Court Opinion

ID: 7805749
Source: CourtListenerOpinion
Date Created: 2022-09-01 18:05:12.040024+00
Date Added: 2024-06-11T16:30:05.299162
License: Public Domain

STATE OF LOUISIANA

                                     COURT OF APPEAL

                                      FIRST CIRCUIT

                                       2021 CA 0906

                                COASTAL INDUSTRIES, LLC

                                          VERSUS

      ARKEL CONSTRUCTORS, LLC, SMITH LAROCK ARCHITECTURE P. C. AND THE
          LEFFLER GROUP CONSULTING STRUCTURAL ENGINEERING, INC.

                                             Judgment Rendered:
                                                                          SEP 01 2022

                     On Appeal from the Nineteenth Judicial District Court
                           In and for the Parish of East Baton Rouge
                                      State of Louisiana
                                     Docket No. 649, 069

                           Honorable Wilson Fields, Judge Presiding

  Russel W. Wray                            Counsel for Plaintiff/ Appellant
  St. Francisville, Louisiana               Coastal Industries, LLC

  John C. Funderburk                        Counsel for Defendant/ Appellee
  Thomas D. Bourgeois, Jr.                  Arkel Constructors, LLC
  Baton Rouge, Louisiana

e_"
                   BEFORE:      McCLENDON, WELCH, AND THERIOT, JJ.
McCLENDON, J.

       In this construction contract case, the plaintiff appeals a district court's judgment

that confirmed an arbitration award in favor of the defendant.                  For the reasons that

follow, we reverse in part and affirm in part.

                            FACTS AND PROCEDURAL HISTORY

       On June 13, 2016, the plaintiff, Coastal Industries, LLC ( Coastal), filed a petition

for damages against Arkel Constructors, LLC ( Arkel), Smith LaRock Architecture P. C.

Smith LaRock),      and The Leffler Group Consulting Structural Engineers, Inc.,                d/ b/ a The

Leffler Group ( Leffler). Coastal sought damages from the three defendants arising from

the construction of a control building at the Marathon Petroleum Company LP

 Marathon) plant in Garyville, Louisiana ( the Project).              Arkel, the general contractor,

had   subcontracted      with    Coastal   to   perform     certain    work    on      the   Project ( the

Subcontract).      In its petition, Coastal claimed that Arkel breached the Subcontract

resulting in damages to Coastal in an amount no less than $ 700, 000. 00. Coastal also

alleged that Smith LaRock, the architect,            was engaged by Marathon to design the

Project and that Smith LaRock contracted with                   Leffler to perform the structural

engineering      work.   Coastal asserted that Smith LaRock and Leffler breached the

standard    of    care   owed    to   Coastal   by providing       untimely    and      incorrect     plans,

specifications, and modifications that interfered in Coastal' s work causing damages.

        On July 20, 2016, Arkel filed a dilatory exception of prematurity and alternative

motion to stay and compel arbitration, alleging that Coastal' s claims fell within the

scope of an arbitration clause contained in the Subcontract. Thus, Arkel requested that

Coastal' s claims be dismissed.'        Additionally, Leffler and Smith LaRock answered the

petition and, thereafter, filed a joint memorandum in support of Arkel' s exception of

prematurity.      Leffler and Smith LaRock requested that the district court sustain the

dilatory exception and dismiss Coastal' s claims against Arkel,                     but      reject   Arkel' s

alternative motion to stay, arguing that only Coastal' s claims against Arkel were subject

to arbitration.    After a hearing held on May 9, 2017, the district court took the matter

1 Coastal had previously filed its own motion to stay the proceedings pending arbitration, but later filed
an ex parte motion to withdraw the motion to stay, which the district court granted.

                                                    2
under advisement and, on May 16, 2017, issued its ruling, sustaining the exception of

prematurity,      ordering      arbitration    between     Coastal   and   Arkel,   and    staying          the

proceedings as to all other parties. On June 13, 2017, the district court issued an order

memorializing its oral ruling and ordering that the pending arbitration between Arkel

and Coastal be administered by the American Arbitration Association ( AAA).

         On June 9, 2017, Coastal initiated arbitration proceedings with the AAA.                     In the

demand for arbitration,          Coastal attached a copy of its previously filed petition,              and

stated that "[    t] he arbitrator will be called upon to hear claims for delay, disruption,

extra work, payments due, and de facto termination -for -convenience damages, along

with penalties, interest, and attorney fees in excess of one million dollars."

         Arkel    filed   an    answer   and    counterclaim    to   Coastal' s   arbitration    demand,

specifically asserting numerous delays and errors committed by Coastal,                         as   well    as

abandonment of the project prior to completion.              Arkel further alleged that, as a result,

it terminated the Subcontract with Coastal for default and self -performed Coastal' s

remaining work under the Subcontract.                    Arkel requested the costs of completing

Coastal' s scope of work after termination and for payments it made on behalf of Coastal

to Coastal' s subcontractors or material suppliers that Coastal failed to pay,                        which

resulted in deductive change orders.               Arkel asserted that it terminated Coastal' s

Subcontract for cause under Section 22. 4 of the Subcontract, which provided that upon

termination, Coastal "         shall be liable for all expenses of completing the Subcontract

Work."      Arkel also asserted a claim for interest and attorney fees under the

Subcontract.

         The AAA arbitration hearing was conducted for nine days in September 2018.

Thereafter,      both parties submitted post -hearing briefs, after which the hearing was

deemed closed. 2          On December 11,        2018, the arbitrator issued an Interim Award,

2
    In November 2018, the arbitrator reopened the hearing pursuant to AAA rules for additional
information requested by the arbitrator. The parties submitted the requested information, and the
hearing was again closed.

