242 So. 3d 92
Miss.2018Background
- Caldwell (roofing subcontractor) and Yates (general contractor) had a Mississippi-governed subcontract for roofing at an Alabama site; Caldwell performed repairs under an oral “cost plus” arrangement and later claimed unpaid repair costs.
- The parties arbitrated the payment dispute; arbitrator heard three days of evidence (no transcript) and issued a 13‑page award on December 8, 2015; Yates’ motion for clarification to the arbitrator was denied.
- Caldwell moved in circuit court to confirm the award; Yates moved to modify/vacate under Mississippi arbitration statutes alleging an "evident miscalculation" (duplication of labor costs and retainage issues).
- At the confirmation hearing the trial court denied Caldwell’s motion to limit proof, allowed witness testimony and additional evidence outside the arbitration record, and modified the award by reducing it by $104,507 for an alleged evident miscalculation.
- The Supreme Court of Mississippi reversed: it held no evident miscalculation was apparent on the face of the award or from the arbitration record and that the trial court erred by admitting witness testimony beyond the arbitration record.
- The Court directed the circuit court to confirm the arbitrator’s award and declined to shift attorneys’ fees because the subcontract required each party to bear its own costs.
Issues
| Issue | Plaintiff's Argument (Caldwell) | Defendant's Argument (Yates) | Held |
|---|---|---|---|
| Whether the arbitrator’s award contained an "evident miscalculation" justifying modification under Miss. Code § 11‑15‑135 | Award was correct as issued; no facial mathematical error evident | Arbitrator duplicated labor costs (once under subcontract, once under oral repair agreement) and left retainage unresolved, producing double payment; this is an evident miscalculation | No. Court held an "evident miscalculation" must be apparent on the face of the award or from the arbitration record; no such error was shown, so modification was improper |
| Whether the trial court could receive new witness testimony/evidence beyond the arbitration record at confirmation hearing | Confirmation review should be limited to award and arbitration record; additional testimony is improper | Trial court may consider extrinsic evidence to identify and quantify an evident miscalculation | Court held it was error to admit witness testimony; permitting it converted the hearing into an impermissible de novo fact‑finding review |
| Proper treatment of retainage (whether award both final and left retainage unresolved) | Retainage properly reserved as amounts "unpaid yet remaining under dispute" and excluded from award | Reserving retainage while issuing final award is inconsistent and supports modification | Court found no error: arbitrator excluded retainage as not ripe for decision; reservation did not create a miscalculation |
| Whether attorneys’ fees and costs should be shifted on appeal | Caldwell sought fees for defending meritless motion to modify | Yates argued statutory procedures warranted litigation; contract allocated fees to each party | Court enforced subcontract provision requiring each party to pay its own fees and declined to award fees to Caldwell |
Key Cases Cited
- MS Credit Ctr., Inc. v. Horton, 926 So. 2d 167 (Miss. 2006) (federal law controls enforcement where arbitration involves interstate commerce)
- Volt Info. Sci., Inc. v. Bd. of Tr. of Leland Stanford Jr. Univ., 489 U.S. 468 (U.S. 1989) (parties may choose state arbitration rules if consistent with FAA)
- Hall Street Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576 (U.S. 2008) (FAA limits judicial review of arbitration awards)
- Apex Plumbing Supply, Inc. v. U.S. Supply Co., Inc., 142 F.3d 188 (4th Cir. 1998) ("evident miscalculation" must appear on face of award)
- City of Hattiesburg v. Precision Constr., LLC, 192 So. 3d 1089 (Miss. Ct. App. 2016) (adopted facial/mathematical error standard; no inquiry into evidentiary basis of award)
- Wilson v. Greyhound Bus Lines, Inc., 830 So. 2d 1151 (Miss. 2002) (judicial review of arbitration award is narrowly limited; courts indulge every reasonable presumption in favor of arbitration)