Opinion
2016 CA 0600
05-17-2017
JOSEPH BERGERON D/B/A DESIGN/BUILD ASSOCIATES v. NEAL PATEL D/B/A LOUISIANA PARTY COMPANY
J. Rodney Messina Janna Messina Kiefer Baton Rouge, Louisiana Attorneys for Appellee, Joseph Bergeron d/b/a Design/Build Associates Daniel Lund, III Imtiaz A. Siddiqui Tamara J. Lindsay Aaron J. Hurd New Orleans, Louisiana and Andre G. Coudrain Jamie P. Gomez Hammond, Louisiana Attorneys for Appellant, Neal Patel d/b/a Louisiana Party Company, LLC
NOT DESIGNATED FOR PUBLICATION
On Appeal from the Nineteenth Judicial District Court In and for the Parish of East Baton Rouge State of Louisiana
Trial Court No. 638,566, Section 26 Honorable Donald R. Johnson, Judge Presiding J. Rodney Messina
Janna Messina Kiefer
Baton Rouge, Louisiana Attorneys for Appellee,
Joseph Bergeron d/b/a
Design/Build Associates Daniel Lund, III
Imtiaz A. Siddiqui
Tamara J. Lindsay
Aaron J. Hurd
New Orleans, Louisiana
and
Andre G. Coudrain
Jamie P. Gomez
Hammond, Louisiana Attorneys for Appellant,
Neal Patel d/b/a Louisiana
Party Company, LLC BEFORE: PETTIGREW, McDONALD, WELCH, CRAIN, and CALLOWAY, JJ. McDONALD, J.
Hon. Curtis Calloway, retired, is serving as judge ad hoc by special appointment of the Louisiana Supreme Court.
Defendant, Louisiana Party Company, LLC (LPC), appeals a judgment confirming an arbitration award in favor of Design/Build Associates, Inc. (DBA), and denying LPC's motion to vacate or modify the arbitration award. We affirm in part, vacate in part, and remand.
This matter was originally captioned "Joseph Bergeron d/b/a Design/Build Associates versus Neal Patel d/b/a Louisiana Party Co." However, the trial court issued a judgment on the motion for new trial, in part, recognizing the proper parties and that the underlying arbitration award was rendered in favor of Design/Build Associates, Inc., only, and against Louisiana Party Co., LLC, only. Therefore, we refer to the proper company names in this opinion and not to the individuals originally named as plaintiff and defendant in the suit.
FACTUAL AND PROCEDURAL BACKGROUND
On September 10, 2012, DBA, the contractor, and LPC, the owner, entered into a contract for the construction of a shopping center in Houma, Louisiana (the Houma Project). A dispute arose over amounts due on the contract and resulting from certain change orders. The contract required arbitration of disputes. On April 4 and 7, 2014, the parties' attorneys exchanged emails suggesting potential arbitrators. One suggested name was Craig Kaster, an attorney with Kaster & Cop, LLC (Kaster & Cop). The LPC attorney indicated that he was familiar with Mr. Kaster and would check with his client, Neal Patel (LPC's sole member), as to that suggestion.
On April 10, 2014, Teresa Cop, another attorney with Kaster & Cop, sent a letter to DBA (April 10 demand letter), seeking payment of an outstanding account in the amount of $6,647.16 for her client, Acoustical Specialties & Supply, Inc. (Acoustical). On the same day, Ms. Cop sent another letter to the attention of Neal Patel at Tripate Marketing, Inc. d/b/a The Ultimate Party Store (April 10 Tripate letter). Ms. Cop stated that she represented Acoustical, a supplier who had sold materials to DBA for the Houma Project and who was owed $6,647.16 for unpaid invoices.
LPC agreed to arbitrate the Houma Project dispute with DBA and to have Mr. Kaster serve as the arbitrator. On August 13, 2014, DBA filed a written demand for arbitration with the American Arbitration Association (AAA). The AAA appointed Mr. Kaster as the arbitrator for the dispute. As part of his appointment, Mr. Kaster was required to complete a disclosure questionnaire. On November 4, 2014, Mr. Kaster sent a letter to the AAA stating that DBA owed money to Acoustical, his firm's client, and that his partner (Ms. Cop) had sent an April 10 demand letter to DBA. Mr. Kaster's November 4 letter to the AAA did not specifically state that Acoustical sought to be paid by DBA for work performed on the Houma Project. The AAA attached Mr. Kaster's letter and disclosure questionnaire to its appointment notice dated November 4, 2014, sent it to the parties, and gave them until November 11, 2014, to object to Mr. Kaster's appointment. No objections were made.