                                                     3
                                                                       3
addressing the merits and ruling in favor of Arkel.                          The arbitrator made several

findings,    including that Coastal breached its Subcontract with Arkel and that,                          as a

result,   its Total     Loss Claim was not reasonable.                     Accordingly,   Coastal' s claim   of

 972, 278. 72 for Termination Costs was denied.                   The arbitrator also found that Arkel

had the contractual right to delay or withhold any payments to Coastal when there were

questions or concerns as to compliance with the Subcontract; that Arkel was justified in

delaying or withholding payments to Coastal; that Arkel' s billing and payment methods

to Coastal did not violate the Subcontract; and that Arkel did not breach its Subcontract

with Coastal regarding its payments to Coastal.                  Thus, the arbitrator denied the claims

made by Coastal for payment of penalties, interest, and attorney fees.

          The arbitrator also determined that when Coastal demobilized from the jobsite,

its " scope of work was 95% -           97% complete and invoiced for."              As such, the arbitrator

determined that Coastal " substantially performed"                     its subcontract work under the

Subcontract with Arkel and did not default.                  The arbitrator found that although Coastal

may have technically breached some provisions of the Subcontract with Arkel, "                         none of

them, even all together," rose to the level of a " material breach" of the Subcontract.

Accordingly, the arbitrator found no material breach of the Subcontract by either party.

Further, the arbitrator determined that Arkel' s termination of Coastal was a termination

for ' convenience,"        i.e., a " no fault"      termination pursuant to Section 22. 5 of the

Subcontract.4

3 The Interim Award did not include qualification of the amounts to be awarded to Arkel for attorney fees
and costs, nor did it include the award of arbitration costs or award of arbitrator fees/ expenses, which
were to be addressed in the Final Award.

4 Section 22. 5 of the Terms and Conditions of the Subcontract provides:

                  Notwithstanding anything to the contrary in this Subcontract, and in addition to
          Arkel' s] rights to terminate this Subcontract for breach or default, [ Arkel] may terminate
          all or any part of this Subcontract when [ Arkel] determines, regardless of fault, that such
          termination is in the interest of the Project.     Upon such no- fault termination, [ Coastal]
          shall be entitled to the reasonable, actual direct cost of all Subcontract Work satisfactorily
          performed and materials purchased prior to notice of termination, plus a single markup
          of not more than ten percent ( 10%) for both provable overhead ...      and provable profit on

          completed Subcontract work, plus the reasonable out-of-pocket costs of terminating the
          Subcontract Work, less ( a) any amounts paid by [ Arkel], and ( b) back charges due
           Arkel] with respect to the Subcontract Work. [     Coastal]  shall not receive any
          compensation, overhead, or profit on Subcontract Work not performed or for materials
          not purchased.   Notwithstanding the foregoing, the total sum to which [ Coastal] may be
          entitled in the event of a no-fault termination, including all prior payments made to or on
          behalf of [ Coastal], shall not exceed the adjusted Subcontract price. [ Coastal] shall not

                                                        51
        Pursuant     to     Section   22. 5,   the     arbitrator     determined   that   the    Adjusted

Subcontract amount was $          1, 765, 468. 00; that the amounts paid by Arkel on Coastal' s

behalf, including the performance of Coastal' s remaining work ( Arkel' s counterclaim),

amounted to $ 243, 390. 95; and that the total amount of backcharges was $ 129, 218. 92.

Subtracting the $ 243, 390. 95 and $ 129, 218. 92 amounts, the arbitrator determined that

the amount due Coastal under Section 22. 5 was $ 1, 392, 858. 13.                      The parties had

stipulated that $ 1, 437, 614. 11 was paid to Coastal.              Accordingly, the arbitrator awarded

Arkel $ 44,755. 98,       reflecting the overpayment, plus judicial interest from the date of

termination, September 1, 2016. Further, the arbitrator found that Arkel was entitled to

                                                                           5
reasonable attorney fees and costs, including expert fees.                     The arbitrator requested

that Arkel submit a spreadsheet setting forth the attorney fees and related expenses

incurred    as a    result of the arbitration proceeding, along with sufficient backup

information, to the AAA and to him, with a copy to Coastal.

        Subsequently, Coastal sought to modify the Interim Award of the arbitrator,

asserting ' clerical, typographical, technical, and/ or computational errors in the award,"

which was denied. 6 Coastal also filed an objection to Arkel' s submission of its attorney

fees and costs.       Coastal asserted that the redaction by Arkel of the attorney fees

invoices sent to Coastal precluded any meaningful review of the invoices in determining

the reasonableness of the fees.

        be entitled to any other compensation or payment of any nature, in the event of a no-
        fault termination, other than as specifically provided in this paragraph.

The arbitrator also found Section 22. 3 applicable, which provides:

                In the event of termination of this Subcontract, in whole or in part, [ Arkel] shall
        be entitled to exercise its discretion as to the means and methods for prosecution and
        completion of the Subcontract Work as [ Arkel] in good faith deems to be appropriate and
        in the interests of the Project, as a whole.

5
    The arbitrator relied on Rule R- 48( d)( ii) of the AAA Construction Industry Arbitration Rules and
Mediation Procedures, which provides for an award of attorney fees by the arbitrator if all parties have
requested such an award or it is authorized by their arbitration agreement. The arbitrator determined
that because both Arkel and Coastal requested attorney fees, AAA Rule R- 48 allowed such an award.

6 AAA Rule R -51( a) provides that the arbitrator or any party " may request that the arbitrator correct any
clerical, typographical, technical, or computational errors in the award. The arbitrator is not empowered
to redetermine the merits of any claim already decided."

