STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
13-1053
RITA MAYEAUX
VERSUS
SKYCO HOMES, ET AL.
**********
APPEAL FROM THE TWELFTH JUDICIAL DISTRICT COURT PARISH OF AVOYELLES, NO. 20127559 HONORABLE WILLIAM BENNETT, DISTRICT JUDGE
SYLVIA R. COOKS JUDGE
Court composed of Sylvia R. Cooks, John D. Saunders, and Elizabeth A. Pickett,
Judges.
Pickett, J. dissents.
AFFIRMED. REMANDED.
Fred A. Pharis Pharis & Pharis 831 DeSoto Street Alexandria, LA 71301 (318) 445-8266 COUNSEL FOR PLAINTIFF/APPELLEE: Rita Mayeaux Charles V. Richie Richie, Richie & Oberle, LLP P. O. Box 44065 Shreveport, LA 71134 (318) 222-8305 COUNSEL FOR DEFENDANT/APPELLANT: Skyco Corporation
Lamont P. Domingue Voorhies & Labbe P. O. Box 3527 Lafayette, LA 70502-3527 (337) 232-9700 COUNSEL FOR DEFENDANT/APPELLEE: CMH Manufacturing, Inc. d/b/a Schult Homes Corporation COOKS, J.
FACTS AND PROCEDURAL HISTORY
Rita Mayeaux (Mayeaux) sued Skyco Homes (Skyco) and CMH
Manufacturing, Inc. (CMH) to recover a reduction in the purchase price of a
double-wide manufactured home and for general damages, attorney fees, and costs
for alleged redhibitory defects. Mayeaux purchased the home for her daughter and
directed Skyco to deliver and assemble the home on a certain piece of property.
Mayeaux filed a supplemental and amended petition seeking recission of the sale
and maintained her claims for damages, attorney fees, and costs. Skyco and CMH
filed exceptions based upon a contractual provision requiring such matters between
the parties be arbitrated by the Better Business Bureau (BBB). The parties agreed
to a stipulated judgment which referred the dispute to arbitration by the BBB and
stayed the lawsuit pending a decision by the BBB.
Less than a week before the scheduled arbitration hearing Mayeaux asked
for a continuance because one of her expert witnesses could not attend on the date
set and another of her expert witnesses could only attend a portion of the scheduled
hearing. CMH did not oppose the continuance, but Skyco insisted on moving
forward. The BBB arbitrator denied the request for continuance on the basis that
the expert unable to attend could testify by telephone and the other expert could
appear to testify. The BBB arbitrator found Mayeaux did not establish any basis
for recovery against CMH; held Skyco liable for $3,000.00 in repairs to the home;
made each party responsible for their own attorney fees and costs; and stated the
decision is a full settlement of all claims submitted. Mayeaux’s request for a re- consideration was denied. CMH filed a Motion to Lift Stay and Confirm the
Arbitration Award in the trial court. Mayeaux, in response, filed a Motion to
Vacate or Modify the arbitration award. The trial court, after a hearing on the
matter, vacated the arbitration award, ordered the matter be resubmitted to the
BBB for arbitration with a different arbitrator, and taxed Skyco with all costs of
Mayeaux’s motion to vacate. Skyco appeals the trial court judgment.
Skyco asserts the trial court erred in vacating the arbitrator’s decision and
erred in requiring a different arbitrator conduct the new hearing. For the reasons
set forth below, we affirm the trial court’s ruling and remand the case for further
proceedings.
ANALYSIS
First, it is important to note that we are being asked to review the
correctness of the trial judge’s finding that the arbitrator should not have denied the
requested continuance. We are not being asked to substitute our own conclusions
about what Mayeaux may be entitled to under the facts which form the basis of this
dispute. We are, instead, being asked to do what we as an appeallate court are
empowered to do, and that is to determine whether the arbitration proceeding was
fundamentally fair under our notions of due process. Our sister circuit issued an
opinion this year which sets forth a concise and cogent explanation of what we are
empowered and duty-bound to do in this instance, to wit:
In the absence of statutory or agreed to procedures, the arbitrator has broad discretion in conducting arbitration proceedings. Southern Tire v. Virtual Point Development, 00-2301, p. 6 (La.App. 4 Cir. 9/26/01), 798 So.2d 303,307. The appellate court’s function is to determine if the arbitration proceedings have been fundamentally fair. Id. Arbitration awards may not be overturned for errors of fact or law. Tower Hill Trading Co., Ltd v. Howard, Weil, Labouisse, Friedrichs, Inc., 96-463, p. 5 (La. App. 4 Cir. 1/22/97), 687 So.2d 1096, 1099.
