b) Where the arbitrators have awarded upon a
matter not submitted to them, unless it is a matter
not affecting the merits of the decision upon the
matter submitted.
"(c) Where the award is imperfect in matter of form
not affecting the merits of the controversy.
"The order may modify and correct the award, so as
to effect the intent thereof and promote justice
between the parties."
(Emphasis added.)
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"1. The documents from the arbitrators dated
February 16, 2011 and March 16, 2011 are the awards.
The Clerk is directed to enter the two documents
from the arbitrators as a judgment under Rule
71(C)(f). Since the arbitrators did not address the
issues, circuit court costs should be taxed as paid.
"2. The court and clerk are available to enforce the
award if it is capable of enforcement through
non-discretionary, perfunctory, ministerial acts
such as garnishment, execution or other writ as
provided in Ala. Code [1975,] § 6-6-13.
"3. 
Any 
issue 
regarding 
interpretation,
modification, clarification or amendment of the
awards should be presented to the arbitrators.
"4. If a certificate of judgment is requested under
Ala. Code [1975,] § 6-9-210, the Clerk would need to
determine whether such a request complies with the
language of the arbitrators' awards. No certificate
of judgment should be prepared unless it complies
with the arbitrators' awards.
"The April 27 order is modified as noted above.
All other claims are denied."
On May 13, 2011, WAR filed what it styled as a "Notice of
WAR's Compliance with the Conditions of Judgment."  In the
filing, WAR explained that it had supplied SEC with releases
of all liens filed by subcontractors.  As to its own lien, WAR
again represented that it "does not want to jeopardize its
security for the judgment without adequate assurance SEC is
going to pay the judgment."  Thus, WAR attached copies of a
signed satisfaction of the judgment and a signed release of
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WAR's lien to its filing with the circuit court.  WAR proposed
that SEC "submit payment in full of the judgment" to WAR's
attorney, the payment to be held in the attorney's trust
account.  After payment had been submitted, WAR's attorney
would file the original signed satisfaction of the judgment
with the circuit clerk, and he would file the original signed
release of the lien in the Tuscaloosa Probate Court.  WAR
stated that its attorney would not release SEC's funds to WAR
until the release and the satisfaction of the judgment had
been filed.  
SEC responded by filing a "Notice of WAR's Noncompliance
with Conditions of Judgment."  In that filing, SEC contended
that WAR had not supplied SEC with releases of claims by two
subcontractors –- Premier Electric Service Company, Inc., or
Laco Woodworks, Inc.  It also noted that WAR had admitted that
it still had not provided SEC with a release of its own lien.
The circuit court scheduled a hearing on the parties'
filings that was initially set for June 2, 2011, but the
hearing was continued to a later unspecified date.  
On June 7, 2011, SEC appealed from the circuit court's
May 9, 2011, order, arguing that the circuit court erred in
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entering a judgment on the arbitration award before WAR had
fulfilled its obligations under the award.  Subsequently, WAR
filed a cross-appeal, complaining that the circuit court had
failed to take any nonministerial actions to enforce the
judgment.  As noted at the outset of this opinion, we treat
WAR's cross-appeal as a petition for a writ of mandamus.  
On July 21, 2011, WAR filed a motion to dismiss SEC's
appeal.  In the motion, WAR contended that this Court lacked
jurisdiction to entertain SEC's appeal "[b]ecause SEC did not
file a Rule 71B[, Ala. R. Civ. P.,] notice of appeal," because
"[t]he entry by the circuit clerk of the arbitration award as
the final judgment of the court in accordance with Rule 71C[,
Ala. R. Civ. P.,] is not a final appealable judgment," and
because there remain "unresolved questions of fact and law"
before the circuit court.  On November 18, 2011, this Court
denied WAR's motion to dismiss SEC's appeal.  
III.  Analysis
A. Jurisdiction Over the Appeal and the Mandamus Petition
At the outset, WAR contends, as it did in its motion to
dismiss, that SEC waived its right to appeal because it did
not follow the procedure specified in Rule 71B, Ala. R. Civ.
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P., to obtain appellate review of an arbitration award.
Conversely, WAR insists that its own failure to appeal in
accordance with Rule 71B, Ala. R. Civ. P., does not foreclose
its petition to this Court.  
