{¶ 3} On January 2, 2004, Kostas subcontracted with Midwest to provide the glass curtainwall system for the Pinnacle project. After various disputes between the parties, work halted on the Pinnacle project. Kostas then engaged a different organization, Harmon, Inc., to complete the curtainwall system. Thereafter, on February 2, 2005, Midwest filed a demand for arbitration under section 6.2 of the parties' subcontract. Midwest amended its *4 demand for arbitration on April 26, 2005. On May 20, 2005, Midwest filed a complaint in federal court, naming Gus Georgalis and Harmon, Inc.
{¶ 4} The parties later agreed to arbitrate the issue. The arbitrator set up a procedure to define the issues that would be tried at the arbitration hearing. The arbitrator required the parties to file prehearing briefs disclosing the issues to be tried, supporting arguments and authorities, and all elements of claims or defenses. The parties submitted their briefs, and the arbitrator presided over the arbitration proceedings from May 15 through May 19, 2006. On August 31, 2006, the arbitrator awarded Midwest $573,511.51, including $115,089.55, jointly and severally against Georgalis, individually, and Kostas Construction Co., Ltd., the general contractor, for attorneys fees based upon the bad faith conduct of Georgalis and Kostas. The trial court confirmed this award. In the trial court and on appeal, Georgalis challenged only that portion of the award which was entered against him personally. Appellants now appeal.
{¶ 7} The limited scope of judicial review of arbitration decisions comes from the fact that arbitration is a creature of contract. Contracting parties who agree to submit disputes to an arbitrator for final decision have chosen to bypass the normal litigation process. If parties cannot rely on the arbitrator's decision (if a court may overrule that decision because it perceives factual or legal error in the decision), the parties have lost the benefit of their bargain. Arbitration, which is intended to avoid litigation, would instead become merely a system of "junior varsity trial courts" offering the losing party de novo review. Motor Wheel Corp. v. Goodyear Tire RubberCo. (1994),
{¶ 8} By the same token, respect for the parties' contract justifies the limited review undertaken by the court of common pleas. An arbitrator draws his power from the parties' contract. For a court to enforce an award that is clearly beyond the arbitrator's authority *6 denies the parties of the benefit of their bargain just as surely as overturning an award because the court disagrees with the decision on a factual or legal basis. Id.
{¶ 9} Our review of the common pleas court's judgment is likewise limited. "Appellate review of arbitration proceedings is confined to an evaluation of the order issued by the court of common pleas, pursuant to R.C. Chapter
{¶ 10} It is with the above standards in mind, that we now review appellants' arguments. Appellants argue that appellees did not properly raise the Ohio Prompt Payment Act. However, at the time appellee Midwest filed its arbitration demand, it did not know that the Ohio Prompt Payment Act claims existed.
{¶ 11} Under R.C.
{¶ 12} Midwest described the Prompt Payment Act claims in its prehearing brief in a section entitled "Payment Failures."2 "From the beginning of the project, Kostas repeatedly failed to make timely payments in violation of the subcontract and Ohio's Prompt Payment Act(R.C. §
{¶ 13} On May 15 through May 19, 2006, a hearing was held before Arbitrator Keranen. Midwest stated at this hearing that it was seeking interest and attorneys fees based on both the Ohio Prompt Payment Act and on Georgalis' bad faith. For example, President Donald F. Kelly explained the following as it concerned Midwest's damage calculation and exhibit:
"Q. Item H is `Interest on late payments, $160,335.'
A. Yes. That's calculated for all of the payments — I think they were all eight. We have it on a table, a complicated table. The calculations are based on Georgalis' violation of the Prompt Pay Act in Ohio, which, if *8 breached — if he violates that act with Midwest or anyone, he is subject to interest charges at 18 percent.
