Opinion
2018 CA 1152
04-12-2019
INLAND MARINE SERVICES, L.L.C. v. HAMP'S CONSTRUCTION, LLC
J. Mark Robinson Baton Rouge, Louisiana And David W. Carley E. Allen Graves, Jr. David C. Voss Joshua J. Coleman Baton Rouge, Louisiana Attorneys for Plaintiff/Appellee Inland Marine Services, L.L.C. John I. Hulse, IV Brian A. Gilbert Metairie, Louisiana Attorneys for Defendants/Appellants Hamp's Construction LLC, and Hartford Fire Insurance Company
NOT DESIGNATED FOR PUBLICATION On Appeal from the Nineteenth Judicial District Court In and for the Parish of East Baton Rouge State of Louisiana
No. C659557, Sec. 25 The Honorable Wilson Fields, Judge Presiding J. Mark Robinson
Baton Rouge, Louisiana
And
David W. Carley
E. Allen Graves, Jr.
David C. Voss
Joshua J. Coleman
Baton Rouge, Louisiana Attorneys for Plaintiff/Appellee
Inland Marine Services, L.L.C. John I. Hulse, IV
Brian A. Gilbert
Metairie, Louisiana Attorneys for Defendants/Appellants
Hamp's Construction LLC, and
Hartford Fire Insurance Company BEFORE: McDONALD, CRAIN, AND HOLDRIDGE, JJ. HOLDRIDGE, J.
Hamp's Construction LLC (Hamp's) and its surety, Hartford Fire Insurance Company (Hartford), appeal from a district court judgment confirming an arbitration award in favor of Inland Marine Services, L.L.C. (Inland). We affirm.
Hartford was not named as a defendant in Inland's motion to confirm the arbitration award, and it was not named in the judgment or in the denial of the motion for new trial. Hartford is appealing the judgment as Hamp's surety, and Inland has not challenged its right to appeal. Pursuant to La. C.C.P. art. 2086, a person who could have intervened in the district court may appeal, and Hartford alleged in the motion for appeal that it and Hamp's had paid $363,892.25 to Inland.
PROCEDURAL AND FACTUAL BACKGROUND
Hamp's was the general contractor for a public works project described as Fourchon Beach Rehabilitation, Phase 1 - Greater Lafourche Port Commission - Port Fourchon, Lafourche Parish. Pursuant to a written contract signed in May of 2013, Inland was a subcontractor of Hamp's on the project. The project owner was the Greater Lafourche Port Commission, and the project plans and specifications were prepared by the Commission's engineer and furnished to Inland by Hamp's. Inland was to install geotube containers, scour apron, and anchor tubes along the coastline of the Gulf of Mexico in Lafourche Parish. The subcontract required Inland to complete the work within forty-five days from the first day that its equipment and manpower were on site, which was on June 4, 2013. Inland did not finish the work until about August 23, 2013, beyond the forty-five day period.
On May 5, 2016, Inland initiated arbitration through the American Arbitration Association in accordance with the contract to obtain payment for the balance due under the contract and delay damages, among other items. A hearing was held before an arbitrator on May 8-12, 2017. On July 11, 2017, the arbitrator rendered a decision in favor of Inland in the amount of $497,639.57, with legal interest from October 1, 2013 until the date of the award, totaling $75,859.36; administrative fees and expenses of the American Arbitration Association, totaling $22,400.00; and the compensation and expenses of the arbitrator, totaling $19,200.00. The arbitrator also awarded Inland additional interest at the rate of twelve percent from July 11, 2017 (the date of the award) until paid in full, if the sums awarded were not paid in full within thirty days of July 11, 2017. Hamp's paid $315,067.57 of the award, which represented the subcontract balance, plus interest, for a total of $363,892.25, and this portion of the award is not at issue. The portion of the award remaining at issue represents the extra work Inland performed totaling $190,454.00, less a credit of $7,882.00 for Inland's use of Hamp's equipment.
On July 14, 2017, Inland filed a petition to confirm the arbitration award in the district court. In response, Hamp's filed a motion to partially vacate the award and to modify or correct the award. The matter was heard by the district court on December 11, 2017. On January 10, 2018, the district court signed a judgment wherein it confirmed the arbitration award in all respects except for its modification of one paragraph of the arbitration award to state that if the sums awarded by the arbitrator were not paid in full within thirty days, Hamp's must pay Inland additional interest on all sums awarded at the Louisiana legal rate from the date of the award until paid; the award was attached to the court's judgment as an exhibit. Hamp's filed a motion for new trial as to the district court's judgment. The district court denied the motion for new trial, and from this ruling and the earlier judgment, Hamp's and Hartford appeal.
We note that at the time of filing the petition for confirmation of the arbitration award, Inland attached the arbitration award, but it did not attach the agreement to arbitrate as required by La. R.S. 9:4214. The agreement was attached to Hamp's motion to partially vacate the arbitration award and the motion to modify the award, and that copy of the agreement was offered into evidence along with the suit record by counsel for Inland at the hearing in district court on the confirmation of the award. Hamp's and Hartford did not raise any issues regarding the arbitration agreement itself. Cf. Worldwide Asset Purchasing, L.L.C. v. Sanders, 2010-1160 (La. App. 1 Cir. 3/3/11), 2011 WL 940493 (unpublished) (This court held that an arbitration award could not be confirmed without proof of a valid arbitration agreement on a motion for summary judgment where the appellant challenged the validity of the agreement to arbitrate.) Since Hamp's and Hartford did not raise any issue as to the failure of Inland to attach the agreement to arbitrate to the petition, and this agreement was offered into evidence, we decline to further address this issue.
We note that Hartford joined with Hamp's in filing the motion for new trial. See footnote 1. --------
On appeal, Hamp's and Hartford raise four assignments of error, contending that the district court erred: in failing to vacate and correct the arbitration award (1) where
the arbitrator exceeded his powers and executed them so imperfectly as to preclude a final award, where the arbitrator's actions demonstrate prejudice and partiality, where the arbitrator ignored a known, controlling principle of law and failed to apply it, rather than merely applying it erroneously, and where the award contains material miscalculations;(2) in awarding delay damages of $190,454.00; (3) in failing to credit Hamp's with $16,664.40, which represented signed work tickets for equipment rental and associated costs by Inland; and (4) in denying the motion for new trial.
DISCUSSION
Under the Louisiana Arbitration Law, La. R.S. 9:4201-4217, 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 it is vacated, modified, or corrected. La. R.S. 9:4209. 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 statute. Crescent Property Partners, LLC v. American Mfrs. Mut. Ins. Co., 2014-0969 (La. 1/28/15), 158 So.3d 798, 803; MMR-Radon Constructors, Inc. v. Continental Ins. Co., 97-0159 (La. App. 1 Cir. 3/3/98), 714 So.2d 1, 5, writ denied, 98-1485 (La. 9/4/98), 721 So.2d 915. A court does not ordinarily sit in an appellate capacity to an arbitration panel, but confines its determination to whether there exists one or more of the specific grounds for impeachment as provided for under the applicable statute. Crescent Property Partners, 158 So.3d at 804; MMR-Radon Constructors, Inc., 714 So.2d at 5. The applicable statutes to which we must confine our review in this case are La. R.S. 9:4210(D) and La. R.S. 9:4211(A). Louisiana Revised Statutes 9:4210(D) states, in pertinent part, that the court in and for the parish where the award was made shall vacate the award "[w]here 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." Louisiana Revised Statutes 9:4211(A) provides that the court in and for the parish where the award was made shall modify or correct an award "[w]here 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." The type of "evident material miscalculation of figures" contemplated by La. R.S. 9:4211 would be one akin to a mathematical error as distinguished from an error in the value or legal conclusions underlying the arbitrator's award. See Bergeron v. Patel, 2016-0600 (La. App. 1 Cir. 5/17/17), 2017 WL 2170142 (unpublished), writ denied, 2017-1270 (La. 10/27/17), 228 So.3d 1226. The burden of proof is on the party attacking the award. See Crescent Property Partners, 158 So.3d at 804.