An appeal in accordance with Rule 71B concerns an "appeal
from the award entered as a result of the arbitration." 
Rule 71B(a), Ala. R. Civ. P.  This Court has noted that "[a]
party seeking review of an arbitration award is required to
file a motion to vacate during this period -- while the
judgment entered by the circuit clerk remains conditional --
in order to preserve its ability to later prosecute that
appeal to an appellate court once the judgment becomes final." 
Horton Homes, Inc. v. Shaner, 999 So. 2d 462, 467 (Ala. 2008)
(first emphasis added).   In the course of making its
4
argument, WAR states that "SEC waived its right to judicial
review of the merits of the arbitration award because SEC did
not file a Rule 71B. appeal."  (Emphasis added.)  
"Rules 71B and 71C, Ala. R. Civ. P., were adopted,
4
Rule 4(e), Ala. R. App. P., was adopted, and Rule 4(a)(1),
Ala. R. App. P., was amended, all effective February 1, 2009,
in response to Horton Homes, to clarify the procedure for
taking an appeal from an arbitrator's award."  Ace Title Loan,
Inc. v. Crump, 14 So. 3d 94, 97 n.3 (Ala. 2009).
12
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The problem with WAR's argument that SEC waived its right
to appeal is that SEC is not challenging the merits of the
arbitration award.  The first paragraph of the court's May 9,
2011, order states that the award made by the arbitration
panel was to be entered by the clerk of the court as a
judgment pursuant to Rule 71C, which provides for the entry of
a judgment of an arbitration award when there has not been a
challenge to the merits of that award under Rule 71B.
Moreover, what SEC challenges in its appeal is merely the
manner in which the circuit court sought in its May 9, 2011,
order to implement and enforce the judgment, the entry of
which it was simultaneously ordering.  The procedure detailed
in Rule 71B, Ala. R. Civ. P.,  is not applicable to such an
order.
In its petition to this Court, WAR takes issue with the
circuit court's "refus[al] to take any non-ministerial, non-
perfunctory act to enforce the arbitration award.  WAR agrees
with SEC that "the underlying arbitration award [is] not
ambiguous.  WAR asks this Court "to instruct the circuit court
that it has both the authority and obligation to enforce its
judgment and, if necessary, to construe the award to
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effectuate the intent thereof and promote justice between the
parties." 
To the extent that WAR's petition does not request this
Court to direct the circuit court to modify the substance of
the arbitration award, that petition likewise is not barred by
WAR's failure to file a Rule 71B appeal.  
B. Merits of SEC's Appeal and WAR's Petition
SEC argues that the circuit court's May 9, 2011, order
did not give effect to the arbitrators' decision.  We see
nothing in that order to support SEC's position.  To the
contrary, paragraph 1 of the order explicitly provides for the
clerk of the court "to enter the two documents from the
arbitrators as a judgment under Rule 71C(f)."  As is the case
with any judgment, paragraph 2 states that "[t]he court and
clerk are available to enforce the award if it is capable of
enforcement 
through 
non-discretionary, 
perfunctory 
ministerial
acts such as garnishment, execution or other writ."
The final judgment the court ordered the clerk to enter
based upon the arbitrators' decision is one that adjudicates
the rights and responsibilities of the parties.  Accordingly,
it is enforceable as a final judgment.  In essence, it is a
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final judgment that requires certain acts of both parties.  As
such, it contemplates further enforcement, and perhaps
interpretative acts, by the circuit court.  This, however,
does not make it a nonfinal judgment.5
WAR contends that the circuit court is required to give
effect to the arbitrators' award, citing Smallwood v. Holiday
"A final judgment is an order 'that conclusively
5
determines the issues before the court and ascertains and
declares the rights of the parties involved.'  Bean v. Craig,
557 So. 2d 1249, 1253 (Ala. 1990)."  Lunceford v. Monumental
Life Ins. Co., 641 So. 2d 244, 246 (Ala. 1994). The
determination whether a judgment is final does not depend on
the title of the order; "rather, the test of a judgment's
finality is whether it sufficiently ascertains and declares
the rights of the parties."  Ex parte DCH Reg'l Med. Ctr., 571
So. 2d 1162, 1164 (Ala. Civ. App. 1990) (emphasis added)
(citing McCulloch v. Roberts, 290 Ala. 303, 276 So. 2d 425
(1973)).  In McCulloch, the Court explained as follows:
"In Ex parte Elyton Land Co., 104 Ala. 88, 91,
15 So. 939 (1893), this court held that:
"'...  The test of the finality of a
decree to support an appeal is not whether
the cause remains in fieri, in some
respects, in the court of chancery,
awaiting further proceedings necessary to
entitle the parties to the full measure of
the rights it has been declared they have;
but whether the decree which has been
rendered, ascertains and declares these
rights–-if 
these 
are 
ascertained 
and
adjudged, the decree is final, and will
support an appeal.  ...'"
