Birkey Design Group, Inc. v. Egle Nursing Home, Inc.

THIEME, Judge. Birkey Design Group, Inc. (Birkey), appeals from an order of the Circuit Court for Allegany County (Sharer, J., presiding) confirming an arbitrator’s award entered in favor of Egle Nursing Home, Inc. (Egle) in its contractual dispute with Birkey. Birkey’s challenge to that judgment arises under the following circumstances. I. Birkey and Egle contracted for architectural services for the design and construction of an addition to Egle’s nursing home, as well as renovations to the existing structure. 1 The contract contained a provision requiring arbitration of all claims, disputes, and other matters arising out of the contract.

It contained no provision that allowed for an award of attorney’s fees to the prevailing party in arbitration. Disputes between the parties resulted in several lawsuits. Birkey filed a Petition to Establish and Enforce a Mechanic’s Lien against Egle in the amount of the unpaid balance of the contract. Egle answered and counterclaimed that Birkey failed adequately to supervise construction, failed to represent the owners’ interests, and failed to prepare proper and sufficient plans, specifications, and designs for construction of the building.

The circuit court granted Birkey’s motion to compel arbitration. At arbitration, Egle sought damages of $287,-560.11 and attorney’s fees of $80,270.72. ²⁶⁵ The arbitrator, without elaboration, ordered Birkey to pay Egle $80,270.00. Eschewing an application to the arbitrator to correct, modify, or clarify his award, Birkey filed in the Circuit Court for Allegany County a petition to vacate the arbitration award. The circuit court confirmed the arbitrator’s award in its entirety.

In a timely appeal from that order, Birkey raises the following question for our review: Did the circuit court’s refusal to vacate the arbitrator’s award constitute reversible error? For the reasons stated below, we shall affirm the circuit court’s judgment.

II

Arbitration is an informal, expeditious, and inexpensive alternative to conventional litigation. Marsh v. Loffler Housing Corp., 102 Md.App. 116, 124 , 648 A.2d 1081 (1994). Arbitration eases the burden on clogged court dockets; it offers parties an opportunity to submit disputes to one experienced in that field of business. Snyder v. Berliner Constr., 79 Md.App. 29, 34 , 555 A.2d 523 , cert. denied, 316 Md. 550 , 560 A.2d 1118 (1989).

Furthermore, arbitration originates from an agreement between the parties as to how and in what forum the parties will settle their disputes. Bel Pre Medical Ctr. v. Frederick Contractors, Inc., 21 Md.App. 307, 315 , 320 A.2d 558 (1974), rev’d on other grounds, 274 Md. 307 , 334 A.2d 526 (1975). For these reasons, arbitration is encouraged; accordingly, the scope of judicial review of an arbitrator’s award is limited. Marsh, 102 Md.App. at 124 , 648 A.2d 1081 .

Under the Maryland Uniform Arbitration Act, an arbitrator’s award will only be vacated for any one of the following five reasons: (1) An award was procured by corruption, fraud, or other undue means; (2) There was evident partiality by an arbitrator appointed as a neutral, corruption in any arbitrator, or misconduct prejudicing the rights of any party; (3) The arbitrators exceeded their powers; ²⁶⁶ (4) The arbitrators refused to postpone the hearing upon sufficient cause being shown for the postponement, refused to hear evidence material to the controversy, or otherwise so conducted the hearing, contrary to the provisions of § 3-213, as to prejudice substantially the rights of a party; or (5) There was no arbitration agreement as described in § 3-206, the issue was not adversely determined in proceedings under § 3-208, and the party did not participate in the arbitration hearing without raising the objection. Md.Code Ann., Cts. & Jud. Proc. § 3-224(b) (1995).

III

Birkey contends the award should be vacated because the arbitrator exceeded his power. At arbitration, Egle requested $287,560.11 in damages and $82,270.72 in attorney’s fees; Egle was awarded $82,270.00. Birkey argues the award was compensation for attorney’s fees. Its view is stated more colorfully in Birkey’s brief: “While the arbitrator did not expressly identify the award as attorney’s fees, simple logic, and a hearty disregard for cosmic coincidence is all that is needed to reach this conclusion.” Attorney’s fees are not recoverable unless a statute or contract provision provided for the award.