The arbitrator in his award set forth his factual findings and analyzed the parties' claims. He made the following determinations based on a preponderance of credible evidence: the project's design, plans, and specifications were deficient; the ruptures in the geotube containers were not Inland's fault; due to design deficiencies and changes and adverse weather and unforeseen site conditions, Inland failed to complete the work within forty-five days and performed additional work, incurred additional costs, and sustained damages; Hamp's had actual knowledge and adequate notice of Inland's additional work and costs; Inland was entitled to additional compensation for the additional work and material; the subcontract required Inland and Hamp's to "work together, and cooperate with each other, to pursue any claims for additional time and money from the Owner/Engineer;" the subcontract prohibited Inland from having direct communications with the Owner/Engineer; during the project, Inland submitted five applications for payment totaling $386,277.67; Hamp's paid Inland $71,210.10 late; during the project, Hamp's supplied equipment for Inland's benefit, and Inland agreed to pay Hamp's; and Inland completed the work required by the subcontract, but Hamp's breached the subcontract by failing to make timely payments of the subcontract price and by failing to work together with Inland in the pursuit of clams for additional time and money due Inland. The arbitrator noted that Hamp's failure to cooperate on pursuing claims for additional time and money was "clearly evidenced by inter alia its unreasonable refusal to pay even the Subcontract price." The arbitrator awarded Inland the balance of the subcontract price and some delay damages with interest but rejected Inland's claims for statutory penalties and attorney's fees. The arbitrator awarded Hamp's claim for equipment Inland used during the project in the amount of $7,882.00, but rejected Hamp's other claims.
On appeal, Hamp's and Hartford basically contend that the arbitrator's decision grossly departs from the facts espoused by Hamp's and Inland's own expert, Robert Gregory. They argue that Mr. Gregory's key findings in his report are that design defects, as opposed to fault by Hamp's or Inland, caused the delays in the project, and that the arbitrator incorrectly applied the contractual provisions to the factual circumstances of the case. Hamp's and Hartford assert that the arbitrator erred in failing to grant Hamp's the costs for equipment rental and manpower used by Inland. Hamp's and Hartford have only presented arguments related to the merits of whether the arbitrator erred in awarding judgment in favor of Inland. Even if we were to disagree with the arbitrator's decision on the merits, there is no evidence that the arbitrator exceeded or imperfectly executed his powers in this matter. Thus, there were no grounds for the district court to vacate or modify the arbitration and this court is prohibited from reviewing the merits of the arbitrator's decision. This court has generally adhered to the exclusivity of the statutory provisions for vacating or modifying an arbitration award and has not embraced the additional jurisprudentially-created circumstance of "manifest disregard for the law" as a legal basis for vacating an arbitration award. See Preis Gordon, APLC v. Chandler, 2015-0958 (La. App. 1 Cir. 2/26/16), 191 So.3d 31, 36, writ denied, 2016-0590 (La. 5/20/16), 191 So.3d 1067. Errors of fact or law do not invalidate a fair and honest arbitration award. See Preis Gordon, 191 So.3d at 35. Hamp's and Hartford may not seek review of the merits of a case that has been submitted to arbitration by couching their arguments in terms of the arbitrator having exceeded his authority. Furthermore, 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. See Kyocera Mita America, Inc. v. Key Office Equipment, 2010-1205 (La. App. 1 Cir. 2/11/11), 2011 WL 766934 (unpublished). Hamp's and Hartford's complaints as to the arbitrator's findings as to Hamp's and Hartford's claims for equipment rental and manpower do not involve a mathematical error as would justify modifying or vacating that part of the award, but instead are based on a factual error as to the award, which this court has no authority to address. Therefore, Hamp's and Hartford's assignments of error have no merit, and the district court did not err in confirming the arbitration award.
CONCLUSION
For the foregoing reasons, we affirm the January 10, 2018 and April 24, 2018 judgments of the district court. All costs of this appeal are assessed against Hamp's Construction, LLC and Hartford Fire Insurance Company.
AFFIRMED.