                                                       k
         On February 12, 2019, the arbitrator issued his Final Award, which incorporated

the Interim Award, and awarded Arkel a total of $ 530, 574. 02.                   The total amounts

awarded were as follows:

         Principal and Interest $                              50, 037. 08

         Attorney Fees' $                                     408,772. 46

         Arbitrator' s Compensation $                          30, 471. 26

         Costs of Experts $                                    25, 069. 13

         Other Costs $                                          16, 224. 09

         Total Amount of Final Award $                         530, 574. 02

         On February 15, 2019, Arkel filed a motion to lift the stay and to confirm the

arbitration award with the district court.                 The motion also included a request for

additional attorney fees to confirm the arbitration award.                On March 14, 2019, Coastal

filed its own motion to vacate, correct, and/ or modify the award of the arbitrator and ex

parte motion to stay proceedings to enforce the award.                    The motions were opposed.

The district court heard both motions on May 6, 2019, and on May 20, 2019, the district

court ruled on the motions in open court,                  denying Coastal' s motion to vacate and

granting Arkel' s motion to confirm. The district court also adopted Arkel' s briefing as its

reasons for judgment.$

         On August 19, 2019, the district court signed a Partial Final Judgment that lifted

the stay; denied Coastal' s motion to vacate,                 correct,   or modify the award of the

arbitrator and ex parte motion to stay proceedings to enforce the award; and granted

Arkel' s motion to lift the stay and confirm the award. The judgment further awarded

Arkel $ 530, 574. 02 against Coastal for the sum                 due in the award; $ 14, 191. 40 for

additional attorney fees incurred by Arkel to confirm the arbitration award; $                 5, 785. 42

   The arbitrator found Arkel was entitled to recover the full amount of its attorney fees from Coastal in
the amount of $408, 772. 46. The arbitrator specifically found that the attorney fee amount of the award
to Arkel was not out of proportion with the principal amount of the award to Arkel because it was
reasonable to assume that the vast amount of attorney fees incurred by Arkel were for defense against
Coastal' s claim rather than for prosecution of Arkel' s counterclaim.

8 The parties could not reach an agreement as to the form of the proposed judgment, and on June 6,
2019, Arkel filed a motion to enter proposed judgment and to set attorney fees. Following a hearing, the
motion was granted in favor of Arkel as to the attorney fees requested ( except to reduce the paralegal
billable rate).

                                                       2
for interest on $ 525, 292. 92 (   the total amount due in the award excluding interest

therein)   from    March   16,   2019,    through May 21, 2019;         and judicial    interest   on

 525, 292. 92 ( the total amount due in the award excluding interest awarded therein)

from May 22, 2019, until paid.

         Coastal   appealed.     On   September       21,   2020,   another   panel   of this   Court

dismissed the appeal, finding that although the district court's judgment confirmed the

final arbitration award of $ 530, 574. 02 to Arkel, it did not dismiss Coastal' s original

damage claims against Arkel.             Therefore, this Court held that, in the absence of

appropriate decretal language, the judgment was defective and could not be considered

a final judgment for purposes of appeal.               Accordingly, because the Court lacked

appellate jurisdiction, the appeal was dismissed.             See Coastal Industries, LLC v.

Arkel Constructors, LLC, 19- 1586 ( La. App. 1 Cir. 9/ 21/ 20), 313 So. 3d 1270.

         Thereafter, Arkel filed a motion to amend the judgment. On March 11, 2021, the

district court granted Arkel' s motion and amended the Partial Final Judgment to include

the addition of decretal language dismissing Coastal' s claims against Arkel with

prejudice.

         Coastal now appeals the March 11, 2021 judgment and assigns the following as

error:

   1.    The district court erred in granting Arkel' s amended motion to confirm the

         arbitration award and provide other relief to Arkel;

   2.    The arbitration proceeding between Coastal and Arkel was fundamentally unfair

         to Coastal.   The district court erred in confirming the arbitration award in favor of

         Arkel and in denying Coastal' s motion to vacate,            correct,   and/ or modify the

         arbitration award, and did so in violation of the Louisiana Arbitration Law, LSA-

         R. S. 9: 4201, etseq.; and

   3.    The district court erred in granting Arkel additional attorney fees in connection

         with Arkel' s motion to confirm the arbitration award.

                                                  7
                                        LAW AND DISCUSSION

          Arbitration is a mode of resolving differences through the investigation and

determination by one or more individuals appointed for that purpose. The object of

arbitration is the speedy disposition of differences through informal procedures without

resort to court action.      Crescent Property Partners, LLC v. American Mfrs. Mut.

Ins. Co.,      14- 0969 ( La.   1/ 28/ 15),     158 So. 3d 798, 803;        Preis Gordon, APLC v.

Chandler, 15- 0958 (       La. App. 1 Cir. 2/ 26/ 16), 191 So. 3d 31, 35, writ denied,             16- 0590

    La. 5/ 20/ 16), 191 So. 3d 1067.

          Because of the strong public policy favoring arbitration, arbitration awards are

presumed to be valid.           National Tea Co. v. Richmond, 548 So. 2d 930, 932 ( La.

