Nelson Paving Co., Inc. v. Hjelle

• Decision Date: 12 April 1973
• Docket Number: No. 8861,8861
• Citation: 207 N.W.2d 225
• Parties: NELSON PAVING CO., INC., Respondent, v. Walter R. HJELLE, State Highway Commissioner of the State of North Dakota, Appellant. Civ.
• Court: North Dakota Supreme Court

Page 225

207 N.W.2d 225

NELSON PAVING CO., INC., Respondent, v.Walter R. HJELLE, State HighwayCommissioner of the State of North Dakota, Appellant.

Civ. No. 8861.

Supreme Court of North Dakota.

April 12, 1973.

Rehearing Denied May 11, 1973.

Syllabus by the Court

1.Review by this court of a judgment entered upon an arbitration award is strictly limited.

Save for complete irrationality, arbitrators are free to fashion the applicable rules and determine the facts of a dispute before them without their award being subject to judicial revision.When a motion to vacate an arbitration award is made under subsection 4 of Section 32--29--08, N.D.C.C., the award will not be set aside unless it is completely irrational.

2.For reasons stated in the opinion, the judgment and the order denying the motion to vacate the arbitration award are affirmed.

Jos. A. Vogel, Jr., and David K. O. Leer, Sp. Asst. Attys.Gen., Bismarck, for appellant.

Mitchell Mahoney for Pringle & Herigstad, Minot, and McIntee & Whisenand, Williston, for respondent.

ERICKSTAD, Judge.

This is an appeal from a judgment entered upon an arbitration award for Nelson Paving Co., Inc., in the sum of $186,660.69, and from an order denying a motion to vacate that award.It is a sequel to Hjelle v. Sornsin Construction Company, 173 N.W.2d 431(N.D.1969), wherein this court held that Nelson Paving, as a subcontractor in a State highway construction contract, was entitled to have its claim against the State and the prime contractor determined by arbitration.

By way of background we quote from that case.

'On April 11, 1966, the Prime Contractor was awarded certain highway construction contracts, mainly for the grading and application of aggregate base to certain parts of U.S. Highway 83 situated in Bottineau, Renville, and Ward Counties.On April 20, 1966, the Commissioner approved the Prime Contractor's request to sublet certain items of the contract to the Subcontractor.

On February 1, 1968, the Subcontractor served the Commissioner and the Prime Contractor with a 'petition for arbitration,' naming the Commissioner and the Prime Contractor as respondents.By complaint dated February 8, 1968, the Commissioner initiated a declaratory judgment action whereby he sought (1) to have N.D.C.C. §§ 24--02--26 through 24--02--33 declared unconstitutional and void, and (2) if the sections were found to be constitutional, to have the court award a judgment declaring that the Subcontractor could not assert any claims against the Commissioner.

'The Subcontractor filed an answer and counterclaim, denying the contentions of the Commissioner and asserting that if the Court did determine that the arbitration statutes were unconstitutional and void or that they were not applicable to the claims of the Subcontractor, the Subcontractor was entitled to a judgment against the Commissioner of $497,660.80, the amount being the same that it asserted it was entitled to in its petition for arbitration.

'The Prime Contractor denied that the provisions of N.D.C.C. ch. 24--02 were unconstitutional, asserted that the petition of the Subcontractor was fatally defective in that it did not comply with the applicable provisions of ch. 24--02, and asserted that to the extent the claims set forth in the petition for arbitration were not frivolous and greatly exaggerated, they could properly be the subject of arbitration between the Commissioner and the Prime Contractor acting on behalf of the Subcontractor.

'At the same time the Subcontractor filed its cross-claim, asking that a declaratory judgment be entered, declaring that the arbitration statutes(§§ 24--02--26 through 24--02--33) are valid and constitutional and apply to the claims of the Subcontractor as set forth in its petition for arbitration, and asking that a board of arbitration be established, pursuant to § 24--02--26, with the Subcontractor being entitled to one arbiter and the Commissioner and the Prime Contractor together being entitled to one arbiter, a third arbiter to be chosen by the other two.It further asks that if the Court determines that the arbitration statutes are unconstitutional and void or that they are not applicable to the claim of the Subcontractor as set forth in its petition, a judgment must be given the Subcontractor against the Commissioner for $497,660.80.

