This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2014).

STATE OF MINNESOTA

IN COURT OF APPEALS

A14-1187

The Jamar Company,

Respondent,

vs.

Independent School District No. 2142,

St. Louis County Schools, Minnesota,

Appellant.

Filed May 18, 2015

Reversed and remanded

Chutich, Judge

St. Louis County District Court

File No. 69VI-CV-13-260

Dean B. Thomson, Matthew T. Collins, Lucas T. Clayton, Fabyanske, Westra, Hart & 

Thomson, P.A., Minneapolis, Minnesota (for respondent)

Stephen M. Knutson, Michelle D. Kenney, Knutson, Flynn & Deans, P.A., Mendota 

Heights, Minnesota (for appellant)

Considered and decided by Smith, Presiding Judge; Chutich, Judge; and 

Minge, Judge.



 



 Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to 

Minn. Const. art. VI, § 10.
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U N P U B L I S H E D O P I N I O N

CHUTICH, Judge

Appellant Independent School District No. 2142, St. Louis County Schools (the 

school district) challenges the district court’s decision to vacate an arbitration award 

designating the school district as the prevailing party in a construction contract dispute. 

The school district further argues that the district court erred in modifying the arbitration 

award to name respondent Jamar Company as the prevailing party entitled to attorney

fees. Because the arbitrator did not exceed his authority in designating the school district

as the prevailing party, we reverse and remand for the district court to calculate the 

appropriate amount of attorney fees to award in favor of the school district.

FACTS

In August 2010, Jamar signed a $1,430,485 contract with the school district to 

construct a roof for a new school building in New Independence. Installation of the new

roof was to begin on February 3, 2011, and be completed by March 31, 2011. The 

contract stated that Jamar would install a certain type of roof, known as a sure-white 

roofing system, which could only be installed if the surface and/or ambient temperature 

was 25 degrees Fahrenheit or warmer. The contract also specified that Jamar was 

responsible for ensuring that it could install the roof despite winter conditions. 

In early November 2010, Jamar told the school district, through the project 

construction manager, that installation of the sure-white roofing system would be 

impossible because the temperature would likely remain below 25 degrees Fahrenheit for 

at least some of the installation period. Despite Jamar’s breach, the school district chose 
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not to terminate the contract and instead elected to accommodate Jamar and change to an 

alternative hot-mopped roof system. On March 7, 2011, the school district issued a 

construction change directive to allow Jamar to proceed with installation of the hotmopped system. 

In August 2011, Jamar estimated that changing to the hot-mopped roof had cost an 

additional $183,000. The school district refused to pay this amount. On April 16, 2012, 

Jamar initiated an arbitration proceeding to recover the cost of installing the hot-mopped 

system, seeking $149,308.65 in damages plus interest, fees, and costs. The school district

counterclaimed, seeking an award of $75,000 plus interest, fees, and costs. Before the 

arbitration in September 2012, Jamar hired an expert witness to review its claim and as a 

result, reduced its demand to $86,786.72. 

During arbitration, Jamar argued that the temperature only became an issue after 

the project construction manager, Kraus-Anderson, moved its installation schedule up to 

early January. The arbitrator found that this argument was inconsistent with testimony 

presented because Kraus-Anderson did not raise the issue of moving up the schedule until 

December 2010 and Jamar asked to change the roof type in November. Indeed, Jamar’s 

own expert testified that the proposed change in the construction schedule was immaterial 

because Jamar would have needed to use some form of winter protection regardless of 

whether the work was performed in January or February. 

The arbitrator awarded Jamar $40,809.22. The arbitrator determined that Jamar 

breached its contract when it refused to install the sure-white roofing system but that the 

school district waived its right to terminate the contract when it elected to accept the hot-
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mop roof system. The arbitrator stated that Jamar had originally priced its work on the 

hot-mopped system at $183,000, and reduced it to $149,000, then to $86,786.72, and 

ultimately recovered only $40,809.22. The arbitrator stated that “[i]f Jamar had 

accurately calculated the costs for the changed work from the beginning, this entire 

dispute would have likely been avoided.” The arbitrator then concluded that the school 

district was the prevailing party and awarded it $109,454.85 for attorney fees and 

$10,300 for expert-witness fees. 

