Orwell Natural Gas Co. v. PCC Airfoils, L.L.C.

937 N.E.2d 609, 189 Ohio App. 3d 90
CourtOhio Court of Appeals
DecidedJuly 1, 2010
DocketNo. 94181
StatusPublished
Cited by6 cases

This text of 937 N.E.2d 609 (Orwell Natural Gas Co. v. PCC Airfoils, L.L.C.) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Orwell Natural Gas Co. v. PCC Airfoils, L.L.C., 937 N.E.2d 609, 189 Ohio App. 3d 90 (Ohio Ct. App. 2010).

Opinion

Frank D. Celebrezze Jr., Judge.

{¶ 1} Appellant, Orwell Natural Gas Company, Inc. (“Orwell”), challenges the confirmation of an arbitration award in favor of appellee, PCC Airfoils, L.L.C. (“PCC”). The dispute stems from a contract for the transport of natural gas and PCC’s decision to use an alternate means of transport. After a thorough review of the record, we affirm the decision of the lower court.

{¶ 2} On February 8, 2008, the two parties entered into a contract for the transport of natural gas to PCC’s Painesville, Ohio manufacturing facility. The contract took the form of a three-page document signed at the end and followed by an exhibit of ten pages of terms and conditions. In this contract, Orwell agreed to transport natural gas to PCC’s manufacturing facility located on Renaissance Parkway in Painesville (the “Renaissance facility”). Soon after entering into the agreement, PCC began negotiating with another company for an agreement covering all of PCC’s facilities in a certain geographic area. On June 20, 2008, PCC informed Orwell that it would no longer be using Orwell’s gas pipelines for the transport of natural gas.

{¶ 3} In August 2008, Orwell sought a temporary restraining order in the Lucas County Court of Common Pleas barring PCC from using other means of transport. The parties agreed to a restraining order and to submit their dispute to arbitration in Cuyahoga County, Ohio pursuant to an arbitration clause in the contract, and further agreed to continue the restraining order with PCC using Orwell’s supply lines for the transport of natural gas while the arbitration proceedings were pending.

{¶ 4} During the arbitration, PCC argued that the contract was ambiguous and that extrinsic evidence was required to properly interpret the contract. Orwell argued that the contract was an unambiguous “full requirements” integrated agreement that PCC intended to breach by receiving natural gas from another transporter.1 The arbitrator determined that there were material ambiguities in the contract and allowed the introduction of extrinsic evidence to interpret the location of facilities covered and the exclusivity of the agreement. The arbitrator found that the extrinsic evidence demonstrated that PCC had requested that the “full requirements” language be removed from the front three-page section of the [94]*94contract and, as a result, they did not bargain for an exclusive agreement with Orwell. The arbitrator ruled in favor of PCC and dissolved the restraining-order agreement.

{¶ 5} On January 16, 2009, Orwell sought to have the arbitrator’s decision vacated in the Cuyahoga County Common Pleas Court, and PCC petitioned the court to have the arbitrator’s award confirmed. On October 6, 2009, the trial court granted PCC’s motion confirming the arbitrator’s decision, finding that “[t]he arbitrators did not depart from the essence of the contract by conflicting with the express terms of the agreement nor did the decision lack rational support as derived from the terms of the contract.”

{¶ 6} Orwell now appeals the denial of their motion to vacate, modify, or correct the arbitration award, claiming that the “[t]rial court erred when it granted appellee’s motion to confirm [the] arbitration award and denied appellant’s motion to vacate, modify or correct [the] arbitration award.”

Law and Analysis

Review of an Arbitral Determination

{¶ 7} When faced with a motion to vacate an arbitration award, a court is limited in its review. Goodyear Tire & Rubber Co. v. Local Union No. 200 (1975), 42 Ohio St.2d 516, 71 O.O.2d 509, 330 N.E.2d 703. A common pleas court is limited to ascertaining whether fraud, corruption, misconduct, arbitration impropriety, or evident mistake made the award unjust or unconscionable. Russo v. Chittick (1988), 48 Ohio App.3d 101, 548 N.E.2d 314. The trial court has the power to vacate an arbitration award only upon certain enumerated grounds set forth in R.C. 2711.10.

{¶ 8} Appellate review of an arbitral proceeding is confined to an evaluation of the order issued by the trial court pursuant to R.C. 2711.10. The substantive merits of the original arbitration award are not reviewable on appeal absent evidence of material mistake or extensive impropriety. Lynch v. Halcomb (1984), 16 Ohio App.3d 223, 16 OBR 238, 475 N.E.2d 181. A de novo review of the merits of the dispute is not within the contemplation of the statute. Buyer’s First Realty, Inc. v. Cleveland Area Bd. of Realtors (2000), 139 Ohio App.3d 772, 784, 745 N.E.2d 1069. “As a result, once a reviewing court determines that the arbitrator’s award draws its essence from the parties’ contract and is not unlawful, arbitrary or capricious, the reviewing court has no authority to vacate the award pursuant to R.C. 2711.10(D).” Marra Constructors, Inc. v. Cleveland Metroparks Sys. (1993), 82 Ohio App.3d 557, 563, 612 N.E.2d 806, citing Findlay City School Dist. Bd. of Edn. v. Findlay Edn. Assn. (1990), 49 Ohio St.3d 129, 551 N.E.2d 186.

[95]*95{¶ 9} Orwell argues that the trial court erred in overruling its motion to vacate or modify based on R.C. 2711.10(D), which states that “[t]he arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.”

{¶ 10} Under R.C. 2711.10(D), an error of fact or law by an arbitrator does not provide a basis for vacating an arbitration award. Goodyear, 42 Ohio St.2d at 522, 71 O.O.2d 509, 330 N.E.2d 703. If parties could challenge an arbitration decision on the grounds that the arbitrators erroneously decided legal or factual issues, no arbitration would be binding. Ungar v. Ormsbee (Feb. 11, 2002), Stark App. No. 2001CA00210, 2002 WL 221973.

{¶ 11} The fact that a trial court might arrive at a different conclusion from the arbitrator is also immaterial. Motor Wheel Corp. v. Goodyear Tire & Rubber Co. (1994), 98 Ohio App.3d 45, 647 N.E.2d 844. The trial court is bound by an arbitrator’s factual findings and serves only as a mechanism to enforce the arbitrator’s award. Warren Edn. Assn. v. Warren City Bd. of Edn. (1985), 18 Ohio St.3d 170, 18 OBR 225, 480 N.E.2d 456.

Discretion of an Arbitrator

{¶ 12} Orwell takes issue with the decision of the arbitrator to allow extrinsic evidence to interpret the contract, contrary to the parol evidence rule.

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Bluebook (online)
937 N.E.2d 609, 189 Ohio App. 3d 90, Counsel Stack Legal Research, https://law.counselstack.com/opinion/orwell-natural-gas-co-v-pcc-airfoils-llc-ohioctapp-2010.