Martel v. Bulotti

• Court: Idaho Supreme Court
• Writing for the Court: KIDWELL, Justice.
• Citation: Martel v. Bulotti, 65 P.3d 192, 138 Idaho 451 (Idaho 2003)
• Decision Date: 28 January 2003
• Docket Number: No. 27695.,27695.
• Parties: Michel MARTEL, Applicant-Respondent, v. John BULOTTI, dba Bulotti Construction, Defendant-Appellant.

65 P.3d 192

138 Idaho 451

Michel MARTEL, Applicant-Respondent, v. John BULOTTI, dba Bulotti Construction, Defendant-Appellant.

No. 27695.

Supreme Court of Idaho, Twin Falls, November 2002 Term.

January 28, 2003.

Rehearing Denied March 19, 2003.

Roark Law Firm, Hailey, for appellant. Cynthia J. Woolley, Sun Valley, argued.

Luboviski, Wygle & Fallowfield, P.A., Ketchum, for respondent. Janet C. Wygle argued.

KIDWELL, Justice.

The district court confirmed an arbitration award in favor of Michel Martel (Martel) and entered judgment against John Bulotti (Bulotti) pursuant to the Uniform Arbitration Act (UAA). I.C. §§ 7-901 to -922 (2002). Bulotti appeals on the grounds that the district court erred in finding that he did not properly request formal arbitration and that the "award" was not confirmable pursuant to the UAA. This Court affirms the judgment of the district court on alternative grounds.

I. FACTS AND PROCEDURAL BACKGROUND

Martel contracted with Bulotti to build an addition to her home. On July 12, 1999, Martel and Bulotti entered into a written contract using an American Institute of Architects (AIA) contract form (the contract).

The contract incorporated by reference General Conditions (conditions) that provided a process for resolving disputes arising out of the contract. Pursuant to the conditions, the parties were to submit disputes to the project architect for decision. Then, the architect was to provide a written decision to each party. The architect's decision was "final and binding on the parties subject to arbitration." After the architect submitted a written decision to the parties that stated it was "final but subject to arbitration," either party could demand arbitration of the dispute. The conditions instructed the party demanding arbitration that "[n]otice of demand for arbitration shall be filed in writing with the other party to the Agreement ... and with the American Arbitration Association [(AAA)], and a copy shall be filed with the architect." Failure to demand arbitration within thirty days would result in "the Architect's decision becoming final and binding upon [the parties]."

A dispute arose between Martel and Bulotti regarding Bulotti's performance. The parties submitted the dispute to the architect for a decision. The architect issued a written decision on March 26, 2001, awarding Martel damages totaling $11,594.94. The decision stated: "This decision is final but subject to a demand for arbitration and a demand for arbitration of this claim must be made within thirty (30) days of Ms. Martel's receipt of this certification. Ms. Martel received a copy of this certification on March 27, 2001." Bulotti received the architect's decision on March 29, 2001.

Bulotti faxed a demand for arbitration to the architect's office on April 26, 2001, one day before the running of the thirty-day period in which to demand arbitration. Bulotti did not send the demand to Martel or to the AAA as required by the conditions of the contract.

On May 25, 2001, Martel applied for confirmation of the architect's award and moved for entry of judgment. Bulotti filed an objection to confirmation of the award on the grounds that there was no arbitration award to confirm "notwithstanding the fact that Mr. Bulotti, pursuant to the contract of the parties, specifically requested arbitration within the time permitted under the contract ...". At hearing, Bulotti offered additional grounds for his objection which included: (1) the conditions never became part of the contract because he neither received nor read them; and (2) even if the conditions became part of the contract, he substantially complied with the requirements for demanding arbitration. Bulotti only pursues the latter appeal.

On June 28, 2001, the district court entered a judgment that included the following findings of fact and conclusions of law:

The Court finds and concludes as follows: (1) that no facts are in dispute which would be dispositive of the matter and that all issues are questions of law; (2) that [Martel] has followed the contract between the parties; (3) that there is no legal significance to when Defendant received a copy of the General Conditions because they were incorporated into the contract he signed; (4) that the contract between the parties says that the architect's decision is final and binding; and (5) that the architect's decision is an arbitration award subject to confirmation by the Court.

Based on the foregoing, the arbitration award of $11,594.94 to [Martel] from [Bulotti] is affirmed.

Bulotti timely filed this appeal.

II. STANDARD OF REVIEW

This Court exercises free review over matters of law. Polk v. Larrabee, 135 Idaho 303, 308, 17 P.3d 247, 252 (2000). Determining the meaning of a statute or applying law to undisputed facts constitute matters of law. Id.; Melendez v. Hintz, 111 Idaho 401, 402, 724 P.2d 137, 138 (Ct.App. 1986).

This Court may uphold decisions on alternate grounds from those stated in the findings of fact and conclusions of law on appeal. See Hanf v. Syringa Realty Co., Inc., 120 Idaho 364, 370, 816 P.2d 320, 326 (1991) (citing Foremost Ins. Co. v. Putzier, 102 Idaho 138, 627 P.2d 317 (1981) and Anderson & Nafziger v. G.T. Newcomb, Inc., 100 Idaho 175, 179, 595 P.2d 709, 713 (1979)).

III. ANALYSIS

A. The Architect's Decision Does Not Constitute An Arbitration Award.

Bulotti argues that the district court erred in confirming the architect's decision as an arbitration award because the architect was not an "arbitrator" for purposes of I.C. § 7-908. Rather than seeking confirmation, the proper method for enforcing the architect's decision was a breach of contract claim. Then, the architect's decision would be mere evidence subject to attack on grounds of bias. Martel, on the other hand, contends that the architect was an arbitrator under the terms of the contract even though his decision could be appealed through further arbitration. Consequently, the court's confirmation of the architect's award should be affirmed.

Whether the decision of an architect constitutes an arbitration award for purposes of I.C. § 7-911 presents an issue of first impression in Idaho. Section 7-911 states that:

Upon application of a party, the court shall confirm an [arbitration] award, unless within the time limits hereinafter imposed grounds are urged for vacating or modifying or correcting the award....

Section 7-912(a)(2) sets out grounds on which a party may seek to vacate an arbitration award, including bias of the arbitrator, corruption, or fraud; it states in pertinent part:

(a) Upon application of a party, the court shall vacate an award where;[:]

(1) The award was procured by corruption, fraud or other undue means;

(2) There was evident partiality by an arbitrator appointed as a neutral, or corruption in any of the arbitrators, or misconduct prejudicing the rights of any party ....

Id. Once an award is confirmed, I.C. § 7-914 directs the court to enter judgment in accordance with the arbitration award.

Generally, "arbitration award" means a decision of an extra judicial arbiter upon whom the parties have agreed and by whose decision the parties have agreed to abide. Chillum-Adelphi Volunteer Fire Dept., Inc. v. Button & Goode, Inc., 242 Md. 509, 219 A.2d 801, 806 (1966) (citing Cont'l Milling & Feed Co. v. Doughnut Corp. of America, 186 Md. 669, 48 A.2d 447 (1946)); Rural Water Dist. No.6 Butler County v. Ziegler Corp., 9 Kan.App.2d 305, 677 P.2d 573, 578 (1984). "In construction contracts, it is not unusual for the parties to submit certain questions to the architect, ... and to agree that the expert's finding or decision shall be final and conclusive." 4 CORBIN ON CONTRACTS, § 31.14, p. 113; See also United States v. Moorman, 338 U.S. 457, 461-62, 70 S.Ct. 288, 290-291, 94 L.Ed. 256, 259-60 (1950) (discussing such agreements in the government contract context); State Highway Comm'n of Wyoming v. Brasel & Sims Constr. Co., 688 P.2d 871, 876 (Wyo.1984). Nonetheless, an architect is generally employed by one of the parties to a construction contract. Therefore, the architect's decisions are not necessarily rendered impartially or based upon a fair investigation of the facts. 4 CORBIN ON CONTRACTS, § 31.14, p. 114.

The UAA does acknowledge that arbitrators may be non-neutral. See, e.g., I.C. §§ 7-905(c) and -912(a)(2). The plain language of the UAA, however, only contemplates non-neutral arbitrators in the multiple-arbitrator context. I.C. § 7-905 states that if "an arbitrator for any reason ceases to act, the remaining arbitrator or arbitrators appointed to act as neutrals may continue with the hearing and determination of the controversy." I.C. § 7-912(a)(2) provides for vacation of an arbitration award where "[t]here was evident partiality by an arbitrator appointed as a neutral, or corruption in any of the arbitrators...." An architect may be an arbitrator in certain cases. However, a project architect employed by a party to a contract cannot be the sole arbitrator in a case because of the potential for bias and non-neutrality and the possibility it will discourage a fair investigation of the facts. Thus, the architect in this case was not an arbitrator for purposes of the UAA. Therefore, the architect's decision does not constitute an arbitration award for purposes of I.C. § 7-911 and the district court's order confirming the award is vacated.

B. The Judgment Against Bulotti Is Affirmed On Alternate Grounds.

When a judgment on appeal reaches the correct conclusion, but employs reasoning contrary to that of this Court, we may affirm the judgment on alternate grounds. See Hanf, 120 Idaho at 370,816 P.2d at 326. Additionally, the relevant facts in this matter are undisputed. This Court may apply the law to undisputed facts de novo. Polk, 135 Idaho at 308,17 P.3d at 252; Melendez,111 Idaho at 402,724 P.2d at 138.

The clear language of the contract in this case provided in relevant part: ...