Escapes! To the Shores Condominium Association, Inc., individually and on behalf of Tom Allen, Gaja Bathala, Johnny Berry and Alice Berry, Anna Camus, Alexis Delcambre, Joseph Durastanti, Danny Ford, Chris Fudge and Gary Fudge, Ann Gancayo, Rick Greene, Scott Guerin, Gayle Herring, Caryle Dyer, Ted Hicks, Rodney Hogan, Peter Jolet, Ronn Babin, Gordon Jones and Vicki Jones, Pat Lee, John Mangum, Chris Nieland and Kathy Nieland, Shirley Olsen, William Ranieri, Noah Sechrest, and Jennifer Skaggs and Mark Skaggs v. Hoar Construction, LLC, and Architectural Surfaces, Inc. ( 2023 )

Rel: February 17, 2023
Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern
Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts,
300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0650), of any typographical or other
errors, in order that corrections may be made before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2022-2023
_________________________
1210378
_________________________
Escapes! To the Shores Condominium Association, Inc.,
individually and on behalf of Tom Allen, Gaja Bathala, Johnny
Berry and Alice Berry, Anna Camus, Alexis Delcambre, Joseph
Durastanti, Danny Ford, Chris Fudge and Gary Fudge, Ann
Gancayo, Rick Greene, Scott Guerin, Gayle Herring, Caryle
Dyer, Ted Hicks, Rodney Hogan, Peter Jolet, Ronn Babin,
Gordon Jones and Vicki Jones, Pat Lee, John Mangum, Chris
Nieland and Kathy Nieland, Shirley Olsen, William Ranieri,
Noah Sechrest, and Jennifer Skaggs and Mark Skaggs
v.
Hoar Construction, LLC, and Architectural Surfaces, Inc.
1210378
Appeal from Baldwin Circuit Court
(CV-17-901106)
SELLERS, Justice.
Escapes! To the Shores Condominium Association, Inc. ("the
Association"), individually and on behalf of certain condominium-unit
owners, 1 appeals from an order denying a Rule 59, Ala. R. Civ. P., motion
to vacate a judgment entered on an arbitration award in favor of Hoar
Construction, LLC ("Hoar"), and Architectural Surfaces, Inc. ("ASI"). We
affirm.
I. Facts
The arbitration award in favor of Hoar and ASI stems from the
construction of a condominium building located in Orange Beach known
as "Escapes! To the Shores." Hoar was the general contractor for the
construction project; Stephen G. Hill was the architect for the
construction project; and ASI was the subcontractor responsible for the
1The condominium-unit owners are Tom Allen, Gaja Bathala,
Johnny Berry and Alice Berry, Anna Camus, Alexis Delcambre, Joseph
Durastanti, Danny Ford, Chris Fudge and Gary Fudge, Ann Gancayo,
Rick Greene, Scott Guerin, Gayle Herring, Caryle Dyer, Ted Hicks,
Rodney Hogan, Peter Jolet, Ronn Babin, Gordon Jones and Vicki Jones,
Pat Lee, John Mangum, Chris Nieland and Kathy Nieland, Shirley
Olsen, William Ranieri, Noah Sechrest, and Jennifer Skaggs and Mark
Skaggs.
2
1210378
installation of the exterior surfaces to the condominium building. After
construction of the condominium building was substantially complete,
the developer of the project ( Escapes!, Inc.) sold the units and transferred
ownership and management of the common areas to the Association.
The Association thereafter commenced this action against Hoar,
ASI, and Hill in the Baldwin Circuit Court, seeking damages arising out
of alleged construction and design defects to the condominium building,
specifically, "stucco blistering and water intrusion." The Association's
claims against Hoar and ASI proceeded to arbitration, pursuant to the
Federal Arbitration Act ("the FAA"), 9 U.S.C. § 1; however, the
Association's claims against Hill remained pending in the trial court.
Following a hearing, a panel of three arbitrators ("the arbitration panel")
issued a final award in favor of Hoar and ASI, concluding, in relevant
part, that the defects to the condominium building were the result of a
design defect and not a construction defect. The Association filed a timely
notice of appeal in the trial court, pursuant to Rule 71B, Ala. R. Civ. P.,
which, as explained below, governs appeals from arbitration awards.