Arbitration was held over three days in December 2014, and on March 3, 2015, Mr. Kaster awarded DBA $394,693.09, after a reduction for certain deductions and liquidated damages. LPC filed a request for award modification with the AAA on March 19, 2015, claiming that Mr. Kaster made several miscalculations. Mr. Kaster, as the AAA arbitrator, denied the request on March 31, 2015.
On April 14, 2015, DBA filed a petition and rule to show cause to confirm the arbitration award in the trial court. On April 17, 2015, LPC sent a letter to the AAA that it had discovered that Kaster & Cop sent "[LPC] correspondence on behalf of Acoustical" requesting payment for overdue invoices arising from work done on the Houma Project. LPC claimed that the April 10 Tripate letter revealed an "undisclosed conflict of interest between the arbitrator and [LPC]." LPC requested that the AAA refund its arbitration costs. The AAA responded that it had reviewed the information and would not issue any refund. The AAA directed the parties to Rule R-19 of the Construction Industry Arbitration Rules (CIAR) pertaining to the duty of the arbitrator and parties to disclose.
In the trial court, LPC opposed the award confirmation sought by DBA and sought to either vacate or modify the award based on an undisclosed conflict and/or a miscalculation of the award. In connection with LPC's opposition, Mr. Patel, LPC's sole member, filed an affidavit stating that he discovered Mr. Kaster's conflict of interest on or about March 4, 2015, while reviewing LPC's records. Specifically, Mr. Patel claimed that Mr. Kaster failed to disclose that his law firm represented Acoustical in connection with a demand made against Mr. Patel for outstanding amounts related to the Houma Project.
The trial court held a hearing on June 15, 2015, and at the end, orally granted LPC's motion to vacate the arbitration award and denied DBA's petition to confirm. Although a judgment was submitted to the trial court after this hearing, the trial court did not sign the judgment. DBA then filed a motion for written reasons, which the trial court issued and signed on July 6, 2015.
Before issuing the written reasons, the trial court, on its own motion, scheduled another hearing, which was held on July 13, 2015. At the hearing, the trial court sought clarity on when LPC received notice of the alleged conflict. LPC's attorney stated that he did not personally become aware of the conflict until an associate in his firm pointed out the April 10 Tripate letter. He emphasized that there were 1,300 exhibits involved in the arbitration. The trial court orally maintained its previous ruling vacating the arbitration award.
A judgment was submitted to the trial court after the July 13, 2015 hearing, but it was not signed before DBA filed a "Motion to Hear Newly Discovered Evidence Which Clearly Contradicts When Defendant Was Aware of a Potential Conflict With the Arbitrator." DBA claimed that it had discovered that LPC had filed the April 10 Tripate letter (from Ms. Cop and addressed to Mr. Patel, seeking the balance owed to Acoustical for the Houma Project) into the arbitration matter as Bates-stamped exhibit "LPC 930." Also included in LPC's exhibits were Acoustical invoices Bates-stamped as exhibits "LPC 931-935." DBA asserted that this evidence showed that Mr. Patel knew of Mr. Kaster's conflict before the arbitration took place and eight months before he admitted he knew of such in his affidavit.
LPC responded by filing a motion to strike and an opposition to DBA's motion to hear newly discovered evidence. LPC attached Mr. Patel's supplemental affidavit, which stated that LPC did not dispute that it had been in possession of the April 10 Tripate letter, but that LPC "did not review the exhibits for the purposes of determining whether any of the subcontractors and their respective attorneys possessed a prior relationship with the selected Arbitrator."
The trial court held a hearing on DBA's and LPC's motions on October 5, 2015. At the hearing, DBA offered several exhibits, including a September 30, 2015 letter Mr. Kaster wrote to the parties' counsel, in which he reviewed his prior disclosures and stated his belief that he had made a full disclosure before the arbitration was held. LPC's counsel objected to the admission of Mr. Kaster's September 30, 2015 letter. After hearing argument, the trial court took the matter under advisement.
On October 28, 2015, the trial court signed a judgment, denying LPC's motion to strike, granting DBA's motion to hear newly discovered evidence, overruling LPC's objection to DBA's evidence at the October 5, 2015 hearing, reversing its previous ruling on the motion to confirm, and granting DBA's motion to confirm the arbitration award. LPC filed a motion for new trial, which the trial court heard on January 25, 2016. On January 28, 2016, the trial court granted the motion for new trial, in part, with respect to the parties' identities, to reflect that the arbitration award was rendered in favor of Design/Build Associates, Inc. and against Louisiana Party Co., LLC, not in favor of Joseph Bergeron d/b/a Design/Build Associates and against Neal Patel d/b/a Louisiana Party Company, LLC. The trial court further denied the motion for new trial in all other respects and ordered the parties to submit an amended judgment in accordance with its ruling. On the same date, January 28, 2016, the trial court signed an amended judgment confirming the arbitration award and "supplanting and superseding" the October 28, 2015 judgment. LPC appeals from this judgment.
