Court Opinion

ID: 4319697
Source: CourtListenerOpinion
Date Created: 2018-10-11 20:17:03.165519+00
Date Added: 2024-06-11T14:45:56.757917
License: Public Domain

STATE OF MICHIGAN

                            COURT OF APPEALS

KORDOBA, LLC,                                                        UNPUBLISHED
                                                                     October 9, 2018
               Plaintiff-Appellee,

v                                                                    No. 339209
                                                                     Wayne Circuit Court
LANDMARK CONTRACTING COMPANY,                                        LC No. 17-001442-CB

               Defendant-Appellant.

Before: JANSEN, P.J., and METER and STEPHENS, JJ.

PER CURIAM.

        In this construction contract dispute defendant appeals as of right the trial court’s order
granting plaintiff’s motion to confirm the arbitration award and denying defendant’s motion to
vacate the arbitration award. We affirm.

                         I. FACTUAL AND PROCEDURAL HISTORY

        On August 21, 2012, plaintiff and defendant entered into an agreement for the
construction of a commercial building. The contract contained an arbitration agreement.
According to defendant, the contract work was “substantially completed” on April 7, 2014, when
the city issued a Temporary Certificate of Occupancy, and the balance of the contract became
due. Defendant subsequently recorded a Claim of Lien against the commercial property and
initiated a circuit court action against plaintiff for the balance owed. That action was dismissed
on plaintiff’s motion for summary disposition based on the arbitration clause.

        Defendant then filed a demand for arbitration in the circuit court. At arbitration, plaintiff
presented a counter claim and alleged that defendant had abandoned the contract, leaving
significant portions of the commercial building uncompleted, and further, refused to return to
complete the work or perform corrective work. Each party hired experts to generate reports
listing the costs to perform repairs and complete the work on the building. Moreover, the
arbitrator enlisted contractors to inspect roofing and HVAC work and provide bids to do the
work.

       On December 1, 2016, the arbitrator issued an arbitration award in favor of plaintiff in
the amount of $358,830, plus an additional $3,750 in arbitration fees. Plaintiff filed a complaint
in the circuit court, and subsequently moved for confirmation of the arbitration award and a

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judgment for the amount awarded. Defendant responded with a motion to vacate the arbitration
award on the basis that the arbitrator had “exceeded her powers”. The trial court denied
defendant’s motion and granted plaintiff’s motion, entering a judgment on plaintiff’s behalf.
Defendant then filed a motion for reconsideration, which the trial court also denied. This appeal
followed.

                                   II. MOTION TO VACATE

        On appeal, defendant first argues that the trial court erred by denying its motion to vacate
the arbitration award. We disagree.

        “A trial court’s decision to enforce, vacate, or modify an [arbitration] award is reviewed
de novo.” Nordlund & Assoc, Inc v Hesperia, 288 Mich App 222, 226; 792 NW2d 59 (2010). In
doing so, “we review the legal issues presented without extending any deference to the trial
court.” Washington v Washington, 283 Mich App 667, 672; 770 NW2d 908 (2009). “Whether
an arbitrator exceeded his or her authority is also reviewed de novo.” Id.

        “Judicial review of arbitration awards is limited.” Konal v Forlini, 235 Mich App 69, 74;
596 NW2d 630 (1990). “A court may not review an arbitrator’s factual findings or decision on
the merits[,]” may not second guess the arbitrator’s interpretation of the parties’ contract, and
may not “substitute its judgment for that of the arbitrator.” City of Ann Arbor v American
Federation of State, Co & Muni Employees (AFSCME) Local 369, 284 Mich App 126, 144; 771
NW2d 843 (2009). Instead, the reviewing court’s inquiry is limited to “whether the award was
beyond the contractual authority of the arbitrator.” Id. “[A]s long as the arbitrator is even
arguably construing or applying the contract and acting within the scope of his authority, a court
may not overturn the decision even if convinced that the arbitrator committed serious error.” Id.
(quotation marks and citation omitted).

