Arbitration - Arbitrator Has Power to Grant Summary Judgment Without Evidentiary Hearing

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Atreus Communities Group v. Stardust Dev., Inc.,633 Ariz. Adv. Rep 47 (App., Div. I, May 1, 2012) (J. Kessler)

http://azcourts.gov/Portals/89/opinionfiles/CV/CV100129.pdf

ARBITRATION AGREEMENTS ARE FAVORED AND UNLESS AGREEMENT EXPRESSLY SAYS OTHERWISE ARBITRATOR HAS AUTHORITY TO GRANT SUMMARY JUDGMENT

Plaintiff sued defendant for delays in hooking up the sewer to its housing development and failing to notify plaintiff of the expected delays. The parties were contractually bound to arbitrate any disputes under their contract pursuant to the Arbitration Rules for the Real Estate Industry of the American Arbitration Association [AAA]. While these rules do not expressly provide that an arbitrator had the right to issue summary judgment without an evidentiary hearing, they do provide that the “arbitrator shall have the authority to award any remedy or relief that a court of the State of Arizona could order or grant.” Pursuant to this rule the arbitrator granted summary judgment to the defendant and awarded fees. The defendant then sought to have the award confirmed and judgment entered by the Arizona Superior Court pursuant to ARS sec. 12-1511. Plaintiff objected claiming the arbitrator exceeded his authority in granting summary judgment because the AAA rules did not authorize this and instead required the arbitrator to hold an evidentiary hearing. The superior court overruled the objection and awarded defendant additional fees related to the proceeding in the superior court. The Arizona Court of Appeals affirmed.

First the court noted that Arizona's public policy favors arbitration to obtain a “speedy and inexpensive disposition” and that judicial review of an arbitration award is “severely limited by statute.” Examining plaintiff's objection in this light the court found the AAA rules broad enough to incorporate the right of an arbitrator to grant summary judgment without an evidentiary hearing where there is no dispute of a material fact. The rules give the arbitrator the power to decide questions of law and fact and while not expressly providing the right to grant summary judgment, impliedly extend that right by granting the arbitrator the authority to “award any remedy or relief” that an Arizona court could award. The court found this authority was not limited to discovery issues as argued by plaintiff and further noted that while summary judgment is generally considered a “procedural device,” it also constitutes a “remedy or relief.” Finally, while the rules provide the parties the right to an evidentiary hearing, just as in superior court, if there is no material question of fact such a hearing is not necessary.

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