In three assignments of error, LPC contends the trial court erred by: (1) granting DBA's motion to hear newly discovered evidence and overruling LPC's objections to admission of Mr. Kaster's September 30, 2015 letter; (2) concluding that Mr. Kaster's failure to disclose his financial interest in the outcome of the arbitration did not amount to "evident partiality" under LSA-R.S. 9:4210; and (3) denying LPC's alternative motion to deny or modify the arbitration award under LSA-R.S. 9:4211 based on an evident miscalculation.
EVIDENTIARY RULING
LPC argues that the trial court erred in granting DBA's "Motion to Hear Newly Discovered Evidence" and in overruling its objections to admission of Mr. Kaster's September 30, 2015 letter. Louisiana Code of Evidence article 103 provides that error may not be predicated upon a ruling admitting or excluding evidence unless a substantial right of the party is affected. In reviewing the trial court's evidentiary rulings, the appellate court must consider whether the particular ruling complained of was incorrect, and if so, whether the error prejudiced the complainant's cause, for unless it did, reversal is not warranted. Brumfield v. Guilmino, 93-0366 (La. App. 1 Cir. 3/11/94), 633 So.2d 903, 911, writ denied, 94-0806 (La. 5/6/94), 637 So.2d 1056.
We have reviewed Mr. Kaster's September 30, 2015 letter and conclude that reversal is not warranted because LPC was not prejudiced by the letter's admission. In the letter, Mr. Kaster merely reviewed his prior disclosures and reiterated his belief that he made a full disclosure of his firm's representation of Acoustical before the arbitration hearing commenced. Mr. Kaster's statements in the letter are not materially different than his answers to the AAA disclosure questionnaire or statements he made in his November 4, 2014 letter to the AAA, both of which were properly included in the record. Thus, the September 30, 2015 letter is cumulative of other properly admitted evidence and did not prejudice LPC. See McGlothlin v. Christus St. Patrick Hosp., 10-2775 (La. 7/1/11), 65 So.3d 1218, 1230. LPC's argument to the contrary is without merit.
ARBITRATION LAW
Under the Louisiana Arbitration Law, LSA-R.S. 9:4201 et seq., a party to an arbitration proceeding may, within one year after the award is made, apply to the district court for confirmation of the award, and the court shall confirm the award unless the award is vacated, modified, or corrected, as set forth in LSA-R.S. 9:4210 and 4211. See LSA-R.S. 9:4209. An arbitration award may be vacated under LSA-R.S. 9:4210, which states:
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.(Emphasis added.)
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.
And, an arbitration award may be modified or corrected under LSA-R.S. 9:4211, which states:
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.
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.
It is well-settled in both state and federal courts that an award may be challenged only on the grounds specified in the applicable arbitration statutes, here LSA-R.S. 9:4210 and 9:4211. Crescent Prop. Ptrs, LLC v. Am. Mfrs. Mut. Ins. Co., 14-0969 (La. 1/28/15), 158 So.3d 798, 803. Those grounds do not include errors of law or fact and such grounds are insufficient to invalidate an award fairly and honestly made. A court does not ordinarily sit in an appellate capacity over an arbitrator but instead must confine its determination to whether there exists one or more specific grounds for invalidation as provided by the applicable statute. Id. at 803-04. Moreover, an appellate court's function is to determine if the arbitration proceedings have been fundamentally fair. Preis Gordon, APLC v. Chandler, 15-0958 (La. App. 1 Cir. 2/26/16), 191 So.3d 31, 36, writ denied, 16-0590 (La. 5/20/16), 191 So.3d 1067. The burden of proof rests upon the party attacking the award. Mack Energy Co. v. Expert Oil and Gas, LLC, 14-1127 (La. 1/28/15), 159 So.3d 437, 441-42.
