Stockade Enterprises v. Ahl

NO. 95-246
IN THE SUPREME COURT OF THE STATE OF MONTANA
1995

STOCKADE ENTERPRISES,
Plaintiff and Appellant,
v.
KEVIN AHL,
Defendant and Respondent.

APPEAL FROM: District Court of the Eleventh Judicial District,
In and for the County of Flathead,
The Honorable Ted 0. Lympus, Judge presiding.

COUNSEL OF RECORD:
For Appellant:
Randall A. Snyder; Snyder & Noble, Bigfork,
Montana

For Respondent:
James C. Bartlett; Hash, O'Brien & Bartlett,
Kalispell, Montana

Submitted on Briefs: October 12, 1995
Decided: October 31, 1995
Filed:
Justice W. William Leaphart delivered the Opinion of the Court.

Stockade Enterprises, Inc. (Stockade) appeals the Eleventh
Judicial District Court's denial of its motions to modify or to
vacate an arbitration award. We affirm.
The dispositive issue on appeal is whether the District Court
erred in refusing to partially vacate or to modify the arbitration
award.
Stockade commenced this action against Kevin Ah1 (Ahl) in an
attempt to collect on a construction lien. Pursuant to a written
agreement between Stockade and Ahl, the District Court ordered the
parties to arbitrate the dispute. The parties signed a Stipulation
to appoint an arbitrator. The Stipulation provided in part:
Wilmer E. Windham shall serve as the arbitrator in this
litigation, with his decision to be binding on the
parties and the Court. . . .[Iln this case his decision
is final and binding and the District Court must adopt
his decision as a final judgment.
The court signed the Order appointing Mr. Windham as the
arbitrator. The Order reads in part:
[The arbitrator's] decision shall be final and binding
and the District Court shall adopt his decision as a
final judgment.
After the arbitrator issued the award, Stockade moved the
District Court to vacate or to modify the award on the grounds that
the award was beyond the scope of inquiry, in error, and contrary
to law. The District Court denied Stockade's motion to modify the
award. In its Order and Rationale, the court declined to perform
I' an extensive review of the file and the transcript of the
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arbitration hearing." Instead, the court determined that judicial
review of the arbitrator's decision was precluded by the parties'
Stipulation and the court's Order. The court quoted the provision
of the Order stating the arbitrator's decision was final and
binding on the parties and the court. Based on the provisions of
the Stipulation and Order, the District Court concluded that "there
simply is no authority on which this Court can set aside the
award." Accordingly, the court did not review the arbitrator's
decision and made no findings regarding the award.
Did the District Court abuse its discretion in refusing to

vacate or modify the arbitration award?

Our standard in reviewing a court's refusal to modify or
vacate an arbitration award is whether the court abused its
discretion. May v. First National Pawn Brokers (1994), 269 Mont.
19, 21-22, 887 P.2d 185, 187; Duchscher v. Vaile (1994), 269 Mont.

1, 5, 887 P.2d 181, 184. We note that the parties and the District
Court improperly focused their attention on the provisions of the
Stipulation and Order to the effect that the arbitrator's decision
is binding and final. The District Court was incorrect in
concluding that there is "no authority" authorizing the court to
set aside the award. Regardless of the "binding" nature of the
arbitration procedure, the Montana Uniform Arbitration Act (MUAA)
does provide the court with authority to set aside an award.
However, judicial review of an arbitration award is strictly
limited by the statutory provisions governing arbitration found in

