JEROME DEWITT V STEPHEN COLLINS
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STATE OF MICHIGAN
COURT OF APPEALS
JEROME DEWITT and KELLY DEWITT,
UNPUBLISHED
January 22, 2004
Plaintiffs-Appellants,
v
STEPHEN COLLINS and CYNTHIA COLLINS,
No. 243063
Oakland Circuit Court
LC No. 2001-036306-CZ
Defendants-Appellees.
Before: Hoekstra, P.J., and Sawyer and Gage, JJ.
PER CURIAM.
In this action requesting the trial court’s confirmation of an arbitration award, plaintiffs
appeal by right from the trial court’s order granting defendants’ motion for summary disposition,
vacating the arbitration award pursuant to MCR 3.602(J)(1)(d), and remanding the case to the
arbitrator for rehearing. We reverse.
This case concerns the validity of an arbitration award concerning water damage to a
home plaintiffs purchased from defendants. Defendants received notice that a demand for
arbitration had been made before they left the country for vacation. During their absence, notice
of the arbitration hearing date was sent via mail to their home. Defendants returned home in
time for the hearing but, because of a family emergency, failed to open their mail until two days
after the hearing. Consequently, defendants did not attend the hearing nor did they submit any
information to the arbitrator. The arbitrator ruled in favor of plaintiffs.
Defendants sent the arbitrator a request for rehearing, but the arbitrator denied the request
because plaintiffs would not agree to a rehearing. Plaintiffs thereafter filed a motion to enforce
the arbitration award, to which defendants filed a motion to vacate. Both parties also filed
motions for summary disposition. The trial court, while noting that defendants’ application to
vacate the award was untimely, vacated the award pursuant to MCR 3.602(J)(1)(d), on the
ground that the arbitrator conducted the hearing before defendants knew of the hearing date.
A trial court’s decision on a motion for summary disposition is reviewed de novo.
Dressel v Ameribank, 468 Mich 557, 561; 664 NW2d 151 (2003). A trial court’s decision to
enforce, vacate or modify an award is reviewed de novo. Tokar v Albery, 258 Mich App 350,
352; 671 NW2d 139 (2003), citing Gordon Sel-Way, Inc v Spence Bros, Inc, 438 Mich 488, 496497; 475 NW2d 704 (1991) Additionally, this Court reviews the interpretation of court rules de
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novo. St George Greek Orthodox Church of Southgate, Mich v Laupmanis Assocs, PC, 204
Mich App 278, 282; 514 NW2d 516 (1994).
In reviewing de novo a decision on a motion for summary disposition based on an
agreement to arbitrate or on the lack of a material factual dispute, an appellate court considers
the affidavits, pleadings, depositions, admissions, and other documentary evidence submitted in
the light most favorable to the party opposing the motion. MCR 2.116(C)(7), (C)(10), (G)(5).
Summary disposition was appropriately granted if there was no genuine issue as to any material
fact and the moving party was entitled to judgment as a matter of law. Id.
Michigan public policy favors arbitration to resolve disputes. Rembert v Ryan’s Family
Steak Houses, Inc, 235 Mich App 118, 128; 596 NW2d 208 (1999). The uniform arbitration act
permits persons to agree to submit controversies to arbitration and to “agree that a judgment of
any circuit court shall be rendered upon the award.” MCL 600.5001(1); Watts v Polaczyk, 242
Mich App 600, 608; 619 NW2d 714 (2000). In this case, both parties signed the purchase
agreement, which included the following arbitration clause:
23. Any claim or demand of Seller or Buyer . . . arising out of or related
to the physical condition of any property covered by this agreement, . . . shall be
settled in accordance with the rules, then in effect adopted by the American
Arbitration Association and the Michigan Association of REALTORS. . . . A
judgment of any circuit court shall be rendered on the award or determination
made pursuant to this agreement. This agreement is specifically made subject to
and incorporates the provisions of Michigan law governing arbitrations, MCL
600.5001; MSA 26A5001 is [sic] amended and the applicable court rules, MCR
2.602 [sic] as amended. . . .
Once an issue is submitted to arbitration, the uniform arbitration act and MCR 3.602 limit
judicial review. DAIIE v Sanford, 141 Mich App 820, 825; 369 NW2d 239 (1985). MCR
3.602(J)(1) lists the grounds for vacating an arbitration award and reads as follows:
On application of a party, the court shall vacate an award if:
(a) the award was procured by corruption, fraud, or other undue means;
(b) there was evident partiality by an arbitrator appointed as a neutral,
corruption of an arbitrator, or misconduct prejudicing a party’s rights;
(c) the arbitrator exceeded his or her powers; or
(d) the arbitrator refused to postpone the hearing on a showing of
sufficient cause, refused to hear evidence material to the controversy, or
otherwise conducted the hearing to prejudice substantially a party’s rights.
The fact that the relief could not or would not be granted by a court of law or
equity is not ground for vacating or refusing to confirm the award.
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MCR 3.602(J)(2) states generally that an application to vacate an award must be made within
twenty-one days after delivery of a copy of the award to the applicant.
In this case, defendants returned home from their vacation on July 21 and notice of the
July 25 hearing date was waiting in their mail. Defendants claim that because of several family
illnesses, they left to tend to ailing relatives and failed to look at their mail. Thus, it was
defendants’ decision not to open their mail that caused them to miss the hearing date.1 Because
they had actual notice of the demand for arbitration, at a bare minimum defendants were obliged
to peruse their mail. More importantly, however, defendants waited until after the award had
been granted before notifying the arbitrator of their situation. While defendants did send the
arbitrator a letter requesting another hearing, defendants proceeded to wait several months after
the award was granted before seeking to challenge the validity of the arbitration award in court,
and they presented no justification for waiting past the applicable period to file a motion to
vacate the award.