        Defendant argues that the trial court erred in failing to vacate the arbitrator’s award
because the arbitrator exceeded her power. Under MCL 691.1703(1), an arbitration award must
be vacated if an arbitrator has exceeded his or her powers. An arbitrator exceeds his or her
powers when he or she makes a material error of law that substantially affects the outcome of the
arbitration. This Court has previously articulated that:

       In order for a court to vacate an arbitrator award because of an error of law, the
       error must have been so substantial that, but for the error, the award would have
       been substantially different. Any such error must be readily apparent on the face
       of the award without second-guessing the arbitrator’s thought processes, and the
       arbitrator’s findings of fact are immune from review altogether. [Eppel v Eppel,
       322 Mich App 562, 563-65; 912 NW2d 584 (2018) (quotation marks and citations
       omitted).]

       Defendant claims that the trial court erred in failing to vacate the arbitration award
because the arbitrator ignored the plain and unambiguous terms of the parties’ contract, returned
an award contrary to the form required by the parties’ contract, and relied on an unqualified

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expert’s testimony. However, in order for defendant to prevail, this Court would be required to
review the parties’ contract side by side with the arbitrator’s findings regarding the contract,
arbitration testimony regarding what was requested by the parties, the credentials of an expert
witness, and all other remaining evidence in the record. This would amount to second guessing
the arbitrator’s findings of act, which are immune from review. Eppel, 322 Mich App at 563-65.
Even if we were convinced that a serious error had been made by the arbitrator, this Court may
not overturn an award based on such an error. AFSCME, 284 Mich App at 144. Because we
cannot review the merits of the arbitrator’s decision, and defendant has failed to establish any
error of law apparent from the face of the arbitration award, defendant’s arguments must fail.

                           III. MOTION FOR RECONSIDERATION

       Defendant also argues on appeal that the trial court erred by denying its motion for
reconsideration. Again, we disagree.

        In its motion for reconsideration, defendant argued for the first time that the arbitrator
had exceeded her authority by failing to comply with the form requirements under the
Construction Industry Arbitration Rules. Issues presented for the first time in a motion for
reconsideration are not preserved. Vushaj v Farm Bureau Gen Ins Co of Mich, 284 Mich App
513, 519; 773 NW2d 758 (2009). Accordingly, defendant’s unpreserved claim is reviewed for
plain error. Kern v Blethen–Coluni, 240 Mich App 333, 336; 612 NW2d 838 (2000). “To avoid
forfeiture under the plain error rule, three requirements must be met: 1) the error must have
occurred, 2) the error was plain, i.e., clear or obvious, 3) and the plain error affected substantial
rights.” Id. (citation and quotation marks omitted).

       MCR 2.119(F)(3), which governs a motion for reconsideration, provides:

       Generally, and without restricting the discretion of the court, a motion for
       rehearing or reconsideration which merely presents the same issues ruled on by
       the court, either expressly or by reasonable implication, will not be granted. The
       moving party must demonstrate a palpable error by which the court and the
       parties have been misled and show that a different disposition of the motion must
       result from correction of the error.

A “palpable error” is defined as “[e]asily perceptible, plain, obvious, readily visible, noticeable,
patent, distinct, manifest.” Luckow v Luckow, 291 Mich App 417, 426; 805 NW2nd 453 (2011).

         Defendant raised the argument that the arbitrator had exceeded her authority by failing to
comply with the form requirements under the Construction Industry Arbitration Rules for the
first time in its motion for reconsideration. Defendant’s new argument could have been raised in
defendant’s original motion and defendant otherwise failed to demonstrate palpable error.
Therefore it was not plain error for the trial court to deny defendant’s motion for reconsideration.

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Affirmed.

                  /s/ Kathleen Jansen
                  /s/ Patrick M. Meter
                  /s/ Cynthia Diane Stephens

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