Court Opinion

ID: 9792584
Source: CourtListenerOpinion
Date Created: 2023-08-31 02:31:17.618337+00
Date Added: 2024-06-11T07:37:43.759960
License: Public Domain

DONALDSON, Justice.
A contract was entered into between the appellant-third party plaintiff Audrie B. Cudahy and the respondent-third party defendant John R. Smith on February 2,1976. Smith was to perform for compensation by Cudahy services as an architect in the construction of a single-family dwelling. The contract contained an arbitration clause.1 It also recited that the house would be built on a particular lot, but in fact the house was built on a different lot. Upon Smith’s recommendation, Cudahy entered into a construction contract with a contractor. A performance bond was issued by Ronald W. Liese and Liese & Associates Insurance, Inc. purportedly as agents for United Pacific Insurance Company. The contractor defaulted and another contractor Loomis came in and contracted with Liese to complete the house on a time and materials basis. When his final bill of approximately $14,000.00 was not paid, Loomis filed a mechanic’s lien against the property and later filed an action to foreclose on the claim of lien against Cudahy. In turn, Cudahy filed a third-party complaint against Smith and others. A default judgment was entered against Smith which later was set aside.
Pursuant to the provisions of I.C. § 7— 902(a) an evidentiary hearing was held on December 2, 1977, before the district court to determine whether a valid agreement to arbitrate existed between the parties. After reviewing briefs and considering the oral testimony presented by Cudahy, the district court ordered the parties to proceed to arbitration. Cudahy sought certified interlocutory review of this order which was denied by this Court on February 3, 1978.
Pursuant to a district court order, the American Arbitration Association (AAA) was appointed to arbitrate the dispute. In August 1978, Cudahy filed a motion to dismiss arbitration with the AAA which was forwarded to the arbitrator. The AAA gave notice dated October 10,1978, that the arbitration hearing would be held on December 4, 1978. The arbitrator by letter dated November 14, 1978, informed the AAA that the parties had agreed to reschedule the hearing to December 5, 1978. The AAA gave notice dated November 17, 1978, of the new hearing date. Cudahy’s counsel sought by letter dated November 16,1978, a continuance until February 1979 due to alleged personal problems which made Cudahy unavailable for the scheduled *108hearing. Later, Cudahy’s counsel made a formal request for postponement dated December 4, 1978, which was mailed and also hand delivered to the arbitrator and Smith’s counsel. On December 5, 1978, after reviewing the request, the arbitrator denied it and proceeded with the hearing. After the denial, Cudahy’s counsel left the hearing without presenting any evidence. The arbitrator rendered an award on December 20, 1978, which denied the claims of both parties.2
After receiving cross-motions to confirm or vacate, the district court confirmed the arbitration award and later denied Cudahy’s motion for reconsideration of the confirming order. Cudahy appeals. We affirm.
Appellant Cudahy first contends that no ruling was ever made on the question of whether or not the agreement to arbitrate was valid and enforceable. This contention is without merit as the record clearly reveals that after a hearing was conducted pursuant to I.C. § 7-902(a), the district court found a valid and enforceable agreement to arbitrate.
Under I.C. § 7-901 “a provision in a written contract to submit to arbitration any controversy thereafter arising between the parties is valid, enforceable and irrevocable, save upon such grounds as exist at law or in equity for the revocation of any contract.” This provision together with the following sections comprises the Idaho Uniform Arbitration Act as enacted by our legislature in 1975. By passage of the act, our legislature has aligned Idaho with the majority of jurisdictions which have adopted the Uniform Arbitration Act. Under the act arbitration and agreements to arbitrate are encouraged and given explicit recognition as effective means to resolve disputed issues.3 Arbitration generally offers an inexpensive and rapid alternative to prolonged litigation.4 It also serves to alleviate crowded court dockets. Since our own sparse array of arbitration caselaw evolved before our legislature enacted the Uniform Arbitration Act as promulgated by the National Conference of Commissioners on Uniform State Laws, it is necessary for us to look for possible edification and guidance among the courts of our sister states and the federal system.
I.C. § 7-901 and Section 1 of the Uniform Arbitration Act closely parallel Section 2 of the Federal Arbitration Act.5 In County of Middlesex v. Gevyn Construction Corp., 450 F.2d 53, 56 (1st Cir.1971), cert. denied, 405 U.S. 955, 92 S.Ct. 1176, 31 L.Ed.2d 232 (1972), the court held “that the only grounds for revocation which meet the requirement of 9 U.S.C. § 2 are mutual agreement or a condition which vitiates *109agreement ab initio, i.e., fraud, mistake, or duress.” In Halcon International, Inc. v. Monsanto Australia Limited, 446 F.2d 156 (7th Cir.), cert. denied, 404 U.S. 949, 92 S.Ct. 286, 30 L.Ed.2d 266 (1971), reh’g denied, 404 U.S. 1026, 92 S.Ct. 672, 30 L.Ed.2d 677 (1972), the court stated with regard to revocation under § 2 that
