T & M Properties v. ZVFK Architects and Planners

• Citation: 661 P.2d 1040
• Decision Date: 14 April 1983
• Docket Number: No. 5786,5786
• Parties: T & M PROPERTIES and Tim C. Miracle and Marilyn Krueger, Appellants (Defendants), v. ZVFK ARCHITECTS AND PLANNERS, Appellee (Plaintiff).
• Court: United States State Supreme Court of Wyoming

Page 1040

661 P.2d 1040

T & M PROPERTIES and Tim C. Miracle and Marilyn Krueger, Appellants (Defendants), v. ZVFK ARCHITECTS AND PLANNERS, Appellee (Plaintiff).

No. 5786.

Supreme Court of Wyoming.

April 14, 1983.

Philip Nicholas of Corthell, King, McFadden, Nicholas, Prehoda & Olson, Laramie, for appellants.

Jay Dee Schaefer, Jay Dee Schaefer & Associates, Laramie, for appellee.

Before ROONEY, C.J., and RAPER, THOMAS, ROSE and BROWN, JJ.

BROWN, Justice.

Appellee entered into a contract with Miracle Enterprises dated February 9, 1977, and contracts with appellant T & M Properties dated February, 1977 (day of month blank in this contract) and September 1, 1977. The Miracle Enterprises contract was signed by Tim C. Miracle, owner, president. The T & M Properties contracts were signed by Tim C. Miracle, owner, partner. The three contracts were for architectural and planning services to be rendered by appellee. Each contract contained a provision for arbitration. The basic language read:

"All claims disputes and other matters in question arising out of, or relating to, this Agreement or the breach thereof shall be decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association then obtaining unless the parties mutually agree otherwise. This agreement to arbitrate shall be specifically enforceable under the prevailing arbitration law."

Appellee invoked the arbitration clauses in the contracts and initiated arbitration when a dispute arose regarding the amount of fees owed. Appellee caused to be prepared and executed a demand for arbitration. ¹ This demand was directed to T & M Properties, Tim C. Miracle and Marilyn Krueger, 630 East First, P.O. Box 2160, Casper, Wyoming 81601. In the demand, reference was made to contracts dated "2/9/77, 2/9/77 [sic] 9/1/77." Attached to the demand was the contract entered into February, 1977, between appellee and T & M Properties.

On May 22, 1981, the tribunal administrator for the American Arbitration Association wrote a letter to the parties giving notice that they had received a copy of the demand for arbitration. This letter told appellants of their right to counterclaim and the rule regarding site of the arbitration hearing. A former attorney for appellants entered into correspondence with the tribunal administrator and participated in the selection of an arbitrator and the place of the hearing. ²

The arbitration hearing was held October 22, 1981. Appellants elected not to attend, although notified. The award was rendered November 2, 1981, in favor of appellee in the sum of $17,726.50, plus $5,870.78 interest. On November 6, 1981, appellants were mailed a copy of the award. On January 28, 1982, appellee filed a petition for recognition of award and judgment in the district court. Appellants answered on April 23, 1982, alleging defenses and asking that the award be vacated. Appellee's motion for a summary judgment was granted August 20, 1982. The appeal is from this judgment.

The issues are:

1. Are the appellants' defenses raised in their answer to appellee's petition for recognition of award and judgment barred by the provisions of § 1-36-114(b), W.S.1977, because they were not made within 90 days of receipt of the arbitration award?

2. Did appellants receive adequate notice of what issues were arbitrated?

3. Did the arbitrator have the power to award interest on appellee's claims?

We will affirm.

I

Section 1-36-113, W.S.1977, provides:

"Upon application of a party the court shall confirm the award unless within the time limits allowed grounds are urged for vacating or modifying the award."

Section 1-36-114(b), W.S.1977, provides:

"An application for vacating an award shall be made within ninety (90) days after delivery of a copy of the award to the applicant, or if predicated upon corruption, fraud or other undue means it shall be made within ninety (90) days after the grounds are known or should have been known."

On November 6, 1981, appellants were mailed a copy of the award. On January 28, 1982, appellee filed a petition for recognition of award and judgment in district court under § 1-36-113, supra. Appellants contend that since appellee filed a petition under § 1-36-113, supra, then they are allowed to assert affirmative defenses regardless of the 90-day time proscriptions of § 1-36-114(b), supra. Appellee argues that the time limits of this statute apply.

