Home Oil Co. of Hot Springs v. Home Oil Co.

393 S.E.2d 188, 240 Va. 5, 6 Va. Law Rep. 2515, 1990 Va. LEXIS 101
Supreme Court of Virginia·Decided June 8, 1990·No. Record No. 891092·Published·Cited by 1 cases

Opinion

CHIEF JUSTICE CARRICO

delivered the opinion of the Court.

On September 9, 1988, Home Oil Company, Incorporated (Home Oil) filed in the Circuit Court of Lancaster County a bill of complaint against Home Oil Company of Hot Springs, Virginia, Inc. (Hot Springs). The bill sought to have the trial court establish as valid and enforceable a report of an arbitrator dated June 29, 1988.

On October 14, 1988, Hot Springs filed in the Circuit Court of Rockbridge County a bill of complaint against Home Oil. This bill sought a declaratory judgment establishing as valid and enforceable a report of the same arbitrator dated January 15, 1988.

In the Lancaster County proceeding, Hot Springs waived objection to jurisdiction in that county and, with the consent of Home Oil, was permitted to file its Rockbridge bill of complaint as a cross-bill. Both parties then filed motions for summary judgment.

After a hearing, the trial court denied Hot Springs’s motion for summary judgment and granted Home Oil’s, holding that the June 29, 1988 report of the arbitrator was valid and enforceable. In accordance with the report, the court entered judgment in favor [7]*7of Home Oil in the sum of $5,436.32, with interest at the judgment rate from July 1, 1988. We granted Hot Springs this appeal.

The record shows that in January 1984, Home Oil agreed to sell certain assets to Hot Springs. Following settlement of the agreement, a .dispute arose between the parties concerning whether each had performed as required, and each side filed or threatened to file legal action.

In 19.85, the parties agreed to submit the dispute to binding arbitration, and Eric L. Sisler, a Lexington attorney, was selected to act as arbitrator. By letter dated April 9, 1986, addressed to Sisler and signed by both disputants, the parties agreed to the “ground rules concerning the arbitration between them.”

On January 15, 1988, following a series of hearings in which substantial evidence was taken, Sisler issued an “Arbitrator’s Report.” In the report, Sisler found that Home Oil was indebted to Hot Springs in the sum of $9,997.44. Then, on January 18, 1988, on his own motion, Sisler issued an “Arbitrator’s Supplemental Report.”

In his supplemental report, Sisler stated that, in his earlier rendition, he had not given Home Oil credit for the sum of $10,485.72 for accounts receivable withheld by Hot Springs and not remitted to Home Oil. As a result of applying the credit, Sisler found that Hot Springs was indebted to Home Oil in the sum of $488.28.

On April 6, 1988, Sisler issued “Arbitrator’s Supplemental Report #2.” In this report, Sisler stated that Home Oil had requested he determine whether interest should be allowed on the $10,485.72 credit granted in his first supplemental report. Sisler held that Home Oil was entitled to interest on the amount of the credit.

Lastly, on June 29, 1988, Sisler issued “Arbitrator’s Supplemental Report #3: Final Report.” In this report, Sisler stated that he had been requested by Home Oil to “calculate interest on the various accounts in order to arrive at net figures due and payable.” Sisler attached three schedules to the report in which interest was computed to June 1, 1988, with the result, Sisler said, that Hot Springs owed Home Oil the sum of $5,436.32 with interest from June 1, 1988. As noted previously, the trial court held this report valid and enforceable and, in accordance therewith, entered judgment for $5,436.32 in favor of Home Oil.

[8]*8On appeal, Hot Springs argues that Sisler’s first report, issued January 15, 1988, was a final report, addressing and answering all aspects of the dispute submitted tb him by the parties. Then, quoting Sydnor Co. v. County School Board, 182 Va. 156, 28 S.E.2d 33 (1943), Hot Springs states that it is settled law in Virginia that “[ajfter a purported award has been made, the arbitrators become functi officio [and] cannot remedy a defective award, or conduct further proceedings, in the absence of agreement or statute.” Id. at 172, 28 S.E.2d at 39.

Here, Hot Springs maintains, the parties did not consent to Sisler taking any further action with respect to the January 15, 1988 award, and there is no statutory authority which would allow an arbitrator, on his own motion, to amend a purported award. Furthermore, Hot Springs complains, Sisler considered and decided the matters contained in the second and third supplemental reports on the ex parte requests of Home Oil without any notice to Hot Springs that modifications were being sought.

Hot Springs contends further that had Home Oil wished correction of any error or defect in the January 15, 1988 award, it had available the provisions of the Uniform Arbitration Act, Code §§ 8.01-581.01 et seq., yet failed to avail itself of the Act’s provisions. Hot Springs asserts that, while the Act did not become effective until after the parties signed the “ground rules” letter,

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Home Oil Co. of Hot Springs v. Home Oil Co., 393 S.E.2d 188, 240 Va. 5, 6 Va. Law Rep. 2515, 1990 Va. LEXIS 101 (Va. 1990).

393 S.E.2d 188 (Home Oil Co. of Hot Springs v. Home Oil Co.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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