Jamar moved to vacate and modify the arbitration award in district court, arguing 

that the arbitrator exceeded his authority. The district court granted Jamar’s motion and 

vacated the portion of the arbitration award designating the school district as the 

prevailing party. It concluded that the arbitrator exceeded his authority by relying on 

facts outside the record, specifically focusing on the arbitrator’s statement that “[i]f Jamar 

had accurately calculated the costs for the changed work from the beginning, this entire 

dispute would have likely been avoided.” The district court characterized this statement 

as “pure speculation and without any evidentiary support in the record.” The district 

court also modified the award and named Jamar as the prevailing party entitled to recover 

attorney fees and costs and remanded the issue of calculating attorney fees to the 

arbitrator.

The school district then appealed the district court’s decision to vacate and modify 

the arbitration award. This court dismissed the appeal because it was taken from a 

nonfinal order. Jamar next moved the arbitrator for an award of all attorney fees, costs, 

and disbursements that it had incurred. 
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The arbitrator issued a modified award, granting Jamar $125,865.20 in attorney

fees, costs, and disbursements relating to the arbitration. The arbitrator declined to award 

Jamar attorney fees for its motion to vacate and modify the arbitration award, stating that 

these amounts would be “more appropriately addressed by the District Court.” 

Accordingly, Jamar filed a motion in district court to confirm the arbitration 

award. The district court confirmed the award and concluded that Jamar’s motion for 

attorney fees was timely. The district court also granted Jamar an additional $37,374.58 

for attorney fees and costs incurred in the lawsuit following the arbitration. The school 

district appealed.

D E C I S I O N

The arbitration process is favored in the law. Ehlert v. W. Nat’l Mut. Ins. Co., 296 

Minn. 195, 199, 207 N.W.2d 334, 336 (1973). Arbitrators make final determinations of 

law and fact. Grudem Bros. Co. v. Great W. Piping Corp., 297 Minn. 313, 316, 213 

N.W.2d 920, 922-23 (1973). An arbitration award is set aside “only when the objecting 

party meets its burden of proof that the arbitrators have clearly exceeded the powers 

granted to them in the arbitration agreement.” Seagate Tech., LLC v. W. Digital Corp., 

854 N.W.2d 750, 760-61 (Minn. 2014) (quotation omitted). 

In reviewing the arbitrator’s authority, this court exercises every reasonable 

presumption “in favor of the finality and validity of the award.” Nat’l Indem. Co. v. 

Farm Bureau Mut. Ins. Co., 348 N.W.2d 748, 750 (Minn. 1984). Thus, an appeal from 

an arbitration decision is “subject to an extremely narrow standard of review.” Hunter, 

Keith Indus., Inc. v. Piper Capital Mgmt. Inc., 575 N.W.2d 850, 854 (Minn. App. 1998). 
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This court reviews the scope of an arbitrator’s authority de novo. Seagate Tech., 854 

N.W.2d at 760. 

The school district argues that the contract gave the arbitrator broad discretion to 

designate a prevailing party and sufficient evidence in the record supported his decision. 

Jamar contends that the arbitrator exceeded his authority in designating the school district 

as the prevailing party because the award relied on evidence outside the record. We 

agree with the school district.

“The scope of an arbitrator’s authority is a matter of contract interpretation to be 

determined from a reading of the parties’ arbitration agreement.” Cnty. of Hennepin v. 

Law Enforcement Labor Servs., Inc., Local No. 19, 527 N.W.2d 821, 824 (Minn. 1995). 

Arbitration awards will be set aside if the objecting party shows that the arbitrator has 

clearly exceeded the powers granted in the arbitration agreements. Seagate Tech., 854 

N.W.2d at 760–61. “[C]ourts will not overturn an award merely because they may 

disagree with the arbitrators’ decision on the merits.” Id. at 761 (quotation omitted).

Here, the contract between the two parties stated, “[T]he ‘prevailing party’ shall be 

determined by Arbitrator(s).” The term “prevailing party” was not defined in the 

contract. The contract therefore gave the arbitrator complete discretion to name the 

prevailing party. 

Despite this broad discretion, Jamar contends that the arbitration award lacked 

evidentiary support because it relied on an assumption outside the record—that the 

conflict could have been avoided had Jamar accurately calculated the cost for the 
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changed work at the outset. After carefully reviewing the arbitrator’s decision, we 

disagree.

The evidence here shows that Jamar breached the contract, the school district 

accommodated the breach, and Jamar’s explanation for the breach was not credible and 

belied by the testimony of its own expert witness. The record also shows a notable 

discrepancy between Jamar’s initial asking price of $183,000, and its ultimate recovery of 

$40,809.22. Jamar argues that this discrepancy was not a “fact” in the record and that the 

arbitrator exceeded his authority by inferring that the entire litigation would have been 

avoided had Jamar priced its work reasonably at the outset.1 But the arbitration award

did not rest solely on this discrepancy, and even if it were part of the arbitrator’s 

reasoning, the arbitrator’s reliance on it was not an error warranting vacation of the 

award. See Garvey, 532 U.S. at 509, 121 S. Ct. at 1728 (stating that an arbitrator’s 

improvident and even “silly” fact-finding is not a basis for a reviewing court to refuse to 

enforce the award).

