Cacheris v. Mayer Homes, Inc.

• Decision Date: 16 June 1998
• Docket Number: No. 72188,72188
• Citation: Cacheris v. Mayer Homes, Inc., 969 S.W.2d 876 (Mo. App. 1998)
• Parties: William P. CACHERIS, et al., Plaintiffs-Respondents, v. MAYER HOMES, INC., et al., Defendants-Appellants.
• Court: Missouri Court of Appeals

Page 876

969 S.W.2d 876

William P. CACHERIS, et al., Plaintiffs-Respondents, v. MAYER HOMES, INC., et al., Defendants-Appellants.

No. 72188.

Missouri Court of Appeals,

Eastern District,

Division Three.

June 16, 1998.

Devereux, Murphy, Striler, Brickey & Sher, L.L.C., Joseph F. Devereux, Jr., St. Louis, for defendants-appellants.

Matthew M. Moak, St. Louis, for plaintiffs-respondents.

KAROHL, Judge.

Mayer Homes, Inc. appeals from a trial court judgment confirming an arbitration award made by an arbitrator in a contract and warranty dispute involving contracts for purchase and sale of residences between homeowners and Mayer Homes.

Between January 1990 and January 1992, homeowners entered into sale and purchase contracts for new homes with Mayer Homes. The homes were built with M-21 insulated windows manufactured by The Jordan Companies (Jordan). Homeowners experienced difficulties with the windows. They experienced water leaking from the windows. During cold weather, water condensed on the windows and turned to ice preventing some of the windows from opening. Homeowners placed towels on the windowsills to soak up the water as the ice melted. The water leaks caused drywall stains.

Homeowners complained to Mayer Homes about the windows. Mayer Homes responded that the problem was disclaimed in its H.O.W. warranty. Homeowners received a H.O.W. warranty at the closing. It addresses "condensation and/or frost on windows" as a possible deficiency in a new home. It assigned responsibility for the deficiency to the homeowner unless directly attributed to faulty installation. The deficiency requires no corrective action to be taken by the builder. At closing, homeowners also received a five-year warranty from Jordan, the window manufacturer. The warranty covers "material obstruction of vision resulting from film formation or dust collection between the interior glass surface of insulating glass." The Jordan warranty did not cover condensation, ice build-up and melting problems.

On July 20, 1995, the first-time owners of nine homes built by Mayer Homes filed a seven-count petition against Mayer Homes, Michel Building Products, Inc. (Michel) and Jordan. Five of the counts were dismissed, leaving Count I, a breach of express warranty claim against Mayer Homes and Jordan, and Count VII, a breach of contract claim against Mayer Homes. Mayer Homes filed a motion to compel arbitration of the claims of homeowners, Cacheris, Chapin, Schroeder, Omohundro, Mahon and Clay. The trial court ordered arbitration. Additionally, it ordered homeowners, Lee, Naughton and Sieckman, to submit to non-binding arbitration. Jordan and Michel did not participate in the arbitration proceedings. The trial court stayed homeowners' claims against Jordan and Michel pending the outcome of the arbitration.

Homeowners proceeded under the theories of breach of contract and breach of the implied warranty of habitability. Homeowners' petition did not assert a cause of action for a breach of an implied warranty of habitability. However, both theories were submitted to the arbitrator. The only objection Mayer Homes made regarding the implied warranty of habitability was that the U.C.C. statute of limitations precluded the cause of action. Otherwise, Mayer Homes agreed to have the issue heard in the arbitration proceeding.

The arbitrator did not explain the basis of the award. The award merely provided for individual awards in favor of each of the homeowners. The award also assessed the fees and expenses of the arbitration, including the attorney's fees of homeowners, against Mayer Homes. The arbitrator denied Mayer Homes' motion for reconsideration. It then filed a motion to vacate with the trial court. The trial court, on the request of homeowners, denied that motion and confirmed the arbitration award. This appeal followed.

The purpose of arbitration is to afford the parties the opportunity to reach a final disposition of their differences in an easier, more expeditious manner than by litigation. Lorenzini v. Group Health Plan Inc., 753 S.W.2d 106, 107 (Mo.App.1988). To facilitate this purpose, judicial review of arbitration awards is limited. Id. Arbitration awards may be vacated only under limited circumstances. Section 435.405.1 RSMo 1994 ¹ provides that an award shall be vacated where:

(1) The award was procured by corruption, fraud or other undue means;

(2) There was evident partiality by an arbitrator appointed as a neutral or corruption in any of the arbitrators or misconduct prejudicing the rights of any party;

(3) The arbitrators exceeded their powers;

(4) The arbitrators refused to postpone the hearing upon sufficient cause being shown therefor or refused to hear evidence material to the controversy or otherwise so conducted the hearing, contrary to the provisions of section 435.370, as to prejudice substantially the rights of a party; or

(5) There was no arbitration agreement and the issue was not adversely determined in proceedings under section 435.355 and the party did not participate in the arbitration hearing without raising the objection;

but the fact that the relief was such that it could not or would not be granted by a court of law or equity is not grounds for vacating or refusing to confirm the award.

The party who requests vacation of the award has the burden of demonstrating its invalidity. R.L. Hulett & Co. v. Barth, 884 S.W.2d 309, 311 (Mo.App. E.D.1994).

In its first point, Mayer Homes argues the trial court erred by not vacating the award because the arbitrator refused to postpone the hearing for one day upon the showing of sufficient cause. Prior to the hearing, Mayer Homes filed a motion to lift stay and grant a continuance for one day with the trial court. Mayer Homes filed the motion because the law firm representing it switched lawyers on the case five days before commencement of the hearing. The newly assigned attorney had a personal conflict with the hearing date, and therefore, requested a one day continuance. The trial court denied the request. The attorney who originally represented Mayer Homes until five days before the scheduled hearing represented Mayer Homes during the arbitration. The newly assigned attorney never appeared on behalf of Mayer Homes during the arbitration.

Section 435.405.1(4) provides that "[u]pon application of a party, the court shall vacate an award where: (4)[t]he arbitrators refused to postpone the hearing upon sufficient cause being shown therefor ... as to prejudice substantially the rights of a party." We find Mayer Homes experienced no prejudice as a result of the denial of its motion to lift stay and grant a continuance. The attorney who represented Mayer Homes during this entire dispute also represented Mayer Homes at the arbitration proceedings. Mayer Homes misconstrues section 435.405.1(4) to mean that if good cause is shown, the trial court is compelled to grant the...