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the MUM. Sections 27-5-312 and -313, MCA; m, 887 P.2d at 187;
Duchscher, 887 P.2d at 183.
Montana adopted the Montana Uniform Arbitration Act in 1985.
Sections 27-5-312 and -313, MCA, establish the grounds to modify,
to correct, or to vacate an arbitration award, These sections
generally limit the district court's review to allegations of
fraud, partiality, misconduct, excess of power, or technical
problems in the execution of the award. Duchscher, 887 P.2d at
183. Section 27-5-312, MCA, provides:
Vacating an award. (1) Upon the application of a party,
the district court shall vacate an award if:
(a) the awardwas procured by corruption, fraud, or
other undue means;
(b) there was evident partiality by an arbitrator
appointed as a neutral or corruption in any of the
arbitrators or misconduct prejudicing the rights of any
party;
(c) the arbitrators exceeded their powers;
(d) the arbitrators refused to postpone the hearing
upon sufficient cause being shown therefor or refused to
hear evidence material to the controversy or otherwise so
conducted the hearing, contrary to the provisions of 27-
5-213, as to prejudice substantially the rights of a
party; or
(e) there was no arbitration agreement and the
issue was not adversely determined in proceedings under
27-5-115 and the party did not participate in the
arbitration hearing without raising the objection.
Section 27-5-313(l), MCA, provides:
Modification or correction of award by court. (1) Upon
application made within 90 days after delivery of a copy
of the award to the applicant, the district court shall
modify or correct the award if:
(a) there was an evident miscalculation of figures
or an evident mistake in the description of any person,
thing, or property referred to in the award;
(b) the arbitrators awarded upon a matter not
submitted to them and the award may be corrected without
affecting the merits of the decision upon the issues
submitted; or

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 Cc) the award is imperfect in a matter of form not
affecting the merits of the controversy.
Thus, the MDAA'S authorization of judicial review of
arbitration awards is very limited in scope. We have held that
these provisions do not permit a court to review the merits of the
controversy. May, 887 P.2d at 190; Duchscher, 887 P.2d at 184.
The party seeking to vacate, to modify, or to correct an
arbitration award bears the burden of alleging and proving that one
of the statutorily enumerated grounds exists. Mav, 887 P.2d at
189; Duchscher, 887 P.2d at 184. Therefore, in order to trigger
the District Court's authority to review the arbitration award,
Stockade had to properly raise one of the grounds in §§ 27-5-312 or
-313, MCA. Stockade failed to do so.
Stockade presented the District Court with four issues in
support of its motion to modify/vacate the arbitration award:
1. Is there substantial evidence to support the findings
of fact and conclusions of law?
2. Does the evidence support a finding that Plaintiff
assaulted Defendant and is there a proper award of
damages?
3. Can the District Court modify or correct the award in
a fashion consistent with the evidence?
4. Was the award of attorneys fees arbitrary and
capricious? [Emphasis added.]
None of the above issues raised by Stockade address the limited
bases of judicial review set forth in 55 27-5-312 and -313, MCA.
On the contrary, Stockade's issues all raise questions regarding
the sufficiency of the evidence to support the award. Although

Stockade's brief referenced § 27-5-313, MCA, Stockade failed to

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address the statutory criteria that would trigger judicial review.
Instead, Stockade propounded an extremely broad scope of judicial
review, as follows: "Here, the Arbitrator abused his discretion,
transcended or ignored evidence and did substantial injustice to
Plaintiff. In nearly every respect, this Court can modify and
correct the award, based solely on the evidence." Clearly, there
is no basis for such a broad standard of judicial review. Neither
the District Court nor this Court has any authority to engage in a
"sufficiency of the evidence" review of an arbitration award. The
District Court understated its statutory authority to vacate or to
modify an arbitration award. Nonetheless, under the pleadings in
this case, the court correctly concluded that it had no obligation
to engage in an extensive review of the transcript to weigh the
sufficiency of the evidence. We hold that the District Court did
not abuse its discretion in refusing to vacate the award.
To invoke the courts' power of review, the grounds set forth
in §§ 27-5-312 and -313, MCA, must be raised by the party
challenging the arbitration award. Stockade advances no grounds

that satisfy these criteria. Had either of the parties read our
two recent decisions in this area, namely Mav and Duchscher, they
would have known that petitioning the courts to review an
arbitration award based on the sufficiency of the evidence is
beyond our scope of judicial review.
Affirmed.

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I We concur: