745 N.E.2d 1069 | Ohio Ct. App. | 2000
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[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *775
From the record we glean the following: Both Buyer's First and Realty One are members of CABOR whose purpose is, in part, [t]o promote and maintain high standards of conduct in the real estate profession as expressed in the Code of Ethics of the National Association of REALTORSR.1 Members are required, *776
pursuant to CABOR bylaws, to arbitrate disputes between each other in accordance with the Code of Ethics and Arbitration Manual of the National Association of REALTORSR and R.C.
On August 28, 1997, Buyer's First filed its first complaint in Cuyahoga County Common Pleas Court Case No. 339578 against Realty One, Rigney and CABOR, alleging that it acted as the agent for Trevor and Rhonda Collis who had purchased the home of Robert and Dianna Gronski. It claimed that, according to the Purchase Agreement attached to the complaint, both the Collises and the Gronskis had agreed that Buyer's First should receive a brokerage fee of 3.50% of the $117,000 purchase price for services rendered to the Collises. Buyer's First further alleged that Realty One was entitled to a commission from the Gronskis on the sale of the property. It further claimed that on April 17, 1997, after a CABOR arbitration hearing, the arbitrators awarded Realty One the full $3,925 that Buyer's First had received upon the closing of the Collis/Gronski sale, which award the CABOR Board of Directors confirmed on August 14, 1997. Buyer's First did not attach to the complaint copies of the CABOR rules which provide for arbitration of disputes, the arbitration agreement, the arbitration award, nor the award confirmation as required by R.C.
On December 29, 1997, Buyer's First filed a second complaint in Cuyahoga County Common Pleas Court, Case No. 346010, against Realty One, Lupi and CABOR, alleging that it had acted as an agent for Martino Rossi and Lisa Aveton in the purchase of a home from Richard A. Favazzo and/or John Kobal. It further alleged that the buyers and sellers agreed in writing to pay Buyer's First $3,443.75 as a brokerage fee from the $105,750 purchase price and that on December 8, 1997, the CABOR hearing panel awarded Realty One the $3,443.75 paid to Buyer's First. Again, Buyer's First did not attach to the complaint a copy of the purchase agreement nor either the CABOR rules or the arbitration agreement. It did, however, attach a copy of the arbitration award.
In both complaints, Buyer's First alleged in its first cause of action that the award was outside its [CABOR's] scope of authority in that no rule in the By-Laws or other regulations of CABOR authorized the making of an award of funds which were paid to Buyer's First as a result [of] and as consideration for its service and which was not in the nature of a real estate agent's commission. It further contended, the award was entirely ultra vires and manifestly mistaken in that by the rules of CABOR, the arbitration must be the subject of a contract between the complainant and the respondent. No such contract existed. Buyer's *777 First also claimed that Realty One and Rigney were guilty of laches because of their negligence in failing to raise their claim for said commission prior to and during the time the sales contract was finalized. Finally, Buyer's First requested that the judge reverse the arbitration award and grant judgment in its favor because Realty One would be unjustly enriched.
In its answers, CABOR asserted, inter alia, that it was an improper party to the suit. Realty One denied the various allegations in its answers, asserted in its counterclaims for entry of judgment in its favor on the arbitration awards, and attached all documentation required under R.C.
On March 27, 1998, the judge granted the defendants' joint motion to consolidate both actions upon his docket. On September 18, 1998, CABOR filed its motion for summary judgment, arguing that Buyer's First asserted no facts to support a cause of action against it and that it was completely immune from liability for its act of handling the arbitration. Later, on October 4, 1998, Realty One, Rigney and Lupi filed a motion for summary judgment on both Buyer's First's claims and Realty One's counterclaims. Realty One argued that the remedy sought by Buyer's First a reversal of the arbitration award after a de novo review — was not allowed under R.C. Chapter 2711. Moreover, it argued, Buyer's First could not show any specific grounds under the statute that would authorize the judge to vacate the arbitration award. Realty One then asked the judge to grant summary judgment in its favor on its counterclaims and confirm the two arbitration awards, because Buyer's First failed to show grounds for the vacation or modification of the award.
In response to both motions for summary judgment, Buyer's First asserted that the CABOR arbitrators acted outside their authority, arguing that they had authority only to consider the division of commissions where there is an agreement between its members to share commissions. Buyer's First attached as exhibit C a document titled Appendix I to Part Ten, Arbitrable Issues. It also attached an affidavit of James L. Restina, an officer of Buyer's First and a member of its Board of Directors, and copies of both the Collis and the Rossi/Averton Purchase Agreements.
In his affidavit, Restina claimed that Realty One sought to obtain funds from Plaintiff which were earned by Plaintiff pursuant to contracts between other parties, and of which contracts Plaintiff, was a third-party beneficiary. He asserted that neither the by-laws, rules of governance, rules of arbitration, nor membership conditions authorize CABOR arbitrators to award damages or other compensation to a member claiming funds earned by and paid to another member via a specific contract for services rendered. He also claimed that the sellers may have had separate contracts obligating them to pay Realty One *778 commissions greater than those called for under the Buyer's First purchase agreements and which were, in fact, paid to Realty One by the sellers.
On December 8, 1998, the judge entered the following order:
[Defendant], Cleveland Area Board of Realtors' motion for summary judgment is granted. Motion of [Defendants], Realty One Inc., Laura Rigney, and Marilyn Lupi for summary judgment on [Plaintiff's] complaints is hereby granted. Motion for summary judgment on the counterclaims of Realty One is granted. Pursuant to R.C.
2711.09 , the Court hereby confirms the two arbitration awards. FINAL.
It is from this journal entry Buyer's First appealed.
It is clear the order confirms the arbitration award but does not enter judgment on the award and, therefore, we are required to consider whether the order is final and appealable before addressing the merits of the Buyer's First appeal. We look to the following to answer that question: the rules announced in Stewart v. Midwestern Indem. Co (1989),
While arbitration was recognized as common law, a judge would not force the specific performance of an agreement to refer any matter in controversy between adverse parties to arbitrators. Nor [would] they compel arbitrators to make an award * * *. The reason given for this rule is that [the courts] will not aid parties in ousting, by their agreements, the jurisdiction of the ordinary tribunals of the country, established for the trial of causes. Conner v. Drake (1853),
In contrast to common-law arbitration, courts construing the early examples of statutory arbitration recognized that it is capable of becoming extensively useful in its operation as [i]t settles controversies speedily * * *, Carey, *779
Over one hundred years after Carey, the Supreme Court succinctly held that the law favors arbitration. Brennan v. Brennan (1955),
To this end, the General Assembly has limited the role of judicial review by delineating the circumstances under which a judge may vacate (R.C.
To further the purpose of the Arbitration Act, the General Assembly also provided for a two-step process in the ultimate entry of an arbitration award. After conducting a limited review under R.C.
This conclusion, however, does not end the inquiry since the Supreme Court has concluded that this section must be read in pari materia with R.C.
The Stewart decision was reaffirmed without opinion in Cleveland Police Patrolmen's Ass'n v. City of Cleveland (1998),
At the time the court decided Stewart, R.C.
An order that affects a substantial right in an action which in effect determines the action and prevents a judgment, an order that affects a substantial right made in a special proceeding or upon a summary application in an action *782 after judgment, or an order that vacates or sets aside a judgment or grants a new trial is a final order that may be reviewed, affirmed, modified, or reversed, with or without retrial.
R.C.
An order is a final order that may be reviewed, affirmed, modified, or reversed, with or without retrial, when it is one of the following:
(1) An order that affects a substantial right in an action that in effect determines the action and prevents a judgment;
(2) An order that affects a substantial right made in a special proceeding or upon a summary application in an action after judgment;
(3) An order that vacates or sets aside a judgment or grants a new trial;
(4) An order that grants or denies a provisional remedy * * *.
(5) An order that an action may or may not be maintained as a class action.
A special proceeding, as now defined by R.C.
After having determined that the present order under appeal was made in a special proceeding, we now consider whether it affects a substantial right. A substantial right as now defined by R.C.