1989).     Further, it is well settled in both state and federal courts that an award may be

challenged only on the grounds specified in the applicable arbitration statutes.                    Firmin

v. Garber, 353 So. 2d 975, 977 ( La. 1977).                In Crescent Property Partners,                158

So. 3d at 803, our supreme court confirmed that an arbitration award may only be

challenged on the grounds listed in the arbitration statutes. 9                 Those grounds do not

include errors of law or fact, which are insufficient to invalidate an award fairly and

honestly made. Crescent Property Partners, 158 So. 3d at 803- 04; Preis Gordon,

191 So. 3d at 35.

          Therefore,   misinterpretation of a contract by an arbitrator is not subject to

judicial correction.    Judges are not entitled to substitute their judgment for that of the

arbitrator    chosen    by the      parties.      National     Tea     Co., 548     So. 2d   at   933;   3K

Developments, LLC v. Amtek of Louisiana, Inc.,                     07- 1825 ( La. App. 1 Cir. 3/ 26/ 08),

9    We note that in JK Developments, LLC v. Amtek of Louisiana, Inc., 07- 1825 ( La. App. 1 Cir.
3/ 26/ 08), 985 So. 2d 199, 202 and n. 2, writ denied, 08- 0889 ( La. 6/ 20/ 08), 983 So. 2d 1276, another
panel of this Court pointed out that the third, fourth, and fifth circuits had added a jurisprudential ground
for modifying or vacating arbitration awards, at least in part, despite the exclusivity of the arbitration
laws. A " manifest disregard of the law" was a judicially created ground for vacating an arbitration award
by these Louisiana courts and referred to error which was obvious and capable of being readily and
instantly perceived by an average person qualified to serve as an arbitrator. The doctrine implied that the
arbitrator appreciated the existence of clearly governing legal principle, but decided to ignore or pay no
attention to it.   See Robert S. Robertson, Ltd. v. State Farm Ins. Companies/ State Farm Fire
and Cas. Companies, 05- 435 ( La. App. 5 Cir. 1/ 17/ 06), 921 So. 2d 1088, 1091; Louisiana Physician
Corp. v. Larrilson Family Health Center, L. L.C., 03- 1721 ( La. App. 3 Cir. 4/ 7/ 04), 870 So. 2d 575,
577; Welch v. A.G. Edwards & Sons, Inc., 95- 2085 ( La. App. 4 Cir. 5/ 15/ 96), 677 So. 2d 520, 524.
However, this Court chose to adhere to the narrow authority and exclusive nature of the statutes
governing arbitration awards in light of the purpose of arbitration. See 3K Developments, 985 So. 2d at
202- 03.  In Crescent Property Partners, 158 So. 3d at 803, decided in 2015, the supreme court
inferentially validated this Court's position that the grounds set forth in the arbitration statutes to
challenge an arbitration award are exclusive.
985 So. 2d     199, 201, writ denied, 08- 0889 ( La. 6/ 20/ 08),              983 So. 2d        1276.    Such

deference to arbitral awards is consistent with the longstanding recognition that

arbitration is intended to speedily determine disputes and controversies by quasi- judicial

means,    thus avoiding the formalities, the delay,              the expense, and the vexation of

ordinary litigation.     Mack Energy Co. v. Expert Oil and Gas, L. L. C.,                       14- 1127 ( La.

1/ 28/ 15), 159 S0. 3d 437, 442.

       Under the Louisiana Arbitration Law, a party to an arbitration proceeding may,

within one year after the award is made, apply to the district court for confirmation of

the award, and the court must confirm the award                       unless the award is vacated,

modified,    or   corrected.     LSA- R. S. 9: 4209. 10    The exclusive grounds for vacating an

award are set out in LSA- R. S. 9: 4210, which provides, in pertinent part:

                  In any of the following cases the court in and for the parish
       wherein the award was made shall issue an order vacating the award
       upon the application of any party to the arbitration.

       A. Where the award was procured by corruption, fraud, or undue means.

        B. Where there was evident partiality or corruption on the part of the
       arbitrators or any of them.

       C. Where the arbitrators were guilty of misconduct in refusing to postpone
       the hearing, upon sufficient cause shown, or in refusing to hear evidence
       pertinent and material to the controversy, or of any other misbehavior by
       which the rights of any party have been prejudiced.

        D.   Where     the     arbitrators   exceeded     their powers or so imperfectly
       executed them that a mutual, final, and definite award upon the subject
        matter submitted was not made.

Further, with regard to modifying or correcting an arbitration award, LSA- R. S. 9: 4211

provides, in part:

                  In any of the following cases the court in and for the parish
       wherein the award was made shall issue an order modifying or correcting
       the award upon the application of any party to the arbitration.

10 Louisiana Revised Statutes 9: 4209 provides, in pertinent part:

                 At any time within one year after the award is made any party to the arbitration
         may apply to the court in and for the parish within which the award was made for an
         order confirming the award and thereupon the court shall grant such an order unless the
         award is vacated, modified, or corrected as prescribed in R. S. 9: 4210 and 9: 4211.

                                                      9
          A. Where there was an evident material miscalculation of figures or an
          evident material mistake in the description of any person, thing,          or

          property referred to in the award.

          B. Where the arbitrators have awarded upon a matter not submitted to
          them unless it is a matter not affecting the merits of the decision upon the
          matters submitted.

          C. Where the award is imperfect in matter of form not affecting the merits
          of the controversy.

          A court does not ordinarily sit in an appellate capacity over an arbitration panel,

but instead must confine its determination to whether there exists one or more of the

specific grounds for invalidation as provided by the applicable statute. The burden of

proof rests upon the party attacking the award. Crescent Property Partners,                158

So. 3d at 804; Preis Gordon, 191 So. 3d at 36.

          Initially, we address Coastal' s argument that the arbitrator' s entire award should

be vacated pursuant to LSA- R. S. 9: 4210D, because the arbitrator exceeded his powers.

Coastal contends that the arbitrator exceeded his authority by ruling on matters not

submitted to him.

          Arbitration is a matter of contract, and a party cannot be required to submit to

arbitration any dispute to which he has not so agreed.         See LSA- C. C. art. 3099.   The

authority of an arbitrator to resolve disputes is derived from the parties' advance

agreement to submit such grievances to arbitration.        Preis Gordon, 191 So. 3d at 36.