2 However, this Court has made it clear that due process violations require a reviewing court to vacate the award. Johnson v. 1425 Dauphine, L.L.C., 10-793 (La.App. 4 Cir. 12/1/10), 52 So.3d 962, 968-69, writ denied, 11-01 (La.2/18/11), 57 SO.3d 334. See also Hennecke v. Canepa, 96-772, p. 3 (La.App. 4 Cir. 5/21/97), 700 So.2d 521, 522, writ denied, 97-1686 (la.10/3/97), 701 So.2d 210. ‘An arbitrator should be constantly vigilant of basic due process requirements, the first and foremost of which is the opportunity to present evidence and be heard.’ Pittman Construction Co., Inc. v. Charles Pittman, 96-1498, 96-1079, p. 13 (La.App. 4 Cir. 3/12/97), 691 So. 2d 268, 274. The four grounds [set forth in La.R.S. 9:4210] which require a reviewing court to vacate an arbitrator’s award are broad in scope and provide sufficient leeway to correct fundamental due process violations. Id.
Crescent Prop. Partners, LLC v. Am. Mfr. Mut. Ins. Co., et al., 13-661, p.3
(La.App. 4 Cir. 2/28/14) 134 So.3d 85, 89. (emphasis added).
Denying the continuance in this instance effectively denied Mayeaux the
right to fully present evidence by her expert witnesses. Forcing Mayeaux’s expert
witness to testify by telephone did not accord that witness the opportunity to hear
defendant’s witnesses so that Mayeaux’s expert might effectively rebut such
testimony. Thus, Mayeaux was placed at a disadvantage in presenting her
evidence. The trial judge, as a reviewing court in this instance, also has the
constitutional duty and authority to protect Mayeaux’s right to due process.
Neither the trial court nor this court are neutered by the decisions cited by
Defendant which purport to severely restrict the authority of the courts to review
arbitration awards. Neither statutory law nor jurisprudence restrict the authority of
the courts to determine whether the arbitration was fundamentally fair applying our
notions of due process of law.
Defendant cites General Motors Corp. v. Pamela Equities Corp., 146 F.3d
242 (5th Cir. 1998); Lakeland Anesthesia, Inc. v. United Healthcare of Louisiana,
Inc., 03-1662 (La. App.4 Cir. 3/17/04), 871 So.2d 380 and cases cited therein;
3 Superior Oil Co. v. Transco Energy Co., 616 F.Supp. 98 (W.D. La. 1985); and J.
Caldarera & Co. v. Louisiana Stadium and Exposition District, 98-294 (La.App. 5
Cir. 12/16/98), 725 So.2d 549, for the proposition that arbitration is highly favored
in Louisiana for dispute resolution and “all doubts should be resolved in favor of
the correctness of the subsequent arbitration decision.” These cases have no
application to the issue before us, i.e. whether Mayeaux was accorded fundamental
due process in the arbitration proceeding. Louisiana Revised Statute 9:4210 is
broad enough in scope to permit “sufficient leeway to correct fundamental due
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STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
13-1053
RITA MAYEAUX
VERSUS
SKYCO HOMES, ET AL.
**********
APPEAL FROM THE TWELFTH JUDICIAL DISTRICT COURT PARISH OF AVOYELLES, NO. 20127559 HONORABLE WILLIAM BENNETT, DISTRICT JUDGE
SYLVIA R. COOKS JUDGE
Court composed of Sylvia R. Cooks, John D. Saunders, and Elizabeth A. Pickett,
Judges.
Pickett, J. dissents.
AFFIRMED. REMANDED.
Fred A. Pharis Pharis & Pharis 831 DeSoto Street Alexandria, LA 71301 (318) 445-8266 COUNSEL FOR PLAINTIFF/APPELLEE: Rita Mayeaux Charles V. Richie Richie, Richie & Oberle, LLP P. O. Box 44065 Shreveport, LA 71134 (318) 222-8305 COUNSEL FOR DEFENDANT/APPELLANT: Skyco Corporation
Lamont P. Domingue Voorhies & Labbe P. O. Box 3527 Lafayette, LA 70502-3527 (337) 232-9700 COUNSEL FOR DEFENDANT/APPELLEE: CMH Manufacturing, Inc. d/b/a Schult Homes Corporation COOKS, J.
