B. S. B. Construction Co. v. Rex Construction Co.

The question for determination on this appeal is whether the trial court erred in confirming an arbitration award.

Bex Construction Company, the appellant herein, as the prime contractor, and B. S. B. Construction Company, the respondent herein, as a subcontractor, executed an agreement in writing whereby the latter was to perform certain cement work required under the prime contract, which involved the construction of a building for a firm named Hyer and Perkins.

The subcontract contained the following arbitration agreement : “Any controversy or claim arising out of or relating to this Contract, or the breach thereof, shall be settled by arbitration in accordance with the Buies Committee of the American Arbitration Association, and judgment upon the award rendered by the Arbitrator(s) may be entered in any Court having jurisdiction thereof. ’ ’

In due course, the subcontractor undertook its work; on July 20, 1959, received a letter from the prime contractor referring to 13 deficiencies therein, and demanding that they be corrected; and on July 28, 1959, received a further letter from the prime contractor stating that the cement floor laid by the subcontractor was less than the specified thickness, that the wire mesh therein was not laid at the required distance from the top thereof, and that unless the floor were removed and replaced in accord with the plans and specifications the prime contractor would proceed to complete the work at the subcontractor’s expense. The subcontractor replied by letter dated July 31,1959, stating that it was unnecessary to remove the floor, and that any action of the prime contractor to do so would be the latter’s sole responsibility. Shortly thereafter the parties agreed to and did submit the controversy thus presented to arbitrators for arbitration, as required by their contract. On August 28, 1959, the arbitrators made a report in the nature of an award in which they set forth their conclusions that 10 of the 13 deficiencies could be corrected; that 3 of the 13 deficiencies were minor in character; and that the failure of the floor to precisely comply with the plans and

In the meantime, the owner of the building, Hyer and Perkins, by letter dated August 24, 1959, demanded that the prime contractor remedy certain deficiencies in the construction work, including the failure of the floor to conform to the plans and specifications. The prime contractor acceded to these demands and thereafter, among other things, removed and replaced the floor.

On September 24, 1959, the subcontractor filed a petition in the Superior Court of Orange County asking that the award of the arbitrators be returned to them with instructions to specifically determine the monetary damages sustained by ■the prime contractor as a result of the alleged deficiencies claimed by it and the net amount due the subcontractor. After hearing, the court made its order remanding the matter to the arbitrators for further proceedings; directed them to determine the amount of damages suffered with respect to the 13 items in the letter of July 20th; ordered them to “ascertain the amount of the monetary damages done to Rex Construction Company by virtue of any defect in the performance with respect to the construction of the floor in the subject factory building”; and further ordered them “to ascertain the agreed contract price of the job, the agreed extras and costs thereof, the amounts of money paid by Bex Construction Company to B.S.B. Construction Company pursuant to said contract and/or contract for extras, and the amounts of money due on the contract and for extras, the total amount of offsets on account of damages hereinbefore referred to, and the balance, if any, due either Bex Construction Company or B.S.B. Construction Company, as the case may be.”

On May 5,1960, the arbitrators made their award in writing which, in substance and reasonably construed, stated that 11 of the 13 claimed deficiencies could and should be corrected; that two of the 13 deficiencies were minor in character; that as a result of these 13 deficiencies the prime contractor had been damaged in the sum of $1,251.65 which “will be sufficient and ample to make such corrections as hereinbefore stated”; that the deficiency in the floor “has not affected the full structural integrity, quality, or the intended use of the building”; that by reason of variances from the plans and specifications, which impliedly the trial court later determined related to the floor, the prime contractor was damaged in the sum of $656.37; that there was unpaid under the original

The arbitrators’ powers initially were conferred by and described in the contract of arbitration executed by the parties (Flores v. Barman, 130 Cal.App.2d 282 , 287 [ 279 P.2d 81 ] ; Crofoot v. Blair Holdings Corp., 119 Cal.App.2d 156 , 184 [ 260 P.2d 156 ]; Screen etc. Guild v. Walt Disney Productions, 74 Cal.App.2d 414 , 415 [ 168 P.2d 983 ]), and ultimately were specifically fixed by and designated in the order of the court remanding the matter to them for further consideration. No attack is made upon this order. Under the circumstances, it is the measure of their powers, and the guide by which to determine whether they exceeded those powers, or so imperfectly executed them that a mutual, final and definite award upon the subject matter submitted was not made. (White v. Arthur, 59 Cal. 33 , 34; Bierlein v. Johnson, 73 Cal.App.2d 728 , 733 [ 166 P.2d 644 ].)

