194 So. 3d 1285
La. Ct. App.2016Background
- Brice Building Co. (general contractor) contracted with Southland Steel to fabricate and erect steel for a New Orleans school; their subcontract required binding arbitration for disputes.
- Southland stopped work in Sept. 2011; Brice hired replacement subcontractors and paid them; Brice sought recovery in arbitration for those costs.
- A three-member arbitration panel issued a final award on Feb. 11, 2015, awarding Brice $817,761.01 (damages, attorneys’ fees, costs, and expenses) plus interest.
- Brice moved in district court to confirm the award; Southland moved to vacate (arguing public-policy invalidity because Brice allegedly contracted with an unlicensed replacement subcontractor) and filed exceptions (no cause/no right of action).
- At a June 18, 2015 hearing the district court granted Brice’s motion to confirm, denied Brice’s request for additional fees, denied Southland’s motions as moot, and entered judgment; Southland appealed.
- The appellate court reviewed de novo (confirmation) and for manifest error (vacatur denial), upheld confirmation, found Southland’s public-policy argument not a statutory ground for vacatur, and denied Brice’s request for additional appellate fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court erred by granting motion to confirm before ruling on Southland’s motion to vacate and exceptions | Southland: district court prematurely confirmed award, should have heard vacatur/exceptions first and remand for hearing | Brice: confirmation proper; pending motions became moot because statutory grounds for vacatur absent | Court: Procedural sequencing error was harmless; district court correctly found Southland’s vacatur ground substantively deficient and properly confirmed award |
| Whether public-policy (alleged payments to an unlicensed subcontractor) is a valid basis to vacate the arbitration award | Southland: contracts with unlicensed contractor are absolutely null; award enforcing payments under such contracts violates public policy and must be vacated | Brice: arbitration focused on Southland’s breach and damages; public-policy claim not among statutory vacatur grounds and cannot override strong policy favoring arbitration | Court: Public-policy argument does not satisfy La. Rev. Stat. 9:4210 grounds; arbitration award must stand to preserve arbitration’s finality and purpose |
Key Cases Cited
- Montelepre v. Waring Architects, 787 So.2d 1127 (La. App. 4 Cir.) (arbitration award given res judicata effect; burden on party attacking award)
- Mack Energy Co. v. Expert Oil & Gas, 159 So.3d 437 (La.) (strong public policy favoring arbitration and deference to arbitral awards)
- Firmin v. Garber, 353 So.2d 975 (La.) (errors of fact or law do not invalidate a fair arbitration award)
- Rauscher Pierce Refsnes, Inc. v. Flatt, 670 So.2d 537 (La. App. 4 Cir.) (La. Rev. Stat. 9:4210 is exclusive statutory authority to vacate an award despite public-policy claims)
- Standard Coffee Service Co. v. Preis, 499 So.2d 1314 (La. App. 4 Cir.) (example where void contract/public-policy issues were considered in arbitration context)
- St. Tammany Manor, Inc. v. Spartan Bldg. Corp., 509 So.2d 424 (La.) (Supreme Court precedent limiting judicial vacatur to statutory grounds)