City of Hattiesburg v. Precision Constr., LLC

• Decision Date: 17 May 2016
• Docket Number: No. 2014–CA–01671–COA.,2014–CA–01671–COA.
• Citation: 192 So.3d 1089
• Parties: The CITY OF HATTIESBURG, Mississippi, Appellant v. PRECISION CONSTRUCTION, LLC, Appellee.
• Court: Mississippi Court of Appeals

192 So.3d 1089

The CITY OF HATTIESBURG, Mississippi, Appellant

v.PRECISION CONSTRUCTION, LLC, Appellee.

No. 2014–CA–01671–COA.

Court of Appeals of Mississippi.

May 17, 2016.

James W. Gladden Jr., attorney for appellant.

Mark D. Herbert, Jackson, Shannon Smutzer McFarland, attorneys for appellee.

Before GRIFFIS, P.J., ISHEE and WILSON, JJ.

WILSON

, J., for the Court:

¶ 1. The City of Hattiesburg and Precision Construction LLC entered into a construction contract for the replacement of water and sewage lines. Precision began work, but problems arose that delayed the project and caused Precision to incur additional expenses. Precision submitted change orders based on these issues, but the City refused payment. Precision then demanded arbitration pursuant to the parties' contract.

¶ 2. The case eventually proceeded to a two-day arbitration hearing that, by the parties' agreement, was not transcribed or otherwise recorded. After the hearing, the arbitrator awarded Precision $848,949.55 for the City's breach of contract and stated that he would also award attorneys' fees. The arbitrator subsequently entered a supplemental award of attorneys' fees. The City then filed a motion for reconsideration, which the arbitrator denied—in part because he deemed it untimely under Mississippi Code Annotated section 11–15–123

(Rev.2004). The City returned to circuit court and filed a motion to modify the arbitration award pursuant to Mississippi Code Annotated section 11–15–135 (Rev.2004). The circuit court denied this motion, concluding that there was no evident miscalculation in the arbitrator's award other than one miscalculation that Precision acknowledged. In the same order, the circuit court granted Precision's motion to confirm the award.

¶ 3. On appeal, the City argues that the arbitrator erred by denying its motion for reconsideration. The City also claims that the arbitration award in favor of Precision is based in part on evident miscalculations by the arbitrator. However, the City's first argument is waived because it was not raised in the circuit court. In addition, the record discloses no evident miscalculation by the arbitrator. Therefore, we affirm.

FACTS AND PROCEDURAL HISTORY

¶ 4. In January 2012, the City and Precision entered into a construction contract for Precision to replace water and sewage lines in the City. As the project progressed, Precision encountered unexpected site conditions, including unstable subsoils, environmental issues, and undisclosed old water lines that had to be removed. Precision also discovered that the City had failed to secure certain easements necessary for the work. The City's engineer initially encouraged Precision to devise solutions to these problems and to submit change orders based on these issues. However, the City later refused to make payments or take any other action responsive to the change orders; the City simply “held” the change orders. These issues caused significant delays, eventually brought the project to a standstill, and ultimately forced Precision to terminate the contract. Precision alleges that the City's handling of these issues breached the parties' contract in a number of respects.

¶ 5. On March 6, 2013, Precision served the City with a demand for arbitration pursuant to the parties' contract and Mississippi Code Annotated sections 11–15–101

and following, but the City did not respond. Precision then filed a complaint in the Forrest County Circuit Court on March 29, 2013. Precision alleged that the City had breached the parties' contract and sought an order compelling arbitration pursuant to the contract and the same provisions of the Mississippi Code.

¶ 6. The City answered the complaint and alleged that the parties' contract did not require arbitration,¹ but the circuit granted Precision's motion to compel arbitration, and the City did not appeal. The parties later submitted, and the court entered, an agreed order appointing Donald Dornan as the arbitrator. The parties also signed an arbitration agreement, which provided for the payment of the arbitrator's fees and stipulated “that the arbitration [would] be governed by rules set forth in the Mississippi Construction Arbitration Act,” codified in Mississippi Code Annotated sections 11–15–101

to –143 (Rev.2004).

¶ 7. The arbitration hearing was held on June 3 and 4, 2014. The parties apparently agreed that there would be no transcript or other record of the hearing.

¶ 8. On June 25, 2014, the parties reconvened for the arbitrator to announce his decision, which a court reporter transcribed. The arbitrator detailed each of the breaches of contract alleged by Precision and the City's defenses. In summary, he found that the City breached the contract in numerous respects and that Precision was entitled to recover damages of $843,929.55. The arbitrator noted that although the City had offered defenses to Precision's claims, the City's engineer “acknowledged in his testimony that [Precision] did perform the work and [was] entitled to be compensated for a number of the items that [were] in dispute in this case.” The arbitrator also found that the City's engineer's testimony on other issues was not credible. In addition, the arbitrator ruled that Precision should be awarded attorneys' fees pursuant to Mississippi Code Annotated section 11–15–119(4)

. He granted Precision one week to file a fee petition and the City a week thereafter to respond. The arbitrator issued a written award on July 2, 2014, that briefly summarized his oral ruling.

¶ 9. On July 24, 2014—after Precision filed its petition for attorneys' fees and the City responded—the arbitrator issued a supplemental decision awarding Precision attorneys' fees of $76,257.65 and requiring the City to pay $7,032.74 in arbitration fees.

¶ 10. On August 7, 2014, Precision filed a motion to confirm the arbitration award in the circuit court. On August 12, 2014, the City—which had retained new counsel following the arbitrator's initial decision—filed a motion for reconsideration with the arbitrator. In this motion, the City alleged multiple errors in the arbitrator's damages calculations. Precision also argued that the arbitrator's award of attorneys' fees was based in part on unreasonable or duplicative time entries.

¶ 11. On August 29, the arbitrator denied the City's motion to reconsider. The arbitrator ruled that the City's motion was untimely to the extent that it attacked his decision awarding damages for breach of contract because Mississippi Code Annotated section 11–15–123

required that such a motion be submitted within twenty days of the parties' receipt of that decision. Accordingly, the arbitrator declined to consider the merits of the City's arguments challenging his initial decision. The arbitrator also denied—on the merits—the City's request to reconsider his award of attorneys' fees.

¶ 12. The City then filed a motion in circuit court to amend, modify, and/or correct the arbitrator's decision. The City's arguments tracked those in the motion for reconsideration previously submitted to the arbitrator. The City sought amendment of the arbitration award pursuant to Mississippi Code Annotated section 11–15–135

.

¶ 13. Precision responded to the City's motion to amend and acknowledged one limited error in the arbitrator's calculation of lost profits related to the installation of thirty-inch pipe. Precision agreed that, based on this error, the arbitrator's award should be reduced by $63,250.74. However, Precision argued that the City failed to establish any other basis for amending or modifying the award pursuant to section 11–15–135

.

¶ 14. Following a hearing, the circuit court granted the City's motion to modify and correct the award only with respect to the $63,520.74 error that Precision had conceded. The court found no other evident miscalculation in the arbitrator's award and thus confirmed the award as modified. The circuit court subsequently entered judgment on the award in favor of Precision and against the City in the amount of $856,666.46 plus eight percent post-judgment interest. The City filed a timely appeal from the circuit court's judgment.

DISCUSSION

¶ 15. The City argues that the arbitrator erred by denying as untimely its motion for reconsideration. The City also argues that the arbitration award should be amended because the arbitrator's award of damages is based in part on evident and material miscalculations. The City waived the first argument by failing to present it to the circuit court. The City's remaining arguments fail to demonstrate any evident miscalculation by the arbitrator and, thus, provide no basis to modify the arbitrator's award. Accordingly, we affirm.

I. Motion to Reconsider

¶ 16. Mississippi Code Annotated section 11–15–123

provides that a party may request reconsideration of an arbitration award if the request is submitted to the arbitrator “within twenty (20) days of the receipt of the award.” In this case, the City requested reconsideration more than twenty days after the arbitrator's written award awarding damages for breach of contract—but less than twenty days after the arbitrator's supplemental award of attorneys' fees. The arbitrator ruled that the City's motion was untimely insofar as it challenged his award of damages—and timely only to the extent that it challenged his supplemental award of attorneys' fees. The City argues that the arbitrator erred by refusing to consider all issues raised in its motion for reconsideration. The City contends that the initial award was interlocutory and that the statutory twenty-day period only commenced when the arbitrator entered a final award.

¶ 17. However, the City did not mention this issue in any motion or response that it filed in the circuit court. At the hearing in the circuit court on the City's motion to amend, modify, and/or correct the arbitration award, counsel for the City did mention the issue briefly in passing, but he immediately indicated that he was not asking the...