Kauffman v. Haas
| Decision Date | 04 May 1982 |
| Docket Number | Docket No. 53994 |
| Citation | 113 Mich.App. 816,318 N.W.2d 572 |
| Parties | C. William KAUFFMAN and Carol A. Kauffman, Plaintiffs-Appellants, v. Francis W. HAAS, Defendant-Appellee. 113 Mich.App. 816, 318 N.W.2d 572 |
| Court | Court of Appeal of Michigan — District of US |
[113 MICHAPP 816] Philip Green, Ann Arbor, for plaintiffs-appellants.
Conlin, Conlin & McKenney by Michael D. Highfield, Ann Arbor, for defendant-appellee.
Before V. J. BRENNAN, P. J., and ALLEN and T. C. MEGARGLE, * JJ.
[113 MICHAPP 817] MEGARGLE, Judge.
Appellants filed an application to vacate an arbitration award. The cause was heard on September 11, 1980. On September 15, 1980, the Circuit Court granted respondent's motion to enter judgment on the award. Appellants filed an appeal as of right on October 3, 1980, and the appellant has moved this Court to affirm.
On July 27, 1978, appellants and respondent entered into a contract for construction of a $166,000 house by the respondent for the appellants. On January 27, 1979, the date on which the house was to have been completed, the house was less than 35% completed. A substantial portion of the work that had been performed by the respondent was ruined due to his failure to protect the partially completed structure from the elements and his failure to comply with the contractor's specifications.
In February, 1979, the appellants learned that respondent had forged the signature of a subcontractor on a lien waiver, submitted the waiver to the bank holding the funds under the construction loan, and failed to turn over the funds to the subcontractor.
On March 9, 1979, the appellants terminated the contract with the respondent. On June 1, 1979, the respondent filed a claim for $54,000 with the American Arbitration Association in accordance with the terms of the contract.
On June 20, 1979, the appellants filed an answer and a counterclaim for $60,000.
A list of potential arbitrators was sent to both parties. Both parties were entitled to cross off any names to which they objected. They were then to list the remaining arbitrators in order of preference. A Mr. Z. T. Gerganoff was listed as a private architect. The appellants ranked Mr. Gerganoff [113 MICHAPP 818] third on their list, and he was eventually selected as an arbitrator.
The arbitration proceedings were conducted on November 9 and 10, 1979. On December 17, 1979, the arbitrator awarded respondent $16,200 on his claim and he denied an award on appellants' counterclaim. On January 8, 1980, appellants filed an application to vacate the arbitration award, alleging in part that the arbitrator displayed "evident partiality in favor of the [respondent]". Appellants allege that it was not until after the arbitration proceedings that they discovered that the arbitrator was the community development coordinator for Ypsilanti Township. They feared that his position could have led to business contracts between the arbitrator and the respondent prior to the arbitration proceeding.
In order to ascertain the existence of any connection between the arbitrator and the respondent, the appellants sought to depose the arbitrator who brought a motion for a protective order to quash the notice of deposition. This motion was heard on May 1, 1980. No transcript is available of this proceeding. The Circuit Judge granted a protective order and quashed the notice of deposition. Apparently, no formal opinion or order was ever issued. The only record of the Judge's decision was a handwritten note on a praecipe for motion noting that the motion was granted. Therefore, it is not apparent from the record why the Judge refused to allow the arbitrator to be deposed.
On September 11, 1980, the application to vacate the arbitration award was heard. Neither side was allowed to introduce testimony from the parties and on the 15th day of September, 1980, the Court issued an opinion and order denying the application to vacate and confirming the arbitration award.
[113 MICHAPP 819] The issue before this Court is whether it was error for the Circuit Court to grant a protective order...
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