Verdex Steel & Const. Co. v. Board of Sup'rs, Maricopa County

• Decision Date: 26 April 1973
• Docket Number: No. 1,CA-CIV,1
• Citation: 19 Ariz.App. 547,509 P.2d 240
• Parties: VERDEX STEEL AND CONSTRUCTION COMPANY, Appellant, v. BOARD OF SUPERVISORS, MARICOPA COUNTY, Arizona, acting for Board of Education of Chandler High School District and Glenn A. McCollum, Appellees. 1867.
• Court: Arizona Court of Appeals

Page 240

509 P.2d 240

19 Ariz.App. 547

VERDEX STEEL AND CONSTRUCTION COMPANY, Appellant, v. BOARD OF SUPERVISORS, MARICOPA COUNTY, Arizona, acting for Board of Education of Chandler High School District and Glenn A. McCollum, Appellees.

No. 1 CA-CIV 1867.

Court of Appeals of Arizona, Division 1, Department A.

April 26, 1973.

Strong & Pugh, by William K. Strong, Phoenix, for appellant

Moise E. Berger, Maricopa County Atty., by Albert I. Firestein, Deputy County Atty., for the Board of Supervisors of Maricopa County and for The Board of Education of the Chandler School District.

Porter, Stahnke & Phillips, by Bernald C. Porter, Tempe, for appellee McCollum.

STEVENS, Judge.

A board of arbitrators entered two awards arising out of a single arbitration proceeding. One of the successful parties filed a suit to confirm the award and one of the defendants filed a third-party claim to confirm that portion of the award which was entered in favor of the third-party plaintiff. The award in favor of the plaintiff was paid and is not in issue. The trial court declined to confirm the award in favor of the third-party plaintiff and this appeal followed.

The appellee, Glenn C. McCollum, is a registered architect. Through the Board of Supervisors of Maricopa County, he entered into a contract for design and other services relating to the construction of a gymnasium for the Chandler High School District. Upon the opening of the bids the appellant, Verdex Steel & Construction Company, a corporation, was awarded the construction contract which included the fabrication and erecting of steel arches. The McCollum-School District contract contained an arbitration clause. The Verdex-School District contract contained an arbitration clause in a contract drawn on the standard American Institute of Architects form. McCollum prepared the Verdex-School District contract but was not a signatory thereof.

The Glens Falls Insurance Company was the surety on the Verdex construction bond. Verdex awarded Bart Del Duca Masonry Contractor, Inc., a corporation, the subcontract to do the masonry work.

On 17 October 1963, during the process of construction, three steel arches then in place above the floor of the building collapsed. Needless to say, problems arose out of this construction failure, including suits filed by three of the Verdex employees seeking damages against the School District and McCollum.

Verdex was instrumental in initiating arbitration arising out of this collapse. It designated Charles R. Magadini, a structural engineer, as its arbitrator. There was an extensive exchange of correspondence between the parties. Initially McCollum took the position that there was no contractual obligation which required him to arbitrate with Verdex. The proposed arbitration date was continued from time to time. Finally upon the recommendation of W. T. Hamlin, ¹ after consultation between McCollum's attorney and the School District attorney, a second arbitrator was designated, being Robert E. Franklin of Los Angeles, a structural engineer. Together the two designated arbitrators selected Phoenix businessman Theo Jablonski as a third arbitrator. There was no writing by shich McCollum expressly consented to arbitrate. His attorney was interested in the use of the arbitration proceedings as a discovery device in relation to the pending civil suits filed by the three Verdex employees.

The arbitration proceeding commenced on 1 November 1965 and consumed two days. Forty-seven pages of the 587-page transcript are devoted to the Del Duca claim and the balance to the dispute between Verdex on the one hand and McCollum, together with his principal, the School District, on the other. McCollum's participation was extensive. At no time in the arbitration proceedings did he disavow that he was an active participant willing to be bound by the arbitrators' award.

It was made clear during the arbitration proceedings that the Board of Supervisors was not a party to the arbitration proceedings.

A reading of the reporter's transcript of the arbitration proceedings discloses a very knowledgeable and unbiased hearing. The rulings on evidence were sound. We do not have the benefit of the exhibits which were presented to the board of arbitration or the benefit of the Hamlin deposition presented to the board as it was stipulated that all documents be returned to the respective counsel after the award of the arbitrators was entered.

The unanimous award of the arbitrators recited certain fact findings and concluded:

'Claim No. 1: To Bart Del Duca Masonary Contractor, Inc.