While other circuit courts have adopted a "manifest disregard for the law" as an additional basis for vacating an arbitration award, this court has adhered to the statutory standard established by LSA-R.S. 9:4210. JK Developments, LLC v. Amtek of Louisiana, Inc., 07-1825 (La. App. 1 Cir. 3/26/08), 985 So.2d 199, 202, writ denied, 08-0889 (La. 6/20/08), 983 So.2d 1276; see also Crescent Prop. Ptrs, LLC, 158 So.3d 798, 802 n.3 and Southgate Penthouses, LLC v. Mapp. Const., 12-1242 (La. App. 1 Cir. 4/26/13), 2013 WL 1790994 n.5 (unpublished), 13-1217, 13-1906 (La. 9/13/13), 120 So.3d 700, 705.
EVIDENT PARTIALITY AND WAIVER
LPC argues that Mr. Kaster's failure to disclose his financial interest in the outcome of the arbitration amounted to "evident partiality" under LSA-R.S. 9:4210, and the trial court erred in finding otherwise. Further, LPC denies that it had adequate notice of and waived its objection to Mr. Kaster's potential conflict of interest.
In their original construction agreement, DBA and LPC agreed that disputes would be arbitrated, if necessary, under the terms and conditions of the 1997 edition of the General Conditions of the Contract for Construction, AIA Document A201-1997 and AIA Document A101-1997. AIA Document A201-1997, Section 4.6.2, pertains to arbitration and provides that the arbitration was to be in accordance with the AAA Construction Industry Arbitration Rules currently in effect. Regarding the duty to disclose, CIAR Rule R-19 titled "Disclosure" provided:
According to the AAA, the 2009 version of CIAR Rule R-19 was in effect at the time of the parties' arbitration. We also note that the 1997 edition of the General Conditions of the Contract for Construction, AIA Document A101-1997, is not in the record.
(a) Any person appointed or to be appointed as an arbitrator as well as the parties and their representatives shall disclose to the AAA, as promptly as practicable, any circumstances likely to give rise to justifiable doubt as to the arbitrator's impartiality or independence, including any bias or any financial or personal interest in the result of the arbitration or any past or present relationship with the parties or their representatives. Such obligation shall remain in effect throughout the arbitration.
In addition to these contractual disclosure obligations applicable to the arbitrator and parties here, there are jurisprudential guidelines for determining the issue of evident partiality. In Firmin v. Garber, 353 So.2d 975, 978 (La. 1977), the Louisiana Supreme Court stated that to constitute evident partiality under LSA-R.S. 9:4210(B), it must clearly appear that the arbitrator was biased, prejudiced, or personally interested in the dispute. Examples are a blood relationship with one of the parties or a pecuniary interest in the outcome of the dispute. Id. Later, in National Tea Co. v. Richmond, 548 So.2d 930, 931 n.1 (La. 1989), although not dealing with an undisclosed relationship, the Supreme Court noted that the evident partiality proscribed by LSA-R.S. 9:4210 is a "strong" bias, prejudice, or personal interest. And, relying on federal jurisprudence, this court has stated that proof of an arbitrator's evident partiality requires more than an appearance of bias. Rather, a challenging party must meet an objective test, that is, he must show that a reasonable person would have to conclude that an arbitrator was partial to the other party to the arbitration. In re Arbitration Between U.S. Turnkey Expl., Inc. & PSI, Inc., 577 So.2d 1131, 1135 (La. App. 1 Cir.), writ denied, 580 So.2d 676 (La. 1991).
Under both the Federal Arbitration Act and the Louisiana Arbitration Act, arbitrator bias is one of the grounds for vacating an award, but there are conflicting approaches regarding the standard of proof required to prove arbitrator bias. Murrill, Elizabeth B., Vacating Arbitrator Awards for Bias Due to Non-Disclosure Relationships, 53 La. B.J. 372 (Feb/Mar 2006). Both parties rely on Commonwealth Coatings Corp. v. Continental Casualty Co., 393 U.S. 145, 89 S.Ct. 337, 21 L.Ed.2d 301 (1968) (plurality opinion), wherein the Supreme Court vacated an arbitrator's award for evident partiality because the arbitrator failed to disclose an ongoing financial relationship with a party to the arbitration. Commonwealth Coatings addressed the burden of proof required to show "evident partiality" with regard to the federal statute, 9 U.S.C. § 10(a)(2), which is almost identical to LSA-R.S. 9:4210. The Supreme Court held that arbitrators must disclose any dealings that might "create the impression of possible bias." The federal Fifth Circuit in Positive Software Solutions, Inc. v. New Century Mortgage Corp., 476 F.3d 278, 283 (5th Cir. 2007), cert. denied, 551 U.S. 1114, 127 S.Ct. 2943, 168 L.Ed.2d 263 (2007), noted that Commonwealth Coatings was a plurality opinion and adopted a practical interpretation of the "reasonable impression of bias" standard such that, in nondisclosure cases, "an award may not be vacated because of a trivial or insubstantial prior relationship between the arbitrator and the parties to the proceeding." Id.
