Motion to vacate an arbitration award; DAIIE v. Gavin; MCR 3.602(J)(2)(c); Claim the arbitrator exceeded his authority by committing an error of law; Miller v. Miller; Common-law conversion; Aroma Wines & Equip., Inc. v. Columbian Distrib. Servs., Inc.; Calculation of damages; Conversion of websites; Sarver v. Detroit Edison Co.; Expert testimony; MCR 3.602(A) (incorporating provisions in the Uniform Arbitration Act (MCL 691.1681 et seq.)); MCL 691.1695(1); Principle that questions of the admissibility of evidence are for the arbitrator to decide; Gozdor v. Detroit Auto. Inter-Ins. Exch.; Defendants’ individual liability
The court rejected defendants’ claim that the arbitrator committed an error of law as to conversion or the calculation of damages, and held that the arbitrator correctly applied Sarver in ruling that the websites plaintiffs set up and operated for years could be the subject of a conversion action. Further, the trial court correctly refused to vacate the arbitration award based on the arbitrator’s consideration of expert testimony. But in his supplemental opinion, the arbitrator did not fully comply with the trial court’s remand order to address defendants’ individual liability for conversion. Thus, the court affirmed in part the denial of defendants’ motion to vacate the arbitration award, and remanded for clarification of the original award as to each defendants’ liability. The case involved a dispute over business assets. “The arbitrator found that plaintiffs proved a claim for common-law conversion and awarded plaintiffs damages of $120,750, plus costs, fees, and judgment interest. Defendants moved to vacate or modify the award, and the parties stipulated to remand the matter to the arbitrator for clarification of the award. After the arbitrator issued a supplemental opinion, defendants” unsuccessfully again moved to vacate the award. They argued that the arbitrator committed an error of law by determining that they could be liable for conversion of property plaintiffs had surrendered to a bank. The court rejected this claim because “the arbitrator did not find that plaintiffs had surrendered the property at issue to the Bank[.]” Rather, the arbitrator determined that they “were the lawful owners of the intangible assets at issue in this case, including, but not limited to, intellectual property, trade names, e-mail accounts, customer lists and related data, websites, promotional materials, bidding data, telephone numbers, and signage. The arbitrator found that the Bank had the right to seize the intangible assets under the terms of its surrender agreement with plaintiffs, but that the Bank released its lien on those assets, which meant that plaintiffs retained their ownership over” them. Given that he concluded, as a matter of fact, that they retained ownership over those intangible assets, there was no error of law in finding that defendants could be liable for converting those assets.
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