Hundley v. Greene

Birdsong, Presiding Judge.

This is an appeal from the superior court’s confirmation of an arbitrator’s award in a construction dispute between Hundley and Butt, who are the homeowners, and the contractor Stephen Greene individually and d/b/a Stephen Greene Construction. The arbitrator found favorably to Greene and two independent contractors who were not parties to the arbitration agreement and did not participate in the arbitration.

Appellants in their statement of fact cite evidence of several claims, viz.: that Greene charged appellants more than the contract price; that when appellants had already paid Greene more than the contract price the house was incomplete and so defectively constructed that appellants had to fire Greene; that completion of the *194house and repair of the defective construction will cost about $50,000 above the maximum agreed price; that Greene charged appellants for 7,076 finish bricks and 2,300 fill bricks which are missing, according to appellants’ expert who counted the bricks in the house, and that this evidence was not refuted by Greene; that Greene charged appellants for 400 pieces of lumber which were not used in the house; that an independent contractor double-billed appellants for footings; that Greene’s painter sprayed paint over mildewed siding; that two months after being fully paid, the framer filed a materialmen’s lien, although the house is out-of-square and the county issued a stop-work order because the framer did not complete the job properly; that Greene built the brick underpinning two feet lower than required by contract, with ensuing water problems; that Greene never completed trim work; that although Greene guaranteed the floors, an inspection nine days after he was fired revealed the flooring had cracked, which will cost $12,000 to $18,000 to repair. Appellants specifically describe, with citations to the record, those and other defects too numerous to recount here.

The trial court found, however, that as appellants offered “no independent evidence” of fraud, corruption or misconduct in the arbitrator’s award or that the arbitrator overstepped his authority, the trial court had no authority to review and “rehash” the award and that it was the “duty” of the trial court to confirm it, citing Raymer v. Foster & Cooper, Inc., 195 Ga. App. 200, 202 (393 SE2d 49). Appellants contend the arbitrator exceeded his authority by failing to adhere to rules of contract construction, and by awarding Greene a bonus and making awards to persons who were not parties to the construction contract and arbitration agreement and who declined to participate in the arbitration. Held:

1. Appellees Greene move to dismiss the appeal as frivolous. They contend the appeal does not challenge the judgment within the framework of OCGA § 9-9-13 (b) as to grounds for vacating an arbitration award. The appeal is not frivolous.

2. The trial court is required by law to accept the arbitrator’s findings of fact and may vacate the award only “if the court finds that the rights of [a] party were prejudiced by: (1) Corruption, fraud, or misconduct in procuring the award; (2) Partiality of an arbitrator appointed as a neutral; (3) An overstepping by the arbitrators of their authority or such imperfect execution of it that a final and definite award upon the subject matter submitted was not made; or (4) A failure to follow the procedure of this [law], unless the party applying to vacate the award continued with the arbitration with notice of this failure and without objection.” OCGA § 9-9-13 (b).

Appellees Greene are incorrect in asserting that the evidence in an arbitrated case is irrelevant to show any ground named in OCGA *195§ 9-9-13 (b) for vacating the award. It is true that an appellate court has no authority to weigh evidence when the factfinder has ruled on that evidence, but that rule hinges on the requirement that there be evidence to support the findings in the first place. See, e.g., OCGA § 5-4-12 (b) which sets a “substantial” evidence standard for the superior court’s certiorari review of “any inferior judicatory” or a case heard before “any person exercising judicial powers” (OCGA § 5-4-3); and see, e.g., OCGA § 50-13-19 (h) (5) and (6) which allows review of administrative rulings to determine whether an administrative decision is “[cjlearly erroneous in view of the reliable, probative, and substantial evidence on the whole record” or is so “[arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.” In other cases where the legislature has made no such direction, the lower judicatory’s findings may be reversed or vacated as not supported by “any evidence.” See Green Room v. Confederation Life Ins. Co., 215 Ga. App. 221 (1) (450 SE2d 290). Whenever any award is not supported by any evidence it is “clearly erroneous.” Bd. of Equalization v. York Rite &c. of Savannah, 209 Ga. App. 359 (433 SE2d 299); Covrig v. Miller, 199 Ga. App. 864, 865 (406 SE2d 239).

