Unpublished Disposition, 875 F.2d 871 (9th Cir. 1989)

No. 88-3542.

United States Court of Appeals, Ninth Circuit.

Before ALARCON, DAVID R. THOMPSON, Circuit Judges, and A. WALLACE TASHIMA,^*  District Judge.

MEMORANDUM^** 

Washington Mechanical Contractors, Inc. (Washington Mechanical) appeals from the judgment entered following the dismissal of its petition to vacate an arbitrator's award. Washington Mechanical seeks reversal on the ground that the arbitrator adopted a clearly erroneous rule of law in denying its claim. We disagree and affirm.

FACTS

Austin contracted with the Boeing Company to design and build a test facility known as the Free Electron Laser Project in Kent, Washington. Austin entered into a subcontract with Washington Mechanical to provide machine welded stainless steel pipes and fittings. Austin agreed to pay Washington Mechanical $965,875.

Austin specified in the agreement that the pipes and fittings furnished by Washington Mechanical must meet the standard industry specifications of the American Society of Testing Materials (ASTM) A312. ASTM A312 requires that stainless steel pipes and fittings have a sulfur content of between 0.0% and 0.03%. Washington Mechanical supplied pipes and fittings with a sulfur content of 0.002%, which was within the required range. The agreement also provided that Washington Mechanical was required to use an automated orbital welding machine to join the pipes and fittings.

Stainless steel pipes and fittings with a sulfur content between 0.01% and 0.02% can be welded with an orbital machine. Stainless steel with a sulfur content less than 0.01% can be machine welded by using sulfur dioxide.

Washington Mechanical experienced difficulties in using an automated orbital welding machine to weld stainless steel with a sulfur content below 0.01%. Accordingly, it welded these pipes and fittings manually. The cost of welding was increased because it was done manually on the pipes and fittings made from steel with a sulfur content below 0.01%. Washington Mechanical submitted a change order to Austin seeking payment of additional costs. Austin refused to pay for the costs of manual welding. The dispute was submitted to private arbitration pursuant to the parties' agreement.

The arbitrator denied Washington Mechanical's claim. He concluded that "Washington Mechanical had the risk of 'unforeseen difficulties' associated with use of stainless steel with less than .01% sulfur." Washington Mechanical filed in the Washington Superior Court (King County) a petition and motion to vacate the arbitrator's ruling. The matter was removed to the district court pursuant to Austin's petition for removal on diversity grounds.

The district court denied Washington Mechanical's motion to vacate the arbitration award. Washington Mechanical moved for reconsideration of the district court's ruling and order, and in the alternative for certification of local law questions to the Washington Supreme Court under Revised Code of Washington 2.60.020. These motions were denied. Washington Mechanical appeals.

The district court had jurisdiction based on diversity of citizenship. 28 U.S.C. § 1332 (1982). Jurisdiction over this appeal is proper under 28 U.S.C. § 1291 (1982).

* Washington Mechanical contends that the arbitrator's award "shows, on its face, the adoption of an erroneous rule of, and mistake in applying, Washington law." The parties have agreed that the Washington Arbitration Act is applicable in this matter rather than the Federal Arbitration Act because none of the activities of either party had an impact on interstate commerce. We accept this concession and apply Washington law.¹ 

We review the district court's decision to confirm the arbitration award independently and non-deferentially. French v. Merrill, Lynch, Pierce, Fenner & Smith, 784 F.2d 902, 906 n. 4 (9th Cir. 1986). In Washington, an arbitrator is the judge of the law and the facts. Keen v. 1FG Leasing Co., 28 Wash. App. 167, 622 P.2d 861 (1980); Cohen v. Graham, 44 Wash. App. 712, 722 P.2d 1388 (1986). An award will be vacated or modified only where the adoption of an erroneous rule or a mistake in applying the law shows "on the face" of the award. Id. We must determine whether the arbitrator's award shows on its face that he applied or adopted an erroneous rule of law.