[T]hat it affects substantial rights, if that must be deemed of any importance, must be apparent from the very fact that, in the judgment of the legislature, the rights affected by such order are of sufficient importance to be protected by allowing a review either by appeal or in error. Id. at 249.
Applying North to the present matter, the fact that the General Assembly has granted the right of appellate review to either orders confirming, modifying, correcting, or vacating an award, or from judgment on that award establishes that it has predetermined that the right involved is a substantial one. Therefore, this order confirming the arbitrators' award satisfies the definition of final order contained in subdivision (B)(2) of R.C.
Our in pari materia review, as required by Stewart, is in keeping with the definition of substantial right adopted by the General Assembly in 1998. It also furthers the purpose of the Arbitration Act by allowing the aggrieved party to quickly appeal without having to wait for the common pleas judge to enter judgment against the aggrieved party and in the triumphant party's favor. Therefore, whether we apply the mandates of R.C.
Turning now to the merits of this appeal, we first address Buyer's First's second assignment of error.
II. THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT FOR APPELLEES WHERE THE RULES GOVERNING THE ARBITRATION SPECIFICALLY PROVIDED FOR JUDICIAL REVIEW OF THE ARBITRATION PROCEDURE.
Buyer's First argues that R.C.
R.C.
In the instant case, it is clear that the judge's review was limited to the question of whether the arbitration awards were drawn from the essence or terms of the rules of arbitration between members as adopted by CABOR and the arbitration agreement as assented to by Buyer's First upon its membership *785 in the organization and upon its agreement to arbitrate both the Collis and Rossi/Averton disputes. This assignment of error is without merit.
We next consider the application of this standard in the context of Buyer's First's first and third assignments of error:
I. THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT FOR APPELLEES WHERE THE PLEADINGS AND EXHIBITS SUBMITTED DEMONSTRATED GENUINE ISSUES OF FACT IN DISPUTE RELATING TO THE EXTENT OF THE AUTHORITY OF ARBITRATORS IN THE SUBJECT MATTER UNDER ARBITRATION AS PROVIDED IN THE RULES OF THE ORGANIZATION.
III. [THE] TRIAL COURT ERRED IN GRANTING APPELLEES' MOTION FOR SUMMARY JUDGMENT WHERE EXHIBITS SUBMITTED PURSUANT TO THE MOTION CLEARLY SHOWED THE AWARD MADE BY THE ARBITRATORS TO BE EXCEEDING THEIR AUTHORITY.
Buyer's First argues that the purchase agreements entered into by both the buyers and sellers in the two transactions were not subject to arbitration pursuant to the CABOR code of ethics and rules of arbitration. Buyer's First denies any agreement with Realty One regarding these transactions, and contends the arbitration award giving the brokerage fee to Realty One fell outside the scope of authority granted to the arbitrators and should be reversed.
Realty One challenges this assertion, arguing that Buyer's First failed to state a claim upon which relief can be granted because R.C.
This Court reviews the grant of summary judgment de novo, applying the same standard as that applied by the trial judge. Druso v. Bank One of Columbus (1997),
(1) No genuine issue as to any material fact remains to be litigated; (2) the moving party is entitled to judgment as a matter of law; and (3) it appears from the evidence that reasonable minds can come to but one conclusion, and viewing such evidence most strongly in favor of the party against whom the motion for summary judgment is made, that conclusion is adverse to that party.
Temple v. Wean United, Inc. (1977),
The foundation of these assignments of error rests solely upon the premise that Buyer's First and Realty One did not have a contract or agreement regarding the division of a commission associated with each property. According to Buyer's First, under the CABOR rules of arbitration, the lack of agreement between them precludes the arbitrators from considering such a dispute.