Generally, a party seeking to vacate an arbitration award based on an arbitrator's evident partiality, and who knows the reasons supporting such an objection, must object during the arbitration proceedings. U.S. Turnkey Expl., 577 So.2d at 1135. His failure to do so constitutes a waiver of the objection. Dealer Computer Services, Inc. v. Michael Motor Co., 485 Fed. Appx. 724, 727 (5th Cir. 2012), 2012 WL 3317809 (unpublished), cert. denied, 464 U.S. 824, 133 S.Ct. 945, 184 L.Ed.2d 727 (2013). Where a party has knowledge of facts possibly indicating arbitrator bias, he cannot remain silent and later object to the arbitrator's award on that ground. See York Research Corp. v. Landgarten, 927 F.2d 119, 121-22 (2nd Cir. 1991); Early v. Eastern Transfer, 699 F.2d 552, 558 (1st Cir. 1983), cert denied, 464 U.S. 824, 104 S.Ct. 93, 78 L.Ed.2d 100 (1983) ("[W]e cannot accept that parties have a right to keep two strings to their bow - to seek victory before the tribunal and then, having lost, seek to overturn it for bias never before claimed.") Additionally, in this case, CIAR Rule R-19 imposed a duty not only on Mr. Kaster, but on the parties and their representatives as well, to disclose to the AAA "as promptly as practicable, any circumstances likely to give rise to justifiable doubt" as to Mr. Kaster's impartiality.
We need not determine whether Mr. Kaster's failure to specifically disclose that DBA owed money to Acoustical on the Houma Project constituted evident partiality. After a thorough review of the record, we find the trial court correctly determined that, before the arbitration, LPC "waived any potential conflict with the arbitrator as [LPC] was provided adequate notice about the relationship between the arbitrator's client [Acoustical] and plaintiff [DBA] in this matter prior to the rendition of the arbitrator's award."
On November 4, 2014, the AAA sent a letter to the parties appointing Mr. Kaster as the arbitrator, enclosing the disclosures Mr. Kaster previously made and an "Arbitrator's Oath," and requiring any objections to his appointment be made by November 11, 2014. On the "Notice of Appointment," Mr. Kaster responded to several questions, including the following:
2. Have you represented any person against any party to the arbitration?
[Mr. Kaster's response] Yes.
***
7. Have you, any member of your family, or any close social or business associate been involved in the last five years in a dispute involving the subject matter contained in the case, which you are assigned?
[Mr. Kaster's response] No.
***
14. Are there any connections, direct or indirect, with any of the case participants that have not been covered by the above questions?
[Mr. Kaster's response] No.
In addition to the above disclosures, Mr. Kaster wrote a separate letter to the AAA, dated November 4, 2014, stating:
I'm writing with regard to inquiry concerning the cases involving [DBA]. One of my clients filed suit against [DBA] in Zachary City Court; however, that matter has been resolved and a dismissal was filed with the court on October 16, 2014.
Another one of my clients, [Acoustical,] is owed money by [DBA]. Back in April, my partner sent a demand letter to [DBA] on behalf of the client for a past due balance owed on the account. It [is] my understanding the materials supplied by Acoustical and the amount owed are not in dispute.
My file also reflects that I spoke to both attorneys, Andre Coudrain, on behalf of [LPC], and Janna Kiefer on behalf of [DBA], back in April with regard to arbitrating their disputes on this matter. The attorneys and
parties agreed for me to serve as arbitrator and now are proceeding with the arbitration through the [AAA].
(R. 280).
Mr. Kaster also sent the AAA case manager a letter dated November 3, 2014, enclosing his Notice of Appointment, Notice of Compensation and Arbitrator's Oath, and stating:
I have represented a few parties in the past with claims against [DBA]. To my knowledge, all of those matters have since been resolved. I am also familiar with both attorneys on a professional basis only. Therefore, I believe my ability to be impartial will not be hindered in that regard.
LPC claims that Mr. Kaster's letters to the AAA leave out all the information that would indicate that Mr. Kaster and his law firm had an interest in the outcome of this particular dispute regarding the Houma Project. LPC contends that Mr. Kaster references Ms. Cop's April 10 demand letter sent to DBA, but makes no mention of a demand upon LPC, which might have triggered an investigation by LPC into the conflict. Furthermore, LPC asserts that the April 10 demand letter to DBA did not mention LPC or the Houma Project. LPC maintains that only DBA was in privity with Acoustical and that no one informed LPC that the amount DBA owed to Acoustical, Mr. Kaster's client, was related to the Houma Project. LPC also asserts that it was unaware that the money Acoustical sought from DBA was for work on the Houma Project, the arbitration subject matter. LPC reasons that because Mr. Kaster did not supplement his prior incomplete disclosure, it never had an opportunity to appropriately review Mr. Kaster's conflict or possess sufficient information to ever consider waiving the conflict.
