LAN Construction, Inc., Appellant, vs. Robert Williams, et al., Respondents.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2002).

 

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A03-1060

 

LAN Construction, Inc.,
Appellant,
 
vs.
 
Robert Williams, et al.,
Respondents.

 

Filed April 13, 2004

Affirmed

Wright, Judge

 

Hennepin County District Court

File No. 02-020068

 

 

Lawrence P. Marofsky, Boulevard Plaza Office Suites, 7022 Brooklyn Boulevard, Brooklyn Center, MN  55429 (for appellant)

 

Curtis D. Smith, Terese A. West, Moss & Barnett, 4800 Wells Fargo Center, 90 South Seventh Street, Minneapolis, MN  55402 (for respondents)

 

 

            Considered and decided by Schumacher, Presiding Judge; Hudson, Judge; and Wright, Judge.

 

U N P U B L I S H E D  O P I N I O N

 

WRIGHT, Judge

 

Appellant challenges the district court's determination that appellant failed to file its motion to vacate, in part, an arbitration award and notice the hearing on the motion within the statutory time limit.  We affirm. 

FACTS

 

On October 1, 1996,appellant LAN Construction, Inc. and respondent Bobby & Steve's Auto World LLP (Bobby & Steve's) entered into two agreements pertaining to the design and construction of a gas station, carwash, and automotive service center (the facility).  Under the agreements, all "[c]laims, disputes and other matters in question" would be submitted to binding arbitration.

            In August 1999, the facility's underground heating, ventilation, and ice-melting system failed.  As a result of the failure, the facility flooded, and Bobby & Steve's incurred substantial expenses attributable to flood damage, snow removal, and medical expenses for an employee who slipped on ice at the facility. 

            LAN filed a demand for arbitration, seeking damages of $19,688.37 plus interest for installation of the ventilation system.  Bobby & Steve's filed a counterclaim for $87,000, seeking reimbursement for damages it incurred as a result of the allegedly defective ventilation system.  The arbitrator's award granted LAN's claim, in part, in the amount of $20,047.50 and granted Bobby & Steve's claim, in part, in the amount of $32,355.  The arbitrator's award was delivered to the parties by fax on September 17, 2002. 

            On November 15, 2002, LAN filed an Application for Partial Confirmation of Arbitration Award, seeking confirmation of its award and vacation of Bobby & Steve's award.  On January 23, 2003, LAN filed its motion for relief sought in its application and noticed the hearing on the motion for April 16, 2003.  The district court subsequently confirmed the award in its entirety, concluding that LAN failed to file its motion within the time limit set by Minn. Stat. § 572.19 (2002).  This appeal followed.

D E C I S I O N

 

Statutory interpretation presents an issue of law, which we review de novo.  Lolling v. Midwest Patrol, 545 N.W.2d 372, 375 (Minn. 1996). 

An application to vacate an arbitration award "shall be [made] by motion and shall be heard in the manner and upon the notice provided by law or rule of [the] court for the making and hearing of motions."  Minn. Stat. § 572.23 (2002).  A motion is defined as "[a]n application to a court or judge for [the] purpose of obtaining a rule or order directing some act to be done in favor of the applicant.  It is usually made within the framework of an existing action or proceeding and is ordinarily made on notice."  In re Simpkins, 599 N.W.2d 170, 172-73 (Minn. App. 1999) (citing Black's Law Dictionary at 1146 (6th ed. 1990)); see also Minn. R. Civ. P. 7.02(a) (defining motion as "[a]n application to the court for an order").  "If the motion is in writing, it must be served with a written notice of hearing thereon."  Stern v. Dill, 442 N.W.2d 322, 325 (Minn. 1989) (citing Minn. R. Civ. P. 6.04).  An application to vacate an arbitrator's award must be made within 90 days after the date the award is delivered to the applicant.  Minn. Stat. § 572.19, subd. 2 (2002); Khawaja v. State Farm Ins. Cos., 631 N.W.2d 106, 112 (Minn. App. 2001) (holding that the motion to vacate, but not necessarily the hearing, must be filed within the 90-day time limit), review denied (Minn. Sept. 25, 2001).  Expiration of the 90-day period precludes any challenge to the award.  Great Am. Ins. Cos. v. LeMieux, 439 N.W.2d 733, 735 (Minn. App. 1989), review denied (Minn. July 12, 1989). 

Here, the arbitrator delivered the award by fax on September 17, 2002.  LAN filed an Application for Partial Confirmation on November 15, 2002, within the 90-day time limit.  But LAN did not file its motion for the relief sought in its application or notice a hearing until January 23, 2003128 days after delivery of the arbitration award.  LAN argues that its Application for Partial Confirmation of Arbitration was the functional equivalent of a notice of motion and motion, thus it met the procedural requirements for challenging the award. 

Contrary to LAN's contention, its Application for Partial Confirmation did not serve as the functional equivalent of a written motion because it was not served with written notice of a hearing.  See Stern, 442 N.W.2d at 325.  As the district court reasoned, this case is factually similar to Haekenkamp v. Allstate Ins. Co., 265 N.W.2d 821 (Minn. 1978).  In Haekenkamp, an insurer filed and served a petition to vacate the arbitrator's award within the 90-day time limit.  265 N.W.2d at 823.  But the petition was not noticed formally for a hearing.  Id.  In light of this procedural defect, the Minnesota Supreme Court observed, "[t]he filing of a petition with the district court . . . without setting a prompt hearing date opens the entire judicial process to manipulation and abuse and the practice is to be condemned."  Id. at 824.

We also find persuasive the factual distinction drawn by the district court when analyzing this case in light of Khawaja.  There, respondent filed a motion to vacate but failed to notice the hearing date within the time limit because a case was pending before the Minnesota Supreme Court that was potentially dispositive of his motion to vacate.  Khawaja, 631 N.W.2d at 113.  Under those unique circumstances, the Khawaja court determined that, in the absence of a showing of prejudice resulting from noncompliance with the time limit for noticing a hearing, the district court did not err in considering the merits of the challenge.  Id.  Such unique circumstances, however, are not present here. 

Because LAN did not file its motion to vacate the arbitrator's award and notice the hearing on the motion within the time limit prescribed by Minn. Stat. § 572.19, subd. 2, the district court did not err in confirming the arbitration award on procedural grounds. 

Affirmed.