Smith v. Barnett
| Decision Date | 13 December 1963 |
| Docket Number | No. 16259,16259 |
| Citation | 373 S.W.2d 762 |
| Parties | William H. SMITH et ux., Appellants, v. Robert H. BARNETT, Appellee. |
| Court | Texas Court of Appeals |
Biggers, Baker, Lloyd & Carver and Monty C. Barber, Dallas, for appellants.
Frand G. Newman and Gerald C. Galbraith, Dallas, for appellee.
Appellee Robert H. Barnett, a building contractor, sued appellants William H. Smith and wife to enforce an arbitration award of $33,157.00; and in the alternative, should the award be held to be invalid, for judgment for $36,166.69, the latter figure being the total cost of the construction of a house, including $32,150.00, the contract price, and $4,016.69 for extras.
In addition to their answer appellants filed a cross-action for $15,000.00 for damages for defects in material and workmanship in the construction of the house.
The trial court rendered summary judgment in favor of appellee, sustaining the arbitration award in the amount of $33,157.00.
On August 5, 1961 the parties entered into a written contract for the construction by appellee of a house for appellants on premises now known as 4707 Crooked Lane in the City of Dallas, Texas.
Appellants had been unsuccessful in their efforts to buy a house located at 4623 Allencrest Street. Upon investigation they found that this house had been constructed by appellee. So they employed appellee to build a similar house for them at 4707 Crooked Lane. The contract with blank spaces filled in by typewriter was prepared on a printed from issued by The American Institute of Architects known as 'AIA Short Form for Small Construction Contracts.'
In two separate places the contract provides that the house shall be a duplication of 4623 Allencrest with additions and exceptions as noted. In one place the phrase 'exact duplication' is used. The contract provides further that 'both workmanship and materials shall be of good quality' and 'All workmen and sub-contractors shall be skilled in their trades.'
Appellants moved into their new house before construction was completed. A controversy arose. To settle their controversy the parties entered into a written arbitration agreement. The arbitrators selected were Thomas L. Magner, a building contractor, and La Vere Brooks, an architect.
The arbitration agreement conferred broad powers on the arbitrators. It reads that the parties agree 'to submit all manner of causes of action, controversies, differences, claims, demands and matters whatsoever now pending, existing, held by and between us, relating to or growing out of said contract dated August 5, 1961, by and between Owner and Contractor, and performance thereunder to Tom Magner and La Vere Brooks, as arbitrators * * *.'
The arbitration agreement further provides that the arbitrators shall arbitrate and make an award as to whether Contractor breached his contract by failing to perform according to the standard of skill and excellence practiced in Dallas County, Texas, whether he failed to provide the quality of materials as called for in the plans and specifications relating to the contract of August 5, 1961, and if so what amount of damages Contractor owed Owner by reason of said breaches. But in connection with the standard above referred to the agreement goes on to say that the arbitrators 'are to take cognizance, however, of that provision of the contract between Robert H. Barnett and William H. Smith for the construction of the subject house, wherein the house to be built for William H. Smith was to be a duplication of a house built at 4623 Allencrest by the same builder, Robert H. Barnett, with additions and refinements as agreed on.'
The agreement also provides that in determining damages the arbitrators should give a breakdown of the damages by assigning to each item of substandard work the reasonable cost of correction. However, the agreement expressly states that such breakdown is required for the purpose of Contractor's seeking recourse against his subcontractors for the damages resulting from substandard work.
The arbitrators were furnished a copy of the arbitration agreement, a lengthy list of the complaints made by appellants, and on at least two occasions inspected both the house at 4707 Crooked Lane and the house at 4623 Allencrest Street.
The arbitrators in their award presented a summation of their findings and conclusions as follows:
The allowance of "Extra' Costs Allowed' as above set out was supported by a list of 66 items totaling $4,369.50, with the amount of the allowance after each item.
As will be seen, the allowance of 'Damage Awards to Owner' as above set out includes an allowance of $1,000.00 in adjustment for quality of materials and workmanship. This allowance of $1,000.00 is in turn broken down in another part of the award into an itemized list of 23 items.
OPINIONAppellants present four points on appeal. They allege the trial court erred in granting summary judgment for these reasons: (1) genuine issues of material fact existed as to the validity of the arbitration award; (2) the arbitration award decided matters in excess of the authority given the arbitratrors, therefore was void; (3) the award did not determine all matters submitted to the arbitrators, therefore lacked finality, and was void; and (4) alternatively, if not void under Point No. (2), the award contained surplusage matter as a recovery to appellee, therefore the award is void.
We see no merit in any of the above points, but before discussing them in detail we shall review the established legal principles which we consider are controlling in this case.
In the absence of a reservation in the arbitration agreement of a right of appeal, the arbitrators' decision is final. If the award is within the authority conferred on the arbitrators in the agreement, the award will not be set aside except for fraud, misconduct, or such gross mistake as would imply bad faith or failure to exercise an honest judgment. Haddad v. Bagwell, Tex.Civ.App., 317 S.W.2d 781, 784; Couey v. Arrow Coach Lines, Tex.Civ.App., 288 S.W.2d 192, 196; Galveston, H. & S. A. Ry. Co. v. Henry & Dilley, 65 Tex. 685. Mere errors of fact or law are not grounds for setting aside an award. Johnson v. American Can Co., Tex.Civ.App., 361 S.W.2d 451; Grand International Brotherhood of Locomotive Engineers v. Wilson, Tex.Civ.App., 341 S.W.2d 206; Johnson v. Korn, Tex.Civ.App., 117 S.W.2d 514. Even though the arbitrators exceed their authority the award will not be set aside if the excess may be disregarded and a valid award left standing, or if the excess may be regarded...
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