Ward v. Ohio State Waterproofing , 2012 Ohio 4432 ( 2012 )

[Cite as Ward v. Ohio State Waterproofing, 2012-Ohio-4432.]
STATE OF OHIO ) IN THE COURT OF APPEALS
)ss: NINTH JUDICIAL DISTRICT
COUNTY OF SUMMIT )
JAMES WARD, et al. C.A. No. 26203
Appellees
v. APPEAL FROM JUDGMENT
ENTERED IN THE
OHIO STATE WATERPROOFING, et al. COURT OF COMMON PLEAS
COUNTY OF SUMMIT, OHIO
Appellants CASE No. CV 2010-10-6692
DECISION AND JOURNAL ENTRY
Dated: September 28, 2012
WHITMORE, Presiding Judge.
{¶1} Defendant-Appellant, Ohio State Waterproofing (“OSW”), appeals from a
judgment of the Summit County Court of Common Pleas denying its motion to vacate an
arbitration award. This Court reverses and remands.
I
{¶2} Plaintiff-Appellees, James and Brandi Ward (“the Wards”), were experiencing
flooding in the basement of their home. The Wards contacted OSW to inspect their basement
and to make recommendations on how to resolve the water problem. In September 2008, based
on OSW’s recommendations, the Wards entered into a contract with OSW. OSW was to install
several products in exchange for $12,870. OSW completed its work pursuant to the contract, but
the Wards’ water problem persisted. Despite OSW performing several warranty repairs in 2009,
the Wards were still experiencing flooding in their basement. In January 2010, the Wards
requested OSW refund the contract price, but no refund was made.
2
{¶3} The Wards discovered that in 2007, Springfield Township had hired Butcher and
Sons, Inc. to demolish a building on the lot adjacent to the Wards. In the spring of 2010, at the
request of the Wards, Springfield Township discovered the source of the Wards’ water problems
was a broken water line buried on the adjacent property. The Wards did not experience any
water problems after the water line was fixed.
{¶4} In October 2010, the Wards filed a complaint against OSW for breach of contract,
and against Springfield Township and Butcher and Sons, Inc. for damages. OSW filed a motion
to compel arbitration, citing an arbitration clause in the contract signed by the Wards.
Ultimately, the Wards and OSW agreed to binding arbitration and the court stayed the matter and
referred them to arbitration.
{¶5} The arbitrators found OSW had breached its contract with the Wards and awarded
them the contract price plus interest and attorney’s fees. On September 26, 2011, the trial court
issued two orders: (1) reinstating the case to the active docket, and (2) adopting the arbitrators’
report and award as a judgment of the court. On that same day, OSW filed a motion to vacate
the arbitrators’ award. On November 8, 2011, the trial court denied OSW’s motion to vacate the
award. OSW now appeals and raises one assignment of error for our review.
II
Assignment of Error
OSW’S MOTION TO VACATE ARBITRATION AWARD WAS DENIED IN
ERROR BECAUSE THE ARBITRATORS ALLOWED THE APPELLEES,
JAMES AND BRANDI WARD (HEREINAFTER “WARD”), TO INTRODUCE
EVIDENCE NOT DISCLOSED TO OSW IN DISCOVERY; DID NOT PERMIT
OSW’S INSPECTOR TO TESTIFY ABOUT HIS CONVERSATIONS WITH
THE WARDS WITH REGARD TO THE SERVICES THAT WOULD BE
PERFORMED BY OSW AND; AND (sic) THE ARBITRATORS EVIDENT
MISTAKE MADE THE AWARD UNJUST AND/OR UNCONSCIONABLE
ALL IN CONTRAVENTION OF OHIO REVISED CODE § 2711.10 WHICH
STATES THAT AN ARBITRATION AWARD SHOULD BE VACATED IF: 1)
3
THE AWARD WAS PROCURED BY CORRUPTION, FRAUD, OR UNDUE
MEANS; 2) THERE IS EVIDENT PARTIALITY OR CORRUPTION ON THE
PART OF THE ARBITRATORS, OR ANY OF THEM; 3) THE
ARBITRATORS WERE GUILTY OF MISCONDUCT IN REFUSING TO
POSTPONE THE HEARING, UPON SUFFICIENT CAUSE SHOWN, OR IN
REFUSING TO HEAR EVIDENCE PERTINENT AND MATERIAL TO THE
CONTROVERSY; OR OF ANY OTHER MISBEHAVIOR BY WHICH THE
RIGHTS OF ANY PARTY HAVE BEEN PREJUDICED; OR 4) THE
ARBITRATORS EXCEEDED THEIR POWERS, OR SO IMPERFECTLY
EXECUTED THEM THAT A MUTUAL, FINAL, AND DEFINITE AWARD
UPON THE SUBJECT MATTER SUBMITTED WAS NOT MADE.
