Opinion ID: 1880490
Heading Depth: 1
Heading Rank: 3

Heading: Whether the arbitrator manifestly disregarded the law with respect to the elements of fraud.

Text: The arbitration award provided, in pertinent part: Based upon the testimony and documents presented at the hearing as well as the written arguments and briefs, the Arbitrator concludes that [Christina] is entitled to an award against [H & S Homes]. Accordingly, the undersigned arbitrator, having been designated in accordance with rulings by the Alabama Supreme Court and Circuit Court of Montgomery, Alabama, AWARDS as follows: The Respondent, H & S Homes, L.L.C. shall pay to [Christina] $500,000.00.... This Award is in full settlement of all claims submitted to this Arbitration. All claims not expressly granted herein are, hereby denied. In Birmingham News, 901 So.2d at 50, this Court, joining the majority of State appellate courts that recognize manifest disregard of the law as a ground available for reviewing an arbitration award, wrote: As have all other courts, State and Federal, that have recognized this ground, however, we emphasize that judicial review under it is severely limited and that the party challenging an award on the ground bears a heavy burden.... [A]n arbitration award should be vacated only if the arbitrators knew of a well-defined and explicit governing legal principle, clearly applicable to the circumstances at hand, yet chose to ignore that principle or refused to apply it. In her complaint, Christina alleges not only fraud but also suppression, deceit, conversion, negligence, and wantonness. No issue is made that the arbitrator knew of the governing legal principle as it relates to suppression, deceit, conversion, negligence, or wantonness, yet refused to apply it or ignored it altogether. From reviewing the record, which an appellate court should not have to do when a party is seeking to vacate an arbitration award on the basis of manifest disregard of the law, this Court is satisfied that evidence was presented in arbitration as to each of those causes of action so that awarding damages for those causes of action was not a manifest disregard of the law. There is clear and convincing evidence that an agent of H & S Homes converted the down payment made by the McDonalds and the furniture in the mobile home, which came as standard equipment with the mobile home, and that H & S Homes concealed from Christina the fact that although $3,000 had been added to the price of the mobile home as a furniture allowance, Christina received only $2,000 as furniture allowance. When these and other problems were presented to the vice president of H & S Homes in an attempt to rectify the problems, the vice president asked if Christina knew about these problems. When told that she did not, he stated what the customer doesn't know won't hurt them. H & S Homes takes two of many instances of misrepresentations constituting fraud and contends that Christina could not have reasonably relied upon those misrepresentations because, it argues, she could have ascertained the truth by reading the documents that she signed in their entirety. H & S Homes proves that the arbitrator knew the reasonable-reliance aspect of the law of fraud by citing his comment: [T]he law says, at least the latest law I am aware of, that you are deemed to know and understand what you signed. The fact that it is done quick or with marks a lot doesn't bother me. However, the mere fact that the arbitrator found for Christina based on the evidence of wrongdoing by H & S Homes that was before him does not mean that he ignored the reasonable-reliance aspect of the law of fraud in making his award [b]ased upon the testimony and documents presented at the hearing as well as written arguments and briefs.... This issue is without merit.