The order in question directed the arbitrators to ascertain and determine the amount of damages with respect to the 13 deficiencies noted in the prime contractor’s letter of July 20th; “the amount of monetary damages” sustained by the prime contractor ‘ by virtue of any defect in the performance with respect to the construction of the floor”; all amounts payable under the contract by the prime contractor to the subcontractor; all amounts paid by the prime contractor to the subcontractor; the amount of money due on the contract, including extras; the total amount of offsets on account of damages; and the balance, if any, due either to the prime contractor or the subcontractor as the case may be. When the award, as made, is compared with the requirements of the order of submission, adequate compliance with the latter is at once.apparent. The prime contractor argues that the award

“A decision simply that one of the parties should pay the other a sum of money is sufficiently determinative of all items embraced in the submission.” (Sapp v. Barenfeld, 34 Cal.2d 515 , 523 [ 212 P.2d 233 ].)

The prime contractor contends that the statements of the arbitrators in their addenda to the award, together with the statements made in their affidavits, establish that they imperfectly executed the powers conferred upon them, i.e., that they did not consider the damages sustained by it in removing and replacing the floor and other parts of the work done by the subcontractor. The affidavits in question properly were before the court for consideration at the time of the hearing upon the motions in question. (Sapp v. Barenfeld, supra, 34 Cal.2d 515 , 523.) However, the court was not required to accept the statements therein as true if a rational ground existed for rejecting them. (Hicks v. Reis, 21 Cal.2d 654 , 659 [ 134 P.2d 788 ].) Such a ground is found in the impeaching statements contained in the affidavit filed on behalf of the subcontractor, and the contradictory statements appearing in the award itself. The trial court was entitled to conclude that the arbitrators determined that the expenses in question were not proper items of damages chargeable against the subcontractor. Their decision in this regard re-

In support of its position that the arbitrators exceeded their powers, the prime contractor contends that their authority is limited to making an award in conformity with the terms of the subject contract and that the award as made is in direct conflict with these terms. Particular reference is made to the provisions of the contract that (1) payment was to be made only “after satisfactory completion and acceptance by the owner”; (2) the job was to be completed in strict conformity with the plans and specifications; (3) all changes and extras were to be authorized only by a writing; and (4) any deficiency was to be repaired or replaced by the subcontractor to the satisfaction of the owner. This contention is based on a false premise; arises from a failure to differentiate between those provisions of the contract which define and limit, either directly or indirectly, the subject matter of the arbitration, and thus limit the powers of the arbitrators, and those provisions which apply to that subject matter as defined and themselves may be the cause of arbitration; and is not sustained by the cases cited in support thereof, i.e., Screen etc. Guild v. Walt Disney Productions, supra, 74 Cal.App.2d 414 , where the arbitration contract specifically provided that the award should not be in conflict with the express provisions of the agreement, and Drake v. Stein, 116 Cal.App.2d 779 [ 254 P.2d 613 ], where the arbitrators, in considering a dispute as to whether one of the parties had performed services as agreed, substituted a cash award in lieu of the unequivocally agreed consideration, i.e., a conveyance of real property. In the ease at bar, the subject matter of the dispute concerned the subcontractor’s alleged noncompliance with the contract; involved a determination respecting the requirement thereof; presented questions of interpretation as to the meaning of its provisions; and gave rise to issues of both law and fact. For example, the prime contractor contends the payment was not to be made until completion and acceptance by the owner, whereas the contract provides that payment should be made upon acceptance by the owner “and/or local governing author

The orders appealed from are affirmed.

Griffin, P. J., and Shepard, J., concurred.