Marsh, 102 Md. App. at 125 , 648 A.2d 1081 . The Maryland Uniform Arbitration Act reads, in pertinent part: (b) Counsel fees. - Unless the arbitration agreement provides otherwise, the award may not include counsel fees. Md.Code Ann., Cts. & Jud. Proc. § 3-221(b) (1995).

Since the contract in the instant case did not provide for attorney’s fees, the arbitrator exceeded his power if the award included attorney’s fees. We are, however, unwilling to assume the award was compensation for attorney’s fees. Before an award can be vacated on the ground that an arbitrator exceeded his authority, the record must objec ²⁶⁷ tively disclose that the arbitrator exceeded that authority in some respect. See Marsh, 102 Md.App. at 128-136 , 648 A.2d 1081 .

If, on its face, the award represents a plausible interpretation of the contract, judicial inquiry ceases and the award must be enforced. Graceman v. Goldstein, 93 Md.App. 658, 675 , 613 A.2d 1049 (1992), cert. denied, 329 Md. 336 , 619 A.2d 546 (1993). “This remains so even if the basis for the arbitrator’s decision is ambiguous____” Id. Judicial deference is appropriate unless the arbitrator’s award actually violated the law or any explicit, well-defined and dominant public policy. Id. at 676 , 613 A.2d 1049 .

In this case, the arbitrator evidently did nothing wrong. The arbitrator was not obligated to explain his award. See CJ § 3-219(a). It is not this Court’s function to speculate about the arbitrator’s thought process when making an award.

Appellate discipline mandates we give deference to the decision of the arbitrator. The possible combinations of actual damages that amount to $82,270.00 are infinite. Since it is possible that the award comprised damages rather than attorney’s fees, we must assume the arbitrator acted properly. Birkey cites several out-of-state cases in an attempt to prove an appellate court can determine, from the record, that ambiguous arbitrator’s awards include attorney’s fees.

Only two of those cases are relevant. In the first case, the plaintiff at arbitration requested $619,486.03 in damages and $275,-926.42 in attorney’s fees. G.L. Wilson Building Co. v. Thorneburg Hosiery Co., 85 N.C.App. 684 , 355 S.E.2d 815 , cert. denied, 320 N.C. 798 , 361 S.E.2d 75 (1987). The arbitrator’s award was $656,050.93.

Id. 355 S.E.2d at 818 . The award obviously included attorney’s fees because the award exceeded the request of damages. G.L. Wilson is therefore unpersuasive in deciding the case sub judice because the arbitrator’s award in the instant case could have been derived solely from damages. In the second case, it was unclear whether the arbitrator’s award included attorney’s fees.

Hughes & Peden, Inc. v. Budd Contracting, 193 Ga.App. 656 , 388 S.E.2d 753 (1989), ²⁶⁸ overruled on other grounds by Hope & Assoc. v. Marvin M. Black Co., 205 Ga.App. 561 , 422 S.E.2d 918 (1992). The losing party at arbitration requested a clarification of the ruling. Id. 388 S.E.2d at 754 . Upon a request for clarification, the arbitrator admitted the award included attorney’s fees.

Id. Hughes is distinguishable from the case sub judice because the losing party in Hughes sought clarification of the award to determine if attorney’s fees were included. Birkey should have similarly sought clarification, but, instead, assumed the award was for attorney’s fees. 2 Birkey’s failure to seek clarification waived its right to argue the issue on appeal. IY.

The Maryland Uniform Arbitration Act reads, in pertinent part: (a) Application.-A party may apply to the arbitrators to modify or correct an award within twenty days after delivery of the award to the applicant. (c) Grounds for modification. -The arbitrators may modify or correct an award: (2) for the purpose of clarity. CJ § 3-222. By filing a petition under this section, Birkey could have obtained a clarification of the arbitrator’s award.

Clarification of the award most likely would have rendered this appeal unnecessary: if the arbitrator stated the award was compensation for attorney’s fees, the trial court would have vacated the award under CJ § 3 — 221(b); if the arbitrator explained how he arrived at the award without including attorney’s fees, the issue would have been settled. ²⁶⁹ Birkey, however, stood mute, despite a statute providing for clarification. Birkey should not