King Company Limited Partnership VS MBD Construction Company, Inc. and JTS Consolidated Properties, L.P.

Annotate this Case

Download PDF

NOT DESIGNATED FOR PUBLICATION STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT 2010 CA 0902 KING COMPANY LIMITED PARTNERSHIP VERSUS MBD CONSTRUCTION COMPANY INC AND JTS CONSOLIDATED PROPERTIES L P DATE OF JUDGMENT OCT 2 9 n1p PPEAL FROM THE NINETEENTH JUDICIAL DISTRICT COURT IBER 571 DIVISION D PARISH OF EAST BATON ROUGE 688 STATE OF LOUISIANA HONORABLE JANICE CLARK JUDGE Danny G Shaw Mark W Frilot Counsel for Plaintiff Appellant King Company Limited Partnership Mandeville Louisiana Brian L McCullough Baton Rouge Louisiana Counsel for Defendant Appellee JTS Consolidated Properties LP and The Travelers Casualty and Surety Company of America John S McLindon Counsel for Defendant Appellee Baton Rouge Louisiana MBD Maintenance LLC BEFORE KUHN PETTIGREW AND KLINE JJ Disposition DISTRICT COURT JUDGMENT REVERSED ARBITRATOR SEPTEMBER 3 S 2009 AWARD MODIFIED AND AS MODIFIED CONFIRMED JUDGMENT RENDERED MOTION TO SUPPLEMENT GRANTED The Honorable William F Kline Jr is serving pro tempore by special appointment of the Louisiana Supreme Court Kuhn J King Company Limited Partnership King appeals the district court s judgment that denied its motion to confirm an arbitration award and further vacated the award on the grounds that a definite award upon the subject matter submitted was not made pursuant to La R 9 We reverse the district S 4210 s court judgment Additionally we modify the arbitrator September 3 2009 s award and as modified we confirm it and render judgment in accordance with its terms L PROCEDURAL AND FACTUAL BACKGROUND King filed suit naming MBD Construction Company Inc MBD as defendants JTS Consolidated Properties L JTS P and s King petition alleged that 1 it had executed written subcontracts with MBD for two construction projects in Baton Rouge one referenced as the Corporate Atrium project and the other referenced as the Acadian Centre project 2 King satisfactorily provided the services labor equipment and materials required by these contracts on immovable property owned by JTS and 3 MBD has been paid by JTS for the construction projects but MBD has failed to pay King any amounts due under the subcontracts King sought to recover 162 plus interest costs and 00 650 attorneys fees Thereafter MBD ITS and King agreed to submit their disputes arising from the two construction projects to arbitration The arbitrator September 3 s 2 King also named Travelers Casualty and Surety Company of America Travelers as a defendant but Travelers is not involved in this appeal and it was not named in the arbitration award 7 Our reference to King petition includes both its original and amending petitions s 2 2009 award indicates that an evidentiary hearing was held where all parties submitted documentation testimony of witnesses and other arguments and proofs related to the matter The award further states that The Hearing was recessed for the filing of additional information and was declared closed by the undersigned arbitrator on August 14 2009 The award ordered JTS and MBD to pay the following sums in pertinent part JTS shall pay to MBD the following amounts for the listed Proj ects 1 Acadian Centre Protect JTS shall pay to MBD of the remaining contract balance due from the OwnerJTS in the amount of 128 less Liquidated 40 169 Damages payable by MBD for 71 days of delay in the amount of 00 750 31 and less 53 awarded for completion of the 00 625 flooring for this Project and JTS shall pay to MBD the contractual interest for late Progress payments for Pay Applications 1 2 3 4 5 and 6 in the amount of 1 74 159 Corporate Atrium Project JTS shall pay to MBD of the remaining balance of the contract amounts payable from the OwnerJTS in the amount of 90 554 128 less Liquidated Damages payable by MBD for 74 days of delay in the amount of 33 and 00 250 JTS shall pay to MBD the contractual interest due for late Progress payments for Pay Application 1 2 3 4 5 and 6 in the amount of 9 46 369 Total amount payable and due by JTS to MBD for Acadian Centre 43 and for Corporate Atrium 104 is 14 954 36 674 50 628 148 2 King is awarded the following amounts against MBD and JTS In Solido for the below listed Projects Acadian Centre Proiect MBDJTS shall pay to King the remaining balance of the subcontract amounts payable from ContractorMBD the sic in the sum of 00 750 56 plus Judicial Interest in the amount of 8 51 945 for a total amount of 65 51 695 3 Corporate Atrium Protect JTS MBD shall pay King the remaining balance of the subcontract amounts payable from ContractorMBD the sic in the sum of 105 plus Judicial Interest in the sum of 16 00 900 03 693 for a total amount of 122 and 03 593 MBDJTS shall pay to King the amount of 3000 for 00 work done by King for nonscope expenditures related to the carpet transition strips Total amount payable and due by MBDJTS to King for Acadian Centre 65 and for Corporate Atrium 125 is 51 695 03 593 54 288 191 plus legal Prompt Payment Penalties in amount of 56 8920 and reasonable attorneys fees of 10 sic 000 The award further provided that all amounts awarded were due and payable on or before the 30 day of September and further specified that there after sic interest at the legal rate of interest established by the Office of Financial Institutions for the State of Louisiana is AWARDED on all unpaid balances until the same are paid in full Otherwise the award ordered that 12 in 000 administrative fees and expenses of the