Hilton Const. Co., Inc. v. Martin Mechanical Contractors, Inc.
| Decision Date | 03 February 1983 |
| Docket Number | No. 64968,64968 |
| Citation | 166 Ga.App. 40,303 S.E.2d 119 |
| Parties | HILTON CONSTRUCTION COMPANY, INC. v. MARTIN MECHANICAL CONTRACTORS, INC. |
| Court | Georgia Court of Appeals |
David W. Porter, David A. Rabin, Atlanta, for appellant.
Robert D. Marshall, Atlanta, for appellee.
The appellant filed in the lower court a petition to vacate an arbitration award under the Federal Arbitration Act, 9 U.S.C.A. § 1 et seq. The petition alleged that under Section 10 of that Act (9 U.S.C.A. § 10) upon a proper showing being made, a court may enter an order vacating an arbitration award. The appellee answered, denying the material allegations of the complaint, and by way of counterclaim asserting it was entitled to a judgment confirming the award.
Both sides moved for summary judgment. After discovery, the filing of briefs and a hearing pursuant thereto, the trial judge entered an order denying the appellant's motion for summary judgment and granting appellee's motion, thereby refusing to vacate the arbitration award and instead confirming such award. Appeal was taken to this court. Held:
1. The threshold question in the case sub judice concerns the applicability of the Federal Arbitration Act, Section 10. That section reads:
There is no question that Georgia courts have dealt with the Federal Arbitration Act. See West Point-Pepperell v. Multi-Line Indus., 231 Ga. 329, 201 S.E.2d 452; Paine, Webber, etc., Inc. v. McNeal, 143 Ga.App. 579, 239 S.E.2d 401; Tasco Indus. v. Fibers & Fabrics of Ga., 162 Ga.App. 593, 292 S.E.2d 439. This results because jurisdictional grounds are basically the same for arbitration proceedings as other cases.
Title 9 U.S.C.A. does not provide an independent source of federal jurisdiction. Subject matter jurisdiction must exist through source other than this title, such as diversity of citizenship or a federal question. Hamilton Life Ins. Co. of New York v. Republic Nat. Life Ins. Co., 291 F.Supp. 225 affirmed in 408 F.2d 606; Litton RCS, Inc. v. Penn. Turnpike Comm., 376 F.Supp. 579 affirmed in 511 F.2d 1394; Commercial Metals Co. v. Balfour, Guthrie & Co., 577 F.2d 264.
Section 3 and Section 9 (U.S.C.A. §§ 3 and 9) have been considered by state courts and their language clearly refers to both state and federal courts. Section 3 reads: "If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, ... shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, ...." 9 U.S.C.A. § 3. Section 9 reads: 9 U.S.C.A. § 9.
Both sides have therefore insisted that we must construe and apply Section 10--each, of course, taking different and opposing positions as to how we should construe and apply it as well as how we should interpret the contract which provided for arbitration. What this glosses over is the express language of Section 10 which we reiterate for emphasis. "In either of the following cases the United States court in and for the district wherein the award was made may make an order vacating the award upon the application of any party to the arbitration--(a) Where the award was procured by corruption, fraud, or undue means...." (Emphasis supplied.)
There is no provision for a state court to set aside an arbitration award for the reasons provided therein. It is clear from a reading of the entire Act that where the enactors intended for both state and federal courts to apply the Act it was so provided. Therefore, the limiting language in Section 10 unequivocably means that only a "United States court in and for the district wherein the award was made may make an Although the trial judge in refusing to vacate the award treated the merits of such issue, his judgment was correct for the reason we have outlined.
order vacating the award" for the reasons therein specified. If Congress intended otherwise why was not language utilized such as that found in Section 3?
2. Having found the award could not be vacated by the Clarke Superior Court, we now consider the judge's authority to confirm the award.
Section 9 of the Arbitration Act provides that the contracting parties may specify a court where the award may be confirmed or in lieu thereof "application may be made to the United States court in and for the district within which such award was made...."
The contract in this case recited: "... The award rendered by the arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof." The contract did not specify what court but by use of the language "any court" obviously included state courts. Therefore, the Clarke Superior Court could confirm the award and since the award had not been vacated, modified or corrected under Section 10 or 11, the trial court was required to grant confirmation under Section 9.
Judgment affirmed.
I agree that the judgment of the trial court should be affirmed. However, I cannot join the majority in the reasoning it utilizes to arrive at that conclusion. The majority correctly states that there is no independent source of federal jurisdiction over arbitration proceedings under the Federal Arbitration Act and that "[s]ubject matter jurisdiction must exist through source other than [Title 9 U.S.C.A.], such as diversity of citizenship or a federal question." It appears that there was no such independent basis of federal jurisdiction in this case and that the proceeding was properly brought in the Superior Court of Clarke County. However, I cannot embrace the majority's construction of the relevant portions of Title 9 U.S.C.A. so as to hold that a state court otherwise having jurisdiction over the proceeding has authority to affirm but not to vacate an award of an arbitrator. I see absolutely no difference in meaning of the words "in any of the courts of the United States ..." as used in Section 3 and the import of "United States court in and for the district wherein the award was made ..." as utilized in Section 10. Since under the circumstances of this case, the Superior Court of Clarke County had jurisdiction over this proceeding, it could take any action which could be taken by a federal court having jurisdiction over the case.
Therefore, the trial court was correct in reaching and ruling upon the merits and, in reviewing this case, we must determine the correctness of that ruling. The essence of this case is that appellants contend that either appellee herein, Martin Mechanical Contractors, Inc., or another subcontractor, Stephenson Associates, Inc., was responsible for certain defects in the work under their respective subcontracts. Appellee instituted arbitration proceedings with appellants. Appellants repeatedly requested of the arbitrator that Stephenson be made a party to the arbitration. However, at no time prior to the award, did appellants demand arbitration as to Stephenson or seek any judicial direction. Stephenson was never a party to the arbitration between appellants and appellee and is not a party to this proceeding. In fact, appellants did not file a demand for arbitration as to Stephenson until five months after the award. Although the trial court opined that had appellants instituted arbitration vis-a-vis Stephenson, a motion to consolidate at that time and before an award may have been appropriate, the trial court further concluded that the record showed that the arbitrator had no power or authority to compel joinder of Stephenson and that, therefore,
there was no abuse of the arbitrator's power which would justify vacation of the award. I believe that the trial court was correct and that its judgment should be affirmed.
The movant argues that the Federal Arbitration Act must be applied in its entirety. The Georgia cases do not so hold.
The two cases, which are cited by movant and were cited in the opinion, deal with the principle that state policy must yield to the express command of federal law where interstate commerce is involved, not that the Federal Arbitration Act has been engrafted into the state law by command of Congress. Indeed, as we shall see, this is diametrically opposed to...
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...section 10, the state court had jurisdiction to hear those matters. The appellants cite to us Hilton Construction Co. v. Martin Mechanical Contractors, Inc., 166 Ga.App. 40, 303 S.E.2d 119, aff'd, 251 Ga. 701, 308 S.E.2d 830 (1983). The posture of the case before the appellate court in Hilt......
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