Title: T & M Properties v. ZVFK Architects and Planners

State: wyoming

Issuer: Wyoming Supreme Court

Document:

T & M Properties v. ZVFK Architects and Planners1983 WY 37661 P.2d 1040Case Number: 5786Case Number: 5786Decided: 04/14/1983Supreme Court of Wyoming
T & M PROPERTIES AND 
TIM C. MIRACLE AND MARILYN KRUEGER, APPELLANTS (DEFENDANTS),

v.

ZVFK ARCHITECTS AND 
PLANNERS, APPELLEE (PLAINTIFF). No. 5786

Appeal from the District 
Court, AlbanyCounty, Arthur T. Hanscum, 
J.

Philip Nicholas 
of Corthell, King, McFadden, Nicholas, Prehoda & Olson, Laramie, for appellants.

Jay Dee 
Schaefer, Jay Dee Schaefer & Associates, Laramie, for appellee.

Before ROONEY, C.J., and RAPER, THOMAS, ROSE and 
BROWN, JJ.

BROWN, 
Justice.

[¶1.]     Appellee entered into a 
contract with Miracle Enterprises dated February 9, 1977, and contracts with 
appellant T & M Properties dated February, 1977 (day of month blank in this 
contract) and September 1, 1977. The Miracle Enterprises contract was signed by 
Tim C. Miracle, owner, president. The T & M Properties contracts were signed 
by Tim C. Miracle, owner, partner. The three contracts were for architectural 
and planning services to be rendered by appellee. Each contract contained a 
provision for arbitration. The basic language read:

"All claims disputes and 
other matters in question arising out of, or relating to, this Agreement or the 
breach thereof shall be decided by arbitration in accordance with the 
Construction Industry Arbitration Rules of the American Arbitration Association 
then obtaining unless the parties mutually agree otherwise. This agreement to 
arbitrate shall be specifically enforceable under the prevailing arbitration 
law."

[¶2.]     Appellee invoked the 
arbitration clauses in the contracts and initiated arbitration when a dispute 
arose regarding the amount of fees owed. Appellee caused to be prepared and 
executed a demand for arbitration.1 This demand was directed to T & 
M Properties, Tim C. Miracle and Marilyn Krueger, 
630 East First, P.O. Box 2160, 
Casper, Wyoming81601
. In the demand, 
reference was made to contracts dated "2/9/77, 2/9/77 [sic] 9/1/77." Attached to 
the demand was the contract entered into February, 1977, between appellee and T 
& M Properties.

[¶3.]     On May 22, 1981, the 
tribunal administrator for the American Arbitration Association wrote a letter 
to the parties giving notice that they had received a copy of the demand for 
arbitration. This letter told appellants of their right to counterclaim and the 
rule regarding site of the arbitration hearing. A former attorney for appellants 
entered into correspondence with the tribunal administrator and participated in 
the selection of an arbitrator and the place of the hearing.2

[¶4.]     The arbitration hearing 
was held October 22, 1981. Appellants elected not to attend, although notified. 
The award was rendered November 2, 1981, in favor of appellee in the sum of 
$17,726.50, plus $5,870.78 interest. On November 6, 1981, appellants were mailed 
a copy of the award. On January 28, 1982, appellee filed a petition for 
recognition of award and judgment in the district court. Appellants answered on 
April 23, 1982, alleging defenses and asking that the award be vacated. 
Appellee's motion for a summary judgment was granted August 20, 1982. The appeal 
is from this judgment.

[¶5.]     The issues 
are:

1. Are the appellants' 
defenses raised in their answer to appellee's petition for recognition of award 
and judgment barred by the provisions of § 1-36-114(b), W.S. 1977, because they 
were not made within 90 days of receipt of the arbitration 
award?

2. Did appellants receive 
adequate notice of what issues were arbitrated?

3. Did the arbitrator 
have the power to award interest on appellee's claims?

[¶6.]     We will 
affirm.

I

[¶7.]     Section 1-36-113, W.S. 
1977, provides:

"Upon application of a 
party the court shall confirm the award unless within the time limits allowed 
grounds are urged for vacating or modifying the award."

[¶8.]     Section 1-36-114(b), 
W.S. 1977, provides:

"An application for 
vacating an award shall be made within ninety (90) days after delivery of a copy 
of the award to the applicant, or if predicated upon corruption, fraud or other 
undue means it shall be made within ninety (90) days after the grounds are known 
or should have been known."

[¶9.]     On November 6, 1981, 
appellants were mailed a copy of the award. On January 28, 1982, appellee filed 
a petition for recognition of award and judgment in district court under § 
1-36-113, supra. Appellants contend that since appellee filed a petition under § 
1-36-113, supra, then they are allowed to assert affirmative defenses regardless 
of the 90-day time proscriptions of § 1-36-114(b), supra. Appellee argues that 
the time limits of this statute apply.