The scope of submission to arbitration is set forth in LSA- C. C. art. 3102, which provides

that "[   p] arties may submit either all their differences, or only some of them in

particular;   and likewise they may submit to arbitration a lawsuit already instituted or

only in contemplation, and generally every thing which they are concerned in, or which

they may dispose of." The power of arbitrators is limited to what is explained in the

submission.     LSA- C. C. art. 3104. Further, LSA- C. C. art. 3122 provides that the authority

of arbitrators extends only to the things contained in the submission, unless it has been

stated that they shall have power to decide all disputes which may arise between the

parties in the course of the arbitration. Thus, an arbitration award must conform to the

submission.     Preis Gordon, 191 So. 3d at 36- 37.

                                               10
         In this matter, pursuant to Section 28. 1 of the Terms and Conditions of the

Subcontract agreement between Coastal and Arkel, "                   all   claims,    disputes,   and    other

matters in controversy or question between [              Arkel]     and [   Coastal]    arising out of or

relating to this Subcontract, including allegations of breach and claims of tort as well as

contract"   shall be decided in accordance with this Section.                     Section 28. 1. 1 further

provides that ' zany and all disputes between [            Arkel]    and [   Coastal] arising out of or

related to these terms and conditions and the associated Contract shall be decided

before    an   arbitrator mutually agreeable to both                 parties."       Therefore,    following

submission of Coastal"s lawsuit to arbitration, all " claims, disputes, and other matters in

controversy" were within the scope of the arbitration proceedings. See National Tea

Co., 548 So. 2d at 933.

         However,    Coastal      maintains that the      parties'    submission        to arbitration    was

distilled and narrowed"        by the arbitration demand and counterclaim, as well as by

supplemental specifications of claims and defenses, damage summaries, briefs, and

evidence at the hearing before the arbitrator.              Particularly, Coastal argues that Arkel

withdrew its claim for certain portions of its improper anchor bolt placement backcharge

and that, despite Arkel' s withdrawal of this claim, the arbitrator impermissibly awarded

Arkel the initial amount it sought.          Additionally, Coastal claims that not only was the

arbitrator' s award to Arkel for the cost to complete the Project in excess of his

authority, but also that the arbitrator miscalculated the award for Coastal' s remaining

work,    using    the   amount      of $   216, 682. 19   as    claimed      by      Arkel,   despite    Arkel

acknowledging that $ 19, 507. 50 of that amount was erroneously included in its

demand."

         The record before us establishes that the parties were allowed to brief and argue

all issues before the arbitrator.          The arbitration proceeding was conducted over nine

days,    where    the   parties    presented considerable evidence and expert testimony

regarding their various claims, including the various deductive change orders or

11 With regard to the $ 19, 507. 50 amount that Coastal asserts was incorrectly included in Arkel' s cost to
complete the Project, we note that Arkel requested $ 216, 682. 19 for the performance of Coastal' s
remaining work, but the arbitrator awarded seventy-five percent of that amount, or $ 162, 511. 64.

                                                    11
backcharges and Arkel' s counterclaim.               Thereafter, the arbitrator set forth,              in   his

Interim    Award     and    the   Final     Award,    his     reasoned    findings    and     calculations.

Accordingly, we find no merit to Coastal' s argument that the arbitrator impermissibly

exceeded his authority, and we find that the arbitration award covered the subject

matters submitted to arbitration. 12

        Additionally, Coastal argues that the arbitrator misinterpreted the Subcontract

and incorrectly determined the amounts awarded. Coastal specifically claims that the

arbitrator erroneously included $ 44, 906. 67 as part of the backcharge for improper

anchor bolt placement and a $ 19, 507. 50 amount as part of Arkel' s costs to complete

the Project.     Coastal' s argument is premised on Arkel' s acknowledgement that both

amounts were mistakenly included in its demand. Coastal also maintains that because

the arbitrator found no material breach of the Subcontract, under the specific terms of

the Subcontract, Coastal was not liable for Arkel' s costs of completion.

        However, errors in factual or legal conclusions will not invalidate an otherwise

fair and honest arbitration award.             In the case before us, the arbitrator made a

calculation of damages pursuant to Section 22. 5 of the Subcontract. 13 Even were we to

disagree with the arbitrator's interpretation of the Subcontract that " any amounts paid"

by Arkel pursuant to Section 22. 5 included amounts paid by Arkel for the performance

of Coastal' s remaining work, the calculated amounts were his interpretation of the

Subcontract      under     Section     22. 5   following       a   no- fault   termination,      and         any

misinterpretation of the terms of the Subcontract is not subject to judicial correction.

12 We find Preis Gordon, 191 So. 3d at 37, to be distinguishable.        In that case, the issue of attorney
fees was never submitted to arbitration, but attorney fees were awarded. Therefore, this Court held that
the award of attorney fees by the arbitrator was beyond the scope of the agreement between the parties,
and the arbitrator exceeded his powers.

13
     In his Interim Award, the arbitrator found that Section 22. 5 of the Subcontract established the
following formula for determining the amount to be paid to Coastal following a " no-fault" termination:

                Direct cost of all subcontract work satisfactorily       performed and      materials
                purchased prior to the date of termination,
                         PLUS
                10% max OH& P,
                         PLUS
                Reasonable out of pocket costs of terminating the subcontract work[,]
                         MINUS
                Any amounts paid by Arkel, and
                         MINUS
                Backcharges due to Arkel.

                                                     12
See Crescent Property Partners,                 158 So. 3d at 803- 04; National Tea Co., 548

So. 2d at 933.

          This type of substantive review of the arbitrator's findings and interpretations of

the Subcontract between the parties is not contemplated within the scope of LSA- R. S.

