Griffith Co. v. San Diego College for Women

• Citation: 45 Cal.2d 501,289 P.2d 476,47 A.L.R.2d 1349
• Court: United States State Supreme Court (California)
• Decision Date: 10 November 1955
• Parties: , 47 A.L.R.2d 1349 GRIFFITH COMPANY, a corporation, Plaintiff and Appellant, v. SAN DIEGO COLLEGE FOR WOMEN, a corporation, Defendant and Respondent. L. A. 23725.

Page 476

289 P.2d 476

45 Cal.2d 501, 47 A.L.R.2d 1349

GRIFFITH COMPANY, a corporation, Plaintiff and Appellant, v. SAN DIEGO COLLEGE FOR WOMEN, a corporation, Defendant and Respondent.

L. A. 23725.

Supreme Court of California, In Bank.

Nov. 10, 1955.

Rehearing Denied Dec. 8, 1955.

Gibson, Dunn & Crutcher, Ira C. Powers and Richard L. Wells, Los Angeles, for appellant.

Bodkin, Breslin & Luddy, Los Angeles, Martin & Mahedy and O'Neill P. Martin, San Diego, for respondent.

Joseph Scott, Los Angeles, as amicus curiae on behalf of respondent.

CARTER, Justice.

A rehearing was granted in this case so that plaintiff's supplemental reply brief might be considered by this court. We have examined said brief and find nothing therein which compels any change in our decision as heretofore filed.

Plaintiff Griffith Company appeals from an order denying its motion to vacate an arbitrators' award and from a judgment entered on an order confirming the award in favor of defendant college.

A construction contract entered into between the parties provided for the erection of certain college buildings for defendant by plaintiff on a cost plus and maximum price basis. The contract provided that all disputes subject to arbitration should be settled by arbitration under the 'Standard Form of Arbitration Procedure of the American Institute of Architects.' The work was delayed beyond the date set for substantial completion and a dispute arose. Plaintiff demanded arbitration and eventually an arbitration panel was agreed upon: Mr. McKittrick, a contractor, was named by the plaintiff; Mr. J. Howard Ziemann, an attorney, was named by the defendant; and the two nominees selected the third, Paul B. Young, as chairman. After several hearings at which evidence and briefs were considered Mr. Young, as chairman, with Mr. Ziemann concurring, agreed on an award in defendant's favor. Mr. McKittrick dissented in a written opinion in which he (among other things) accused Mr. Young of not having arrived at his decision by his own independent though but through the work of an 'outside attorney,' or, in other words, of misconduct sufficient to justify setting aside the award. Mr. McKittrick's affidavit, as well as those of Mr. Young and Mr. Ziemann are on file.

We said in Sapp v. Barenfeld, 34 Cal.2d 515, 523, 212 P.2d 233, 239, that 'Although an arbitrator cannot impeach the award by testifying to his fraud or misconduct, his testimony is admissible to show what matters were submitted for decision and were considered by the arbitrators.' This is, apparently, the general rule. In Commercial Arbitrations and Awards, by Sturges, it is said: 'While ordinarily an arbitrator may not testify to his own acts of mistake or misconduct any more than he may to those of the members of the arbitral board generally, to establish a cause sufficient to defeat or vacate an award, it has been held that the complaining party may take such testimony of an arbitrator when it implicates the other party in the alleged misconduct, partiality, bias or corrupt action.

'Again, in the case of a dissenting arbitrator, the award not being his, it is uniformly held that he may testify as to the bias, partiality or other misconduct of the arbitrators who rendered the award in question the same as any other witness.' (§ 365, p. 787.)

McKittrick, the dissenting arbitrator, by affidavit, stated that Mr. Young, prior to full discussion by the panel members, had submitted the matter to an unnamed attorney who had drafter an opinion; that Mr. Young, at a meeting, signed the original and gave it and a copy thereof to McKittrick; that Mr. Young and Mr. Ziemann desired then and there to make an award but because of Mr. McKittrick's opposition, agreed to a further meeting. At the next meeting, McKittrick moved, behalf of plaintiff, to reopen the proceedings to permit further testimony on the 'items of damage'; that the motion was denied. It is also claimed that Mr. Young and Mr. Ziemann did not sign the award in each other's presence; that the acknowledgment of Mr. Young's signature was made prior to the time he signed it; that the award was not delivered simultaneously to all arbitrators; that the award went outside the issues of the arbitration proceeding. It is also contended that Mr. Young was guilty of prejudicial misconduct in refusing to reopen the proceedings to permit additional testimony on the part of Mr. McKittrick.