Pursuant that rule, the trial court entered a judgment on the arbitration
3
1210378
award. The Association thereafter filed a Rule 59 motion to vacate that
judgment, which the trial court denied. This appeal followed.
II. Appellate Jurisdiction
As a preliminary matter, we address the Association's argument
that this Court lacks jurisdiction to consider this appeal because, it says,
the judgment entered on the arbitration award, pursuant to Rule 71B,
has not been certified as a final judgment, pursuant to Rule 54(b) --
which allows a trial court to certify a judgment with respect to less than
all claims or all parties as final and appealable. The Association contends
that, because its claims against Hill remain pending in the trial court,
the judgment entered on the arbitration award requires certification
under Rule 54(b) to be appealable. In other words, the Association argues
that when an action involves still-pending claims that were not resolved
in arbitration or additional parties who are not subject to the arbitration
award, a judgment entered on an arbitration award pursuant to Rule 71B
is not a final judgment unless and until a trial court certifies it as final
pursuant to Rule 54(b). For the reasons discussed below, we conclude
that there is no interplay between Rule 71B and Rule 54(b). See Alabama
Pub. Serv. Comm'n v. Redwing Carriers, Inc., 281 Ala. 111, 115, 199 So.
41210378
2d 653, 656 (1967) ("By and large, the construction of rules of court are
for the court which promulgated them.").
Rule 71B establishes the procedure for appealing an arbitration
award. 2 The rule provides, in relevant part:
"(f) Procedure After Filing [a notice of appeal]. The
clerk of the circuit court promptly shall enter the award as the
final judgment of the court. Thereafter, as a condition
precedent to further review by any appellate court, any party
opposed to the award may file, in accordance with Rule 59,
[Ala. R. Civ. P.,] a motion to set aside or vacate the judgment
based upon one or more of the grounds specified in Ala. Code
1975, § 6-6-14, or other applicable law. The court shall not
grant any such motion until a reasonable time after all parties
are served pursuant to paragraph (e) of this rule. The
disposition of any such motion is subject to civil and appellate
rules applicable to orders and judgments in civil actions.
"(g) Appellate Review. An appeal may be taken from
the grant or denial of any Rule 59 motion challenging the
award by filing a notice of appeal to the appropriate appellate
court pursuant to Rule 4, Alabama Rules of Appellate
Procedure."
(Emphasis added.) This Court has summarized the procedure for
appealing an arbitration award as follows:
" '(1) A party must file a notice of appeal with the appropriate
circuit court within 30 days after service of the notice of the
2Rule 71B, which became effective February 1, 2009, supersedes the
procedures for appealing an arbitration award provided in § 6-6-15, Ala.
Code 1975. See Committee Comments to Rule 71B.
5
1210378
arbitration award; (2) the clerk of the circuit court shall
promptly enter the award as the final judgment of the circuit
court; (3) the aggrieved party may file a Rule 59, Ala. R. Civ.
P., motion to set aside or vacate the judgment, and such filing
is a condition precedent to further review by any appellate
court; (4) the circuit court grants or denies the Rule 59 motion;
and (5) the aggrieved party may then appeal from the circuit
court's judgment to the appropriate appellate court .' "
Russell Constr. of Alabama, Inc. v. Peat, 310 So. 3d 341, 346 (Ala. 2020)
(quoting Guardian Builders, LLC v. Uselton, 130 So. 3d 179, 181 (Ala.
2013)) (emphasis added).
As this Court's summary of the procedure for appealing an
arbitration award in Peat acknowledges, the plain language of Rule
71B(f) requires that an arbitration award be "promptly" entered as "the
final judgment" of the circuit court. By using the word "promptly," Rule
71B(f) contemplates that a final judgment shall be entered on the
arbitration award immediately. See, e.g., Black's Law Dictionary 1468
(11th ed. 2019) (defining "prompt" as "[t]o incite, esp. to immediate
action."); id. at 897 (defining "immediate" as "[o]ccurring without delay;
instant ….").