9: 4210 and 9: 4211.         Again,   misinterpretation of a contract by an arbitrator is not

subject to correction by the courts.                See National Tea Co., 548 So. 2d at 933;

Lakeview Home Care, L. L. C. v. Medistar Home Health of Baton Rouge, L. L. C.,

14- 1374 (   La. App. 1 Cir. 3/ 6/ 15), 2015 WL 997159, at *             4(   unpublished).     Further, an

arbitrator's conclusions drawn from conflicting evidence do not equate to misconduct or

use of undue means in resolving disputed facts, and consequently, do not provide a

basis for vacating an arbitration award. Inland Marine Services, L. L. C. v. Hamp' s

Construction,         LLC,   18- 1152 (   La. App. 1 Cir. 4/ 12/ 19), 2019 WL 1577800,                at *    3

 unpublished),       writ denied, 19- 00729 ( La. 9/ 6/ 19), 278 So. 3d 370, cert. denied,

U. S. ,      140 S. Ct. 959, 206 L. Ed. 2d 121 ( 2020). 14

          This was a complicated case,           with considerable evidence submitted by both

parties.      Upon     review   of that evidence,          this Court may have reached different

conclusions as to the interpretation of the Subcontract or the amount of damages.

However, a court may not substitute its conclusions for those of the arbitrator.                            JK

Developments, 985 So. 2d at 201.                As this Court stated in JK Developments, 985

So. 2d at 202, referring to and citing the United States Supreme Court in Major League

Baseball Players Association v. Garvey, 532 U. S. 504, 509- 10, 532 U. S. 1015, 121

S. Ct. 1724, 1728- 29, 149 L. Ed. 2d 740 ( 2001) (         per curiam):

            When an arbitrator resolves disputes regarding the application of a
          contract, and no dishonesty is alleged, the arbitrator's ' improvident, even
          silly, factfinding' does not provide a basis for a reviewing court to refuse
          to enforce the award."      The Court also reiterated that " even serious error'
          on the arbitrator' s part does not justify overturning his decision, where ...
          he is construing a contract and acting within the scope of his authority."

14 In Bergeron v. Patel, 16- 0600 ( La. App. 1 Cir. 5/ 17/ 17),   2017 WL 2170142, at * 8 ( unpublished),   writ

denied, 17- 1270 ( La. 10/ 27/ 17), 228 So. 3d 1226, another panel of this Court determined that appellant' s
arguments that the arbitrator did not account for payments made directly to subcontractors and for
certain reductions erroneously considered as extras, did not relate to a mathematical error; rather, the
appellant simply sought a different and more favorable outcome on the merits than that decided in the
arbitration award.    The Court stated that, at best, the arguments suggested a factual error, which the
court had no authority to remedy.

                                                      13
      Regarding the attorney fees awarded to Arkel, Coastal argues that the arbitrator

was guilty of misconduct or misbehavior as set forth in LSA- R. S. 9: 4210C, requiring

vacatur of the arbitration award.            Coastal maintains that the arbitrator accepted and

relied on evidence submitted to him by Arkel that was not provided to Coastal.

Specifically, Coastal claims that because the invoices for attorney fees submitted to the

arbitrator were unredacted, but the invoices Coastal received were redacted, Arkel' s ex

parte communication was prejudicial to Coastal.

      The record shows that Arkel submitted,                    as requested by the arbitrator in its

Interim Award, a spreadsheet and other documents setting forth the attorney fees and

related expenses it incurred as a result of the arbitration proceeding, along with backup

information.     In its letter to the arbitrator! Arkel stated that it was sending unredacted

versions of all invoices to the arbitrator only, in order to allow the arbitrator to review

the privileged description of each attorney charge in camera. Arkel submitted the same

documentation        to   Coastal,     but   redacted    the    privileged   descriptions   of the    work

performed by Arkel' s attorneys. In his Final Award, the arbitrator found no inaccuracies

or misrepresentations in the invoices to Arkel and determined that Arkel' s submission of

attorney fees was in order and acceptable.

      We find no misconduct or misrepresentation                       in the manner in which Arkel

submitted      its   attorney    fee     evidence,      which    did   not   constitute     an   ex   parte

communication by Arkel. Arkel' s submission was for an in camera review of privileged

material to protect confidential information, with Coastal' s knowledge, and Coastal was

notified that unredacted versions of the invoices were being sent to the arbitrator.

Accordingly, we find that Coastal failed to present sufficient evidence that the arbitrator

was guilty of misconduct or misbehavior as set forth in LSA- R. S. 9: 4210C.

      Therefore, based on the decision of the Louisiana Supreme Court in Crescent

Property Partners and our consistent line of jurisprudence, we must conclude that

Coastal failed to establish the existence of any of the statutory grounds mandating

                                                        14
vacatur of the arbitrator's decision.        See LSA- R. S. 9: 4210. 15 Also, we find no statutory

grounds under LSA- R. S. 9: 4211, as alternatively argued by Coastal, to modify or correct

the arbitration award. 16

        In one of its remaining assignments of error, Coastal challenges the district

court's authority to order the dismissal of its claims.           Coastal contends that Arkel' s initial

motion to confirm the arbitration award did                   not include dismissal as part of its

requested    relief, and,    therefore, Arkel' s amended motion to confirm the award was

untimely.    It is undisputed that Arkel filed its original motion to confirm the arbitration

award in a timely manner. However, as previously stated, a prior decision of this Court

found the district court's judgment confirming the arbitration award lacked appropriate

decretal language.        See Coastal Industries, LLC, 313 So. 3d at 1274.                       After this

Court's September 21, 2020 decision, Arkel' s motion to amend the motion to confirm

the arbitration award sought the addition of appropriate decretal language, and the

district court dismissed Coastal' s claims in a final judgment.                  Therefore, we find no

validity in this assignment of error.

