Bingham County Com'n v. Interstate Elec. Co., a Div. of the L.E. Myers Co.

• Citation: 105 Idaho 36,665 P.2d 1046
• Decision Date: 22 June 1983
• Docket Number: No. 14177,14177
• Parties: BINGHAM COUNTY COMMISSION, Plaintiff-respondent, Cross-appellant, v. INTERSTATE ELECTRIC COMPANY, A DIVISION OF THE L.E. MYERS CO., Defendant-appellant, Cross-respondent.
• Court: Idaho Supreme Court

Page 1046

665 P.2d 1046

105 Idaho 36

BINGHAM COUNTY COMMISSION, Plaintiff-respondent, Cross-appellant, v. INTERSTATE ELECTRIC COMPANY, A DIVISION OF THE L.E. MYERS CO., Defendant-appellant, Cross-respondent.

No. 14177.

Supreme Court of Idaho.

June 22, 1983.

Robert M. Anderson of Berman & Anderson, Salt Lake City, Utah, David R. Gallafent of Merrill & Merrill, Pocatello, for defendant-appellant, cross-respondent.

Stephen Roth of Snow, Christensen & Martineau, Salt Lake City, Utah, Jay H. Stout of Stout & Moss, Blackfoot, for plaintiff-respondent, cross-appellant.

BAKES, Justice.

The major question presented in this appeal is whether a county can agree to submit a disputed claim to binding arbitration without violating the claims procedures mandated by I.C. § 31-1501 et seq. Also presented are questions concerning the scope of review of an arbitration award, and the power of an arbitrator to award attorney fees. We reverse in part and affirm in part.

In 1976, Bingham County, in anticipation of a needed remodeling and expansion of Bingham Memorial Hospital, retained as its consultant the architectural firm, Design West. Design West in turn advised Bingham County to hire Christiansen Bros., a contracting firm, as construction manager for the project. This arrangement resulted in Bingham County acting as its own contractor, with Christiansen Bros. acting as its manager.

The defendant respondent Interstate Electric Co. (I.E.C.) contracted with the Bingham County Commission to provide all electrical work on Phase II of the project. The bid accepted by the county was for $560,000. No projected completion date had been set by the county before the bids were entered. A contract was signed on April 15, 1977, and provided that I.E.C. would begin work as of that day, and the project would be completed by September 1, 1978. The contract was a standard AIA form supplied by the architectural firm, Design West.

I.E.C. actually began work on the project in June of 1977. Work progressed slowly. I.E.C. asserted that this delay occurred because it could not complete its work until other parts of the construction were completed. Other problems developed, causing confusion and disorganization. The result, according to I.E.C., was delay and inefficient use of the work force, resulting in cost overruns and increases. The completion date was extended to December 4, 1978. However, work on the project was not actually completed until late 1979.

Bingham County alleged that they had done everything in their power to keep the job moving, but that delays were caused by other contractors, delay in material delivery, the complexity of the job, and by I.E.C. itself. I.E.C. complained several times. Several letters are included in the record as exhibits, dated October 20, 1977; March 16, 1978; September 25, 1978; and January 15, 1979, requesting change orders to cover cost overruns. No change orders were ever issued. On March 9, 1979, I.E.C. wrote to the Bingham County Commission, stating its claim for damages and requesting a meeting. At that meeting, with all parties and their attorneys present, I.E.C. presented a claim for additional compensation for the overruns. The commission met privately to discuss the claim, then notified I.E.C. that its claim was denied.

I.E.C. then sought binding arbitration pursuant to the construction contract. ¹ Arbitration hearings were conducted in November of 1979. Bingham County participated without objection in the arbitration proceeding. I.E.C. presented evidence indicating that its cost overruns were due to delays caused by Bingham County. Bingham County claimed the delay was due to factors beyond their control, that the delays were reasonable, but that in any event I.E.C. had not been damaged by the delays. On February 9, 1980, the arbitrator awarded I.E.C. $100,000 plus various fees and expenses.

On May 9, 1980, Bingham County filed a motion in district court seeking to vacate the arbitration award pursuant to I.C. §§ 7-901 et seq., the Uniform Arbitration Act. The only ground for vacating the award stated in the motion was, "In making the award the arbitrator exceeded his powers under the contract between the parties." On June 6, 1980, I.E.C. responded to Bingham County's motion and filed their own motion asking the district court to confirm the award.

On September 19, 1980, Bingham County moved to amend its motion to add an additional ground, that the arbitrator was biased. I.E.C. argued this motion was not timely since it was not filed within the 90-day limit prescribed by I.C. § 7-912(b). The district court agreed with I.E.C. and denied leave to amend.

