Rural Water Dist. No. 6 Butler County v. Ziegler Corp.

• Decision Date: 09 February 1984
• Docket Number: No. 55055,55055
• Citation: 9 Kan.App.2d 305,677 P.2d 573
• Parties: RURAL WATER DISTRICT NO. 6 BUTLER COUNTY, Kansas, Appellee, v. ZIEGLER CORPORATION, Appellant.
• Court: Kansas Court of Appeals

Page 573

677 P.2d 573

9 Kan.App.2d 305

RURAL WATER DISTRICT NO. 6 BUTLER COUNTY, Kansas, Appellee, v. ZIEGLER CORPORATION, Appellant.

No. 55055.

Court of Appeals of Kansas.

Feb. 9, 1984.

Review Denied April 4, 1984.

Syllabus by the Court

1. Arbitration awards, which courts regard as valid and suitable for judicial enforcement, are neither contract nor judgment but partake of the nature of both. The award partakes of the nature of a contract because it is the result of a contract, the submission agreement, whereby the parties agree to comply with the award. It differs from a contract in that it is the act of the arbitrators, not of the parties themselves. It partakes of the nature of a judgment in that, if it is valid, it is binding upon them though imposed by an outside source. Following Coleman v. Local No. 570, 181 Kan. 969, 317 P.2d 831 (1957).

2. Where parties have agreed to be bound by a submission to arbitration, errors of law and fact, or an erroneous decision of matters submitted to the judgment of the arbitrators, are insufficient to invalidate an award fairly and honestly made. Nothing in the award relative to the merits of the controversy as submitted, even though incorrectly decided, is ground for setting aside an award in the absence of fraud, misconduct or other valid objections. Following Evans Electrical Constr. Co. v. University of Kansas Med. Center, 230 Kan. 298, 634 P.2d 1079 (1981).

3. Standing alone, neither counsel's argument before the trial court nor assertions in an appellate brief constitute evidence or are sufficient to satisfy inadequacies in the record on appeal.

4. Appellant must designate an adequate record on appeal to substantiate contentions made to the appellate court. Without such a record, claims of alleged error must fail.

5. To be valid, an arbitration award must be a full and final disposition on all points submitted.

6. An arbitration award is final when it conclusively determines the matter submitted, leaving nothing to be done but to execute and carry out the terms of the award.

7. Arbitration awards, to be final, are not required to be written with such critical nicety that a forced construction cannot discover a doubt. Every presumption is in favor of validity of an award, and it will be construed so as to put one consistent sense on all its terms.

8. An award is sufficiently final if the arbitrators have ruled upon all issues which are in a condition to be considered at the time of the submission.

9. An arbitration award is sufficiently final when only a mathematical calculation is required for its implementation.

10. The fact that the relief granted by an arbitration award was such that it could not or would not be granted by a court of law or equity is not ground for vacating or refusing to confirm the award. K.S.A. 5-412(a ).

11. Public policy questions are subject to the same rules as other questions and if they are not raised before the trial court, they may not be raised for the first time on appeal.

12. The record is examined and it is held that the trial court did not err in retaining jurisdiction over future liquidated damages when the only fact remaining to be determined was the number of days to which the agreed and approved damage figure would apply.

R.W. Miller and Kevin E. Glynn, of Miller & Glynn, P.C., Kansas City, Mo., and Michael G. Coash, of Bond, Bond & Coash, El Dorado, for appellant.

Ray L. Connell, of Connell & Connell, El Dorado, for appellee.

Before REES, P.J., MEYER, J., and RICHARD W. WAHL, District Judge, assigned.

RICHARD W. WAHL, District Judge, Assigned:

This is an appeal by the defendant, Ziegler Corporation, from the district court's confirmation of an arbitration award in favor of the plaintiff, Rural Water District No. 6, of Butler County, Kansas.

The record on appeal in this case is inadequate for a proper statement of facts. It does not contain, among other things, pertinent provisions of the contract between the parties, the rules governing the arbitrators or the documentation of issues presented to the arbitrators. A copy of the contract and many of the facts set forth below have been taken from the parties' briefs on appeal.