Plaintiffs assert that the trial court should not have considered defendants’ application to
vacate the arbitration award because it was approximately five months late, well past the twentyone-day limit set by the court rule. While we agree, we note that the trial court did not explicitly
consider defendants’ application to vacate as such; instead, it considered defendants’ motion as
an objection to plaintiffs’ motion to confirm the arbitration award. The trial court, in its opinion,
acknowledged that defendants’ application to vacate the award was untimely but considered
defendants’ objections to the entry of the award, citing Arrow Overall v Peloquin, 414 Mich 95,
99; 323 NW2d 1 (1982), for the premise that a party responding to a motion to confirm an
arbitration award is not precluded from objecting to entry of the award, even if a motion to
vacate the award is time barred.
Arrow Overall dealt with the validity of an arbitration agreement itself, which concerns
jurisdiction. Id. at 98. However, in Arrow Overall, the plaintiff likened the defendant’s assertion
that no agreement to arbitrate existed to an application to vacate the award and maintained that
the defendant should not be allowed to make that argument because the time limit imposed by
the court rule (GCR 1963, 769 – the predecessor of MCR 3.602) for making an application to
vacate the award had passed. Id. at 100-101. This Court responded:
This misperceives the procedure provided by the rule.
The rule’s time limitation binds the moving party, not one who opposes
1
Defendants make much of the fact that a family member became terminally ill and tending to
this ailing family member took precedence over the present arbitration matter. However, from
the record it appears that this family member became ill at the beginning of the family’s vacation
overseas, yet defendants remained overseas for a considerable period of time before coming back
home. While we certainly understand the trial court’s sympathy for defendants’ situation, we
cannot let sympathy overshadow this case. If defendants had not been aware of the demand for
arbitration, our analysis may be different. However, defendants were aware of the demand and
simply did not give it any concern.
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the motion. Here the defendant is not seeking to vacate the award, but simply
opposes its confirmation. Since the rule prescribes no time limitation on the
interposition of defenses, it would appear proper to allow it whenever it be sought
to confirm the award. [Id. at 101.]
While, in the present case, defendants did file an application to vacate the arbitration
award, they also filed an answer and affirmative defenses to plaintiffs’ motion to confirm the
award. Within their answer and affirmative defenses, as within their application to vacate the
award, defendants asserted lack of proper notice of the arbitration hearing date. Therefore,
according to the Court’s reasoning in Arrow Overall, the trial court could consider defendants’
lack of notice objection to the confirmation of the arbitration award even though the included
application to vacate the award was untimely. Id.
We also note the case of DAIIE v Gavin, 416 Mich 407; 416 NW2d 418 (1982). In that
case the defendant claimed that the circuit court lacked jurisdiction to hear the plaintiff’s delayed
motion to vacate an arbitration award. GCR 1963, 769(2) provided that an application to vacate
an award “shall be made within 20 days after delivery of a copy of the award to the applicant.”
Although the plaintiff filed beyond the 20-day period, the Court declined to read the 20-day
period as defining the jurisdictional authority of the circuit court.
We read the rule as delineating a litigant’s right to challenge an arbitration award.
There is nothing in either the explicit language of the rule or the policy it is
intended to effect – moving disputes in a timely fashion through the judicial
process – that mandates that a circuit judge’s discretionary power to permit a
party to plead beyond established time limits upon a showing of excusable
neglect, GCR 1963, 108.7(2), is, or should be, curtailed. [Id.]
Accordingly, we acknowledge that a trial court does have the authority to review a
party’s untimely motion under certain circumstances. However, under the circumstances of this
case, we conclude that the trial court erred in entertaining defendants’ motion and in vacating the
arbitration award.
The trial court vacated the arbitration award on the ground that the arbitrator conducted
the hearing before defendants knew of the hearing date. Defendants asserted that, by mailing
them notice and conducting the hearing in their absence, the arbitrator “conducted the hearing so
as to substantially prejudice” their rights, thus requiring the trial court to vacate the award under
MCR 3.602(J)(1)(d). It is necessary to reiterate, however, that defendants had actual notice that
a demand for arbitration had been made and they did arrive home from out of the country in time
to receive the notice of the hearing date, but defendants neglected to open their mail. According
to section 32 of the Home Buyer Home Seller Arbitration Rules adopted by the AAA and the
Michigan Association of Realtors, the parties consented to notice by mail addressed to the
parties’ last known address. Therefore, while defendants may not have known the date of the
arbitration hearing until they opened their mail, they did receive proper notice of the hearing date
pursuant to the arbitration rules after they were already aware that a demand for arbitration had
been made. Furthermore, no request to postpone the hearing was made of the arbitrator.
Without a request for postponement to consider or, indeed, any indication that defendants would
be unavailable, the arbitrator sent notice of the hearing date using the method prescribed by the
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AAA rules and conducted the hearing in defendants’ absence; the arbitrator followed AAA
procedure in setting and conducting the hearing.
In sum, the arbitrator followed AAA procedure in setting the hearing and properly
conducted the hearing. Under the circumstances, defendants failed to prove the existence of any
grounds to justify vacating the award. Therefore, we conclude that the trial court erred in
vacating the award; thus, the arbitration award should be reinstated.
Reversed and remanded to the trial court for confirmation of the arbitration award. We
do not retain jurisdiction.
/s/ Joel P. Hoekstra
/s/ David H. Sawyer
/s/ Hilda R. Gage
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