In response, DBA contends that LPC and its attorney had ample information from which to discover Mr. Kaster's potential conflict before the arbitration occurred. DBA points out that LPC had the April 10 Tripate letter and Acoustical invoices before the arbitration and submitted these documents as Bates-stamped exhibits in the arbitration. DBA asserts that this evidence contradicts LPC's attorney's claim that he did not personally become aware of the potential conflict until after the arbitration when his associate pointed out the April 10 Tripate letter to him. DBA also asserts that this evidence contradicts Mr. Patel's affidavit wherein he stated that he discovered Mr. Kaster's potential conflict on or about March 4, 2015, the day after the arbitration award was made.
In reviewing the trial court's judgment confirming the arbitration award, we repeat that our function is limited to determining if the arbitration proceeding below was fundamentally fair and that LPC bore the burden of proving that it was not. Preis Gordon, APLC, 191 So.3d at 36. We again point put that LPC and DBA agreed to arbitrate this dispute under the AAA's CIAR rules, including Rule R-19, titled "Disclosure." Under Rule R-19, the arbitrator, as well as the parties and their representatives, had a duty to disclose to the AAA any circumstances likely to give rise to a justifiable doubt as to the arbitrator's impartiality. Thus, not only did Mr. Kaster have a duty to disclose, but LPC, DBA, and their principals and attorneys, had a similar duty to disclose.
The evidence shows that Mr. Kaster disclosed to the parties that DBA owed money to Acoustical and that Ms. Cop with his firm sent the April 10 demand letter to DBA and the April 10 Tripate letter and Acoustical invoices, which referenced the "Houma Shopping Ctr," to Mr. Patel's attention. Admittedly, Mr. Kaster's disclosures alone do not directly link Mr. Kaster or his law firm to the Houma Project, the arbitration subject. But, the evidence also shows that LPC's attorney had Mr. Kaster's disclosures in his possession, as well as the April 10 Tripate letter and Acoustical invoices, before the arbitration award was made, and actually submitted these documents as evidence in the arbitration proceeding. Collectively, these documents show that Mr. Kaster's firm represented Acoustical, a subcontractor involved with the Houma Project.
LPC's attorney admitted to the trial court that he had the documents, but did not "look through" all 1,300 documents submitted in the arbitration, relying instead on summaries from his client. An attorney should know what he is filing on behalf of his client. Further, an attorney's knowledge regarding the facts of a case, actual or otherwise, is imputed to his client. Bonnecaze v. Hamrick, 221 So.2d 638, 641 (La. App. 4 Cir.), writ refused, 223 So.2d 870 (La. 1969); see Regional Transit Authority v. Levey, 595 So.2d 1255, 1258 (La. App. 4 Cir.), writ denied, 604 So.2d 996 (La. 1992) (finding that, when an attorney knew or should have known facts from pleadings and a suit record, this knowledge is imputed to his client). See also York Research Corp., 927 F.2d at 122 (noting that law firm acted as client's agent for purposes of receiving papers relevant to an arbitration, as well as making, or declining to make, objections to arbitrator's appointment).
Thus, LPC is deemed to know what its attorney should have known about Mr. Kaster's potential conflict. With this knowledge possibly indicating arbitrator bias, LPC had its own duty to disclose "as promptly as practicable" under CIAR Rule R-19 and waived that right by not doing so. The quickness with which Mr. Patel and his attorney were both able to unearth the red flag evidence of Mr. Kaster's bias after the adverse award indicates that discovery of this same evidence should have been made before the adverse award was decided. With the evidence in hand, LPC could not remain silent during the arbitration and then later object after the award was made. See CIAR Rule R-19; York Research Corp., 927 F.2d at 121-22.
We conclude that LPC did not carry its burden of proving the arbitration proceeding was fundamentally unfair. Even if Mr. Kaster had an undisclosed interest in the arbitration that amounted to evident partiality under LSA-R.S. 9:4210(B), which is doubtful, such does not require vacatur of the arbitration award. LPC, through both its principal, Mr. Patel, and its attorney, had ample evidence from which the potential conflict should have been discovered and waived its right to object by failing to timely do so.
