Greer v. Delgrolice ( 2014 )

NOTICE: NOT FOR PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION DOES NOT CREATE
LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
JAMES GREER and MEREDITH GREER, Plaintiffs/Appellants,
v.
GARY A. DELGROLICE and TERESA A. DELGROLICE, husband and
wife; MOUNTAIN MARBLE MANUFACTURING, INC.; DELTAG
ENTERPRISES, I, L.L.C. (Affiliate); MTN M MFG, INC. (Successor Entity);
DELTAG ENTERPRISES, II – LOTS, L.L.C. (Successor); DELTAG
ENTERPRISES, III – PAGE, L.L.C. (Successor); DELTAG ENTERPRISES,
IV – DEWEY, L.L.C., Defendants/Appellees.
No. 1 CA-CV 13-0122
FILED 5-20-2014
_________________________________
Appeal from the Superior Court in Maricopa County
No. CV2011-097067
The Honorable Mark F. Aceto, Judge
AFFIRMED
COUNSEL
James and Meredith Greer, Sun City
Plaintiffs/Appellants
Jones, Skelton & Hochuli, P.L.C., Phoenix
By Jay P. Rosenthal, Lori L. Voepel, Jonathan P. Barnes, Jr.
Counsel for Defendants/Appellees Gary A. Delgrolice and Teresa A. Delgrolice
Holloway Odegard & Kelly, P.C., Phoenix
By Peter C. Kelly, II, Ellen M. Van Riper
Counsel for Defendants/Appellees Mountain Marble Manufacturing, Inc.,
Gary A. Delgrolice and Teresa A. Delgrolice, and Deltag Enterprises I, L.L.C.
MEMORANDUM DECISION
Presiding Judge Patricia K. Norris delivered the decision of the Court, in
which Judge Samuel A. Thumma and Judge Kent E. Cattani joined.
N O R R I S, Judge:
¶1 Plaintiffs/Appellants James Greer and Meredith Greer
appeal from the superior court’s order denying their application to vacate
an arbitration award entered by a three-member arbitration panel finding
in favor of Defendants/Appellees (collectively, “Defendants” unless
separately named) and rejecting the Greers’ claims for fraud, breach of
contract, negligent misrepresentation, promissory estoppel, and breach of
fiduciary duty arising out of the sale of a cultured marble business.
¶2 On appeal, as they did in the superior court, the Greers raise
numerous challenges and objections to the factual findings made by the
arbitration panel, 1 ranging from the Greers’ failure to adequately inspect
the business before purchasing it to the reasons for the business’s failure.
Based on our review of the record and briefing on appeal, all of the
1Arizona’s Uniform Arbitration Act, Ariz. Rev. Stat.
(“A.R.S.”) §§ 12-1501 to -1518 (2003), rather than Arizona’s Revised
Uniform Arbitration Act, A.R.S. §§ 12-3001 to -3029 (Supp. 2013), applies
here because the parties’ agreement predated January 1, 2011 and the
arbitration proceedings began before that date. See 2010 Ariz. Sess. Laws,
ch. 139, § 5 (2d Reg. Sess.) (Revised Uniform Arbitration Act “does not
affect an action or proceeding commenced or a right accrued before
January 1, 2011.”).
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GREER v. DELGROLICE et al.
Decision of the Court
Greers’ factual challenges are based upon evidence they allegedly
presented to the panel. We say “allegedly” because, as the superior court
noted, the Greers failed to provide the court with a transcript of the
proceedings before the panel. Absent the transcript, the superior court
was not in a position to evaluate the evidence presented to the panel, and
neither are we. See Anzilotti v. Gene D. Liggin, Inc., 899 S.W.2d 264, 267
(Tex. App. 1995) (“When a non-prevailing party seeks to modify or vacate
an arbitrator’s award, he bears the burden to bring forth a complete record
that establishes his basis for relief. . . . Without a record, we are to
presume that adequate evidence was presented to support the arbitrator’s
award.” (citations omitted)); c.f. Parrish v. Camphuysen, 107 Ariz. 343, 346,
488 P.2d 657, 660 (1971) (presumption favoring validity of Special Master’s
findings strengthened when appellate court did not receive transcript
(citations omitted)).
¶3 Further, even if the Greers had provided the superior court
with a transcript of the arbitration proceeding, as the court correctly
noted, the arbitrators’ factual findings are final and binding. Nolan v.
