Fette v. Peters Construction Co
310 Mich. App. 535
| Mich. Ct. App. | 2015Background
- Fette and the Berrien County Board of Public Works sought to vacate an arbitration award (~$45,301) favoring Peters Construction; Peters cross-appealed to confirm the award.
- Contract included an arbitration clause under the AAA Construction Industry Rules; dispute arose from unforeseen subsurface conditions and extra costs Peters claimed were due.
- Arbitration hearing occurred August 12, 2013; defendant did not formally offer its pre-filed exhibits at the hearing, relying instead on testimony.
- Plaintiffs alleged the arbitrator exceeded authority and prejudiced rights because defendant submitted no exhibits at the hearing; trial court confirmed the award anyway.
- The trial court quashed a subpoena to depose Needham, finding his testimony would not aid plaintiffs since Needham assisted defendant at arbitration and facts were known from the hearing.
- On cross-appeal, Peters sought sanctions under MCR 2.114 for frivolous vacatur; trial court denied sanctions; appellate review affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the arbitrator exceeded authority or prejudiced rights | Fette argued the arbitrator erred by relying on exhibits not presented at hearing. | Peters argued the arbitrator was within discretion and properly considered evidence and testimony. | No; award drew essence and no reversible procedural error found. |
| Whether quashing Needham's deposition was an abuse of discretion | Needham testimony could illuminate arbitration handling and exhibits. | Needham would not add relevant information and deposition would be burdensome. | No abuse; subpoena quashed. |
| Whether sanctions for frivolous vacatur were warranted | Vacatur action lacked basis; frivolous conduct possible. | Actions were in good faith due to unsettled law on review scope. | Sanctions not warranted; good-faith basis found. |
| Whether appellate costs/fees could be awarded under MCL 600.2591 | Rule 2591 could sanction frivolous proceedings extending to appeals. | Appellate costs/fees not authorized by MCL 600.2591; not applicable to appeals. | Denied; cannot award appellate costs under MCL 600.2591. |
Key Cases Cited
- Saveski v Tiseo Architects, Inc., 261 Mich App 553 (2004) (arbitration review limited; no merits reweighing evidence)
- DAIIE v Gavin, 416 Mich 407 (1982) (definitive review limits on arbitration awards)
- Gordon Sel-Way, Inc. v Spence Bros, Inc., 438 Mich 488 (1991) (statutory arbitration framework and judgment entry on award)
- Washington v Washington, 283 Mich App 667 (2009) (narrow review of arbitration merits; essence of award standard)
- Donegan v Mich Mut Ins Co, 151 Mich App 540 (1986) (courts cannot reweigh arbitrator’s evidence credibility)
- Gregory J Schwartz & Co Inc v Fagan, 255 Mich App 229 (2003) (courts defer to arbitrators on procedural matters)
- Howsam v Dean Witter Reynolds, Inc., 537 U.S. 79 (1999) (arb rules/procedural questions designated to arbitrators)
- Jerico Constr, Inc v Quadrants, Inc, 257 Mich App 22 (2003) (frivolous claim standards and reasonableness hindsight)
- Edge v Edge, 299 Mich App 121 (2012) (appellate costs mechanics and MCL 600.2591 scope)
- Barrow v Detroit Election Comm’n, 305 Mich App 649 (2014) (motion timing for sanctions under appellate rules)