Lauria v. Soriano

• Citation: 4 Cal.Rptr. 328,180 Cal.App.2d 163
• Court: California Court of Appeals
• Decision Date: 21 April 1960
• Parties: Lew LAURIA and Maybelle Lauria, Plaintiffs and Appellants, v. Raphael SORIANO, Defendant and Respondent. Civ. 24160.

Page 328

4 Cal.Rptr. 328

180 Cal.App.2d 163

Lew LAURIA and Maybelle Lauria, Plaintiffs and Appellants, v. Raphael SORIANO, Defendant and Respondent.

Civ. 24160.

District Court of Appeal, Second District, Division 2, California.

April 21, 1960.

Palmer & Long, by Alvan M. Palmer, Los Angeles, for appellants.

Macbeth, Ford, Brady & Loveridge, by Owen J. Brady, Los Angeles, for respondent.

ASHBURN, Justice.

Plaintiffs appeal from an order confirming an award of arbitrators and denying plaintiffs' motion to vacate the award (Code Civ.Proc. § 1293; 3 Witkin on California Procedure, § 16, pp. 2159-2160).

On June 13, 1956, plaintiffs Lew Lauria and Maybelle Lauria, as owners, and defendant Raphael Soriano, as architect, entered into a written contract whereby Soriano agreed to perform architectural services in connection with the construction of a residence for the Laurias. The architect's compensation was fixed at 12 1/2 per cent of the cost of the work, but the instrument is silent upon maximum cost or any estimate of same. Appellants claim that it was orally agreed that the building would cost not more than approximately $60,000. The architect billed them for sums aggregating $5,833.11, which total sum was paid; it amounts to 75 per cent of 12 1/2 per cent of $62,220, ¹ and appellants claim that the last mentioned sum necessarily was the architect's own estimate of the cost. When bids were taken they ran from $110,000 down to $89,000 and then to $85,400. The Laurias declared such a house to be beyond their means and the plans and specifications and working drawings to be without value to them.

They sued the architect for return of the $5,833.11 which they had paid him, alleging an agreement that the 'final plans would result in a structure that could be completed for approximately $60,000.00'; that the lowest bid was $110,000.00 and after certain eliminations from the plans the lowest bid was $89,000, 'still beyond plaintiffs' financial capacity'; that the plans were never used and plaintiffs received no benefit from them. Fraud and failure of consideration were alleged.

The contract contains this paragraph 12: 'Arbitration.--All questions in dispute under this agreement shall be submitted to arbitration at the choice of either party, in accordance with the provisions, then obtaining, studies, a sum equal to 25% of the basic Procedure of The American Institute of Architects.' Before any plea was interposed by defendant he noticed a motion for an order staying further proceedings in the action until an arbitration had been had pursuant to the terms of the contract. Upon the return day, May 1, 1958, the motion was placed off calendar pursuant to stipulation. The matter then proceeded to arbitration before Messrs. Harry W. Elliott, Ira S. Brander and Raymond D. Spencer, and they made an award on December 17, 1958, to the effect that Soriano's claim of right to retain the $5,833.11 was upheld and '[t]hat there was no fraud or failure of consideration for such payments to Soriano, but that Soriano's professional services as an architect were of the value of the amount paid him.' Defendant moved for confirmation of the award and plaintiffs moved to vacate it. The court confirmed and refused to vacate; hence this appeal.

Appellants' contentions meet insuperable obstacles in settled legal principles applicable to arbitrations. We are handicapped in their consideration by the fact that we have before us no order of court and no submission agreement of the parties defining the issues to be arbitrated. 'It is the rule that 'The powers of an arbitrator are limited and circumscribed by the agreement or stipulation of submission. Bierlein v. Johnson, 73 Cal.App.2d 728, 733, 166 P.2d 644.'' O'Malley v. Petroleum Maintenance Co., 48 Cal.2d 107, 110, 308 P.2d 9, 11. It may be that we would be warranted in assuming (as in Drake v. Stein, 116 Cal.App.2d 779, 782, 254 P.2d 613, 616) that paragraph 12 of the contract is to be 'properly interpreted as both a 'future disputes agreement' * * * within section 1280 of the Code of Civil Procedure, and a complete though broad 'submission agreement"; and that the issues submitted were '[a]ll questions in dispute under this agreement,' which language still leaves us upon an uncharted sea. An affidavit of appellants' attorney, which was presented in support of the motion to vacate, says: 'A copy of the Complaint filed in the instant action was handed to the Arbitrators for their inspection and determination of the issues in the case.' Counsel for both sides have briefed the case in such manner that we will assume, as appellant contends, that '[t]he issue in this case, without doubt, was whether or not Soriano agreed to draw plans and specifications for a building to cost approximately $60,000.00'

Returning to the contention that Soriano did not furnish plans and specifications in accordance with the contract between him and appellants, it appears that the arbitrators not only made the finding as to consideration which is above quoted, but also found: 'That Soriano, after many conferences, prepared a set of plans and specifications for a residence which was approved by the Laurias and bids for the construction of a residence according to the plans and specifications prepared by Soriano were solicited by the Laurias from several contractors. However, because the bids were higher in cost than the Laurias were willing to spend, no bid was accepted and no contract for construction of the residence was entered into.' Thus it becomes plain that appellants' argument goes to the merits of the decision. That is a matter which the court is not entitled to review.

