Contracts

This summary also appears under Alternative Dispute Resolution

 

Issues: Arbitration; Arbitrator's jurisdiction; Waiver of right to challenge arbitration award; Arrow Overall Supply Co. v. Peloquin Enters.; American Motorists Ins. Co. v. Llanes; Right result reached for the wrong reason; Taylor v. Laban; Michigan public policy favoring arbitration to resolve disputes; Rooyakker & Sitz, PLLC v. Plante & Moran, PLLC; Purpose of arbitration; NuVision v. Dunscombe; "Mutual assent" to arbitrate; Ehresman v. Bultynck & Co., PC; Contractual interpretation; Klapp v. United Ins. Group Agency, Inc.; Singer v. American States Ins.; Freemont Ins. Co. v. Izenbaard; Whether the arbitrator exceeded his authority; MCR 3.602(J)(2); Saveski v. Tiseo Architects, Inc.; Whether a dispute is subject to arbitration; Fromm v. MEEMIC Ins. Co.; Watts v. Polaczyk

Court: Michigan Court of Appeals (Unpublished)

Case Name: Blue River Fin. Group, Inc. v. Elevator Concepts, Ltd.

e-Journal Number: 57741

Judge(s): Per Curiam – Markey, Owens, and Fort Hood

 

The court held that the trial court properly entered an order enforcing an arbitration award in favor of the plaintiff-acquisition firm in its action seeking commissions on the sale of the defendants' business. Plaintiff sought commissions from the sale of defendant ECL (the business). The matter went to arbitration and an award was entered for plaintiff. It later filed suit to enforce the arbitration award. The trial court granted plaintiff's motion and entered a judgment for $255,184.25 against defendants, jointly and severally. On appeal, the court first found that although the trial court erred in finding that defendant-Scott (ECL's managing member) waived his right to challenge the arbitrator's jurisdiction, the error was harmless because he was still bound by the arbitration agreement and the arbitrator had jurisdiction to enter an award against him. It rejected defendants' argument that Scott was not a party to the agreement and the arbitrator exceeded his authority in assigning liability to him. "The plain language of the agreement demonstrates that the parties intended the contract to apply to Scott in his capacity as a shareholder and owner of ECL and that there was mutual assent expressed between Scott and defendant such that Scott was bound by the arbitration clause." Further, "[i]t would have been evident to Scott upon his review of the agreement that he was entering it in his capacity as a shareholder owner and that his individual actions could become the subject of claims adjudicated through arbitration." Finally, the court rejected defendants' argument that the arbitrator exceeded his authority by finding liability and awarding damages for claims outside the scope of the arbitration clause. "Because the arbitration clause does not limit possible damage awards, there was nothing expressly preventing the arbitrator from finding defendants jointly and severally liable, or imposing treble damages." Further, "a court may not hunt for errors in the arbitrator's determination of who is liable under an arbitrated contract or what damages are owed to whom." A "facially valid damage award should not be disturbed." Affirmed.

 

Full Text Opinion

This summary also appears under Alternative Dispute Resolution

 

Issues: Arbitration; Arbitrator's jurisdiction; Waiver of right to challenge arbitration award; Arrow Overall Supply Co. v. Peloquin Enters.; American Motorists Ins. Co. v. Llanes; Right result reached for the wrong reason; Taylor v. Laban; Michigan public policy favoring arbitration to resolve disputes; Rooyakker & Sitz, PLLC v. Plante & Moran, PLLC; Purpose of arbitration; NuVision v. Dunscombe; "Mutual assent" to arbitrate; Ehresman v. Bultynck & Co., PC; Contractual interpretation; Klapp v. United Ins. Group Agency, Inc.; Singer v. American States Ins.; Freemont Ins. Co. v. Izenbaard; Corporate officer liability for individual tortious conduct; Department of Agric. v. Appletree Mktg., LLC; Whether the arbitrator exceeded his authority; MCR 3.602(J)(2); Saveski v. Tiseo Architects, Inc.; Whether a dispute is subject to arbitration; Fromm v. MEEMIC Ins. Co.; Watts v. Polaczyk

Court: Michigan Court of Appeals (Unpublished)

Case Name: Elevator Concepts, Ltd. v. Blue River Fin. Group, Inc.

e-Journal Number: 57729

Judge(s): Per Curiam - Markey, Owens, and Fort Hood

 

The court held that the trial court properly granted summary disposition for the defendant-acquisition firm in the plaintiffs' action to vacate an arbitration award. Defendant sought commissions from the sale of plaintiff-ECL (the business). The matter went to arbitration and an award was entered for defendant. Plaintiffs then filed suit asking the trial court to vacate the arbitration award. The trial court granted summary disposition for defendant. On appeal, the court first found that although the trial court erred in finding that plaintiff-Scott (ECL's managing member) waived his right to challenge the arbitrator's jurisdiction, the error was harmless because he was still bound by the arbitration agreement and the arbitrator had jurisdiction to enter an award against him. It rejected plaintiffs' argument that Scott was not a party to the agreement and the arbitrator exceeded his authority in assigning liability to him. "The plain language of the agreement demonstrates that the parties intended the contract to apply to Scott in his capacity as a shareholder and owner of ECL and that there was mutual assent expressed between Scott and defendant such that Scott was bound by the arbitration clause." Further, "[i]t would have been evident to Scott upon his review of the agreement that he was entering it in his capacity as a shareholder owner and that his individual actions could become the subject of claims adjudicated through arbitration. Furthermore, it is well settled that that corporate officers can be held personally liable for individual tortious conduct." Finally, the court rejected plaintiffs' argument that the arbitrator exceeded his authority by finding liability and awarding damages for claims outside the scope of the arbitration clause. "Because the arbitration clause does not limit possible damage awards, there was nothing expressly preventing the arbitrator from finding plaintiffs jointly and severally liable, or imposing treble damages." Further, "a court may not hunt for errors in the arbitrator's determination of who is liable under an arbitrated contract or what damages are owed to whom." Affirmed.

 

Full Text Opinion
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