'The Prime Contractor filed an answer to the cross-claim, asserting that it had fully performed all of its undertakings and obligations under its contract with the Commissioner and under the subcontract with the Subcontractor; and, pertinent among many other allegations, it asserted that the Subcontractor did not have any right to invoke arbitration against the Prime Contractor, but that the Prime Contractor, on behalf of the Subcontractor, was fully prepared and willing to submit to arbitration under ch. 24--02 any claim that the Subcontractor made in good faith against the Commissioner, providing a sufficient surety was obtained.

'It was stipulated that the counterclaim and cross-claim of the Subcontractor should be held in abeyance until final disposition of the issues raised in the declaratory judgment action.'Hjelle v. Sornsin Construction Company, 173 N.W.2d 431 at 433(1969).

In Hjelle we held that the arbitration statutes in Chapter 24--02, N.D.C.C., are constitutional and apply to controversies between a subcontractor, a prime contractor, and the commissioner.Hjelle v. Sornsin, Supra, Syllabus 2 and 6.

In submitting to arbitration following remand of the case, the parties stipulated in part as follows:

'* * * the undersigned, Nelson Paving Co., Inc., and Walter R. HjelleState Highway Commissioner of the State of North Dakota, do hereby mutually covenant and agree, to and with each other to submit all causes of action, controversies, differences, claims, demands and matters whatsoever, now pending, existing, held by and between us relating to or growing out of the said Highway 83 construction project, and the performance thereunder, to Harry Pippin of Williston, North Dakota, Robert Vogel of Mandan, North Dakota, and Peter J. Johnson of Virginia, Minnesota, as arbitrators, who, or any two of whom, shall arbitrate, award, order, adjudge and determine any and all controversies, differences, claims, demands and matters whatsoever now pending, existing, held by and between us relating to or growing out of the said Highway 83 construction project, and the performance thereunder.

'At the conclusion of the hearings the arbitrators shall prepare Findings of Fact and Conclusions of Law on all factual or legal issues that are raised by the parties.If any one arbitrator shall dissent from such Findings or Conclusions, he shall prepare a memorandum thereof.

'It is agreed that a judgment may be entered in the District Court of Ward County upon any award given by the arbitrators in these proceedings in accordance with Section 24--02--28, N.D.C.C.

'In submitting the above matter to arbitration, the parties intend, regardless of any inadvertent contrary expression herein, to conform to the statutory provisions for arbitration set forth in Sections 24--02--26 through 24--02--33 of the North Dakota Century Code, andChapter 32--29 of the North Dakota Century Code and the general rules of law regarding arbitration proceedings.'

Prior to the commencement of the arbitration hearing the commissioner moved that the arbitrators dismiss the proceedings for the reasons that the amended petition for arbitration alleged a claim for relief which could not be granted and that the commissioner as a matter of law could not vary the terms of the contract.

The motion was denied and the controversy was heard by the arbitration board.Mr. Pippin and Mr. Johnson, constituting a majority of the board, concluded that Nelson Paving was entitled to an award of $146,313.75.They also awarded interest of four per cent per annum from and after August 11, 1967.

Mr. Vogel filed a dissenting opinion.

When Nelson Paving moved in Ward County District Court that the court affirm the award the direct entry of judgment, the commissioner moved to vacate the award.The court denied the commissioner's motion and subsequently denied a motion for relief from the order denying the motion to vacate the award.The court granted Nelson Paving's motion.

The appeal is in two parts, the first being an appeal from the judgment entered upon the arbitration award, and the second being an appeal from the order denying the motion to vacate the arbitration award.

After reviewing the relevant statutes and other authorities, we conclude that the order denying the motion to vacate the award is an intermediate order which is not appealable, but which is reviewable on the appeal from the judgment entered upon the award.Since the appeal from the judgment has been perfected, we may review the order denying the motion to vacate the award at this time.

Under the arbitration statutes a motion may be made by any party to the submission to affirm the award.The court must grant the motion unless the award is (a) vacated or (b) modified or corrected.Any party may make a motion (a) to vacate an award under Section 32--29--08, N.D.C.C., or (b) to modify or correct an award under Section 32--29--09, N.D.C.C.Upon the granting of a motion to affirm, modify, or correct an award, judgment is to be entered in accordance therewith.Section 32--29--11, N.D.C.C.

Section 32--29--13, N.D.C.C., provides that a judgment entered upon an arbitration award has the same force and effect as a judgment entered in other cases and may be reviewed in like manner by the supreme court on appeal.

'32--29--13.Subject to same provisions as other judgments.--The judgment roll upon an award shall be filed and the judgment docketed as in other cases, and shall have the same force and effect in all respects, and shall be subject to all the provisions of law in relation to judgments in actions, and may be reviewed in like...