EVIDENT MATERIAL MISCALCULATION
LPC's final argument is that the trial court erred in denying its alternative motion to deny or modify the arbitration award under LSA-R.S. 9:4211 based on an evident miscalculation. In support of its argument, LPC claims the arbitration award requires that it make duplicate payments for multiple claims.
The type of "evident material miscalculation of figures" contemplated by LSA-R.S. 9:4211 would be one akin to a mathematical error as distinguished from an error in the factual or legal conclusions underlying the arbitrator's award. St. Tammany Manor, Inc. v. Spartan Bldg. Corp., 509 So.2d 424, 427 (La. 1987); Leon Angel Constructors, Inc. v. Kirk Knott Elec., Inc., 36,752 (La. App. 2 Cir. 1/31/03), 837 So.2d 743, 746. We have reviewed LPC's appellate brief, its opposition to DBA's petition to confirm the award that LPC filed in the trial court, and its March 19, 2015 request for award modification to the AAA. In all of these challenges to the arbitration award, LPC argues that Mr. Kaster failed to account for payments LPC made directly to subcontractors and for certain reductions erroneously considered as "extras" when they were "clearly within the scope of work" of the contract. These arguments do not relate to a mathematical error; rather, LPC simply seeks a different and more favorable outcome on the merits than that decided in the arbitration award. At best, LPC's arguments suggest a factual error by Mr. Kaster, which this court has no authority to remedy. Crescent Prop. Ptrs, LLC, 158 So.3d at 803-04; King Co. Ltd. Partnership v. MBD Const. Co., Inc., 10-0902 (La. App. 1 Cir. 10/29/10), 2010 WL 4273003 *6 (unpublished). Thus, we find no error in the trial court's denial of LPC's motion to deny or modify the arbitration award under LSA-R.S. 9:4211.
INDEFINITE JUDGMENT
Although the trial court's judgment correctly confirms the arbitration award in DBA's favor, we note that a portion of the judgment is fatally flawed. The judgment's final paragraph renders judgment in DBA's favor and against LPC "in the principal sum of $394,693.09, less any valid and enforceable liens as set forth in the arbitration award (see attached arbitration award) ... ." In the attached arbitration award, names of ten lienholders are set forth, but the agreed amount to be paid to each lienholder is only stated for four lienholders; the amounts of the remaining six lienholders' liens are not stated. (R1912-13)
The amount of the recovery awarded by a judgment must be stated in the judgment with certainty and precision. In re Succession of Wagner, 08-0212 (La. App. 1 Cir. 8/08/08), 993 So.2d 709, 724; Vanderbrook v. Coachmen Industries, Inc., 01-0809 (La. App. 1 Cir. 5/10/02), 818 So.2d 906, 913. The amount must be determinable from the judgment itself, without reference to an extrinsic source, so that a third person could determine from the judgment the amount owed without reference to other documents. Wagner, 993 So.2d at 724; Vanderbrook, 818 So.2d at 913. This court determined in Wagner that since it was impossible to determine the interest rate from the judgment, without resort to extrinsic evidence, the interest award was uncertain and indefinite. Wagner, 993 So.2d at 724-25.
In the present case, the arbitration award does not state the precise amount of the liens that must be deducted from the $394,693.09 principal sum. Thus, the portion of the judgment regarding the lien deductions is not proper. In Wagner, this court vacated only the portion of the judgment related to interest, rather than the entire judgment. Wagner, 993 So.2d at 725; Vanderbrook, 818 So.2d at 914. Likewise, in this case, we will only vacate that part of the judgment concerning the lien deductions, and we will remand this matter for the limited purpose of having the trial court enter a judgment setting forth the amounts of all valid and enforceable liens to be deducted from the principal sum of $394,693.09.
CONCLUSION
For reasons assigned, that portion of the January 28, 2016 amended judgment ordering the payment of a principal sum "less any valid and enforceable liens as set forth in the arbitration award" is vacated and set aside. In all other respects, the judgment is affirmed. This matter is remanded to the trial court for further proceedings consistent with this opinion. Appeal costs are to be paid by Louisiana Party Company, LLC.
AFFIRMED IN PART; VACATED IN PART; AND REMANDED.
JOSEPH BERGERON D/B/A DESIGN/BUILT ASSOCIATES
VERSUS
NEAL PATEL, D/B/A LOUISIANA PARTY COMPANY
NO. 2016 CA 0600
CRAIN, J., dissenting.