Rule 71B(g) provides that "[a]n appeal may be taken from the grant
or denial of any Rule 59 motion challenging the award by filing a notice
of appeal to the appropriate appellate court pursuant to Rule 4, Alabama
6
1210378
Rules of Appellate Procedure." Rule 4(e), Ala. R. App. P., in turn,
provides that "[a]n order granting or denying a motion to set aside or
vacate an arbitration award filed in accordance with Rule 59, Alabama
Rules of Civil Procedure, is appealable as a matter of right pursuant to
Rule 71B, Alabama Rules of Civil Procedure …." (Emphasis added.)
Neither the two relevant subdivisions of Rule 71B nor Rule 4(e) expressly
references Rule 54(b).
Rule 71B unambiguously provides that a judgment entered on an
arbitration award is a "final judgment" from which an appeal may be
taken as a matter of right -- without resort to Rule 54(b) certification.
Moreover, even if this Court were inclined to find any conflict between
the two rules of procedure, Rule 71B, the more specific rule regarding
appeals of arbitration awards, would prevail over Rule 54(b), the broader
rule relating to certification of certain otherwise nonfinal orders as final
judgments. Rule 71B, then, would be an exception to Rule 54(b). See Ex
parte Jones Mfg. Co., 589 So. 2d 208, 211 (Ala. 1991) (noting that, "[i]n
the event of a conflict between two statutes, a specific statute relating to
a specific subject is regarded as an exception to, and will prevail over, a
general statute relating to a broad subject"); see also Ex parte State ex
7
1210378
rel. Daw, 786 So. 2d 1134, 1137 (Ala. 2000) ("In construing rules of court,
this Court has applied the rules of construction applicable to statutes.").
Our conclusion that there is no interplay between Rule 54(b) and Rule
71B is entirely consistent with the purposes of private dispute resolution
under the FAA. See Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 559
U.S. 662, 685, (2010) ("In bilateral arbitration, parties forgo the
procedural rigor and appellate review of the courts in order to realize the
benefits of private dispute resolution: lower costs, greater efficiency and
speed, and the ability to choose expert adjudicators to resolve specialized
disputes."). Accordingly, this Court will consider the merits of the appeal.
III. Standard of Review
In reviewing a trial court's order confirming an arbitration award
under the FAA, this Court reviews questions of law de novo and findings
of fact for clear error. Municipal Workers Comp. Fund, Inc. v. Morgan
Keegan & Co., 190 So. 3d 895 (Ala. 2015).
IV. The Merits
The Association argues that the trial court erred in refusing to
vacate the judgment on the arbitration award in favor of Hoar and ASI
pursuant to 9 U.S.C. § 10(a)(3) of the FAA. That section authorizes a
8
1210378
court to vacate an arbitration award when "the arbitrators were guilty
of misconduct … in refusing to hear evidence pertinent and material to
the controversy." Id. The Association contends that the arbitration panel
engaged in misconduct by refusing to consider construction-progress
photographs of the condominium building's south-elevation balconies
taken from May 2007 through October 2007, which, the Association
claims, were pertinent and material to show that "a hole on each balcony
to wall interface on each side of every balcony[] was known or should have
[been] known to [Hoar and ASI] during construction." In other words,
the Association challenges the arbitration panel's ruling on an
evidentiary matter, specifically arguing that the arbitration panel's
refusal to consider those photographs deprived it of a fundamentally fair
hearing.
In analyzing the Association's claim that the judgment on the
arbitration award should be vacated under § 10(a)(3) based on alleged
misconduct, this Court must be mindful that judicial review of an
arbitration award is extremely limited and that an arbitration award
should be vacated "only in very unusual circumstances." First Options of
Chicago, Inc. v. Kaplan, 514 U.S. 938, 942 (1995). To establish
9
1210378
"misconduct" under § 10(a)(3), the Association "must demonstrate that
the arbitration proceedings were fundamentally unfair." Tucker v. Ernst
& Young, LLP, 159 So. 3d 1263, 1278 (Ala. 2014); see also Tempo Shain
Corp. v. Bertek, Inc., 120 F.3d 16, 20 (2d Cir. 1997) ("Courts have
interpreted section 10(a)(3) to mean that except where fundamental
fairness is violated, arbitration determinations will not be opened up to
evidentiary review."). It is well settled that arbitrators have "broad
discretion" with regard to evidentiary rulings. International Chem.
