Turquoise Properties Gulf, Inc. v. Overmyer
Decision Date | 30 September 2011 |
Docket Number | 1100160. |
Citation | 81 So.3d 1250 |
Parties | TURQUOISE PROPERTIES GULF, INC. v. Hugh OVERMYER et al. |
Court | Alabama Supreme Court |
OPINION TEXT STARTS HERE
Daniel G. Blackburn, Mark H. Taupeka, and Rebecca A. Gaines of Blackburn & Conner, P.C., Bay Minette, for appellant.
Adam M. Milam and Shelley H. Milam of Milam & Milam, LLC, Fairhope, for appellees.
Turquoise Properties Gulf, Inc. (“Turquoise”), appeals from a judgment of the Baldwin Circuit Court denying its motion to alter, amend, or vacate an arbitration award in an action filed by Clark A. Cooper and David L. Faulkner, Jr., and by Hugh Overmyer and Adrienne Overmyer (hereinafter referred to collectively as “the claimants”). We reverse and remand.
On April 24, 2005, the Overmyers signed a purchase and escrow agreement by which they agreed to purchase a condominium to be built as part of “phase I” of a condominium complex Turquoise was developing in Orange Beach. The purchase price for the condominium was $1,200,900. In conjunction with the purchase, the Overmyers posted a letter of credit in the amount of $240,180, which constituted 20% of the purchase price.
On October 20, 2005, Cooper and Faulkner signed a purchase and escrow agreement agreeing to purchase another condominium to be built as part of “phase I” of the same condominium complex. The purchase price for that condominium was $1,360,900. Cooper and Faulkner posted a letter of credit in the amount of $272,180, which, like the Overmyers' letter of credit, constituted 20% of the purchase price to which they had agreed.
When construction neared substantial completion, the claimants declined to “close” on the purchases on their respective units, allegedly because Turquoise had failed to build an outdoor pool and sundeck area or to provide individual storage units and private cabanas, which, the claimants alleged, it had agreed to build and to provide.
The portion of the purchase and escrow agreements pertinent to this appeal provides as follows:
As noted above, the claimants had paid Turquoise 20% of the total purchase price of each of the two units. When the claimants refused to close on their units, however, Turquoise did not refund the 5% in excess of the 15% of the purchase price the claimants had paid (“the excess 5%”).
The purchase and escrow agreements also contained an arbitration provision, which provided that any dispute between the parties would be “governed by the Federal Arbitration Act (9 U.S.C. § 1 et seq.)” and that the arbitration would be “administered by the American Arbitration Association in accordance with the Construction Industry Dispute Resolution Procedures of the American Arbitration Association....”
On June 18, 2008, Cooper and Faulkner filed with the American Arbitration Association a demand for arbitration of their claims against Turquoise. On June 23, 2008, the Overmyers filed a similar demand. The initial arbitration demands contained claims of breach of contract, fraud, and violations of the Interstate Land Sales Full Disclosure Act, 15 U.S.C. § 1701 et seq. The claimants amended their arbitration demands in January 2009 to include a conversion claim based on Turquoise's refusal to refund the excess 5% in accordance with the default provision of the purchase and escrow agreements. The claimants alleged that Turquoise informed them that it would not refund the excess 5% unless they dismissed their arbitration demands, which the claimants declined to do. In their conversion claims, the claimants contended they had suffered “damage[ ] and mental anguish and stress” as a result of the conversion of their deposit money. The claimants requested relief in the form of compensatory damages, punitive damages, costs, interest, and reasonable attorney fees.
It is undisputed that in June 2009 Turquoise returned the excess 5% to the claimants because it was ordered by the arbitrator to do so. Cooper and Faulkner were refunded approximately $68,000; the Overmyers were refunded approximately $60,000. In an evidentiary hearing before the arbitrator held on January 25–27, 2010, the claimants acknowledged that Turquoise had paid them the excess 5%.1
On June 8, 2010, the arbitrator entered a lengthy arbitration award containing findings of fact and conclusions of law. Pertinent to this appeal, the arbitrator recounted in his rendition of the facts that “[t]he [excess] 5% was returned to Faulkner, Cooper, and the Overmyers in June, 2009.” Concerning the claimants' conversion claims, the arbitrator concluded as follows:
“The Arbitrator finds that an award of punitive damages is not warranted.”
The arbitrator awarded damages to the claimants as follows:
“In favor of Clark Cooper and David Faulkner and against Turquoise Properties Gulf, Inc., on their claim for conversion, and within thirty (30) days from the date of this award Turquoise Properties Gulf, Inc. will pay them jointly the sum of SEVENTY ONE THOUSAND ONE HUNDRED THIRTY TWO DOLLARS AND NINETEEN CENTS ($71,132.19).
“....
“In favor of Hugh Overmyer and Adrienne Overmyer and against Turquoise Gulf Properties Gulf, Inc. on their claim for conversion, and within thirty (30) days from the date of this award Turquoise Properties Gulf, Inc. will pay them the amount of SIXTY TWO THOUSAND SEVEN HUNDRED SIXTY NINE DOLLARS AND TWENTY THREE CENTS ($62,769,23).
“....
On June 11, 2010, Turquoise filed a motion to modify the arbitration award on the ground that the arbitrator had made a computational error in his calculation of damages by failing to credit Turquoise for refunding to the claimants the excess 5%. Turquoise argued that the damages awarded amounted to a double recovery for the claimants and that the damages on the conversion claims should have consisted solely of the interest that accrued on the excess 5% during the period the funds were converted. On June 23, 2010, the arbitrator denied Turquoise's motion to modify, explaining:
“Rule 47 Construction Industry Arbitration Rules and Mediation Procedures (amended and effective September 1,2007), controls the disposition of the motion. The rule states, as follows:
“ ‘Within twenty calendar days after the transmittal of an award, the arbitrator on his or her initiative, or any party, upon notice to the other parties, may request that the arbitrator correct any clerical, typographical, technical or computational errors in the award. The arbitrator is not empowered to re-determine the merits of any claim already decided.
“ ‘If the modification request is made by a party, the other parties shall be given ten calendar days to respond to the request. The arbitrator shall dispose of the request within twenty calendar days after transmittal by the AAA to the arbitrator of the request and any response thereto.
“ ‘If applicable law provides a different procedural time frame, that procedure shall be followed.’
On July 22, 2010, Turquoise appealed the arbitration award to the Baldwin Circuit Court pursuant to Rule 71B, Ala. R. Civ. P. The next day, the claimants filed in the circuit court a motion to enter the arbitrator's award as a final judgment; the circuit court granted the claimants' motion on August 3, 2010. On August 16, 2010, Turquoise filed a motion to alter, amend, or vacate the final judgment of the arbitrator. On September 21, 2010, the circuit court denied Turquoise's motion. Turquoise appeals from the judgment of the circuit court.
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