The majority notes that the judgment is "fatally flawed", then affirms part of the judgment, while remanding another part. This court's jurisdiction is predicated on "final" judgments. A judgment is not "final" unless it is definite. The subject judgment is not definite in its present form because the amount of "any valid and enforceable liens as set forth in the arbitration award must be calculated" must be determined. This imprecision is fatal to our jurisdiction. I would dismiss the appeal without addressing the merits. See La. Code Civ. Pro. arts. 1918 and 2083; Rosewood Enterprises, Inc. v. Rosewood Development, LLC, 16-0352, 2017WL900041 (La. App. 1 Cir. 3/6/17); Duet v. Landry, 16-0575, 2017WL900066 (La. App. 1 Cir. 3/6/17). CALLOWAY, J., dissenting.
I disagree with the majority that LPC waived its right to object to the evident partiality of the arbitrator by not objecting during the arbitration. The cases relied upon by the majority to find that LPC waived its objection are all based on the knowledge of the party. In re Arbitration Between U.S. Turnkey Expl., Inc. & PSI, Inc., 577 So.2d 1131, 1135 (La. App. 1 Cir.), writ denied, 580 So.2d 676 (La. 1991), specifically states that a party seeking to vacate an arbitration award based on an arbitrator's evident partiality, and who knows the reasons supporting such an objection, must object during the arbitration proceedings. The majority also cites York Research Corp. v. Landgarten, 927 F.2d 119, 121-22 (2nd Cir. 1991), for the proposition that where a party has knowledge of facts possibly indicating arbitrator bias, he cannot remain silent and later object to the arbitrator's award on that ground.
I find that the evidence in the record does not support that LPC had knowledge of the arbitrator's bias or any reasons to support an objection. I do not agree that the disclosures made by Mr. Kaster to the AAA were sufficient to give LPC knowledge to object to the appointment of the arbitrator. I agree with LPC that Mr. Kaster's letters to the AAA leave out all the information that indicate that his law firm had a pecuniary interest in the outcome of the particular dispute regarding the Houma Project. Furthermore, the April 10 Tripate letter was sent by Ms. Cop to "Tripate Marketing, Inc. d/b/a The Ultimate Party Store, Attention: Neal Patel." LPC is a limited liability company and a separate entity from Tripate Marketing. The April 10 demand letter sent to DBA did not mention LPC or the Houma Project. I do not believe that the disclosures made by Mr. Kaster gave LPC sufficient information so that it would have the opportunity to object to his law firm's involvement in the very matter being arbitrated. None of the letters in the record disclosed to LPC that Mr. Kaster had a pecuniary interest in the outcome of the arbitration. The majority relies on the April 10 Tripate letter being a Bates stamped document produced in this litigation by LPC. As I noted, that letter was sent to Tripate, not LPC, a different legal entity, and there is nothing in the record to impute the knowledge of Tripate to LPC. See Charming Charlie, Inc. v. Perkins Rowe Associates, LLC, 11-2254 (La. App. 1 Cir. 7/10/12), 97 So.3d 595, 598. I do not believe the evidence of the Bates stamped Tripate letter and invoices in the record were sufficient disclosure to LPC for LPC to make an informed decision and waive its right to object to the arbitrator.
Under La. R.S. 9:4210(b), the evident partiality of the arbitrator is grounds for vacating the award. Under the circumstances of this matter, any pecuniary interest affecting the arbitrator in the outcome of the arbitration was clearly relevant to LPC. Therefore, I do not believe that the arbitration proceedings in this matter were "fundamentally fair." Preis Gordon, APLC v. Chandler, 15-0958 (La. App. 1 Cir. 2/26/16), 191 So.3d 31, 36, writ denied, 16-0590 (La. 5/20/16), 191 So.3d 1067.
I believe the trial court abused its discretion in denying the new trial and in confirming the arbitration award. I would grant the new trial and reverse the arbitration award.
Thus, I respectfully dissent.
We find no Louisiana cases that cite either Commonwealth Coatings or Positive Software Solutions. Instead, relying on Morelite Const. Corp. v. N.Y.C. Dist. Council Carpenters, 748 F.2d 79, 83-84 (2nd Cir. 1984), a federal case that adopted a narrow interpretation of Commonwealth Coatings and that imposed a stricter burden of proof on the party seeking to vacate an award, this court in U.S. Turnkey Expl., 577 So.2d at 1135, set forth the "a reasonable person would have to conclude partiality" test, which requires that evident partiality be shown by more than the "appearance of bias." See also Apperson v. Fleet Carrier Corp., 879 F.2d 1344, 1358-59 (6th Cir. 1989), cert. denied, 495 U.S. 947, 110 S.Ct. 2206, 109 L.Ed.2d 533 (1990).