Arbitration cases are controlled exclusively by the Georgia Arbitration Code, OCGA § 9-9-1 et seq., but they are not exempt from the general requirement that a finding of fact be supported by evidence. See Raymer, supra at 202 (1) (c); Cotton States Mut. Ins. Co. v. Nunnally Lumber Co., 176 Ga. App. 232, 235-237 (335 SE2d 708). In Cotton States at p. 235, we addressed a contention that the arbitrators’ award was “totally inconsistent with the overwhelming weight of the evidence.” We held that “[t]he record contains conflicting testimony. . . . Nor [does the evidence] unequivocally support a finding of liability by Nunnally. . . . [The arbitrators] had province to judge the credibility of the witnesses and the weight of the evidence and their apparent judgment is supported by the evidence. See Cartledge v. Cutliff, 21 Ga. 1 (1857).” (Emphasis supplied.) Id. at 235-236. In Division 4 of Cotton States (pp. 236-237), we addressed a contention that the trial court erroneously applied an “any evidence” standard rather than the statutorily mandated one, and we concluded that it was not necessary to determine whether the trial court erroneously applied an “any evidence” standard of review, since the trial court did not depart from the statutory standard of review. But we also held the trial court made findings of fact which were “not clearly erroneous and indeed, are supported by the record.” Id. at 237. In Amerispec Franchise v. Cross, 215 Ga. App. 669, 671 (452 SE2d 188), we cited the general rule that “ ‘an arbitrator’s decision must be upheld unless it is completely irrational or it constitutes a manifest disregard of the law.’ Bartlett v. Dimension Designs, 195 Ga. App. 845, *196848 (395 SE2d 64) (1990), overruled on other grounds, Pace Constr. Corp. v. Northpark Assoc., 215 Ga. App. 439 (450 SE2d 828) (1994).” (Emphasis supplied.) An award is “completely irrational” if it is not supported by evidence.

As the Supreme Court concluded in the early case of Cartledge v. Cutliff, supra, it defies common sense to say courts have no power to review an arbitration award which does not comport with the law. We think it equally defies common sense to say that an award which is not supported by any evidence, and is thus clearly erroneous and completely irrational or amounts to fraud, nevertheless comports with the law and must be affirmed by the courts. The legislature, in naming the grounds for vacating an arbitrator’s award, did not intend to elevate the powers of arbitrators above the powers of courts of law, administrative courts and juries.

The function of the trial court in proceedings to confirm or vacate an arbitration award is severely limited “in order not to frustrate the purpose of avoiding litigation by resorting to arbitration.” Cotton States, supra at 236-237 (4). To that end, the sufficiency of evidence is not subject to judicial review in arbitration cases, but if an arbitration award is not supported by any evidence, it is clearly illegal. See 5 AmJur2d, Arbitration and Awards, § 145. The ordinary requirement that arbitrators’ awards be supported by some evidence does not frustrate that purpose, and no party has a right to an award based on no evidence. Nothing in OCGA § 9-9-13 prohibits a party from showing that he was prejudiced in a manner named in OCGA § 9-9-13 (b) because the findings are not supported by any evidence. The powers of an arbitrator do not include power to issue clearly erroneous or completely irrational findings of fact, for this would deprive a party of due process and would prejudice him within the meaning and spirit of § 9-9-13 (b). A finding of fact which is not supported by any evidence is clearly erroneous and “completely irrational” and is therefore a finding made outside the authority of the arbitrator, or is fraud or tainted by partiality. See OCGA § 9-9-13 (b) (1), (2) and (3). If the courts are required to accept and confirm an arbitrator’s award even if it is not supported by any evidence, the arbitrator’s powers would surpass those of any court of law which is bound to limit its findings to the evidence, would surpass those of this court and the Supreme Court, and would amount to unlimited power, including power to cloak fraud in a mantle of “factfinding.”

In asserting that such unlimitable power is the law, appellees and the trial court rely on a reference in Raymer, supra at 202 (1) (c) to a party’s attempt to “relitigate and reargue the extensive evidence” presented at arbitration. However, this was not a statement that we have no authority to review evidence decided by an arbitrator. The statement was made only in the expressly stated context that the *197Raymer arbitrators’ judgment “[was] supported by the evidence.” (Emphasis supplied.) Id., citing Cotton States, supra.

With respect to the dissent, arbitration is a unique process and the parties do waive many rights, but the right to have his case judged by the evidence is a right not waived by any party. Arbitration is part of the “judicial process,” for the legislature made arbitration subject to judicial review on the application of any party. OCGA §§ 9-9-12 through 9-9-16. An application to arbitrate may be made to superior court (OCGA § 9-9-4) and the final award is reviewed by the courts. OCGA § 9-9-12 et seq. Under OCGA §§ 9-9-8 and 9-9-9, arbitrating parties have rights of subpoena power, discovery, and cross-examination, but these rights are pointless if an arbitrator can with impunity issue an award not supported by any evidence. However liberal the powers of an arbitrator, they do not arise to the power to force the courts to affirm awards not based on any evidence. A court may not reject the arbitrator’s findings merely because it disagrees with them, and it may not examine the sufficiency of the evidence (see Cotton States, supra at 235-236), but if there is no evidence to support an award, it is “completely irrational” and it is an illegal award. So long as arbitration awards are subject to review of this court, we must respond to a showing that they are not supported by any evidence, unless the legislature decrees otherwise in legislation held constitutional.