FACTS AND PROCEDURAL HISTORY
Rita Mayeaux (Mayeaux) sued Skyco Homes (Skyco) and CMH
Manufacturing, Inc. (CMH) to recover a reduction in the purchase price of a
double-wide manufactured home and for general damages, attorney fees, and costs
for alleged redhibitory defects. Mayeaux purchased the home for her daughter and
directed Skyco to deliver and assemble the home on a certain piece of property.
Mayeaux filed a supplemental and amended petition seeking recission of the sale
and maintained her claims for damages, attorney fees, and costs. Skyco and CMH
filed exceptions based upon a contractual provision requiring such matters between
the parties be arbitrated by the Better Business Bureau (BBB). The parties agreed
to a stipulated judgment which referred the dispute to arbitration by the BBB and
stayed the lawsuit pending a decision by the BBB.
Less than a week before the scheduled arbitration hearing Mayeaux asked
for a continuance because one of her expert witnesses could not attend on the date
set and another of her expert witnesses could only attend a portion of the scheduled
hearing. CMH did not oppose the continuance, but Skyco insisted on moving
forward. The BBB arbitrator denied the request for continuance on the basis that
the expert unable to attend could testify by telephone and the other expert could
appear to testify. The BBB arbitrator found Mayeaux did not establish any basis
for recovery against CMH; held Skyco liable for $3,000.00 in repairs to the home;
made each party responsible for their own attorney fees and costs; and stated the
decision is a full settlement of all claims submitted. Mayeaux’s request for a re- consideration was denied. CMH filed a Motion to Lift Stay and Confirm the
Arbitration Award in the trial court. Mayeaux, in response, filed a Motion to
Vacate or Modify the arbitration award. The trial court, after a hearing on the
matter, vacated the arbitration award, ordered the matter be resubmitted to the
BBB for arbitration with a different arbitrator, and taxed Skyco with all costs of
Mayeaux’s motion to vacate. Skyco appeals the trial court judgment.
Skyco asserts the trial court erred in vacating the arbitrator’s decision and
erred in requiring a different arbitrator conduct the new hearing. For the reasons
set forth below, we affirm the trial court’s ruling and remand the case for further
proceedings.
ANALYSIS
First, it is important to note that we are being asked to review the
correctness of the trial judge’s finding that the arbitrator should not have denied the
requested continuance. We are not being asked to substitute our own conclusions
about what Mayeaux may be entitled to under the facts which form the basis of this
dispute. We are, instead, being asked to do what we as an appeallate court are
empowered to do, and that is to determine whether the arbitration proceeding was
fundamentally fair under our notions of due process. Our sister circuit issued an
opinion this year which sets forth a concise and cogent explanation of what we are
empowered and duty-bound to do in this instance, to wit:
In the absence of statutory or agreed to procedures, the arbitrator has broad discretion in conducting arbitration proceedings. Southern Tire v. Virtual Point Development, 00-2301, p. 6 (La.App. 4 Cir. 9/26/01), 798 So.2d 303,307. The appellate court’s function is to determine if the arbitration proceedings have been fundamentally fair. Id. Arbitration awards may not be overturned for errors of fact or law. Tower Hill Trading Co., Ltd v. Howard, Weil, Labouisse, Friedrichs, Inc., 96-463, p. 5 (La. App. 4 Cir. 1/22/97), 687 So.2d 1096, 1099.
2 However, this Court has made it clear that due process violations require a reviewing court to vacate the award. Johnson v. 1425 Dauphine, L.L.C., 10-793 (La.App. 4 Cir. 12/1/10), 52 So.3d 962, 968-69, writ denied, 11-01 (La.2/18/11), 57 SO.3d 334. See also Hennecke v. Canepa, 96-772, p. 3 (La.App. 4 Cir. 5/21/97), 700 So.2d 521, 522, writ denied, 97-1686 (la.10/3/97), 701 So.2d 210. ‘An arbitrator should be constantly vigilant of basic due process requirements, the first and foremost of which is the opportunity to present evidence and be heard.’ Pittman Construction Co., Inc. v. Charles Pittman, 96-1498, 96-1079, p. 13 (La.App. 4 Cir. 3/12/97), 691 So. 2d 268, 274. The four grounds [set forth in La.R.S. 9:4210] which require a reviewing court to vacate an arbitrator’s award are broad in scope and provide sufficient leeway to correct fundamental due process violations. Id.