arbitration were to be borne equally amongst MBD JTS and King Compensation and expenses of the arbitrator in the amount of 11 was also to be borne equally amongst these parties 12 003 In response to motions filed in the arbitration proceeding the arbitrator signed a Modified Award on November 23 2009 The Modified Award did not affect any of the amounts ordered to be paid to or by King the modifications pertained to the award insofar as it set forth JTS obligations to MBD s The parties do not dispute that the Modified Award was a correction of the September 3 2009 award in that the original award transposed the amounts attributable to each construction project The Modified Award ordered JTS to 4 pay MBD the same amounts that it had been ordered to pay in the initial award but with respect to the opposite construction project On January 28 2010 King filed a motion to confirm the arbitrator award s pursuant to La R 9 JTS filed an opposition memorandum wherein it S 4209 raised the following argument in pertinent part he T arbitrator ordered JTS to pay MBD a total amount of 50 628 148 for both projects This award included a reduction of liquidated damages assessed against MBD and a further reduction of 00 625 53 for completion of the flooring for the Corporate Atrium Project However the arbitrator ordered JTS and MBD in solido to The deduction of pay King a total amount of 191 54 288 00 625 53 for completion of the flooring for the Corporate Atrium Project was not deducted from the amount awarded to King the flooring contractor As a result of this oversight and because the award to King was granted in solido JTS is now bound to pay an amount granted to it as a reduction in order to complete the unfinished flooring work MBD also filed an opposition memorandum wherein it urged the following in pertinent part The arbitrator deducted from the amount owed to MBD 53 00 625 for completion of the flooring The arbitrator refused neglected or forgot to pass on this deduction to the sole flooring subcontractor on this job King This is illogical and unfair This allegation of flooring work not being completed should have been handled in one of two ways first the deduction for the flooring work should have been passed on from the general contractor MBD to the flooring subcontractor King second is the more probable scenario namely that the flooring work was completed and there never should have been a deduction of the 53 from the amount owed to MBD 00 625 It is respectfully submitted that this Court modify the arbitration award by eliminating the deduction of 53 from the 00 625 s arbitrator award In other words MBD should be awarded its contract balance less liquidated damages In turn King should get the amount that was awarded to it Either the work was completed or it was not If it was completed then MBD should not have this amount deducted from its contract balance If it was not completed then this 5 amount should be passed on to the flooring subcontractor who should have completed it King argued in a reply memorandum that the arbitrator did not allow MBD to pass along any delay damages to King based in part on MBD failure to s produce certain documents It asserts that the arbitrator presumably made his ruling regarding the alleged defective work on that same basis i that sufficient e documentation was not provided to support a deduction against the award in s King favor The district court held a hearing on the motion during which counsel presented their respective arguments but no evidence was introduced After the arguments were presented the district court commented I do not have a record of the arbitration proceedings and I can not sic conduct a record review But it appears that the arbitrators sic may have so imperfectly executed these proceedings that it just defies logic After taking the matter under advisement the district court rendered judgment on March 11 2010 stating in pertinent part The court is of the opinion that the award should be vacated It appears that the arbitrator acted imperfectly in executing its powers so that a definite award was not made on the subject matter On March 31 2010 the trial court signed a judgment denying King motion to confirm the arbitration award and further s vacating the arbitration award King also filed by facsimile transmission a supplemental memorandum in support of his motion It filed a motion to supplement this court record on appeal with the Nineteenth s Judicial Clerk of Court March 10 2010 confirmation of that filing At oral arguments before s this court JTS and MBD both represented they had no opposition to King motion Therefore s we grant King motion to supplement the record in this regard s 6 King has appealed the trial court judgment urging that the trial court s erred 1 in vacating the arbitrator award because it had no legal basis on which s to do so and 2 in failing to confirm the award 11 ANALYSIS Louisiana Civil Code Articles 3099 through 3132 comprise Title XIX entitled Of Arbitration Parties who have submitted their differences to arbitrators must establish their claims in the same manner as in a court of justice by producing written or verbal evidence La C art 3112 Once an arbitrator fixes an award the award in order to be put in execution ought to be approved by the judge but this formality is only intended to invest the award with a sufficient authority to ensure its execution and not to submit to the judge the examination of its merits except in case an appeal is brought before him La C art 3129 A party who is not