Workers Union v. Columbian Chems. Co., 331 F.3d 491, 497 (5th Cir.
2003). See, e.g., Amalgamated Meat Cutters & Butcher Workmen of N.
Am., Dist. Local No. 540 v. Neuhoff Bros. Packers, Inc., 481 F.2d 817, 820
(5th Cir. 1973) (explaining that, regarding evidentiary rulings, an
arbitrator "has great flexibility and the courts should not review the legal
adequacy of his evidentiary rulings"); Hoteles Condado Beach, La Concha
& Convention Ctr. v. Union De Tronquistas Local 901, 763 F.2d 34, 39
(1st Cir. 1985) (noting that arbitrators are "not bound to hear all of the
evidence tendered by the parties" but rather, are required only to "give
each of the parties to the dispute an adequate opportunity to present its
evidence and arguments"); and Tempo Shain Corp., 120 F.3d at 19 ("It
10
1210378
has long been recognized that 'Arbitrators must be given discretion to
determine whether additional evidence is necessary or would simply
prolong the proceedings.' " (citation omitted)).
Accordingly, our review in this case is extremely limited, and we
will decide only whether, under the facts presented, the arbitration
proceeding was fair and, specifically, whether the Association was
provided an adequate opportunity to present its evidence and arguments.
The record indicates that, pursuant to the arbitration scheduling order,
all document requests were required to be served on or before January
19, 2021. The final arbitration hearing commenced on September 8,
2021, and concluded on September 16, 2021. During that hearing, the
arbitration panel heard testimony from 18 witnesses, including experts,
and considered over 300 exhibits, including photographs. After the
hearing had concluded, but before closing briefs were filed, the
Association requested (1) that the arbitration panel accept as additional
exhibits 10 balcony-construction photographs taken from November 2006
through April 2007 that the Association had had in its possession, but
had failed to introduce at the hearing, and (2) that the arbitration panel
order Hoar and ASI to "search for and produce all construction progress
11
1210378
photographs of the south elevation balconies from May 2007 through
October 2007 …." The Association claimed, among other things, that "the
balcony construction progress photos … would be both material and
pertinent to important issues in this matter" and that the photographs
"would not be irrelevant, of slight value, or cumulative." The Association
finally claimed that "the determination of whether these photos exist
would not be unduly burdensome or prejudicial to any party." In other
words, the Association implicitly conceded in its request that the
photographs it sought to discover -- specifically, photographs of the
condominium building's south-elevation balconies taken from May 2007
through October 2007 -- may not even exist. After considering the
Association's requests, the arbitration panel informed the Association
that the additional balcony-construction photographs that it had failed
to admit during the hearing -- specifically, those taken from November
2006 through April 2007 -- were admitted for consideration but that the
Association's "motion to reopen discovery" to compel a search for
additional photographs was denied. Under the facts presented, the
arbitration panel acted well within its discretion in denying the
Association's request to reopen discovery to compel a search for evidence
12
1210378
that may not even exist. More importantly, both sides were provided a
full opportunity to present their evidence and arguments; as indicated,
the arbitration panel heard testimony from 18 witnesses, including
experts, and considered over 300 exhibits. Accordingly, the arbitration
panel's decision to deny the Association's motion to reopen discovery to
compel a search for additional evidence did not rise to the level of
misconduct described in § 10(a)(3), nor did it yield a fundamentally unfair
hearing under the FAA.
V. Conclusion
Based on the foregoing, the Association has failed to demonstrate
that the arbitration panel engaged in misconduct that would warrant
vacatur under § 10(a)(3). Accordingly, the order denying the Association's
Rule 59 motion and the judgment entered on the arbitration award are
affirmed.
AFFIRMED.
Parker, C.J., and Shaw, Wise, Bryan, Mendheim, Stewart, Mitchell,
and Cook, JJ., concur.
13