Q. And finally, you have `Legal costs due to bad faith' estimated at $104,000. That's the costs for this arbitration?
A. Yes."
{¶ 14} The attorneys who represented Georgalis at the arbitration were aware of, and responded to, the Prompt Payment Act claims.5 For example, early in the hearings, counsel specifically discussed the Prompt Payment Act with the arbitrator.6 During the dialogue, Georgalis' attorneys responded to the arbitrator's questions as to the statutory interest rate for violations of the Prompt Payment Act and suggested that the parties brief other Prompt Payment Act issues raised by the arbitrator. In addition, attorneys for Georgalis and Kostas argued Prompt Payment Act issues in the post hearing briefs.7
{¶ 15} Moreover, at the arbitration, Georgalis' counsel stipulated to the evidence which establishes Georgalis' Prompt Payment Act violations. Midwest presented a table that showed the dates and amounts of Midwest's payment applications, the dates and amounts requested for Midwest on Georgalis' payment applications to Huntington, the dates and the amounts Huntington disbursed funds to Georgalis allocated for Midwest, and the dates on *9 which Georgalis paid this money to Midwest, if he ever did. Georgalis' counsel stipulated to the accuracy of Exhibit 375.8
{¶ 16} In addition to the evidence above, the parties' agreements to arbitrate included all disputes relating to the project. For example, paragraphs two and three of the Agreement to Arbitrate state as follows:
"2. Midwest agrees to arbitrate in the Arbitration Proceeding its claims against Harmon and Georgalis arising out of the Project, including, but not limited to, the claims raised in the Federal Lawsuit, as if it were bound to do so under the terms of the Subcontract Agreement;
3. Harmon and Georgalis agree to the arbitration in the Arbitration Proceeding of Midwest's claims against them arising out of the Project, including, but not limited to the claims raised in the Federal Lawsuit, as if they were bound to do so under the terms of the Subcontract Agreement;" (Emphasis added.)
{¶ 17} Therefore, the plain language of the agreement allows for claims raised in the federal lawsuit, however, is not limited to those claims. Moreover, if the parties had intended to limit the claims that would be subject to arbitration they could easily have done that by simply listing the claims that would be subject to arbitration.
{¶ 18} Midwest raised Prompt Payment Act claims in its prehearing brief. At the hearing, Midwest stated that it was seeking Prompt Payment Act interest and attorneys fees from Georgalis. The arbitration specifically discussed the Prompt Payment Act with *10 Georgalis' counsel. Midwest offered substantial evidence of Kostas' Prompt Payment Act violations and Georgalis' personal bad faith in causing those violations. Georgalis attended the entire hearing, testified at length, and had a full and complete opportunity to rebut the evidence presented as to his bad faith conduct. Accordingly, the evidence demonstrates that the Prompt Payment Act, as well as other relevant issues, were properly before the arbitrator and the lower court. Moreover, the explicit language of the Arbitration Agreement specifies that the claims of the parties are not specifically limited to claims raised in the federal lawsuit.
{¶ 19} In addition to finding the issues to be properly before the arbitrator and the lower court, we also find the arbitration award to be well supported under Ohio law. There is a rational connection between the award and the evidence which the arbitrator heard. A decision is unreasonable where there is no sound reasoning process that would support that decision. AAA Enters. Inc. v. River Place Comm.Redevelopment Corp. (1990),
{¶ 20} Under Ohio law, an individual who commits fraud or acts in bad faith can be held personally liable for his conduct, even when he acts through a corporate entity and the entity is also liable. Yo-Can, Inc.v. The Yogurt Exchange Inc.,
{¶ 21} The evidence in the case at bar demonstrates that the claims against Georgalis were subject to arbitration under the parties' agreement. Evidence of Georgalis' bad faith was presented at the arbitration hearing. The record and the evidence demonstrate that the Prompt Payment Act was specifically addressed before, during, and after the hearing. Midwest specifically stated that it was seeking Prompt Pay interest and attorneys fees from Georgalis at the hearing. Georgalis was represented by counsel, attended the hearings, testified at length, and was not precluded from admitting any evidence. There is a rational basis for awarding attorneys fees under the Prompt Payment Act to an individual who commits fraud such that his company violates the act. Georgalis did not cite any rule of procedure which was violated by the arbitrator.
{¶ 22} Upon review, we find that the trial court acted properly in confirming the arbitrator's award. Furthermore, we find that the arbitrator did not exceed his authority in entering judgment against Gus Georgalis in his individual capacity under the Prompt Payment Act. The conclusions of the arbitrator are grounded in the evidence and the terms of the agreement and are rationally supported. Hence, the arbitrator's award is proper, and there *12 is no basis to vacate the arbitration award. For the foregoing reasons, we hold that the common pleas court acted properly.
{¶ 23} Accordingly, appellants' sole assignment of error is overruled.
Judgment affirmed.
It is ordered that appellee recover from appellants costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure.
MELODY J. STEWART, J., and FRANK D. CELEBREZZE, JR., J., CONCUR