Courts have ruled differently on this issue, but we think the better reasoned rule is that the time limits set out in § 1-36-114(b), supra, are applicable. It seems that the majority of jurisdictions which have adopted the Uniform Arbitration Act (7 Uniform Laws Annotated, 1978) follow this rule. In Chauffeurs, Teamsters, Warehousemen and Helpers, Local Union No. 135 v. Jefferson Trucking Company, Inc., 628 F.2d 1023 (7th Cir.1980), the court decided the question under an Indiana statute which provided:

" 'Confirmation of an award.--Upon application of a party, but not before ninety days after the mailing of a copy of the award to the parties, the court shall confirm an award, unless within the time limits hereinafter imposed grounds are urged for vacating or modifying or correcting the award, in which case the court shall proceed as provided in sections 13 and 14 of this act. * * * ' " 628 F.2d at 1026.

The fact that a party opposing an award delays in complying with it and effectively forces the other party into court to enforce the award should not accrue to the delaying party's benefit.

" * * * As the district court observed, this policy [of requiring a motion to vacate or an answer filed within the original 90-day period] would seem to condemn the conduct of the defendant who ignored an award disfavorable to it, failed to move to vacate the award, and then sought to be given its day in court when the plaintiff brought its suit in frustration to have the arbitration award enforced. If the defendant's defenses were of such vital importance to it, the defendant nevertheless had an opportunity to raise them in the manner contemplated by statute." Chauffeurs, Teamsters, Warehousemen and Helpers, Local Union No. 135 v. Jefferson Trucking Company, Inc., supra, at 1027.

Arbitration provides for voluntary settlement of disputes in an inexpensive and expeditious manner without resort to a tribunal and conducted without the rigid formality of strict rules of law. Riverton Valley Electric Association v. Pacific Power and Light Company, Wyo., 391 P.2d 489 (1964). Arbitration is embedded in the public policy of Wyoming and is favored by this court. Matter of Town of Greybull, Wyo., 560 P.2d 1172 (1977). ³ The short time period set out in § 1-36-114(b), supra, gives the arbitration award finality by forcing a party who opposes to petition the courts within 90 days.

Appellants here, through their answer, were asking for the affirmative relief of having the arbitration award vacated. There are two ways in which a party may present reasons for vacating an award: (1) by filing a petition with the trial court to vacate the award; or (2) by raising reasons supporting vacation in an answer to the other party's petition to confirm. ⁴ However, the answer itself must be filed within the 90-day time limit.

" * * * Although the answer is not framed as a counterclaim, the 'defenses' raised therein constitute a request for affirmative relief, namely, vacation of the arbitration award. A counterclaim for affirmative relief may not be asserted if barred by the statute of limitations. [Citation.]" Chauffeurs, Teamsters, Warehousemen and Helpers, Local Union No. 135 v. Jefferson Trucking Company, Inc., supra at 1027.

Appellants assert that since appellee was diligent enough to file a petition to confirm within 90 days and that since appellee consented to a late filing of the answer by appellants, then appellants' answer relates back to the date of the filing of the petition to confirm. Appellants cite no authority for the proposition that all pleadings relate back to the date of the filing of the original petition.

The filing of a petition to confirm thus does not extend the 90-day statutory time period within which a request for vacation of the award must be presented. Bloom v. Landy, Ill.App., 72 Ill.App.3d 383, 27 Ill.Dec. 878, 389 N.E.2d 1286 (1979). See also, Hatch v. Double Circle Ranch, 22 Ariz.App. 124, 524 P.2d 958 (1974); Trustees of the Boston & Main Corp. v. Massachusetts Bay Transportation Authority, 363 Mass. 386, 294 N.E.2d 340 (1973); Component Systems, Inc. v. Murray Enterprises of Minnesota, Inc., 300 Minn. 21, 217 N.W.2d 514 (1974); Emporium Area Joint School Authority v. Anundson Construction & Building Supply Co., 402 Pa. 81, 166 A.2d 269, 85 A.L.R.2d 774 (1960).

II

Appellants contend that the demand for arbitration did not put them on notice that any dispute between Miracle Enterprises and appellee was going to be arbitrated. They argue that since they were not notified in the demand for arbitration that any contract with Miracle Enterprises was involved, and since Miracle Enterprises was not made a party to the arbitration proceedings, then the arbitrator exceeded his authority by granting any award to appellee based on a contract with Miracle Enterprises. Section 1-36-114(a)(iii), W.S.1977, provides that a court shall vacate an award when arbitrators exceed their powers. The right to have a dispute submitted to arbitration is contractual. Panhandle Eastern Pipeline Company v. Smith., Wyo., 637 P.2d 1020 (1981). An arbitrator's authority is limited by the bounds of the agreement, and courts may vacate awards...