Crofoot v. Blair Holdings Corp., 119 Cal.App.2d 156, 185-186, 260 P.2d 156, 171: '[I]t is well settled that both before the superior and appellate courts every intendment of validity must be given the award and that the burden is upon the one claiming error to support his contention. [Citation.] It has been held that the arbitrator need not make findings or give reasons for his conclusions. [Citation.] Certainly it is settled that the courts have no power to review the sufficiency of the evidence. [Citations.] The law is not quite so clear as to a court's powers of review over questions of law. * * * In Pacific Vegetable Oil Corp. v. C. S. T., Ltd., 29 Cal.2d 228, 233, 174 P.2d 441, 445, it was bluntly held that 'The merits of the controversy between the parties are not subject to judicial review.' In Sapp v. Barenfeld, 34 Cal.2d 515, 523, 212 P.2d 233, 239, the court held: 'Even though a party expressly asserts a lawful claim in the submission or raises it by the presentation of evidence to the arbitrators, the law does not guarantee that the claim will be allowed. Arbitrators, unless specifically required to act in conformity with rules of law, may base their decision upon broad principles of justice and equity, and in doing so may expressly or impliedly reject a claim that a party might successfully have asserted in a judicial action.' * * * Under these cases it must be held that in the absence of some limiting clause in the arbitration agreement, the merits of the award, either on questions of fact or of law, may not be reviewed except as provided in the statute.' Among the many authorities to the same effect are O'Malley v. Petroleum Maintenance Co., supra, 48 Cal.2d 107, 111, 308 P.2d 9; Straus v. North Hollywood Hosp. Inc., 150 Cal.App.2d 306, 310, 309 P.2d 541; Sampson Motors, Inc. v. Roland, 121 Cal.App.2d 491, 494, 263 P.2d 445; United States Plywood Corp. v. Hudson Lumber Co., 124 Cal.App.2d 527, 530, 269 P.2d 93.

The claim that there was a failure to find upon the true issue because the arbitrators did not specifically mention the alleged agreement to prepare plans and specifications for a building to cost only $60,000, must fail of fruition. Arbitrators are not required to make findings or assign reasons; if they state erroneous reasons for their conclusion that is not fatal. O'Malley v. Petroleum Maintenance Co., supra, 48 Cal.2d at page 111, 308 P.2d at page 12; McKay v. Coca-Cola Bottling Co., 110 Cal.App.2d 672, 677, 243 P.2d 35. Moreover, every reasonable intendment must be indulged in favor of the award. Drake v. Stein, supra, 116 Cal.App.2d 779, 785, 254 P.2d 613; Crofoot v. Blair Holdings Corp., supra, 119 Cal.App.2d 156, 185, 260 P.2d 156; United States Plywood Corp. v. Hudson Lumber Co., supra, 124 Cal.App.2d 527, 532, 269 P.2d 93. And it is presumed that all matters within the submission have been passed upon. Sampson Motors, Inc. v. Roland, supra, 121 Cal.App.2d 491, 494-495, 263 P.2d 445; Crofoot v. Blair Holdings Corp., supra, 119 Cal.App.2d 156, 192, 260 P.2d 156; Code Civ.Proc., § 1963, subd. 18. The arbitrators having found that there had been no fraud and no failure of consideration the inference seems almost inevitable that they also found as a constituent fact that the agreement for a $60,000 house had not been made as claimed by appellants. Certainly that inference must be indulged here.

'Bias, partiality and improper conduct' are charged to the arbitrators. The statute (Code Civ.Proc. § 1288) ² prescribing grounds for vacating an award is so worded that appellants' assignment must fall within the phrase, 'any other misbehaviors, by which the rights of any party have been prejudiced.' Appellants' showing made upon their motion to vacate consisted of the affidavits of plaintiffs Lew Lauria and Maybelle Lauria, and their attorney Mr. Alvan M. Palmer. They assert such matters as the following: That Mr. Elliott unduly interrupted and curtailed the testimony of plaintiffs' witnesses while giving free rein to the opposition; that he indulged in a long monologue of his activities as general counsel for Douglas Aircraft; that the decision was made ten minutes after the conclusion of the hearing; that Mr. Elliott told the other arbitrators what the decision would be and the arbitrators did not...