“[t]he word ‘revocation,’ when used in a contractual context, ordinarily refers to revocation of an offer or an option; but it is used in Section 2 of the Arbitration Act to apply to a contract and in that connotation obviously is intended to be synonymous with ‘rescission.’ Rescission is an appropriate remedy when, for example, a contract is induced by fraud, mistake or duress, and is ‘used chiefly where the termination of the contractual relation is by mutual consent.’ 5 Williston, Contracts § 1454A, page 4063 (Rev.Ed., 1937). ‘Revocation’ and ‘cancellation’ are closely synonymous; to revoke means ‘to annul, repeal, rescind, cancel.’ Glenram Wine & Liquor Corp. v. O’Connell, 295 N.Y. 336, 67 N.E.2d 570 (1946).
“Since the savings clause of Section 2 is limited to ‘revocation,’ this is clearly the only type of ‘unmaking’ contemplated by the act — that is, an unmaking resulting from the mutual cancellation of the contract by the parties or the voiding of the transaction due to fraud, mistake or duress.” Id. at 159.
In World Brilliance Corp. v. Bethlehem Steel Co., 342 F.2d 362, 364 (2d Cir.1965), the court held that “ ‘[Revocation’ ... [under § 2 of the act] applies only to cases in which the courts will step in and rescind the agreement, for reasons such as fraud, duress, or undue influence.”
In Bernalillo County Medical Center Employees’ Association Local Union No. 2370 of Southwestern Council of Industrial Workers, United Brotherhood of Carpenters, AFL-CIO v. Cancelosi, 92 N.M. 307, 587 P.2d 960 (1978), the court examined their statute which parallels our Section 7-902(a) and stated:
“Under this Act it is the court’s duty to order arbitration where provision for it is clear. Where provision for arbitration is disputed, the court’s function is to determine whether there is an agreement to arbitrate and to order arbitration where an agreement to arbitrate is found.” Id. at 961; see also School District No. 46, Kane, Cook, and DuPage Counties v. Del Bianco, [68 Ill.App.2d 145], 215 N.E.2d 25, 31 (Ill.App.1966); Bel Pre Medical Center, Inc. v. Frederick Contractors, Inc., [21 Md.App. 307], 320 A.2d 558 (Md.Ct.Spec.App.1974), aff’d on other grounds, [274 Md. 307], 334 A.2d 526 (Md.1975).
This is our first opportunity under the Idaho Uniform Arbitration Act to consider the task confronting a district court judge when entertaining cross-motions to compel or stay arbitration under I.C. § 7-902. By the language of I.C. § 7-902(a) when
“[o]n application of a party showing an [arbitration] agreement ... and the opposing party’s refusal to arbitrate, the court shall order the parties to proceed with arbitration, but if the opposing party denies the existence of the agreement to arbitrate, the court shall proceed summarily to the determination of the issue so raised and shall order arbitration if found for the moving party, otherwise, the application shall be denied.”
Faced with the issue of determining the proper scope of inquiry required under I.C. § 7-902 and being mindful of the objectives of the arbitration mechanism, we hold that the inquiry must be limited in scope — is there an agreement to arbitrate or is there not. It would be inappropriate to review the merits of the dispute as such would in many instances emasculate the benefits of arbitration.
Appellant contends that the district court’s finding in his order on arbitration that a valid agreement was in existence was based upon a severely restricted hearing. In appellant’s brief, it is alleged that the appellant was not permitted to introduce proof on issues such as rescission, fraud in the inducement, adhesion contract, vagueness, mutual revocation, waiver, estoppel, fraud or misrepresentation, and *110want of consideration. Appellant argues that this constituted error and should necessitate a reversal and remand for a new evidentiary hearing. However, appellant has failed to demonstrate that at the first evidentiary hearing such restriction occurred; Cudahy’s counsel made insufficient offers of proof when objections were sustained as to his lines of questioning at the hearing. As we expressed in Rutter v. McLaughlin, 101 Idaho 292, 293, 612 P.2d 135, 136 (1980):
“On appeal the appellant must carry the burden of showing that the district court committed error. Error will not be presumed on appeal but must be affirmatively shown on the record by the appellant. Dawson v. Mead, 98 Idaho 1, 557 P.2d 595 (1976); Glenn Dick Equip. Co. v. Galey Construction, Inc., 97 Idaho 216, 541 P.2d 1184 (1975).”
Our rule has been that on appeal district court findings of fact will not be overturned unless clearly erroneous. I.R.C.P. 52(a).
At the evidentiary hearing, Cudahy admitted signing the February 2, 1976, contract and stipulated to its execution and it was admitted as an exhibit. Cudahy’s counsel argued that this contract could be amended only in writing and this was not done, that the contract recited that the house would be built on a particular lot and in fact it was built on a different lot, that the written contract was therefore no longer valid, and that the written agreement between the architect and owner was replaced with an oral agreement. On cross-examination, Cudahy admitted that she entered into no written agreement to terminate the contract. Implicit in the ruling of the district court compelling arbitration must be that the February 2,1976, contract was either amended in fact as to the term describing the lot or that Cudahy was es-topped to deny such an amendment.6 The district court stated that “It seems to me that the matters to which she [Cudahy] testified are matters of whether or not the contract was performed and have nothing basically to do at this point with whether or not the agreement is void.” It seems beyond cavil that evidence of a breach of a contract does not invalidate a contract. Our review of the hearing transcript does not reveal that the district court’s statement was in error. Our examination of the record does not disclose that the district court’s finding of a valid agreement to arbitrate was clearly erroneous; therefore, we will not disturb this finding.