[¶10.]  Courts have ruled differently on this 
issue, but we think the better reasoned rule is that the time limits set out in 
§ 1-36-114(b), supra, are applicable. It seems that the majority of 
jurisdictions which have adopted the Uniform Arbitration Act (7 Uniform Laws 
Annotated, 1978) follow this rule. In Chauffeurs, Teamsters, Warehousemen and 
Helpers, Local Union No. 135 v. Jefferson Trucking Company, Inc., 628 F.2d 1023 (7th Cir. 1980), the court decided the question under an Indiana statute 
which provided:

"`Confirmation of an 
award. - Upon application of a party, but not before ninety [90] days after the 
mailing of a copy of the award to the parties, the court shall confirm an award, 
unless within the time limits hereinafter 
imposed grounds are urged for vacating or modifying or correcting the award, 
in which case the court shall proceed as provided in sections 13 and 14 of this 
act. * * *'" 628 F.2d  at 1026.

[¶11.]  The fact that a party opposing an award 
delays in complying with it and effectively forces the other party into court to 
enforce the award should not accrue to the delaying party's 
benefit.

"* * * As the district 
court observed, this policy [of requiring a motion to vacate or an answer filed 
within the original 90-day period] would seem to condemn the conduct of the 
defendant who ignored an award disfavorable to it, failed to move to vacate the 
award, and then sought to be given its day in court when the plaintiff brought 
its suit in frustration to have the arbitration award enforced. If the 
defendant's defenses were of such vital importance to it, the defendant 
nevertheless had an opportunity to raise them in the manner contemplated by 
statute." Chauffeurs, Teamsters, 
Warehousemen and Helpers, Local Union No. 135 v. Jefferson Trucking Company, 
Inc., supra, at 1027.

[¶12.]  Arbitration provides for voluntary 
settlement of disputes in an inexpensive and expeditious manner without resort 
to a tribunal and conducted without the rigid formality of strict rules of law. 
Riverton Valley Electric Association v. Pacific Power and Light 
Company, Wyo., 391 P.2d 489 (1964). Arbitration is 
embedded in the public policy of Wyoming and is favored by this court. Matter of Town of Greybull, 
Wyo., 560 P.2d 1172 (1977).3 The short time period set out in § 
1-36-114(b), supra, gives the arbitration award finality by forcing a party who 
opposes to petition the courts within 90 days.

[¶13.]  Appellants here, through their answer, 
were asking for the affirmative relief of having the arbitration award vacated. 
There are two ways in which a party may present reasons for vacating an award: 
(1) by filing a petition with the trial court to vacate the award; or (2) by 
raising reasons supporting vacation in an answer to the other party's petition 
to confirm.4 However, the answer itself must be 
filed within the 90-day time limit.

"* * * Although the 
answer is not framed as a counterclaim, the `defenses' raised therein constitute 
a request for affirmative relief, namely, vacation of the arbitration award. A 
counterclaim for affirmative relief may not be asserted if barred by the statute 
of limitations. [Citation.]" Chauffeurs, Teamsters, Warehousemen and Helpers, 
Local Union No. 135 v. Jefferson Trucking Company, Inc., supra at 
1027.

[¶14.]  Appellants assert that since appellee was 
diligent enough to file a petition to confirm within 90 days and that since 
appellee consented to a late filing of the answer by appellants, then 
appellants' answer relates back to the date of the filing of the petition to 
confirm. Appellants cite no authority for the proposition that all pleadings 
relate back to the date of the filing of the original 
petition.

[¶15.]  The filing of a petition to confirm thus 
does not extend the 90-day statutory time period within which a request for 
vacation of the award must be presented. Bloom v. Landy, Ill. App., 72 Ill. App.3d 383, 27 Ill.Dec. 878, 389 N.E.2d 1286 (1979). See also, Hatch v. Double 
Circle Ranch, 22 Ariz. App. 124, 524 P.2d 958 (1974); Trustees of the Boston & Main Corp. v. 
Massachusetts Bay Transportation Authority, 363 Mass. 386, 294 N.E.2d 340 
(1973); Component Systems, Inc. v. Murray 
Enterprises of Minnesota, Inc., 300 Minn. 21, 217 N.W.2d 514 (1974); Emporium Area Joint School Authority v. 
Anundson Construction & Building Supply Co., 402 Pa. 81, 166 A.2d 269, 
85 A.L.R.2d 774 (1960). 

II

[¶16.]  Appellants contend that the demand for 
arbitration did not put them on notice that any dispute between Miracle 
Enterprises and appellee was going to be arbitrated. They argue that since they 
were not notified in the demand for arbitration that any contract with Miracle 
Enterprises was involved, and since Miracle Enterprises was not made a party to 
the arbitration proceedings, then the arbitrator exceeded his authority by 
granting any award to appellee based on a contract with Miracle Enterprises. 
Section 1-36-114(a)(iii), W.S. 1977, provides that a court shall vacate an award 
when arbitrators exceed their powers. The right to have a dispute submitted to 
arbitration is contractual. Panhandle 
Eastern Pipeline Company v. Smith., 
Wyo., 637 P.2d 1020 (1981). An arbitrator's authority is 
limited by the bounds of the agreement, and courts may vacate awards that extend 
beyond the contractual scope of arbitration. International Brotherhood of 
Electrical Workers, Local 1400 v. Citizens Gas & Coke Utility, 
Ind. App., 428 N.E.2d 1320 (1981). An arbitrator exceeds his powers when he decides matters 
which were not submitted to him. Himco 
Systems, Inc. v. Marquette Electronics, Inc., 86 Ill. App.3d 476, 41 
Ill.Dec. 515, 407 N.E.2d 1013 (1980).

