Board of County Comr's of Neosho County ex rel. Bd. of Trustees, Neosho Memorial Hosp. v. Central Air Conditioning Co., Inc.
| Citation | 683 P.2d 1282,235 Kan. 977 |
| Decision Date | 13 July 1984 |
| Docket Number | No. 56271,56271 |
| Parties | BOARD OF COUNTY COMMISSIONERS OF NEOSHO COUNTY ex rel., BOARD OF TRUSTEES, NEOSHO MEMORIAL HOSPITAL, Appellees, v. CENTRAL AIR CONDITIONING COMPANY, INC., et al., Appellants. |
| Court | Kansas Supreme Court |
Syllabus by the Court
1. When a statute conflicts with the common law, the statute controls.
2. The legislature may change the principle of the common law and abrogate decisions made thereunder when in its opinion it is necessary to the public interest.
3. The common law rule was that if a member of a board of arbitrators died prior to the conclusion of the hearings in front of the board and before the arbitrators deliberated, then the remaining board members had no authority to continue hearings and render an award. K.S.A. 5-405(c), however, specifically provides that where an arbitrator ceases to act, the remaining neutral arbitrators "may continue with the hearing and determination of the controversy." That statute, as far as applicable, clearly modifies the common law rule and is now controlling in this state.
4. In an appeal from an order confirming the award of arbitrators, it is held: Under the facts of this case, after one of three members of an arbitration panel died, the two remaining neutral arbitrators were authorized by contract and by law to continue with the hearing and determine the controversy, and the trial court did not err in confirming the award.
Stewart L. Entz of Colmery, McClure, Letourneau, Entz & Merriam, P.A., Topeka, argued the cause and was on the brief for appellants.
Louis F. Eisenbarth and Ruth E. Graham of Sloan, Listrom, Eisenbarth, Sloan & Glassman, Topeka, argued the cause and were on the brief for appellees.
This is an appeal by B.B. Andersen Construction Company, Inc. (Andersen), the general contractor on a construction project, from an order of the Neosho County District Court confirming an arbitrators' award. The appellee is the Board of County Commissioners of Neosho County, Kansas, acting for and on relation of the Board of Trustees of the Neosho Memorial Hospital. The issue to be determined is whether the death of one of three neutral arbitrators, after the conclusion of evidentiary hearings but before closing arguments and deliberations, destroyed the panel's power to make a valid award.
The parties are in substantial agreement as to the facts. A dispute arose between the hospital, the general contractor (Andersen), and the architect during the progress of a construction and remodeling project. The hospital had separate contracts with the contractor and the architect, both of which contained arbitration clauses. Since the parties could not or did not settle their differences, this action was commenced. The district court compelled the parties to arbitrate. The parties eventually selected a panel of three neutral arbitrators--Herbert A. Marshall of Topeka and A. J. Wachter of Pittsburg, both lawyers, and Max Snodgrass, a Wichita contractor--from lists of proposed arbitrators supplied by the American Arbitration Association. The parties and the arbitrators proceeded with and participated in thirty-four days of hearings, from February 1982 to January 1983. We are advised that a number of lay and expert witnesses testified; the record consists of some thirty-five volumes of transcripts plus depositions, and over 1,000 exhibits; and the cost of the arbitration proceedings to one of the parties alone is in the neighborhood of $300,000. In January 1983 the record was closed, and closing arguments were scheduled in early March. Unfortunately, arbitrator Max Snodgrass died on March 1, before closing arguments and deliberations. Andersen objected to a continuation of the arbitration. It filed suit in Shawnee County District Court for the appointment of a substitute arbitrator, for the appointment of an entirely new panel of arbitrators, or for an injunction. That court refused to exercise jurisdiction in view of the pending Neosho County action. Closing arguments were then made to the two remaining arbitrators. Briefs were submitted and the two remaining members of the panel reached their decision. The award favored the hospital. Andersen filed a motion to vacate the award, pursuant to K.S.A. 5-412 and 5-415, and the hospital filed a motion to approve the award of the arbitrators. After hearing, the trial court denied the motion to vacate and confirmed the award. Andersen appeals. The architect did not challenge the award of the arbitrators and is not a party to this appeal.
The contract between the hospital and Andersen contained the following provision relating to arbitration:
The Construction Industry Arbitration Rules of the American Arbitration Association read in part as follows:
K.S.A. 5-405, a part of the Kansas Uniform Arbitration Act, reads in part as follows:
The parties are in agreement that the arbitration panel with which we are here concerned was made up of neutral arbitrators, persons selected from lists of proposed arbitrators supplied by the American Arbitration Association. The parties did not each appoint an arbitrator, with the selection of an additional arbitrator or arbitrators left up to those so appointed; the three neutral arbitrators constituted the panel agreed upon by the parties.
Section 20 of the Construction Industry Arbitration Rules became part of the agreement between the contracting parties. That section specifically authorizes the remaining arbitrator or arbitrators to continue the hearing in the event of a vacancy in the panel, unless the parties agree otherwise. In this case, the parties did not agree otherwise, and the two remaining neutral arbitrators continued with the matter and determined the controversy. The parties here had agreed by their contract that if any one or two of the neutral arbitrators resigned, died, withdrew, or was otherwise unable to continue with the performance of his duties, the remaining neutral arbitrator or arbitrators could continue with the hearing and determine the controversy.
The trial court's decision was based solely upon the application of section 20 to this case. Andersen argues that section 20 is ambiguous because it states that "[v]acancies shall be filled in accordance with the applicable provision of these Rules," but that there are no applicable...
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