The next issue concerns whether the district court erred in refusing to vacate the arbitrator’s award when faced with a motion to vacate upon the grounds “that the Arbitrator refused to postpone the hearing upon sufficient cause being shown therefor .... ” It is necessary for decision to review the statutory grounds for vacating an award as established by I.C. § 7-912(a):
“(a) Upon application of a party, the court shall vacate an award where:
(1) The award was procured by corruption, fraud or other undue means;
(2) There was evident partiality by an arbitrator appointed as a neutral, or corruption in any of the arbitrators, or misconduct prejudicing the rights of any party:
(3) The arbitrators exceeded their powers;
(4) The arbitrators refused to postpone the hearing upon sufficient cause being shown therefor or refused to hear evidence material to the controversy or otherwise so conducted the hearing, contrary to the provisions of section 7-915, Idaho *111Code,[7] as to prejudice substantially the rights of a party; or
(5) There was no arbitration agreement and the issue was not adversely determined in proceedings under section 7-902, Idaho Code, and the party did not participate in the arbitration hearing without raising the objection.
The fact that the relief was such that it could not or would not be granted by a court of law or equity is not ground for vacating or refusing to confirm the award.”
Cudahy by motion to vacate alleged the statutory grounds that the arbitrator refused to postpone the hearing upon sufficient cause being shown. I.C. § 7-912(aX4). One of the principal attributes of the arbitration process is that it promotes a speedy resolution of controversies. To vacate an award under I.C. § 7-912(aX4), a party must demonstrate that the arbitrator was shown “sufficient cause” for postponement. In the appellant’s brief was a further allegation of evident partiality which under § 7-912(aX2) would be additional grounds for vacating the award. From our review, we find no error in the district court’s determination. It is not “sufficient cause” to merely be unable to attend a hearing when given adequate notice. I.C. § 7-905(a) provides that “[t]he arbitrators may hear and determine the controversy upon the evidence produced notwithstanding the failure of a party duly notified to appear.” I.C. § 7-907(b) provides a method by which Cudahy could have presented her side to the arbitrator by deposition despite her professed inability to attend. We do not suggest that no set of circumstances could exist which would establish “sufficient cause.” We only conclude that this appellant has failed to establish “sufficient cause.” The hearing was scheduled for December 5, 1978, and Cudahy through counsel made formal request for postponement no earlier than December 4, 1978, by mail and on December 5, 1978, by hand delivery to the arbitrator just prior to the hearing. The circumstances recited as precipitating the request do not lead us to second guess the district court or arbitrator. Arbitration is not to be avoided by dilatory tactics.
Appeal is also founded upon the district court’s denial of appellant’s motion for reconsideration of the order confirming the award. This motion is treated as a motion under I.R.C.P. 59(e). Obray v. Mitchell, 98 Idaho 533, 567 P.2d 1284 (1977). The motion does not advance any new grounds for vacating the arbitration award. Because we hold that the district court’s power to vacate an arbitration award is confined to the statutory grounds set forth in I.C. § 7-912(a), we affirm the denial. See Pawlicki v. Farmers Insurance Co., 127 Ariz. 170, 618 P.2d 1096 (Ariz.Ct.App.1980).
Appellant argues that an additional policy issue is present which should deny enforcement of the arbitration agreement. Appellant phrases this issue as “where the issues between two parties to a complex, multi-party action are subject to an agreement to arbitrate, and the remaining parties and related controversies are not, does the policy of complete and consistent adjudication contained in the Idaho Rules of Civil Procedure require that arbitration be denied?” This issue first appears in the record in Cudahy’s motion for reconsideration of the order confirming the arbitration award. Since we do not consider this issue to have been timely raised, we do not pass judgment upon its merits. E.g., State ex rel. Evans v. Click, 102 Idaho 443, 449, 631 P.2d 614, 620 (1981), mem., 455 U.S. 987, 102 S.Ct. 1608, 71 L.Ed.2d 846 (1982); McNeil v. Gisler, 100 Idaho 693, 696, 604 P.2d 707, 710 (1979); see also Hall v. Boise Payette Lumber Co., 63 Idaho 686, 693, 125 P.2d 311, 314 (1942).
Attorney fees on appeal are denied both parties.
The district court orders are affirmed.
BAKES, C.J., and McFADDEN and SHEPARD, JJ., concur.
(McFADDEN, J., registered his vote prior to his retirement on August 31, 1982.)