Washington Mechanical asserts that the arbitrator's conclusion is "patent legal error." The arbitrator concluded that, under Washington law, the subcontractor must bear the risk of unforeseen difficulties where the contract required performance within a range of acceptable specification dictated by the general contractor. Austin argues that the award was proper because the contract was capable of performance.

The arbitrator denied Washington Mechanical's claim based on his factual finding that "the Austin specification for machine welding of stainless steel pipes and fittings with a maximum sulfur content of .03% was workable." The arbitrator also found that stainless steel pipes with a sulfur content of less than .01% could be machine welded by using sulfur dioxide. The pipes and fittings procured by Washington Mechanical had a chemical composition of less than .01%. Instead of employing additional measures to facilitate machine welding, such as the use of sulfur dioxide, Washington Mechanical incurred added expense to cover the cost of manual welding. The arbitrator relied on the following principle of law from United States v. Spearin, 248 U.S. 132 (1918) in denying Washington Mechanical's claim: "Where one agrees to do, for a fixed sum, a thing possible to be performed, he will not be excused or become entitled to additional compensation, because unforeseen difficulties are encountered." Id. at 136.

Washington Mechanical contends the Spearin rule is inapplicable under Washington law in a case where the subcontractor performs in accordance with plans and specifications prepared by the general contractor. He relies on Tyee Const. Co. v. Pacific Northwest Bell Tel. Co., 3 Wash. App. 37, 472 P.2d 411 (1970) for this proposition. Washington Mechanical claims that "a close reading of Tyee indicates Spearin does not apply to a design specification case."

In Tyee the Court of Appeals of Washington refused to apply Spearin in a case where the appellant required the respondent to place conduit in a tunnel and blast sand to fill the tunnel. Tyee, 472 P.2d at 413-14. The sandblasting severely damaged appellant's conduit. Id. The work was redone by respondent using plastic pipes. Id. Appellant refused to pay the cost of excavating the tunnel and replacing the conduit and sand. Id. The Court of Appeals of Washington held in Tyee that the appellant, not the respondent, had to bear the cost of redoing the work because respondent had performed the initial work "in strict compliance with the plans ahnd specifications, which were defective." Tyee, 472 P.2d at 414 (citing Huetter v. Warehouse & Realty Co., 81 Wash. 331, 142 P. 675 (1914). The Court of Appeals of Washington concluded that appellant had impliedly warranted that its plans and specifications were workable. Id. at 414.

In a well-reasoned unpublished memorandum, the district court concluded that none of the cases cited by Washington Mechanical, including Tyee, " [provide] the court with clear authority under Washington law for the proposition that the specifier who requires performance within a delineated range warrants that performance at any point on the range will provide satisfactory results or, more importantly, that performance at all points within the range would be equally convenient." (emphasis in the original).

In Tyee, the appellant restricted the respondent to a single means of performance which was defective. In the instant matter, Washington Mechanical could have performed the contract without manual welding by using sulfur dioxide or steel with a sulfur content of .01% to .02%. Under these circumstances, in the absence of any Washington authority discussing a requirement of performance within a range of workable specifications, the award does not show on its face that the arbitrator made a clear error of law in denying Washington Mechanical's claim for additional compensation for the difficulties it encountered in using stainless steel at the lower range specified without emphasizing sulfur dioxide to facilitate machine welding.

III

Washington Mechanical also argues that the district court erred in denying its motion to certify "unanswered and necessary local law questions" to the Washington Supreme Court. This argument is frivolous and completely inconsistent with Washington Mechanical's argument that the arbitrator committed "clear legal error." Under Washington law, a federal court may certify a question to the supreme court for an answer where "the local law has not been clearly determined." Wash.Rev.Code Sec. 2.60.020. The use of certification where available "rests in the sound discretion of the federal court." Lehman Brothers v. Schein, 416 U.S. 386, 391 (1974). As discussed above, an arbitrator's award can only be overturned if it is based on a clear error of law. Having determined that there was no controlling Washington authority regarding range specification, the district court was compelled to affirm the award and deny the motion for certification. Granting certification under the circumstances would have been an abuse of discretion.

The judgment is AFFIRMED.