Millsaps v. Robertson-Vaughn Construction Co.

970 S.W.2d 477, 1997 Tenn. App. LEXIS 840, 1997 WL 731920
CourtCourt of Appeals of Tennessee
DecidedNovember 25, 1997
Docket01A01-9704-CH-00160
StatusPublished
Cited by3 cases

This text of 970 S.W.2d 477 (Millsaps v. Robertson-Vaughn Construction Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Millsaps v. Robertson-Vaughn Construction Co., 970 S.W.2d 477, 1997 Tenn. App. LEXIS 840, 1997 WL 731920 (Tenn. Ct. App. 1997).

Opinion

OPINION

CANTRELL, Judge.

This is an action to enforce an arbitrator’s award or for damages for failing to comply *479 with the award. The trial judge refused to enforce the award on the ground that it was unreasonable, inequitable, and shocking to the conscience of the court. We reverse that conclusion and order that the award be enforced in accordance with the lower court’s alternative findings.

I.

In April of 1986, the Reverend and Mrs. Millsaps hired Robertson-Vaughn Construction Co., Inc. to construct a house in Montea-gle. The cost-plus contract called for the new house to be connected to an existing house on the lot. As the work proceeded, the Millsaps became dissatisfied with the quality of the work and filed suit against the contractor for damages. Before the case came to trial, however, the parties agreed to submit the dispute to arbitration — a decision that may set alternative dispute resolution back a generation.

The record is not clear about the details of the arbitration proceeding, but the arbitrator made his award on May 10,1990. The award listed twelve specific items for the contractor to complete “at no further charge” to the owners. In addition, the award ordered the contractor to complete a three page, barely legible, handwritten “punch list” that had been prepared by the owner’s former attorney. The remaining work was to be supervised by an architect hired by the owners, and the work was to be completed within thirty days of the hiring of the architect. The contractor took no action to modify or vacate the award.

The owner’s architect issued a work order, and after a considerable delay, the contractor attempted to make some of the corrections. The work stretched into the next year, however, and the owners finally terminated the contractor’s efforts and filed this action on the award.

The contractor filed a counter-claim, alleging that it had performed work not covered by the arbitration award and that the owners were responsible for the costs incurred in performing the work not covered by the award.

The Chancery Court of Marion County granted partial summary judgment to the owners. The court found that the parties were bound by the terms and conditions of the award because the time to appeal any part of the award had passed. The order left for a future hearing the questions of what part of the award had not been complied with, whether the defendant should be allowed to complete the remaining items, and, if not, what would be the reasonable cost of completion.

After a subsequent hearing, the trial judge filed a memorandum and order containing the following findings: that the arbitrator’s award shocked the conscience of the court; that the award ordered the contractor to perform thousands of dollars worth of work for which the owners would otherwise have been liable on the cost-plus contract; that it was equally shocking that the contractor did not appeal the award; that the contractor had performed work not covered by the award for which the plaintiffs were liable; that the amount due the contractor was equal to or greater than the amount due the plaintiffs for the items left outstanding on the award.

The order contained two alternative judgments: The first simply dismissed the complaint because the owners did not prove that enforcement of the arbitrator’s award would be equitable, given the uncompensated benefits already bestowed on them. The alternative order, to apply if an appellate court ordered the enforcement of the arbitrator’s award, contained findings of the items in the award that had been completed and the items that remained unfinished. Finally, the trial judge entered a $2,844.00 judgment on the contractor’s counterclaim.

II.

a. Arbitration in General

With the passage of the Uniform Arbitration Act, Tenn.Code Ann. §§ 29-5-301 — 320, arbitration took on a new life in Tennessee. (See Meirowsky v. Phipps, 222 Tenn. 112, 432 S.W.2d 885 (1968) for the status of arbitration under prior law.) “The act governs the scope of judicial review of *480 arbitration awards.” International Talent Group, Inc. v. Copyright Management, Inc., 769 S.W.2d 217 at 218 (Tenn.App.1988). Only in limited circumstances may the courts vacate, modify, or correct the award. 1 (See Tenn.Code Ann. § 29-5-313 on vacation and § 29-5-314 on modification or correction.) And these powers must be invoked in a timely manner; generally within ninety days of the date a copy of the award is delivered to the applicant. Id.

In this ease the contractor did not ask the court to modify or correct the award, and to this date, has not asserted that any of the statutory reasons for modification or correction exist. Although we are puzzled, as the trial judge was, why the arbitrator ordered the contractor to perform several items of new construction at no cost to the owners, the time to correct that part of the order is past, and the court’s ability to correct the award is severely limited. “As long as the arbitrator is, arguably, construing or applying the contract and acting within the scope of his authority, the fact that a court is convinced he committed serious error does not suffice to overturn his decision.” Arnold v. Morgan Keegan & Co., Inc., 914 S.W.2d 445 at 449 (Tenn.1996). Therefore, we are of the opinion that the trial court was in error insofar as its order may be interpreted as a refusal to enforce the award because it was erroneous or because the court thought the award went too far.

b. The Offset Findings

The trial court’s order contained a finding that the “value of the work and materials provided [by the contractor] and unpaid for is equal to or greater than any obligation owed to Plaintiffs by the Defendant.” We think this is a significant finding, even though neither party chose to address it on appeal.

An action may be brought on an arbitrator’s award as on an ordinary contract. See 4 Am.Jur.2d Alternative Dispute Resolution § 218. It follows that the defendant in the action may plead set off or re-coupment. Howard v. Abernathy, 751 S.W.2d 432 (Tenn.App.1988); Lowry v. Hawes, 57 Tenn. 688 (1873). That is how we view the state of the pleadings at the time of the hearing below: the owners had sued for enforcement of the award or, in the alternative, a money judgment; the contractor denied owing anything on the award and filed a counterclaim for money due from the owners (1) as a result of the cost plus nature of the original contract and (2) the extra work performed that fell outside of the original contract.

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970 S.W.2d 477, 1997 Tenn. App. LEXIS 840, 1997 WL 731920, Counsel Stack Legal Research, https://law.counselstack.com/opinion/millsaps-v-robertson-vaughn-construction-co-tennctapp-1997.