Mr. Young's affidavit shows that he took his tentative written opinion to the meeting with him; that it was in a sealed envelope which was not opened until after four and one-half hours of discussion between the three of them. It was also averred that hearings had been held on May 20th, June 15th, June 22nd, June 23rd, June 24th, and July 13th, July 14th, July 15th, July 16th; that briefs were filed on the law and the facts. It is further stated that after hearing the evidence and considering the briefs, Mr. Young formed a tentative opinion of his own and that he then consulted an attorney with whom he had previously discussed the matter so that his opinion could be checked to determine that 'it was not grossly erroneous so far as the law was concerned'; that upon being advised by the attorney that his opinion was not erroneous, he dictated the tentative opinion to his secretary from his own notes; that he language thereof was his own except for the citations of legal authority which he had obtained from the attorney; and that 'said opinion and the award of the arbitrators were the result of affiant's own judgment and that of said J. Howard Ziemann.

'That during the course of the hearings affiant had informed both his fellow arbitrators that he intended to seek legal confirmation of whatever opinion he might arrive at, and no objection was made by either.'

Article 40 of the agreement between the parties provides that any dispute subject to arbitration shall be submitted to arbitration in accordance with the provisions of the Standard Form of Arbitration Procedure of The American Institute of Architects and the 'prevailing arbitration law.'

It is argued by plaintiff that Mr. Young's conduct in privately consulting an attorney constituted misconduct such as would justify vacating the award. In Sapp v. Barenfeld, supra, 34 Cal.2d 515, 521, 212 P.2d 233, 238, substantially the same point was raised. We said there: '(T)he arbitrators, to determine the amount of the award, consulted ex parte with C. L. Weeks, a skilled cost appraiser, for an estimate of the labor and material cost of remedying the defects. They checked his estimate with several building supply firms and adopted it in making their award after this independent investigation. The award was the result of the arbitrators' own judgment, based, however, on information acquired in this manner.

'There is no error in such procedure. Although a hearing is required on disputed questions of fact, arbitrators may inform themselves further by privately consulting price lists, examining materials and receiving cost estimates. Sturges, Commercial Arbitrations and Awards, § 217, p. 495. This procedure may be ex parte, without notice or hearing to the parties, for 'it is entirely proper for arbitrators, in a case requiring it, to obtain from disinterested persons of acknowledged skill such information and advice in reference to technical questions submitted to them, as may be necessary to enable them to come to correct conclusions, provided that the award is the result of their own judgment after obtaining such information.' 1 Mechem, Agency, § 310, p. 229; City of Omaha v. Omaha Water Co., 218 U.S. 180, 198, 30 S.Ct. 615, 54 L.Ed. 991; California Annual Conf. of M. E. Church v. Seitz, 74 Cal. 287, 295, 15 P. 839; Dore v. Southern Pac. Co., 163 Cal. 182, 189, 124 P. 817; Simons v. Mills, 80 Cal. 118, 120, 22 P. 25; Foster v. Carr, 135 Cal. 83, 86, 67 P. 43; Rives-Strong Bldg., Inc., v. Bank of America, 50 Cal.App.2d 810, 814-817, 123 P.2d 942; Gord v. F. S. Harmon & Co., 188 Wash. 134, 140, 61 P.2d 1294; Liggett v. Torrington Bldg. Co., 114 Conn. 425, 432, 158 A. 917; Koepke v. E. Liethen Grain Co., 205 Wis. 75, 77, 236 N.W. 544; Twin Lakes Reservoir & Canal Co. v. Platt Rogers, Inc., 112 Colo. 155, 147 P.2d 828; City of Bangor Savings Bank v. Niagara Fire Ins. Co., 85 Me. 68, 76-77, 26 A.991, 20 L.R.A. 650, 35 Am.St.Rep. 341. It is immaterial whether the subject of the appraisal is the only matter in dispute or is part of a broader submission. Gord v. F. S. Harmon & Co., supra; Hegeburg v. New England Fish Co., 7 Wash.2d 509, 110 P.2d 182; Bangor Savings Bank v. Niagara Fire Ins. Co., supra; Sturges, supra, § 217, pp. 495-498.' See, also, Sampson Motors, Inc., v. Roland, 121 Cal.App.2d 491, 494, 263 P.2d 445.

In view of the foregoing, there appears to be no good reason why Mr. Young should not have talked the matter over with an attorney to check his legal conclusions. There was no showing made by plaintiff that the attorney was not a disinterested person. We made no requirement in the Sapp case that all arbitrators must act as a body when seeking independent advice and it would appear that such a requirement would be unnecessarily burdensome and could lead to absurd results. the conclusion of the trial court in refusing to vacate the award is an implied finding that he believed the affidavit of Mr. Young wherein it was stated that his opinion was reached through his own independent thought and was not that of any other person. 'An appellate court will not disturb the implied findings of fact made by a trial court in support of an order, any more than it will interfere with express findings upon which a final judgment is predicated. When the evidence is conflicting, it will be presumed that the court found every fact necessary to support its order that the evidence would justify. So far as it has passed on the weight of evidence or the credibility of witnesses, its implied findings are conclusive. ...