. The arbitration clause read as follows:
“ARTICLE 8” ARBITRATION
All claims, disputes and other matters in question between the parties to this Agreement, 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. No arbitration, arising out of, or relating to this Agreement shall include, by consolidation, joinder or in any other manner, any additional party not a party to this Agreement except by written consent containing a specific reference to this Agreement and signed by all the parties hereto. Any consent to .arbitration involving an additional party or parties shall not constitute consent to arbitration of any dispute not described therein or with any party not named or described therein. This Agreement to arbitrate and any agreement to arbitrate with an additional party or parties duly consented to by the parties hereto shall be specifically enforceable under the prevailing arbitration law. In no event shall the demand for arbitration be made after the date when such dispute would be barred by the applicable statute of limitations. The award rendered by the arbitrators shall be final.”

. The arbitrator’s award recited that: “This award is in full settlement of all claims submitted to this Arbitration.”

. “The whole purpose of arbitration is to substitute a less expensive and less formal method of settling differences between parties for normal court litigation. In arbitration greater use may be made of persons who have a particular expertise that may permit them to adjudicate and settle differences that may exist on highly technical matters.” City of Madison v. Frank Lloyd Wright Foundation, [20 Wis.2d 361], 122 N.W.2d 409, 421 (Wis.1963). See also Pettinaro Constr. Co., Inc. v. Harry C. Partridge, Jr. & Sons, Inc., 408 A.2d 957 (Del.Ch.1979); Bel Pre Medical Center, Inc. v. Frederick Contractors, Inc., [21 Md.App. 307], 320 A.2d 558 (Md.Ct.Spec.App.1974), affd on other grounds, [274 Md. 307], 334 A.2d 526 (Md.1975); Layne-Minnesota Co. v. Regents of Univ. of Minnesota, [266 Minn. 284], 123 N.W.2d 371 (Minn.1963).

. “Every lawyer understands perfectly that a law suit is a very poor way to resolve conflicts. Regardless of who emerges victorious from the courtroom, everyone loses. The time, effort, and expense of a law suit drains both parties. The trauma can be lessened considerably, however, if arbitration is used to settle the same dispute.” Board of Education of County of Berkeley v. W. Harley Miller, Inc., 221 S.E.2d 882, 888 (W.Va.1975) (Neely, J., concurring).

. “A written provision in ... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2.

. We have held that
“one party to a contract cannot alter its terms without the assent of the other and that the minds of the parties must meet as to any proposed modification. The fact of agreement may be implied from a course of conduct in accordance with its existence and assent may be implied from the acts of one party in accordance with the terms of a change proposed by the other.” Ore-Ida Potato Products, Inc. v. Larsen, 83 Idaho 290, 296, 362 P.2d 384, 387 (1961); Smith v. Washburn-Wilson Seed Co., 54 Idaho 659, 663, 34 P.2d 969, 970 (1934).

. The reference to § 7-915 is confusing and may be in error.