satisfied with the award may appeal from it La C art 3130 Once the arbitrator has given his award he cannot retract it nor change any thing in it La C art 3131 The applicable law governing confirmation of an arbitration award is set forth in The Louisiana Binding Arbitration Law see Louisiana Revised Statutes 4201 9 et seq Louisiana Revised Statutes 9 provides in pertinent part 4209 At any time within one year after the award is made any party to the arbitration may apply to the court in and for the parish within which the award was made for an order confirming the award and thereupon the court shall grant such an order unless the award is vacated modified or corrected as prescribed in La R 9 and S 4210 4211 9 The provisions of La R 9 and 4211 limit the grounds on which an S 4210 appeal from an arbitrator decision may be taken See St Tammany Manor fne s 7 v Spartan Bldg Corp 509 So 424 427 La 1987 2d Louisiana Revised Statutes 9 addresses the grounds for vacating an arbitrator award as 4210 s follows In any of the following cases the court in and for the parish wherein the award was made shall issue an order vacating the award upon the application of any party to the arbitration A Where the award was procured by corruption fraud or undue means B Where there was evident partiality or corruption on the part of the arbitrators or any of them C Where the arbitrators were guilty of misconduct in refusing to postpone the hearing upon sufficient cause shown or in refusing to hear evidence pertinent and material to the controversy or of any other misbehavior by which the rights of any party have been prejudiced D Where the arbitrators exceeded their powers or so imperfectly executed them that a mutual final and definite award upon the subject matter submitted was not made Where an award is vacated and the time within which the agreement required the award to be made has not expired the court may in its discretion direct a rehearing by the arbitrators Louisiana Revised Statutes 9 delineates the following circumstances in 4211 which a district court has the authority to modify or correct an arbitrator award s In any of the following cases the court in and for the parish wherein the award was made shall issue an order modifying or correcting the award upon the application of any party to the arbitration A Where there was an evident material miscalculation of figures or an evident material mistake in the description of any person thing or property referred to in the award B Where the arbitrators have awarded upon a matter not submitted to them unless it is a matter not affecting the merits of the decision upon the matters submitted N C Where the award is imperfect in matter of form not affecting the merits of the controversy The order shall modify and correct the award so as to effect the intent thereof and promote justice between the parties Louisiana courts have strictly adhered to these statutory grounds as the exclusive and very limited authority for judicial modifications of arbitration awards JK Developments L v Amtek of Louisiana Inc 07 1825 La C App 1st Cir 3 985 So 199 201 writ denied 08 0889 La 6 08 26 2d 08 20 983 So 1276 In St Tammany Manor Inc v Spartan Building Corporation 2d 509 So 424 La 1987 our supreme court further specified that t 2d hose grounds do not include errors of law or fact which are insufficient to invalidate an award fairly and honestly made Id at 427 The underlying purpose of this limited scope of review is explained in National Tea Co v Richmond 548 So 2d 930 932 33 La 1989 Because of the strong public policy favoring arbitration arbitration awards are presumed to be valid Errors of fact or law do not invalidate a fair and honest arbitration award Therefore misinterpretation of a contract by an arbitration panel is not subject to judicial correction Judges are not entitled to substitute their judgment for that of the arbitrators chosen by the parties Arbitration is a substitute for litigation The purpose of arbitration is settlement of differences in a fast inexpensive manner before a tribunal chosen by the parties That purpose is thwarted when parties seek judicial review of an arbitration award Citations omitted Further a district court reviewing an arbitration award ordinarily does not sit in an appellate capacity to an arbitration panel but confines its determinations to whether there exists one or more of the specific grounds for impeachment as We also note that this circuit has not embraced the jurisprudentially created circumstance of manifest disregard for the law as an additional legal basis for modifiing or vacating an arbitration award JK Developments L 985 So at 20203 Thus we reject MBD C 2d s contention to that effect 9 provided for by statute MMRRadon Constructors Inc v Continental Ins Co 970159 La App 1st Cir 3 714 So 1 5 writ denied 981485 La 98 2d 98 4 9 721 So 915 Additionally the burden of proof is on the party attacking 2d the arbitrator award Firrnin v Garber 353 So 975 978 La 1977 s 2d In the instant case we note initially that once the arbitrator had given his September 3 2009 award it had no authority to change it and thus had no authority to issue the November 23 2009 modified award La C art 3131 Therefore our references to the arbitrator award hereinafter are to his September s 3 2009 award Although MBD and JTS are not satisfied with the arbitrator award neither s of them has filed an appeal a motion or application to vacate the arbitrator s award or a motion or an application to modify or correct the award They