        Lastly, Coastal challenges the $ 14, 191. 40 awarded by the district court to Arkel

for attorney fees to confirm the arbitration award.               It is well settled in Louisiana that

attorney fees are not recoverable unless authorized by statute or contract.                       Smith v.

15
     Louisiana' s Arbitration Law mirrors the Federal Arbitration Act, which provides identical statutory
situations when a district court shall vacate or modify an arbitration award. See 9 U. S. C. A. §§ 10- 11.
Based thereon, the federal jurisprudence also reflects an " extraordinarily narrow" judicial review of
arbitration awards.  JK Developments, 985 So. 2d at 201. See Oxford Health Plans LLC v. Sutter,
569 U. S. 564, 569, 133 S. Ct. 2064, 2068, 186 L. Ed. 2d 113 ( 2013) ( regarding § 10( a)( 4) of the Federal
Arbitration Act, which authorizes a federal court to set aside an arbitral award where the arbitrator
exceeded his powers or so imperfectly executed them. The United States Supreme Court stated that a
party seeking relief under that provision bears a heavy burden and that it is not enough to show that the
arbitrator committed an error, or even a     serious error.   The Supreme Court stated that because the
parties bargained for the arbitrator's construction of their agreement, an arbitral decision even arguably
construing or applying the contract must stand, regardless of a court's view of its ( de) merits. Only if the
arbitrator acts outside the scope of his contractually delegated authority, issuing an award that simply
reflects his own notions of economic justice rather than drawing its essence from the contract, may a
court overturn his determination.    Therefore, the question is whether the arbitrator ( even arguably)
interpreted the parties' contract, not whether he got its meaning right or wrong.).

16 This is not a situation where there has been " evident material miscalculation of figures" as provided in
LSA- R. S. 9: 4211A, which authorizes a court to modify or correct an arbitration award.    See e. g.
DeArmond v. E. Jacob Construction, Inc., 21- 0981 ( La. App. 1 Cir. 4/ 8/ 22), _   So. 3d _, _,
2022 WL 1055594, at * 4 ( where both parties recognized a mathematical error); Cole v. Hiller, 30, 397
 La. App. 2 Cir. 4/ 8/ 98), 715 So. 2d 451, 456- 57 ( where the appellate court found no error in the district
court's modification of the arbitration award to correct the arbitrator's material miscalculations as jointly
requested by the parties). See also Bergeron, 2017 WL 2170142, at * 8 ( The type of " evident material
miscalculation of figures" contemplated by LSA- R. S. 9: 4211 would be one akin to a mathematical error as
distinguished from an error in the factual or legal conclusions underlying the arbitrator's award).

                                                     15
State, Dept of Trans. and Dev., 04- 1317 ( La. 3/ 11/ 05), 899 So. 2d 516, 527. In this

matter, Arkel requested attorney fees from the district court in its motion to confirm the

arbitration award.   Section 28. 5 of the Subcontract is the section that refers to attorney

fees and provides that if the parties ` litigate or arbitrate a monetary claim, ... the party

found liable in such proceedings will pay the other party's reasonable attorneys' fees."

However, the arbitrator specifically found that Section 28. 5 was ' inappropriate in this

matter" and awarded attorney fees under Rule R- 48( d)( ii) of the American Arbitration

Association.   Moreover, AAA Rule R- 48( d)( ii)    provides for an award of attorney fees by

the arbitrator if certain conditions are met.       Therefore, as Rule R- 48( d)( ii) granted no

authority to the district court to award additional attorney fees and because Section

28. 5 of the Subcontract was found by the arbitrator to be inapplicable, the district court

lacked the legal authority to award additional attorney fees. Accordingly, we reverse

the district court' s award of $ 14, 191. 40 to Arkel for additional attorney fees.

                                       CONCLUSION

       For the foregoing reasons,      we reverse the March 11,         2021 judgment of the

district court insofar as it awarded Arkel Constructors, LLC $ 14, 191. 40 for additional

attorney fees. In all other respects, the judgment is affirmed.         All costs of this appeal

are assessed equally between Coastal Industries, LLC and Arkel Constructors, LLC.

       REVERSED IN PART; AFFIRMED IN PART.

                                               16
         COASTAL INDUSTRIES LLC                                                          2021 CA 0906

         VERSUS
                                                                                    FIRST CIRCUIT

         ARKEL CONSTRUCTORS,                    LLC,
                                                                              COURT OF APPEAL
         SMITH LAROCK ARCHITECTURE P. C.,
         AND THE LEFFLER GROUP                                            STATE OF LOUISIANA
         CONSULTING STRUCTURAL
        ENGINEERING, INC.

IWO'

        WELCH, J.,      concurringin p
                                           art and dissenting           in part.

               I agree with the majority' s finding that the district court lacked legal
        authority to award attorney' s fees for the cost of confirming the arbitration award.
        The majority also correctly states that an arbitrator' s award may not be vacated for
        errors of law or fact.
                                  Therefore, although the arbitrator erroneously awarded 75%
        the cost of completion of the Project to Arkel despite his determination that Arkel
       terminated Coastal " for convenience"
                                                       pursuant to Section 22. 5 of the Subcontract

        which does not provide for cost of completion), this incorrect interpretation of the

       Subcontract is unfortunately not grounds for vacating the award.
              However, the majority fails to recognize that "               where the record that was

       before the arbitrator demonstrates an unambiguous and undisputed mistake of fact

       and the record demonstrates strong reliance on that mistake by the arbitrator in
       making his award, it can fairly be said that the arbitrator `exceeded [ his] powers, or

       so imperfectly executed them' that vacation may be proper."                    Nat' l Post Off.,

       Mailhandlers, Watchmen, Messengers &                      Grp.   Leaders Div., Laborers Intl

       Union of N. Am., AFL-CIO v. U.S. Postal Serv., 751 F. 2d 834, 843 ( 6th Cir.