Crescent Prop. Partners, LLC v. Am. Mfr. Mut. Ins. Co., et al., 13-661, p.3
(La.App. 4 Cir. 2/28/14) 134 So.3d 85, 89. (emphasis added).
Denying the continuance in this instance effectively denied Mayeaux the
right to fully present evidence by her expert witnesses. Forcing Mayeaux’s expert
witness to testify by telephone did not accord that witness the opportunity to hear
defendant’s witnesses so that Mayeaux’s expert might effectively rebut such
testimony. Thus, Mayeaux was placed at a disadvantage in presenting her
evidence. The trial judge, as a reviewing court in this instance, also has the
constitutional duty and authority to protect Mayeaux’s right to due process.
Neither the trial court nor this court are neutered by the decisions cited by
Defendant which purport to severely restrict the authority of the courts to review
arbitration awards. Neither statutory law nor jurisprudence restrict the authority of
the courts to determine whether the arbitration was fundamentally fair applying our
notions of due process of law.
Defendant cites General Motors Corp. v. Pamela Equities Corp., 146 F.3d
242 (5th Cir. 1998); Lakeland Anesthesia, Inc. v. United Healthcare of Louisiana,
Inc., 03-1662 (La. App.4 Cir. 3/17/04), 871 So.2d 380 and cases cited therein;
3 Superior Oil Co. v. Transco Energy Co., 616 F.Supp. 98 (W.D. La. 1985); and J.
Caldarera & Co. v. Louisiana Stadium and Exposition District, 98-294 (La.App. 5
Cir. 12/16/98), 725 So.2d 549, for the proposition that arbitration is highly favored
in Louisiana for dispute resolution and “all doubts should be resolved in favor of
the correctness of the subsequent arbitration decision.” These cases have no
application to the issue before us, i.e. whether Mayeaux was accorded fundamental
due process in the arbitration proceeding. Louisiana Revised Statute 9:4210 is
broad enough in scope to permit “sufficient leeway to correct fundamental due
process violations.” Pittman, 691 So.2d at 274. Defendant also relies on language
in In Re Arbitration Between U.S. Turnkey Exploration, Inc. and PSI, Inc., 577
So.2d 1131 (1st Cir. 1991) in support of the arbitrator’s autonomy and restrictive
limitations on the courts when reviewing arbitrators’ decisions. Defendant
maintains that the cited jurisprudence allows arbitrators broad discretion to employ
“any reasonable procedure for conducting the arbitration proceedings.” Again, the
recited case law is not controlling in this matter as it is the province of the courts to
determine whether the actions of the arbitrator or the procedure employed by the
arbitrator accords the parties fundamental due process of law. The determination
of whether a party is accorded due process in arbitration proceedings is always the
province of the courts and there is no jurisprudence holding the contrary.
Defendant further asserts that “mere errors of law or fact are not sufficient to
vacate an [arbitrator’s] award,” citing National Tea Co. v. Richmond, 548 So.2d
930 (La.1989) and St. Tammany Manor, Inc. v. Spartan Building Corp., 509 So.2d
424 (La. 1987). We are not asked in this case to determine errors of law or fact,
but instead, to address the question of the trial court’s correctness in ruling that the
action of the arbitrator in this case effectively denied Mayeaux due process of law.
4 We find that the action of the arbitrator did deny Mayeaux fundamental due
process rights and therefore the proceeding was flawed. We agree with the trial
court’s finding that a decision reached by a flawed procedure cannot stand. We
agree also with the trial court’s solution to ensure that Mayeaux is accorded due
process as she proceeds with the arbitration. The trial judge found Mayeaux’s
right to due process was violated and believed it was necessary to have a different
arbitrator with the BBB hear the case anew. The contract providing for arbitration
of disputes merely calls for arbitration by the BBB, and nothing requires the matter
be heard by the same arbitrator who denied Mayeaux due process in the first
proceeding. We therefore affirm the trial court’s ruling and remand the case for
further proceedings. All costs of this proceeding are assessed against Skyco.