have merely filed opposition memorandums to King motion to confirm the arbitrator s s award However in these opposition memorandums both MBD and JTS prayed that the arbitrator award be vacated or modified s Because they requested this particular relief we will consider their oppositions as the requisite applications for vacating modifying or correcting the arbitrator award s Addressing the provisions of La R 9 we find no basis for vacating S 4210 the arbitrator award MBD and JTS make no contention of corruption fraud s undue means or partiality La R 9 S 4210A B Neither MBD nor JTS have alleged misconduct or misbehavior by the arbitrator La R 9 Likewise S 4210C they have not alleged that the arbitrator refused to hear evidence material to this controversy or that he exceeded his powers La R 9 S 4210C D While the s arbitrator award is debatable in that it is not apparent why the flooring costs 10 were not deducted from the award in King favor since they were deducted from s the award in MBD favor the district court did not have any of the evidence on s which the arbitrator award was based and it acted improperly by substituting its s judgment for that of the arbitrator chosen by the parties The district court sought to base its action on La R 9 reasoning S 4210D that the award was not definite A final and definite award must both resolve all the issues submitted to arbitration and determine each issue fully so that no further litigation is necessary to finalize the obligations of the parties under the award Holmes v Orleans Parish School Bd 698 So 429 436 La App 4th 2d Cir 7 writ denied 97 2102 La 11 703 So 630 MBD and JTS 97 9 97 14 2d have not identified any outstanding issues dissatisfaction with the manner in which the they have only expressed arbitrator resolved the issues presented to him Thus we conclude the arbitrator award is final and definite s Based on the record before us we find none of the grounds set forth in La R S 4210 9 exist Consequently MBD and JTS failed to meet their burden of establishing grounds to vacate the arbitrator award s Next we address the statutory grounds for modifying or correcting an s arbitrator award MBD and JTS do not challenge the scope or the form of the s arbitrator award La R 9 S 4211B C In its brief to this court MBD urges that the deduction for the flooring work and the associated liquidated damages for not completing the flooring work should have been passed on from it to King This argument does not relate to an evident material miscalculation of figures or an evident material mistake in the description of any person thing or property 11 referred to in the award La R 9 MBD and JTS simply seek a S 4211A different and more favorable outcome on the merits than that set forth in the s arbitrator award At best their arguments suggest an error of fact or law by the arbitrator which this court has no authority to remedy St Tammany Manor Inc v Spartan Bldg Corp 509 So at 427 Thus we conclude that MBD and JTS 2d have not established they are entitled to have the arbitration award modified to provide for a deduction in the amount they have been ordered to pay to King However because the parties agree that the arbitrator award transposed s the amounts attributable to each construction project in addressing JTS s obligations to MBD we find grounds for modifying the arbitrator September 3 s 2009 award to correct this evident material mistake in the description of property referred to in the award La R 9 Accordingly we modify S 4211A Paragraph 1 of the award to provide as follows 1 JTS shall pay to MBD the following amounts for the listed Projects Corporate Atrium Project JTS shall pay to MBD of the remaining contract balance due from the OwnerJTS in the amount of 128 less Liquidated 40 169 Damages payable by MBD for 71 days of delay in the amount of 00 750 31 and less 53 awarded for completion of the 00 625 flooring for this Project and JTS shall pay to MBD the contractual interest for late Progress payments for Pay Applications 1 2 3 4 5 and 6 in the amount of 1 74 159 6 JTS makes no argument in support of a modification it only argues that the district judge properly vacated the arbitration award 12 Acadian Center Project JTS shall pay to MBD of the remaining balance of the contract amounts payable from the OwnerJTS in the amount of 90 554 128 less Liquidated Damages payable by MBD for 74 days of delay in the amount of 33 and 00 250 JTS shall pay to MBD the contractual interest due for late Progress payments for Pay Application 1 2 3 4 5 and 6 in the amount of 9 46 369 Total amount payable and due by JTS to MBD for Corporate Atrium Project 43 and for Acadian Center Project 14 954 36 674 104 is 148 50 628 Based on the provisions of La R 9 we now confirm the arbitrator S 4209 s award as modified by this court and render judgment in accordance with its terms La R 9 S 4212 111 CONCLUSION For these reasons we reverse the district court judgment We modify the s s arbitrator September 3 2009 award as specified herein and as modified we confirm it We further render judgment in accordance with the terms of the modified award DISTRICT SEPTEMBER 3 COURT JUDGMENT 2009 AWARD REVERSED MODIFIED AND S ARBITRATOR AS MODIFIED CONFIRMED JUDGMENT RENDERED MOTION TO SUPPLEMENT GRANTED 7 Louisiana Revised Statutes 9 provides Upon the granting of an order confirming 4212 modifying or correcting an award judgment may be entered in conformity therewith in the court wherein the order was granted 13

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.