Jamar also cites to numerous federal cases for the proposition that vacating an 

arbitration award is warranted when the record reveals no support whatsoever for the 

arbitrator’s determination. We reject this argument because, as stated above, sufficient 

 

1

The arbitrator’s statement could also reasonably be interpreted as a way of chastising 

Jamar. But regardless of the statement’s interpretation, it was not the only fact 

supporting the arbitration award and is therefore not a basis upon which the award can be 

vacated. Cf. Major League Baseball Players Ass’n v. Garvey, 532 U.S. 504, 510, 121 

S. Ct. 1724, 1728 (2001) (“It is only when the arbitrator strays from interpretation and 

application of the agreement and effectively ‘dispense[s] his own brand of industrial 

justice’ that his decision may be unenforceable” (quoting Steelworkers v. Enterprise 

Wheel & Car Corp., 363 U.S. 593, 597, 80 S. Ct. 1358, 1361 (1960))).
8

evidence in the record supports the arbitration award. Moreover, these federal cases are 

all distinguishable because, contrary to the situation here, the arbitrators in those cases 

either relied on obvious mistakes of fact or modified clear contractual language. See 

United Elec. Radio & Mach. Workers of Am., Local 1139 v. Litton Microwave Cooking 

Prods., Litton Sys. Inc., 704 F.2d 393, 396-97 (8th Cir. 1983) (concluding that the 

arbitrator erroneously calculated the work week); Storer Broad. Co. v. Am. Fed’n of TV 

& Radio Artists, Cleveland Local, AFL-CIO, 600 F.2d 45, 48 (6th Cir. 1979) 

(determining that the arbitrator’s finding that the union told its members they would 

receive credited amounts in their profit sharing accounts was wholly unsupported in the 

record); Detroit Coil Co. v. Int’l Ass’n of Machinists & Aerospace Workers, Lodge No. 

82, 594 F.2d 575, 580–81 (6th Cir. 1979) (concluding that the arbitrator modified clear 

and unambiguous language in a collective bargaining agreement). 

Jamar further contends that the arbitration award is irreconcilable with Minnesota

cases that define “prevailing party.” We need not reach this issue, however, because 

arbitration awards “will not be reviewed or set aside for mistake of either law or fact in 

the absence of fraud, mistake in applying its own theory, misconduct, or other disregard 

of duty.” See Seagate Tech., LLC v. W. Digital Corp., 834 N.W.2d 555, 565 (Minn. App. 

2013) (emphasis added) (quotation omitted), aff’d, 854 N.W.2d 750 (Minn. 2014).

Because the arbitrator here did not engage in the type of conduct that would warrant a 

review of the award, we decline to review the award for a misapplication of Minnesota 

caselaw. See id. 
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Lastly, Jamar argues that the arbitrator’s “irrational analysis regarding potential 

settlement demonstrates ‘evident partiality’ against Jamar” and is another basis for 

affirming the district court’s vacation of the arbitration award. A district court shall 

vacate an arbitration award if the arbitrator shows “evident partiality.” Minn. Stat. 

§ 572B.23(a)(2)(A) (2014). But Jamar cites no compelling evidence to show that the 

arbitrator demonstrated evident partiality here: the contract empowered the arbitrator to 

designate a prevailing party and the arbitrator did so. Cf. Ag Servs. of Am., Inc. v. 

Schroeder, 693 N.W.2d 227, 236–37 (Minn. App. 2005) (concluding that receiving an 

adverse ruling is not a proper basis upon which to impute bias to a district court judge). 

Accordingly, this contention fails.

In sum, we conclude that the vacation and modification of the arbitration award 

was improper because the arbitrator did not exceed his authority or demonstrate evident 

partiality, and the record supported his award. The original arbitration award is therefore 

reinstated, and we reverse the attorney fees and costs awarded to Jamar for the arbitration 

and ensuing litigation. We also remand for the district court to calculate reasonable 

attorney fees, costs, disbursements, and interest in favor of the school district. Given our 

conclusion above, we need not address the school district’s argument regarding the 

timeliness of Jamar’s motion for attorney fees. 

Reversed and remanded.