{¶6} In its sole assignment of error, OSW argues that the trial court erred when it
denied its motion to vacate the arbitration award. We do not reach the merits of its argument
because the court did not consider all of the issues raised by OSW.
{¶7} “Ohio courts give deference to arbitration awards and presume they are valid.”
Lowe v. Oster Homes, 9th Dist. No. 05CA008825, 2006-Ohio-4927, ¶ 6, citing Findlay City
School Dist. Bd. of Educ. v. Findlay Educ. Assn., 49 Ohio St.3d 129 (1990), paragraph one of the
syllabus, superseded by statute on other grounds, 61 Ohio St.3d 658 (1991). “When parties
agree to binding arbitration, they agree to accept the result and may not relitigate the facts as
found by the arbitrator.” New Par v. Misuraca, 9th Dist. No. 06CA009060, 2007-Ohio-3300, ¶
4, quoting Bennett v. Sunnywood Land Dev., Inc., 9th Dist. No. 06CA0089-M, 2007-Ohio-2154,
¶ 9.
{¶8} OSW filed a motion to compel arbitration based on an arbitration clause in the
contract signed by the Wards. The court scheduled a hearing on the motion, but the parties
agreed, prior to the hearing, to participate in binding arbitration. The court ordered the matter
stayed, and referred OSW and the Wards to arbitration. Because the parties agreed to binding
arbitration, they have waived the right to a de novo review of the merits. See New Par, 2007-
Ohio-3300, at ¶ 4.
4
{¶9} After arbitration is complete, the court of common pleas has “no jurisdiction
except to confirm, vacate, modify, or enforce the award and only on terms provided by statute *
* *.” Lockhart v. American Reserve Ins. Co., 2 Ohio App.3d 99, 101 (8th Dist.1981). Appellate
review is limited to those orders a common pleas court has issued pursuant to R.C. Chapter 2711.
Warren Educ. Assn. v. Warren City Bd. of Educ., 18 Ohio St.3d 170, 173 (1985). “The
substantive merits of the original arbitration award are not reviewable on appeal.” Lockhart at
99. Accord Warren City Bd. of Educ. at 173.
{¶10} OSW raised three arguments in its motion to vacate the arbitration award. First,
the arbitrators erred in admitting evidence that was not disclosed during discovery. Second, the
arbitrators erred in not allowing OSW inspector, Rick Shaneyfelt, to testify. Third, the
arbitrators erred in their findings of fact, which resulted in an unjust and unconscionable award.
While the trial court addressed the first two issues, it failed to address the third. This Court will
not consider the issue in the first instance. Neura v. Goodwill, 9th Dist. No. 11CA0052-M,
2012-Ohio-2351, ¶ 19. Accordingly, we remand the case for the trial court to consider OSW’s
third argument.
III
{¶11} Appellant’s assignment of error is sustained. The judgment of the Summit
County Court of Common Pleas is reversed consistent with the foregoing opinion and the cause
is remanded for further proceedings.
Judgment reversed
and cause remanded.
5
There were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common
Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy
of this journal entry shall constitute the mandate, pursuant to App.R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of
judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the
period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is
instructed to mail a notice of entry of this judgment to the parties and to make a notation of the
mailing in the docket, pursuant to App.R. 30.
Costs taxed to Appellees.
BETH WHITMORE
FOR THE COURT
CARR, J.
BELFANCE, J.
CONCUR.
APPEARANCES:
MICHAEL C. DEJOHN, Attorney at Law, for Appellant.
ESTELLE D. FLASCK, Attorney at Law, for Appellees.