Marvin Olsen, Et Ux v. H. Gary Wallis, Et Ux
48654-7
| Wash. Ct. App. | Mar 14, 2017Background
- Olsen and Wallis were former law partners who each acquired a one-half interest in an office building (their law office) and a separate residential rental property; Wallis completed payment under a 1978 purchase contract in 1992.
- Olsen obtained a private loan secured by the office building; he stopped participating in mortgage and property expenses after disciplinary problems culminating in disbarment around 2000; Wallis paid the loan and expenses thereafter.
- Olsen sued in 2012 seeking partition, rent for his share, prejudgment interest, and attorney fees; Wallis counterclaimed for abandonment and adverse possession.
- Parties stipulated to binding arbitration in 2014 (appeal limited to fraud or denial of constitutional due process); arbitration occurred in August 2015 and the arbitrator issued an award in September 2015 (transferring office building title to Wallis, awarding Olsen limited rent from Dec 2012, leaving parties co-owners of rental property, no attorney fees).
- Olsen sought clarification from the arbitrator but did not file a motion to modify, correct, or vacate the award in superior court; Wallis moved to confirm the award and obtain judgment; the superior court confirmed the award and entered judgment for Wallis; Olsen appealed.
Issues
| Issue | Plaintiff's Argument (Olsen) | Defendant's Argument (Wallis) | Held |
|---|---|---|---|
| Whether superior court erred by confirming arbitration award and entering judgment | Olsen objected to confirmation, contending arbitrator erred and was partial; asked court not to confirm | Superior court must confirm and enter judgment unless award is modified, corrected, or vacated under RCW 7.04A | Court affirmed: mandatory confirmation/entry of judgment where no motion to modify/correct/vacate was filed |
| Whether arbitration award should be vacated for legal error (arbitrator exceeded powers) | Award wrongly partitioned office, left co-ownership of rental prop, denied rent/interest/fees; asks merits review | Vacatur requires narrow facial legal error apparent on the award; merits-based review is disfavored | Court held Olsen failed to show a facial legal error; cannot vacate under RCW 7.04A.230(1)(d) |
| Whether arbitrator was biased or partial warranting vacatur | Arbitrator was "facially, grossly and fundamentally unfair," showing sympathy for Wallis or bias against Olsen | Vacatur for evident partiality requires nondisclosure of a relationship or circumstance creating reasonable inference of bias and prejudice | Court rejected bias claim: no nondisclosure or factual basis showing arbitrator impartiality compromised |
| Whether arbitration award violated due process (arbitrary and capricious) | Award arbitrary, capricious, and thus denied constitutional due process rights | Due process claim must be shown; parties’ stipulation permitted due process appeal but statutory review controls; arbitrary award alone is not statutory ground for vacatur | Court rejected due process claim: conclusory, no showing of denial of process and not a statutory ground for vacatur |
Key Cases Cited
- Salewski v. Pilchuck Veterinary Hosp., Inc., 189 Wn. App. 898 (discussing narrow facial legal-error review of arbitration awards)
- Broom v. Morgan Stanley DW, Inc., 169 Wn.2d 231 (arbitration review principles; facial legal error standard)
- Davidson v. Hensen, 135 Wn.2d 112 (courts should not reexamine merits of arbitration awards)
- Kenneth W. Brooks Trust A. v. Pac. Media, LLC, 111 Wn. App. 393 (interpreting mandatory confirmation under RCW 7.04A.220)
- Price v. Farmers Ins. Co. of Wash., 133 Wn.2d 490 (ministerial duty to reduce unmodified award to judgment)
- S&S Constr., Inc. v. ADC Props., LLC, 151 Wn. App. 247 (public policy favors finality of arbitration awards)