Kenner, 226 Ariz. 459, 463, ¶ 13, 250 P.3d 236, 240 (App. 2011) (citation
omitted); Smitty’s Super-Valu, Inc. v. Pasqualetti, 22 Ariz. App. 178, 180-81,
525 P.2d 309, 311 (1974) (citations omitted).
¶4 Similarly, the Greers also argue the panel misapplied the
law. But, like the panel’s findings of fact, the legal conclusions it made are
also final and binding. Nolan, 226 Ariz. at 463, ¶ 13, 250 P.3d at 240
(citation omitted); Smitty’s Super-Valu, Inc., 22 Ariz. App. at 181, 525 P.2d
at 311-12 (“Thus, even though a court reviewing an arbitration award
might consider erroneous some rulings on questions of law, the rulings
made by the arbitrators are binding unless they result in extending the
arbitration beyond the scope of submission.” (citation omitted)).
¶5 Restated for clarity, the Greers next argue that counsel for
the Delgrolices engaged in ex parte communications with the panel and
thus the award was “procured by corruption, fraud or other undue
means.” See Ariz. Rev. Stat. (“A.R.S.”) § 12-1512(A)(1) (2003). After
conducting an evidentiary hearing on their application to vacate the
arbitration award, the superior court found the Greers had failed to prove
the award was procured by corruption, fraud, or other undue means.
Whether we review the superior court’s decision de novo or for abuse of
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GREER v. DELGROLICE et al.
Decision of the Court
discretion, 2 we agree with the superior court that the Greers failed to
prove corruption, fraud, or other undue means by clear and convincing
evidence. See Nolan, 226 Ariz. at 462, ¶ 7, 250 P.3d at 239. Although the
Greers presented testimony that counsel for the Delgrolices spoke to the
panel on various occasions, counsel testified that the conversations he had
with the panel were casual conversations, having to do with daily events
or pleasantries and in the presence of all parties. Counsel further testified
that one panel member asked for a private area to make a call on another
matter and he led him to a private room. Counsel also denied having any
private conversation about the case or the evidence with any member of
the panel at that or any other time.
¶6 Furthermore, to show corruption, fraud, or other undue
means, a party must also show the improper conduct was “not
discoverable upon the exercise of due diligence prior to the arbitration.”
Id. The Greers testified at the evidentiary hearing they saw the alleged ex
parte communications during the arbitration; accordingly, we will “refuse
to consider claims that an award was procured through undue means
when the means were readily discoverable during arbitration.” Id. at ¶ 8.
¶7 Finally, the Greers argue the panel exceeded its powers 3 by
rejecting their factual and legal arguments. For the reasons previously
discussed, see supra ¶¶ 3-4, we disagree.
2Defendants assert we should review the superior court’s
order denying the Greers’ application to vacate the arbitration award for
abuse of discretion citing Brake Masters Systems, Inc. v. Gabbay, 206 Ariz.
360, 364 n.3, ¶ 12, 78 P.3d 1081, 1085 n.3 (App. 2003) (“Normally, we
review a trial court’s decision to confirm an arbitration award for an abuse
of discretion.” (citation omitted)), however, this court has reviewed a
vacatur of an arbitration award de novo. See Wages v. Smith Barney Harris
Upham & Co., 188 Ariz. 525, 532, 937 P.2d 715, 722 (App. 1997) (“After
examining the totality of the circumstances . . . we find that a reasonable
person could indeed conclude that [arbitrator] was partial to
[plaintiff] . . . .”). We do not need to decide which standard applies here,
however, because the result in this case is the same under either standard.
3We note the arbitration provision in the parties’ agreement
was very broad and required the parties to submit “any dispute” relating
to their agreement, except for a request for injunctive relief, to arbitration.
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GREER v. DELGROLICE et al.
Decision of the Court
¶8 For the foregoing reasons, we affirm the superior court’s
order denying the Greers’ application to vacate the arbitration award. As
the prevailing party, we award the Defendants their costs on appeal
contingent upon their compliance with Arizona Rule of Civil Procedure
21.
:MJT
See Smitty’s Super-Valu, Inc., 22 Ariz. App. at 180, 525 P.2d at 311
(arbitrators’ powers defined by agreement of parties (citations omitted)).
5