On or about April 24, 1980, Ziegler Corporation (Ziegler) entered into a contract with Rural Water District No. 6, Butler County, Kansas (District), under which Ziegler agreed to construct a water supply system for the District. The contract contained a liquidated damage clause which provided that if the project was not completed by a specified date, the District would be entitled to liquidated damages in the amount of $250 for each calendar day past the agreed completion date. The contract also provided that the District could terminate Ziegler's services if Ziegler "should be intolerably negligent and slow in [its] prosecution of the work, or if [it] repeatedly fails to supply sufficient skilled workmen."

On March 15, 1982, the District served a written demand upon Ziegler to terminate its work on the project. On April 2, 1982, the District filed a petition in the district court seeking a restraining order removing Ziegler from the project. Ziegler responded by filing motions to stay the proceedings and to compel arbitration. The motion to compel arbitration was based upon a provision in the contract which provided that the parties would submit all disputes to arbitration. The trial court sustained Ziegler's motions and the case proceeded to arbitration.

In its demand for arbitration, Ziegler sought additional costs for work performed on the project. The District sought the liquidated damages provided for in the contract in addition to other expenses. The District's demand to terminate Ziegler was also presented.

The arbitration proceedings occurred on June 17, 18, and July 8, 1982. The arbitrators' award denied Ziegler's claims on all counts and terminated Ziegler's services on the project effective July 17, 1982. It also awarded the District liquidated damages, and it is primarily that portion of the award which is in dispute in this appeal. The arbitrators found the $250 per day damage figure to be reasonable and commensurate with the actual damages sustained by the District. They also found that due to "drought conditions beyond Ziegler's control," water was unavailable to Ziegler for 274 days, and, consequently, the completion date for determining liquidated damages was extended to March 21, 1982. The District was then awarded liquidated damages for the period between March 21, 1982, and July 17, 1982, in the amount of $29,250. The award also provided that "[t]his Award does not contain liquidated damages which may be assessible against Ziegler for the period from July 17, 1982, until completion of the contract work, since the amount thereof would only be ascertainable when the work is completed."

The District filed a motion to confirm the arbitration award and Ziegler moved to vacate the award. The district court denied the motion to vacate and sustained the motion to confirm the award. The court confirmed the $29,250 liquidated damage award and, with reference to the liquidated damages to be awarded after July 17, 1982, provided that "this Court shall retain jurisdiction concerning the amount of liquidated damages to be assessed." Ziegler timely perfected an appeal from the order of the district court confirming the arbitration award. We affirm.

In determining the questions raised in the present case, it is helpful to review some general comments made by Justice, now Chief Justice, Schroeder in Coleman v. Local No. 570, 181 Kan. 969, 975-976, 317 P.2d 831 (1957):

"Arbitration awards, which courts regard as valid and suitable for judicial enforcement, are neither contract nor judgment but partake of the nature of both. The award partakes of the nature of a contract because it is the result of a contract, the submission agreement, whereby the parties agree to comply with the award. It differs from a contract in that it is the act of the arbitrators, not of the parties themselves. It partakes of the nature of a judgment in that, if it is valid, it is binding upon them though imposed by an outside source.

"The dual nature of the award serves to explain the limited grounds on which it may be successfully impeached. In general it may be said that the ground urged must be good, both for attack upon a judgment and for relief against the terms of a contract. But, certain grounds that would be sufficient in an appeal from a judgment would not be grounds for impeaching an award, for the reason that the contractual element is present in the award. Thus, the fact that the arbitrator made erroneous rulings during the hearing, or reached erroneous findings of fact from the evidence, is no ground for setting aside the award, because the parties have agreed that he should be the judge of the facts. Even his erroneous view of the law would be binding, for the parties have agreed to accept his view of the law. Were it otherwise in either of these cases, arbitration would fail of its chief purpose; instead of being a substitute for litigation, it would merely be the beginning of litigation. Error of law renders the award void only when it would require the parties to commit a crime or otherwise to violate a positive mandate of the law....

"Judicial intervention is ill-suited to the special characteristics of the arbitration process in labor disputes."

On pages 980-981, 317 P.2d 831, the court said:

"The parties having agreed to be bound by a submission to arbitration under the terms of the Agreement are in no position to complain of the award. The general rule is that errors of law and fact, or an erroneous decision of matters submitted to the judgment of the arbitrators, are insufficient to invalidate an award fairly and honestly made. Nothing in the award relative to the merits of the controversy as submitted, even though incorrectly decided, is ground for setting aside an...