Bradley R. Wood and Linda J. Wood, Trustees of the Wood Family Trust v. GE Custom Homes LLC

Court of Appeals of Virginia·Decided May 20, 2025·No. 2155234·Unpublished

Opinion

COURT OF APPEALS OF VIRGINIA UNPUBLISHED

Present: Judges O’Brien, Ortiz and Lorish Argued at Fredericksburg, Virginia

BRADLEY R. WOOD AND LINDA J. WOOD, TRUSTEES OF THE WOOD FAMILY TRUST DATED DECEMBER 19, 2016

MEMORANDUM OPINION* BY

v. Record No. 2155-23-4 JUDGE DANIEL E. ORTIZ MAY 20, 2025

GE CUSTOM HOMES LLC

FROM THE CIRCUIT COURT OF FAIRFAX COUNTY Tania M.L. Saylor, Judge

Timothy P. Bosson (Robert Rose; Bosson Legal Group, P.C., on briefs), for appellants.

David C. Gutkowski (Angela M. London; Odin, Feldman & Pittleman, P.C., on brief), for appellee.

Contract arbitration is a firm fixture of the modern legal landscape, providing parties flexibility, cost control, and finality. These benefits, however, come at the cost of limited judicial review; a party facing an unfavorable arbitral decision has few opportunities for relief.

This case does not provide any such opportunity for appellants. After receiving an unfavorable award in binding arbitration, appellants’ counsel researched their arbitrator’s background. They discovered that the arbitrator founded a nonprofit supporting women in the construction industry.

The appellee in this case, GE Custom Homes LLC (“GE”), is a majority-woman-owned company. The Woods argued in the trial court that these facts rendered the arbitrator evidently partial, requiring vacatur of the award, because her involvement in an affinity group “would make her feel like she wanted to benefit” GE. They also argued that the arbitrator exceeded her

*

This opinion is not designated for publication. See Code § 17.1-413(A).

powers by suggesting that the parties mediate and by returning to her role as arbitrator after serving as mediator. Finally, the Woods argued that the arbitrator miscalculated the award.

The Virginia Uniform Arbitration Act (“VUAA”), Code §§ 8.01-581.01 through 8.01-581.016, establishes limited grounds for judicial interference in an arbitral award. The trial court found that the Woods failed to carry their burden, and, finding no error, we affirm.

BACKGROUND

In 2021, Bradley R. Wood and Linda J. Wood, acting as trustees of the Wood Family Trust, entered into a contract with GE for the construction of a house. The contract provided for construction to take place over 18 months and payment to be made on a draw schedule, including an initial deposit and 8 draw payments that aligned with the phases of home construction. Like most modern commercial contracts, it also included an arbitration provision.

Construction began in January 2022. By May, shortly after GE completed the house’s framing, the price of lumber increased significantly to the point that GE threatened to halt construction if the Woods did not compensate it for the difference in cost. Communications broke down between the parties over which party would pay for the difference in lumber price. In May, the Woods made their second previously-agreed-upon draw payment of $215,625, bringing their total amount paid to $413,247. After this payment, GE refused to continue construction, leaving the frame of the house exposed to the elements. In August, the Woods filed for emergency relief before the American Arbitration Association (“AAA”) to have GE “secure the property from further damage from the elements” and seeking damages of $300,000 to finish the project.

The AAA typically provides parties an opportunity to review arbitrator biographies and choose who will preside. In cases of emergency relief, however, no such information is provided, and the AAA appoints an arbitrator. Here, the AAA appointed Barbara G. Werther,

Esquire, to preside over the “emergency relief portion of the case.” Upon her appointment, Werther submitted an oath form affirming that she had no conflicts of interest and was not “aware of any other information that may lead to a justifiable doubt as to [her] impartiality.” After emergency proceedings ended, both parties consented to Werther continuing to serve as arbitrator.

Werther then presided over a two-day final hearing on the contract dispute to determine which party breached the contract and damages. The Woods allege that, at the close of evidence, Werther excused the parties and held a closed-door meeting with the lawyers. Werther told counsel that, in her opinion, they should have mediated and that they should consider it again, stating, “If you make me issue a ruling in this case, neither party is going to like it.”

The parties agreed to begin mediation again the next day and signed an agreement that Werther would act as mediator. The agreement also stated: “If the mediation is unsuccessful and the parties resume arbitration, the parties agree that they will not seek to disqualify the arbitrator/mediator because of confidential information the mediator may have learned.” After ten days of mediation, Werther presented a settlement offer that both parties rejected. Werther then issued her final award, holding that the Woods were the first to breach and therefore not entitled to completion damages. Werther did, however, award the Woods damages for protective measures including mold sampling and remediation and debris removal. She further held that GE was “entitled to be made whole only for its uncompensated expenditures and for work performed up to [the Woods’] breach,” an amount of $160,898 after subtracting the protective damages owed to the Woods. The Woods filed a request to modify or correct the award, arguing that damage to the property for purposes of protective damages was higher than Werther found, and arguing that Werther miscalculated the amount of work GE performed or installed after draw

two. Werther granted the first request, modifying the award to reflect the recalculation, but denied the latter.

The Woods, upon receiving the unfavorable award, researched Werther’s background and found that she co-founded the non-profit Women in Construction, Inc. Women in Construction’s stated mission is to “empower women in the construction industry.” Werther served as its president from 2006 to 2021, and then served on its board at least until she accepted arbitration of this case in 2022. At the arbitration hearing, the president of GE testified that GE is a “majority woman owned” company. Based on these facts, the Woods moved the trial court “to vacate or, alternatively, to correct or modify the arbitration award.” They argued that (1) Werther was evidently partial by failing to disclose her involvement with Women in Construction, (2) Werther exceeded her powers by pressuring the parties to mediate and resuming her role as arbitrator post-mediation, and (3) Werther miscalculated the amount GE was owed for work performed after the second draw.

Before a hearing on the motion, GE moved in limine to exclude any evidence outside the contract and arbitration award itself to determine whether Werther exceeded her authority and whether she miscalculated the award. The court agreed, holding that any miscalculation would need to be evident on the face of the award and that it could consider only the arbitration contract and award in determining whether Werther exceeded her power.

At the hearing on the motion to vacate, the trial court issued several additional evidentiary rulings, excluding, inter alia, testimony concerning Werther’s involvement in Women in Construction and testimony from the Woods’ lead counsel on the closed-door meeting between Werther and parties’ counsel.2 On evident partiality, the court held that the applicable

2 The Woods challenge these rulings as part of their appeal. Ultimately, as we explain below, because the Woods’ proffers failed to show any prejudice resulting from the trial court’s alleged error, we need not examine these rulings in depth.

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Bradley R. Wood and Linda J. Wood, Trustees of the Wood Family Trust v. GE Custom Homes LLC, (Va. Ct. App. 2025).

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