       1985), citing 9 U.S. C. § 10( a)( 4) (   previously 9 U.S. C. §     10( d)). La. R.S. 9: 4210( D),

       which is applicable to this case, mirrors 9 U.S. C. § 10( a)( 4) and requires the district

       court to vacate an arbitration award "[ w]here the arbitrators exceeded their powers

       or so imperfectly executed them that a mutual, final, and definite award upon the

                                                   Page 1 of 4
 subject matter submitted was not made."         Like the Sixth Circuit, the Louisiana

 Second Circuit has also acknowledged that the             court may " vacate an award

 founded on a material mistake of undisputed fact unless the party opposing the
motion to vacate offers an alternative rational explanation for the award based on

the evidence before the arbitrator." See Cole v. Hiller, 30, 397 ( La.App. 2 Cir.

4/ 8/ 98), 715 So. 2d 451, 456 ( emphasis in original), citing Nat' l Post Off., 751

F. 2d at 843;     Leon Angel Constructors, Inc. v. Kirk Knott Elec.,          Inc., 36, 752

 La A
    - pp. 2 Cir. 1/ 31/ 03), 837 So. 2d 743, 746. Thus, the arbitration award in favor

of Arkel must be vacated if it was founded on an undisputed mistake of fact.

       The record reveals two separate instances of mistake of fact.              The first

instance relates to Arkel' s counterclaim for        cost of completion.
                                                                            Arkel initially

sought $
           216,682. 19 for its cost of completion of the Project, but Arkel admitted in

its post -hearing brief that "[ d] uring the hearing, it was determined that a net

 19, 507. 50 charge ...   was improperly included in its cost to complete calculation.

These costs ...      are not properly attributable to Coastal and should be removed

from Arkel' s counterclaim."    Despite that admission, the arbitrator began his cost

of completion calculations with the original amount requested by Arkel.                    In

footnote 11,    the majority surmises that the arbitrator' s award of 75%           of the

 216, 682. 19 Arkel sought for cost of completion (         which is not authorized by

statute or contract)   accounts for this oversight.     However, 75%       of $216, 682.   19

does not equal the $   19, 507. 50 mistakenly charged. Thus, I find that the arbitrator

should have begun his cost of completion calculations with the reduced figure, or

 216, 682. 19 minus $ 19, 507. 50.   If the arbitrator intended to reduce the amount

requested by Arkel for cost of completion, he would have certainly said so.

      The second instance concerns the alleged backcharges related to improper

anchor bolt placement included in Arkel' s Deductive Change Order No. 6. Arkel

originally claimed $ 89, 030. 67 but later conceded that it " has since refined and

                                       Page 2 of 4
 reduced the amount requested in []        Change Order [No. 61" during the course of this
 arbitration.     This is supported throughout the record. Pertinently, Arkel' s pre -

 hearing damage summary does not include a claim for cost of delay related to
 improper anchor bolt placement although such a claim was included in the original
 Change Order.
                     Instead, evidence introduced at the hearing demonstrates that the
 damages     from    delays   associated    with   improper anchor bolt placement      are

 subsumed in Arkel' s claim for general delay damages caused by Coastal in Change
 Order No. 6.     Thus, only $ 44, 124 in backcharges associated with improper anchor

bolt placement remain, as is reflected in Arkel' s damage summary. However, the

arbitrator' s award related to improper anchor bolt placement appears to include

delay damages, resulting in double -recovery for delays attributable to Coastal, and

awards Arkel with the total amount it initially claimed rather than the $ 44, 124

requested by Arkel.

        Each instance is an example of a mistake of undisputed fact. Neither party

disputes that these reductions are incorrect or unsupported by the evidence.

Further, Arkel, as the party opposing the motion to vacate filed by Coastal, cannot
be said to have " offer[ ed] an alternative rational explanation for the award based

on the evidence before the arbitrator" since it admitted to both reductions in the

record.   In turn, the record demonstrates that the arbitrator " strongly relied"      on

these incorrect figures, i.e. mistakes of undisputed fact, in crafting his award.

       Rectification of these obvious errors would result in a net award in favor of

Coastal rather than Arkel.      Applying the $ 19, 507. 50 reduction to Arkel' s cost of

completion      claim,
                         the amount requested by Arkel is adjusted to $      197, 174. 69.

Since the arbitrator chose to only award 75% of the amount claimed by Arkel, the

correct award for cost of completion would be $ 147, 881. 02.        This figure plus the

amount in Change Orders Nos. 7 through 9 brings the total amount paid by Arkel

to $ 228, 760. 33.   Next, adjusting the claim for improper anchor bolt placement to

                                           Page 3 of 4
 44, 124   results
                     in a modified amount of backcharges totaling $             84, 312. 25.

Therefore, the corrected calculation of the award is as follows:

       Adjusted Subcontract Amount $                          1, 765, 468. 00
       Minus Amount Paid by Arkel $                             2281760. 33
      Minus Backcharges $                                        84, 312. 25
Amount due to Coastal per Sec. 22. 5 $                        19452, 395. 42
    Minus Stipulated Amounts Paid to Coastal $                1, 437, 614. 11

Net Amount Owed by Arkel to Coastal $                            14, 781. 31

Additionally, the arbitrator' s award of attorney fees to Arkel was clearly founded

on his erroneous determination that Arkel is the prevailing party, thereby rendering
the entire award questionable at best.   Accordingly, I find it necessary to vacate the

arbitrator' s award rather than simply modifying it.

                                     Page 4 of 4