At the hearing on the motion to confirm the award on January 5, 1981, Bingham County orally asserted another ground for vacating the award. It argued that the Board of County Commissioners was barred by Idaho law from submitting a claim against a county to arbitration because it would circumvent the taxpayer appeal procedure provided in I.C. §§ 31-1501 et seq. I.E.C., on the other hand, argued that the oral motion was not timely, but in any event not a proper ground for vacating the award. The district court, on April 7, 1981, while indicating it would otherwise confirm the award of arbitration in a normal case, agreed that the Bingham County Commission was not entitled under Idaho law to submit a county claim to arbitration and vacated the arbitration award. Appellant I.E.C. appeals from that ruling. Respondent Bingham County also appeals from the district court's ruling that, were it not for Bingham County's inability to submit to arbitration, the award must be confirmed.

I

Appellant asserts that Bingham County's oral motion to vacate the arbitration award was untimely because not asserted within ninety days after delivery of the award. I.C. § 7-912(b), a part of the Uniform Arbitration Act, in referring to motions to vacate arbitration awards, provides:

"An application under this section shall be made within ninety (90) days after delivery of a copy of the award to the applicant, except that, if predicated upon corruption, fraud or other undue means, it shall be made within ninety (90) days after such grounds are known or should have been known."

A party seeking to vacate an arbitration award must meet this statutory requirement. Cases decided under the Uniform Arbitration Act ² make it clear that this statutory time limitation is strictly construed and must be complied with before a court can vacate any award. See Chauffeurs, Teamsters, Warehousemen and Helpers, Local Union No. 135 v. Jefferson Trucking Co., 628 F.2d 1023 (7th Cir.1980), cert. den. 449 U.S. 1125, 101 S.Ct. 942, 67 L.Ed.2d 111; Gasworkers Local No. 80 v. Michigan Consolidated Gas Co., 503 F.Supp. 155 (D.C.Mich.1980); Mid-America Regional Bargaining Ass'n v. Modern Builders Industrial Concrete Co., 101 Ill.App.3d 83, 56 Ill.Dec. 606, 427 N.E.2d 1011 (1981); Cutler Ass'n v. Merrill Trust Co., 395 A.2d 453 (Me.1978); Hatch v. Double Circle Ranch, 22 Ariz.App. 124, 524 P.2d 958 (1974). This is true even if the party seeking to vacate the award asserts a valid ground under the act. State Dept. of Administration v. Sightes, 416 N.E.2d 445 (Ind.App.1981). A court cannot extend this ninety day period. Schroud v. Van C. Argiris & Co., 78 Ill.App.3d 1092, 34 Ill.Dec. 428, 398 N.E.2d 103 (1979). Because the time limit under the act is strictly construed, failure to comply with that time limit raises an absolute bar to a motion to vacate.

The record shows that the arbitrator issued his decision on February 9, 1980. Bingham County did not raise the ground asserted here until January 5, 1981. This was nearly eleven months after the arbitrator's decision. Bingham County thus did not comply with the ninety day limitation imposed under the Uniform Arbitration Act in asserting its ultra vires ground for vacation of the award. Its oral motion, based on this ground, was untimely and should have been denied by the trial court.

The district court also erred in vacating the award on the ground asserted by Bingham County. Essentially, Bingham County argued that the county commission's action in submitting this claim to arbitration was an act beyond its power and thus void and of no effect. The district court agreed with Bingham County, holding:

"[O]nly the board of county commissioners can allow a claim, and if allowed, a taxpayer may appeal, and the district court has exclusive jurisdiction to determine the merits of the claim; if disallowed, the claimant may sue the county again exclusively in the district court. There is no room for binding arbitration, whether it stems from a provision in a construction contract, or is simply referred to binding arbitration as a whim of the commissioners."

In making its determination, the district court relied on an 1897 decision of the Indiana Supreme Court. Myers v. Gibson, 147 Ind. 452, 46 N.E. 914 (1897). Myers is the only case called to our attention holding that a statutory claim and taxpayer appeal process prevent a county commission from submitting a claim to binding arbitration. In Myers a taxpayer sought to overturn the decision of a board of county commissioners to pay an arbitration award. The taxpayer argued that the county commissioners lacked the power to submit a claim to arbitration. The court ruled for the taxpayer, and vacated the award.

The Myers decision was based on premises not applicable to Idaho law. The Myers court held:

"The boards of commissioners have no powers except such as are expressly or impliedly given by statute. Their powers are limited, and must be exercised in the manner provided by statute .... The power exercised by the board of commissioners in this case is not expressly given by statute, but on the contrary, is at least impliedly denied." ³

Despite that 1897 ruling in Indiana, it is now a well settled rule that in the absence of a statutory prohibition to the contrary, a county has the power to...