According to the statement of facts and citations to the record by appellants, this award is “completely irrational” (Amerispec Franchise, supra) and appellees have not shown that it is supported by any evidence.

3. In their appellate brief, appellees Greene say they disagree with appellants’ statement of facts, but, in violation of Court of Appeals Rule 27 (b) (1), they point out no material inaccuracy or incompleteness in appellants’ statement of fact and they provide no additional statement of facts. Further, while citing no evidence to dispute appellants’ statement of facts, appellees Greene assert they “[do] not consent to a decision of this case on those portions of the transcript selectively gleaned by appellants.” See Rule 27 (b) (1).

Appellees’ reason for disdaining to refute appellants’ statement of facts is that, according to appellees, evidence is irrelevant to a consideration of the grounds for vacating an arbitrator’s award stated in OCGA § 9-9-13 (c). The legislature has never made such a pronouncement and, as we noted in Division 2, could not reasonably have intended to give arbitrators the unlimited power such a rule would create.

Appellees Greene may not dispute appellants’ statement of facts without following the requirement of Court of Appeals Rule 27 (b) (1) to “point out any material inaccuracy or incompleteness of state*198ment in [appellants’ brief or to cite] such additional parts of the record or transcript [as are] deemed material.” According to Rule 27 (b) (1), if appellees fail to point out such material inaccuracy or incompleteness and fail to provide an additional statement of fact and cite additional material evidence, they will be held to have consented to a decision of the case on the statement made by the appellants. And, unless appellees follow Rule 27, they have no right to assert they “[do] not consent to a decision of this case on those portions of the transcript selectively gleaned by appellants.” As long as appellants’ statement of facts is based on evidence cited in the record, we will not disregard it merely on an assertion that it is “selectively gleaned,” for it is not this court’s duty to sift the record on behalf of a party to sustain that party’s position (see Baker v. NEI Corp., 144 Ga. App. 165, 167 (241 SE2d 4)); if appellants’ statement does not reflect the evidence or, as against a showing that the award is not supported by evidence, if there is evidence to support the award, it is appellees’ duty to show it.

As appellees give no statement of fact pointing out inaccuracies or incompleteness in appellants’ statement of facts and have made no citations to the record, they are deemed to have consented to appellants’ statement of facts, pursuant to Rule 27 (b) (1). Parties may not correct fatal deficiencies in their original brief by filing supplemental briefs. MOM Corp. v. Chattahoochee Bank, 203 Ga. App. 847, 849 (418 SE2d 74).

Appellants having shown that the award is not supported by the evidence and is completely irrational, and the appellees having cited no evidence in support of the award, we find the arbitrator based its award on findings which are not supported by any evidence and are therefore outside the evidence. Although the legislature may deem that the standard of review may be higher, it is clear that an award must at least be supported by some evidence and as the award in this case is not supported by any evidence, it is clearly erroneous. At the very least it oversteps the arbitrator’s authority or shows partiality. OCGA § 9-9-13 (b) (2), (3).

4. The arbitrator erred in entering findings and an award in favor of non-parties with whom appellants had no arbitration agreement, who refused to participate in the arbitration, and against whom appellants could assert no counterclaim and were deprived of full rights of discovery and confrontation.

OCGA § 9-9-2 (c) provides that the arbitration law shall apply to all disputes in which “the parties thereto have agreed in writing to arbitrate.” See also OCGA § 9-9-9. The arbitrator failed to follow procedure (OCGA § 9-9-13 (b) (4)) and exceeded its authority by issuing an award to persons who were not parties to the arbitration agreement (see Bank South v. Howard, 264 Ga. 339, 340, fn. 5 (444 SE2d *199799)) and who did not join the arbitration. Id. at (3); see Hilton Constr. Co. v. Martin Mechanical Contractors, 251 Ga. 701 (308 SE2d 830).

The superior court is directed to vacate the arbitrator’s award and to proceed according to OCGA § 9-9-13 (c).

Judgment reversed and remanded.

McMurray, P. J., Pope, P. J., Johnson, Blackburn and Ruffin, JJ., concur. Beasley, C. J., concurs in judgment only. Andrews and Smith, JJ., dissent.