Hilton Const. Co., Inc. v. Martin Mechanical Contractors, Inc., 64968

• Court: United States Court of Appeals (Georgia)
• Citation: 166 Ga.App. 40,303 S.E.2d 119
• Docket Number: No. 64968,64968
• Parties: HILTON CONSTRUCTION COMPANY, INC. v. MARTIN MECHANICAL CONTRACTORS, INC.
• Decision Date: 03 February 1983

Page 119

303 S.E.2d 119 166 Ga.App. 40 HILTON CONSTRUCTION COMPANY, INC.
v.
MARTIN MECHANICAL CONTRACTORS, INC. No. 64968. Court of Appeals of Georgia. February 3, 1983.
Rehearing Denied March 29, 1983.

[166 Ga.App. 43] David W. Porter, David A. Rabin, Atlanta, for appellant.

Robert D. Marshall, Atlanta, for appellee.

[166 Ga.App. 40] QUILLIAN, Presiding Judge.

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 [166 Ga.App. 41] 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:

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1. The threshold question in the case sub judice concerns the applicability of the Federal Arbitration Act, specifically Section 10. That section reads: "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. (b) Where there was evident partiality or corruption in the arbitrators, or either of them. (c) Where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced. (d) Where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made."

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. [166 Ga.App. 42] Section 9 reads: "If the parties in their agreement have agreed that a judgment of the court shall be entered upon the award made pursuant to the arbitration, and shall specify the court, then at any time within one year after the award is made any party to the arbitration may apply to the court so specified for an order confirming the award, and thereupon the court must grant such an order unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of this title. If no court is specified in the agreement of the parties, then such application may be made to the United States court in and for the district within which such award was made...." 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

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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?

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.

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...