Hill v. Cloud

648 So. 2d 1383, 1995 WL 26196
CourtLouisiana Court of Appeal
DecidedJanuary 25, 1995
Docket26,391-CA
StatusPublished
Cited by23 cases

This text of 648 So. 2d 1383 (Hill v. Cloud) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hill v. Cloud, 648 So. 2d 1383, 1995 WL 26196 (La. Ct. App. 1995).

Opinion

648 So.2d 1383 (1995)

Dr. John B. HILL, Appellee,
v.
W. Duane CLOUD, Appellant.

No. 26,391-CA.

Court of Appeal of Louisiana, Second Circuit.

January 25, 1995.

*1384 Cook, Yancey, King & Galloway by Jerald R. Harper, Shreveport, for appellant.

Comegys, Lawrence, Jones, Odom & Spruiell by James W. Davis, Shreveport, for appellee.

Leon H. Rittenberg, Jr. in pro per.

Before SEXTON, LINDSAY and STEWART, JJ.

LINDSAY, Judge.

Following unsatisfactory litigation, Dr. John B. Hill and W. Duane Cloud agreed to submit their dispute to arbitration in lieu of the appellate process. However, Cloud was also unsatisfied with the results of the arbitration and has now appealed from the trial court judgment confirming the arbitrator's award. For the reasons assigned below, we affirm the judgment of the trial court.

*1385 FACTS

Mr. Cloud, Dr. Hill, and Dr. Charles Hancock were equal shareholders in a closely held corporation, Doctors Park of Minden, Inc. The corporation owned an office building in Minden, where Dr. Hill and Dr. Hancock conducted their medical practices. Mr. Cloud obtained Dr. Hancock's shares and caused a new Board of Directors to be elected. The new board ordered the eviction of the doctors and the sale of the building by auction; at the auction, the building was purchased by Mr. Cloud.

Thereafter, litigation between Mr. Cloud and Dr. Hill ensued in Webster Parish. Dr. Hill claimed violations by Mr. Cloud and the board of numerous obligations, including fiduciary duties and improper eviction. Mr. Cloud reconvened against Dr. Hill, claiming damages as a result of his alleged trespass and failure to vacate. Jury trial was held in 1990 and resulted in damage awards of $100,000 in favor of Mr. Cloud and $107,000 in favor of Dr. Hill.

Both parties were dissatisfied with the jury verdict but wished to avoid the appellate process and a possible retrial. Therefore, they entered into an arbitration agreement, which was negotiated by their respective attorneys over a period of several months. This agreement gave the arbitrator authority to conduct the proceedings in accordance with the Commercial Arbitration Rules of the American Arbitration Association and Louisiana law. In reaching his decision, the arbitrator was allowed to consider the record of the proceedings in the Webster Parish suit, as well as any additional evidence he deemed necessary.

The arbitration hearing was held on June 25, 1992. On August 21, 1992, the arbitrator, Leon H. Rittenberg, Jr., ruled in favor of Dr. Hill.[1] In September 1992, Dr. Hill filed a motion to confirm the arbitration award, as specified in LSA-R.S. 9:4209, and for entry of judgment in the amount of $129,480.92.[2]

In February 1993, Mr. Cloud filed a cross-rule to show cause why the arbitration award should not be vacated, in which he also listed several affirmative defenses. Among these affirmative defenses, Mr. Cloud claimed that the arbitrator's award was null and unenforceable under LSA-R.S. 9:4210 because the arbitrator exceeded his powers as set forth in the arbitration agreement and considered matters beyond the scope of the agreement. He also contended the arbitrator obviously failed to apply Louisiana law and showed partiality toward Dr. Hill. In the alternative, he urged that, if the court determined that Dr. Hill and the arbitrator abided by the terms of the arbitration agreement, that the agreement and the award be deemed null and void due to vice of error as to law and fact.

A hearing was held in the trial court on February 8 and June 29, 1993. On November 5, 1993, the trial court issued written reasons for judgment and confirmed the arbitrator's award. The trial court specifically found that the arbitration agreement was a clear and unambiguous contract and that parole evidence as to the intentions of the parties was not to be considered. The court further found that there was no credible evidence of: (1) error sufficient to vitiate Mr. Cloud's consent; (2) fraud, corruption or undue means by Dr. Hill or his counsel; or (3) misconduct or evident partiality by the arbitrator or action exceeding the scope of his powers. Additionally, the trial court held that the award became final on August 21, 1992, thus entitling Dr. Hill to draw on Mr. *1386 Cloud's letter of credit, and that Mr. Cloud had violated his obligation under the agreement to abide by the arbitrator's award.[3]

Consequently, the trial court entered judgment in favor of Dr. Hill in the amount of $129,480.92, plus legal interest from August 27, 1992, until paid, with all costs. Judgment was also rendered against Mr. Cloud and in favor of the arbitrator for fees of $11,688.50 and in favor of the American Arbitration Association for costs of $1,101.83. Mr. Cloud was also ordered to pay all court costs.

Mr. Cloud appealed, arguing numerous assignments of error. However, given the narrow statutory scope of an appeal in an arbitration case, we do not find it necessary to address all of his contentions specifically. We will consider whether the trial court erred in finding that: (1) the arbitration agreement was a clear and unambiguous contract; and (2) there were no grounds for vacating the arbitrator's award under the Louisiana Arbitration Law.

Additionally, in his brief, Dr. Hill requested damages of $15,000 for frivolous appeal. The arbitrator filed an amicus curiae brief wherein he requested affirmation of the portion of the judgment setting his fee.

TERMS OF THE ARBITRATION AGREEMENT

The final draft of the arbitration agreement between Mr. Cloud and Dr. Hill provided, in relevant part, as follows:

WHEREAS, the parties now desire to submit their disputes to binding arbitration in accordance with the procedural Commercial Arbitration Rules of the American Arbitration Association and Louisiana substantive law.
NOW, THEREFORE, the parties agree as follows:
1. We, the undersigned parties, hereby agree to submit to arbitration under the Commercial Arbitration Rules of the American Arbitration Association the claims alleged by Hill and Cloud, one against the other, in suit Number 44,564, now pending in the Twenty-Sixth Judicial District Court for Webster Parish, Louisiana. We further agree to submit to arbitration the following related issues:
(a) Entitlement to the funds held in the escrow account at Peoples Bank & Trust Company;
(b) Entitlement of Jerry Hughes and Tom Wyatt to indemnification of their attorneys fees from the assets of Doctors Park, including the above escrow account;
(c) It is agreed that the arbitrator is empowered to award attorneys' fees and/or costs should he, in his sole discretion, deem such an award appropriate in the circumstances.
We further agree that the above controversy be submitted to one arbitrator selected from the Panel of Arbitrators of the American Arbitration Association. We further agree that we will faithfully observe this agreement and the rules, and that we will abide by and perform any award rendered by the Arbitrator and a judgment of the court having jurisdiction may be entered upon the award.
2. The parties further agree that the entire record of the proceedings in Suit No.

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Bluebook (online)
648 So. 2d 1383, 1995 WL 26196, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hill-v-cloud-lactapp-1995.