Court Opinion

ID: 3006965
Source: CourtListenerOpinion
Date Created: 2015-10-05 07:07:16.021914+00
Date Added: 2024-06-11T12:46:29.438387
License: Public Domain

STATE OF MICHIGAN

                           COURT OF APPEALS

PAUL HARTIGAN,                                                     UNPUBLISHED
                                                                   October 1, 2015
              Plaintiff/Counter Defendant-
              Appellee,

v                                                                  No. 321506
                                                                   Macomb Circuit Court
THE GOLD REFINERY LLC,                                             LC No. 2011-004683 - CZ

              Defendant/Counter Plaintiff-
              Appellant.

Before: K. F. KELLY, P.J., and CAVANAGH and SAAD, JJ.

PER CURIAM.

        Defendant appeals an order that entered a judgment for plaintiff in conjunction with an
arbitral award. For the reasons stated below, we affirm.

                         I. FACTS AND PROCEDURAL HISTORY

       Defendant The Gold Refinery is a decentralized gold-for-cash business that purchases
gold, usually in the form of jewelry, from individuals. Defendant then resells the gold to
smelters at a profit. Direct purchases are made by defendant’s agents, who organize hotel events
and house parties where third parties can meet and sell their gold. The agents, according to
defendant, are compensated based on the volume of gold that changes hands during these
meetings.

        Plaintiff Hartigan worked as an agent for defendant, and organized gold-purchase events
in California. For reasons that are not clearly explained by either party, he sued defendant in
2011 for breach of contract and unpaid sales commissions. Because the parties agreed to binding
arbitration, the dispute was submitted to an arbitrator in 2012, and the Macomb Circuit Court
retained jurisdiction over the matter pursuant to MCR 3.602. There is no record of the
arbitration proceedings, which took place from 2012 to 2014.

        In August 2013, the arbitrator issued a partial final award, in which the arbitrator made
his legal conclusions. The order specified that defendant: (1) had breached its contract with
plaintiff for failure to pay him promised compensation; and (2) owed plaintiff statutory damages
under MCL 600.2961 for its intentional withholding of commission payments. The partial final
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award noted that the parties would be allowed to present evidence on each of these issues to
determine the precise amount of damages owed by defendant.

        After he considered the evidence submitted by the parties, the arbitrator issued a final
order in January 2014. The order required defendant to pay plaintiff roughly $42,000 with
interest. Soon thereafter, on January 22, 2014, defendant asked the trial court to vacate or
modify the arbitral award, because the arbitrator supposedly misapplied MCL 600.2961 by
awarding plaintiff a “commission” for his work, even though plaintiff did not sell gold on
defendant’s behalf. Plaintiff responded that: (1) defendant’s motion was untimely, because
defendant failed to appeal the August 2013 partial final award, which contained the substantive
legal findings applicable to this case; and (2) in any event, the arbitrator did not make an error of
law under MCL 600.2961, because he made a factual determination that plaintiff was paid a
commission for his activities.

       The trial court concurred with plaintiff’s analysis and denied defendant’s motion to
vacate or modify the arbitral award. On appeal, defendant claims that the trial court erred in
denying its motion, and makes the same arguments as it did at the motion hearing.

                                  II. STANDARD OF REVIEW

        A trial court’s decision to vacate or enforce an arbitral award is reviewed de novo.
Washington v Washington, 283 Mich. App. 667, 671; 770 NW2d 908 (2009). “Judicial review of
an arbitrator’s decision is narrowly circumscribed.” Ann Arbor v AFSCME Local 369, 284 Mich
App 126, 144; 771 NW2d 843 (2009). A court may not review an arbitrator’s findings of fact or
decision on the merits, or substitute its judgment for that of the arbitrator. Id.

                                         III. ANALYSIS

        It is well-established Michigan law that “as long as the arbitrator is even arguably
construing or applying the [arbitration] contract and acting within the scope of his authority, a
court may not overturn the decision even if convinced that the arbitrator committed a serious
error.” Ann Arbor, 284 Mich. App. at 144. And, it is equally clear that an arbitral award may be
vacated “where [legal error] clearly appears on the face of the award or [in] the reasons for the
decision as stated.” Saveski v Tiseo Architects, Inc, 261 Mich. App. 553, 555; 682 NW2d 542
(2004).

         Here, there is nothing in the record regarding the arbitral award that suggests the
arbitrator exceeded his contractual authority or committed legal error when he decided that
plaintiff was entitled to damages for withheld commissions pursuant to MCL 600.2961. As
plaintiff observes, there is no merit to defendant’s protestations that its business model—where
its agents purchase gold from third parties with company funds, and then are paid for the volume
of gold they purchase—does not involve the payment of commissions, and thus protects it from
liability under MCL 600.2961. Defendant’s argument is simply inconsequential to the particular
facts of this case, which were properly found by the arbitrator. “On the face of the [arbitral]
award,” it is obvious that the arbitrator found, in this case, that defendant withheld commissions
from plaintiff, and that it accordingly was required to pay plaintiff damages pursuant to MCL

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600.2961. Saveski, 261 Mich. App. at 555. Again, “[a] court may not review an arbitrator’s
factual findings or decision on the merits.” Ann Arbor, 284 Mich. App. at 144.1

       Because defendant’s appeal has no substantive legal merit, it is unnecessary to address
defendant’s procedural argument on the timeliness (or lack thereof) of its motion to vacate or
modify the arbitral award.2

       Affirmed.

                                                              /s/ Kirsten Frank Kelly
                                                              /s/ Mark J. Cavanagh
                                                              /s/ Henry William Saad

1
  Moreover, there is nothing for us to review apart from the arbitral awards—there is no record of
the arbitral proceedings other than the August 2013 partial final award and the June 2014 final
award.
2
  In any event, the trial court correctly held that defendant’s motion to vacate or modify the
arbitral award was untimely. The arbitrator issued his partial final award on August 26, 2013,
which contained his substantive conclusions of law on each issue in this case. If defendant
believed the arbitrator’s legal conclusions to be in error, it should have filed a motion to vacate
the award within 90 days pursuant to MCL 691.1703(2). Defendant failed to do so, and its
claims that the partial final award was not a final order on the substantive legal issues in this case
are frivolous and unpersuasive. Defendant’s motion to vacate or modify the arbitrator’s award,
filed on January 22, 2014, contested its general liability under MCL 600.2961—the exact issue
which was decided in the arbitrator’s partial final award, issued, again, on August 26, 2013. The
motion did not contest the specific amount defendant was ordered to pay plaintiff under MCL
600.2961, which is the only issue the arbitrator decided in his final award, issued in January
2014.

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