[¶17.]  It is possible that the arbitrator did 
exceed his powers because the demand for arbitration read "To institute 
proceedings, please send three copies of this demand and the arbitration 
agreement * * * to the AAA * * *." Since only one contract was sent with the 
demand, appellants might have properly concluded that the demand referred only 
to that contract, which was not the contract between Miracle Enterprises and 
appellee. Appellants' failure to appear at the hearing could have been 
attributed to the fact that they thought only one contract was being 
arbitrated.

[¶18.]  The real question here, however, is not 
whether the demand for arbitration put appellants on sufficient notice that the 
arbitrator was going to consider and rule on a contract with Miracle Enterprises 
which arguably had not been submitted to arbitration, but whether the 
arbitrator's award did. If the award was sufficient to alert appellants that the 
arbitrator had ruled on a contract with Miracle Enterprises, thereby possibly 
exceeding his authority, then appellants had an obligation under § 1-36-114(b), 
supra, to move to vacate the award within 90 days of its delivery to 
them.

[¶19.]  The award delineates that T & M 
Properties, Tim C. Miracle, and Marilyn Krueger shall pay sums from four 
separate jobs to appellee. Appellants state in their brief that the award refers 
to jobs which are the condominium units of the Miracle Enterprises contract, 
impliedly conceding that they knew after they received the copy of the award 
that the Miracle Enterprises contract had been arbitrated. The arbitration award 
shows that it covers an arbitration agreement "dated 2/9/77, 2/9/77, 9/1/77," 
which includes the date of the contract with Miracle Enterprises. Further, 
circumstances of the contractual arrangements, combined with the wording of the 
award, should have alerted appellants that the arbitrator might have assumed 
that the companies and people involved were one and the same, even if such an 
assumption was incorrect. The record shows that T & M Properties and Miracle 
Enterprises have the same address. The contract between Miracle Enterprises and 
appellee does not list Miracle Enterprises as a corporation. It is signed by Tim 
Miracle as president, but there is no delineation of the status of Miracle 
Enterprises. Based on all of these facts, the award was sufficient to put 
appellants on notice that the arbitrator may have exceeded his powers, and that 
appellants should therefore take the necessary procedures established by statute 
to vacate or correct the award.

[¶20.]  As we have already stated, the purpose of 
arbitration is to permit faster and less expensive resolution of contractual 
disputes than can be had in court proceedings. "[I]t will not do to `hedge it 
about with those procedural limitations which it is precisely its purpose to 
avoid.'" Riverton Valley Electric 
Association v. Pacific Power and Light Company, supra, at 495. The 
procedures themselves are less formal. All that is required is a "`full and fair 
opportunity to contest the decision now said to be controlling.'" American Insurance Company v. Messinger, 
43 N.Y.2d 184, 401 N.Y.S.2d 36, 40, 371 N.E.2d 798, 803 (1977). The award was 
sufficient to give appellants full and fair opportunity to contest it. Since 
they failed to do so within the statutorily prescribed time limits, the district 
court was correct in granting summary judgment.

III

[¶21.]  Because this court has determined that 
appellants failed to timely assert their claim for vacation of the award, there 
is no reason to rule on the propriety of the arbitrator's granting interest on 
appellee's claims.

[¶22.]  Affirmed.

FOOTNOTES

1 This demand was on a 
standard form (C2CR), Construction Industry Arbitration Rules, dated May 13, 
1983.

2 In the correspondence, 
appellants' former attorney speaks of contract singular, while the tribunal 
administrator speaks of contracts plural.

3 The appropriate statute 
for this proposition is § 1-36-103, W.S. 1977:

"A written agreement to 
submit any existing or future controversy to arbitration is valid, enforceable 
and irrevocable, save upon such grounds as exist at law or in equity for the 
revocation of the contract. This includes arbitration agreements between 
employers and employees or between their respective representatives unless 
otherwise provided in the agreement."

4 Parties may also apply 
within twenty days to the arbitrator to modify or correct an award under § 
1-36-111, W.S. 1977, which provides:

"(a) On application of a 
party or an order of the court, the arbitrators may modify the 
award:

"(i) When there was an 
evident miscalculation of figures or description of a person or property 
referred to in the award;

"(ii) When the award is 
imperfect as to form not affecting the merits of the controversy; 
or

"(iii) For the purpose of 
clarifying the award.

"(b) The application 
shall be made within twenty (20) days after delivery of the award to the 
applicant. Written notice shall be given promptly to the opposing party, stating 
he must serve his objections within ten (10) days from receipt of the notice. 
The award as modified is subject to the provisions of W.S. 1-36-113, 1-36-114 
and 1-36-115."