290 Ala. at 305, 276 So. 2d at 426 (emphasis added). 
15
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Development, LLC, 38 So. 3d 818, 721 (Ala. 2009).  As WAR also
contends, circuit courts have inherent authority to interpret
and clarify their own judgments.  State Pers. Bd. v. Akers,
797 So. 2d 422, 424 (Ala. 2000).  See also Helms v. Helms'
Kennels, Inc., 646 So. 2d 1343, 1347 (Ala. 1994) (noting that
"a trial court does have residual jurisdiction or authority to
take certain actions necessary to enforce or interpret a final
judgment"); Gild v. Holmes, 680 So. 2d 326, 329 (Ala. Civ.
App. 1996) ("A trial court possesses an inherent power over
its own judgments that authorizes it to interpret, clarify,
implement, or enforce those judgments.").
WAR also argues, with merit, as follows:
"To the extent that the circuit court is
deterred by ambiguities in the arbitration award
that constitutes its judgment, this Court has given
straightforward direction. In [State Personnel Board
v.] Akers, 797 So. 2d [422] at 424, 425 [(Ala.
2000)], this Court stated as follows:
"'Courts are to construe judgments as they
construe written contracts, applying the
same rules of construction they apply to
written contracts.  See Hanson v. Hearn,
521 So.2d 953, 954 (Ala. 1988). Whether a
judgment is ambiguous is a question of law
to be determined by the court.  See Chapman
v. Chapman, 634 So. 2d 1024, 1025 (Ala.
Civ. App. 1994); Grizzell v. Grizzell, 583
So. 2d 1349, 1350 (Ala. Civ. App. 1991). 
If the terms of a judgment are not
16
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ambiguous, then they must be given their
usual and ordinary meaning and their "legal
effect must be declared in the light of the
literal meaning of the language used" in
the judgment.  Wise v. Watson, 286 Ala. 22,
27, 236 So. 2d 681, 686 (1970); see Moore
v. Graham, 590 So. 2d 293, 295 (Ala. Civ.
App. 1991).  However, if a term in a trial
court's judgment is ambiguous, then the
trial court's interpretation of that term
"is accorded a heavy presumption of
correctness and will not be disturbed
unless it is palpably erroneous."  Chapman,
634 So. 2d at 1025.'"
Given the nature of the award made by the arbitrators in
this case and the nature of the resulting judgment the circuit
court properly ordered the clerk to enter, it is apparent that
the circuit court 
must 
take some additional responsibility for
enforcing that award and the resulting judgment.  To the
extent WAR complains in its petition of the circuit court's
reluctance to do so, we agree with WAR and, accordingly, order
the circuit court to take appropriate action to enforce the
judgment it has entered based upon the arbitrators' award.
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1101050  -–  AFFIRMED.
1101137  –-  PETITION GRANTED; WRIT ISSUED.
Woodall, Stuart, Bolin, Parker, Shaw, Main, and Wise,
JJ., concur.
Murdock, J., concurs specially.
Malone, C.J., recuses himself.
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MURDOCK, Justice (concurring specially).
The main opinion states that, "[g]iven the nature of the
award made by the arbitrators in this case and the nature of
the resulting judgment the circuit court properly ordered the
clerk to enter, it is apparent that the circuit court must
take some additional responsibility for enforcing that award
and the resulting judgment."  ___ So. 3d at ___.  By way of
example, the circuit court might well find it appropriate to
coordinate the parties' fulfillment of the arbitration award
and judgment entered on that award by requiring the parties to
deposit releases or bonds and to make payment into the circuit
court, with the provision that such documents and payment will
be held by the court pending performance by the other party of
its obligation under the judgment.
19