Against: Verdex Steel & Construction Co., and to Insurer, the Glens Falls Insurance Company with no recourse against Glenn A. McCollum and the Chandler High School District

$4,323.16

'Claim No. 2: Verdex Steel & Construction Co.

Against: The Board of Education of Chandler High School District and Glenn A. McCollum with no recourse $4,484.12'

against the Board of Supervisors of Maricopa County, Arizona

Del Duca sued Verdex and Glens Falls to confirm the award entered in that company's favor and Glens Falls paid Del Duca.

In the same civil action Verdex filed a third-party claim against the Board of Supervisors, the School District and McCollum seeking to confirm the award entered in favor of Verdex. McCollum answered and pleaded that he was not obligated to arbitrate and that he did not consent to arbitrate. The trial court entered its judgment as follows:

'This case, having come on for trial on the Third Party Complaint (Third Party Petition for Confirmation of Award of Arbitrators and for Judgment of Award) and having been under advisement, and the Court having considered the evidence presented and the law cited, finds that the Defendant McCOLLUM did not consent to and did not take part in the arbitration proceedings and that the arbitrators exceeded their powers in arriving at the award against the Third Party Defendants to this action, therefore,

'IT IS ORDERED that the Third Party Petition for Confirmation of Award of Arbitrators is denied, and that Judgment of Award is denied; and that the Third Party Defendants have judgment thereon and for their costs herein incurred.'

It is this judgment which is before us on appeal.

BOARD OF SUPERVISORS

The entire record discloses that the Board of Supervisors executed the construction contract for and on behalf of the School District, that otherwise it was not a party to the contract, that it did not agree to arbitrate and that it made that fact crystal clear during the arbitration proceedings. We affirm the judgment of the trial court insofar as that judgment determines that there is no liability on the part of the Board of Supervisors. Roeder v. Huish, 105 Ariz. 508, 467 P.2d 902 (1970), recognized the privilege of urging this defense in a suit to confirm an award of a board of arbitration where a proper foundation for that defense has been preserved. In Bacchus v. Farmers Insurance Group Exchange, 12 Ariz.App. 1, 467 P.2d 76 (1970), the Court of Appeals upheld the trial court in its findings that the matter in dispute before the Court was not the subject of the arbitration proceedings. Thus, it is not every award of arbitrators which is immune from being questioned in the judicial review thereof. We recognize that the Court of Appeals opinion in Bacchus was vacated on review by our Supreme Court in a case by the same name reported at 106 Ariz. 280, 475 P.2d 264 (1970), of which we comment later in this opinion. We concur with the reasoning of the Court of Appeals, an issue expressly not decided on review.

McCOLLUM

The appeal to this Court included the judgment in favor of McCollum. McCollum appeared in this Court and did not file a brief, nor did he join in the brief of the School District. We have reviewed the record made before the board of arbitration and the record made in the Superior Court. There is clearly, at a minimum, a debatable issue as to whether McCollum participated in the arbitration proceedings to the extent that he is bound by the award of the arbitrators. Under A.R.S. § 12--1512, subsec. A, par. 5, one who is not bound by contract to arbitrate and who voluntarily participates in an arbitration proceeding, without making a clear record of non-participation in the binding effects of the arbitration, is bound by the award to the same extent and under the same conditions as a party to a written agreement to arbitrate.

Where there is an absence of a debatable question, we do not hesitate to affirm, even in the absence of an answering brief. Air East, Inc. v. Wheatley, 14 Ariz.App. 290, 482 P.2d 899 (1971). On the other hand, where debatable questions

appear, the failure to file an answering brief is taken as a confession of error and we do not hesitate to reverse. United Bonding Insurance Company v. Thomas J. Grosso Investment, Inc., 4 Ariz.App. 285, 419 P.2d 546 (1966) and Arizona Tank Lines, Inc., v. The Arizona Corporation Commission, 13 Ariz.App. 19, 473 P.2d 821 (1970). For these reasons, fortified by the reasons for our holding in favor of Verdex, we reverse the judgment in favor of McCollum with directions to confirm the award which was entered in favor of Verdex and against McCollum.

VERDEX

In 1962 Arizona adopted the Uniform Arbitration Act which is now A.R.S. § 12--1501 through § 12--1517. In our opinion the pre-Arizona Supreme Court opinions on arbitration awards, and the Court review thereof, while they declare a policy...