As we indicated earlier, Buyer's First failed to provide the arbitration agreement or material outlining the authority of the arbitrators with its complaint and request to reverse the arbitration awards. Applying a strict construction of the Arbitration Act, this defect would ordinarily require the judge to deny a request to confirm, vacate, modify, or correct an arbitration award. Cf. Cleveland Police Patrolmen's Assn. v. Cleveland(1994),
In the event of contractual disputes or specific non-contractual disputes as defined by Standard of Practice 17-4 between REALTORSR associated with different firms, arising out of their relationship as REALTORSR, the REALTORSR shall submit the dispute to arbitration in accordance with the regulations of their Board or Boards rather than litigate the matter. [citing Article 17 of the Code of Ethics, emphasis omitted.]
* * *
As used in Article 17 of the Code of Ethics and in Part Ten of this Manual, the terms dispute and arbitrable matter refer to contractual issues and questions, and certain specific non-contractual issues and questions outlined in Standard of Practice 17-4, including entitlement to commissions and compensation in cooperative transactions, that arise out of the business relationships between REALTORSR, and between REALTORSR and their clients and customers * * *.
This document continues, noting that [m]any arbitrations conducted by Boards of REALTORSR involve entitlement to compensation offered by listing brokers through a multiple listing service or otherwise to cooperating brokers acting as subagents, [or] as agents of purchasers * * *. Buyer's First did not include with their brief or otherwise in the record, the language of Standard of Practice 17-4, referred to in Appendix I to Part Ten which purportedly outlines the specific non-contractual disputes subject to arbitration. *787
To the extent the rules governing CABOR and its members were disclosed, such rules contradict Buyer's First's contention. These rules apparently allow CABOR members to arbitrate disputes regarding their claims against each other for a portion or a whole of a real estate commission, regardless of whether the commission relates to an express commission-sharing agreement. Viewing the facts in a light most favorable to Buyer's First, we find no issue of material fact about the arbitrators exceeding their authority to be in dispute. Temple,
Additionally, CABOR is correct in its contention that it is immune from suit for its role in arbitrating the two commission disputes.
The ability to secure such able persons as arbitrators is essential if such system is to continue as a valuable tool of the judicial system in facing and coping with overcrowded dockets. It is, therefore, necessary and within the doctrines of quasi-judicial immunity, that arbitrators be immune from suits for acts performed within their capacity as arbitrators and performed within their assigned duties and authority. [Wolfe v. Columbia Gas Transmission Co (Mar. 30, 1982), Knox App. 81-CA-19, unreported.]
See, also, Barbara v. New York Stock Exchange, Inc. (C.A. 2, 1996),
Buyer's First argues in its fourth assignment of error:
IV. THE TRIAL COURT ERRED IN GRANTING APPELLEES' MOTIONS FOR SUMMARY JUDGMENT WHEN THE PLEADINGS, AFFIDAVIT [sic] CLEARLY RAISED THE QUESTION AND ISSUE OF A TORTIOUS INTERFERENCE BY THE ARBITRATORS WITH APPELLANT'S CONTRACTUAL RIGHTS.
Buyer's First argues that having as much as raised that question [of tortious interference with a contract] in the complaint, while perhaps not in those words, but by allegations tantamount thereto, a genuine issue of fact was raised, *788 defeating the ground for issuance of summary judgment. Both CABOR and Realty One assert that Buyer's First neither alleged such a cause of action nor presented any facts to support such a claim.
The elements of the tort of tortious interference with contract are (1) the existence of a contract, (2) the wrongdoer's knowledge of the contract, (3) the wrongdoer's intentional procurement of the contract's breach, (4) lack of justification, and (5) resulting damages. Fred Siegel Co., L.P.A. v. Arter
Hadden(1999),
Because Buyer's First failed to argue below that the facts support a claim for tortious interference with a contract against CABOR, we need not address the question here. It is fundamental that a reviewing court need not consider any issues that could have been raised in the trial court, but were not. Thomas Steel, Inc. v. Wilson Bennett, Inc. (1998),
It is ordered that the appellees recover from the appellant their costs herein taxed.
This court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the Cuyahoga County Common Pleas Court to carry this judgment into execution.
____________________________ ANNE L. KILBANE, JUDGE
TIMOTHY E. MCMONAGLE, P.J., AND JOHN T. PATTON, J., CONCUR
