Trial court vacated an arbitration award, and now the court of appeals vacates the trial court order because it “hinges on unsupported findings.”  We believe appellate courts should be more magnanimous with trial courts even when wrong and avoid calling a ruling unhinged. Contractor sued subcontractor for failure to complete its work including damages for delayed completion. The parties agreed to arbitration. Contractor produced a ton of documents but objected to producing others. A few days before the arbitration, subcontractor raised the discovery issue. Arbitration went forward as scheduled, and the arbitrator issued an award that addressed the nondisclosure arguments and penalized the contractor for failing to disclose information on the delay damages. The arbitrator, nonetheless, awarded contractor damages based on subcontractor’s abandonment of work plus fees and costs. Contractor moved to confirm the arbitration award, and subcontractor objected. The superior court vacated the arbitration award based on the nondisclosure. Court of appeals holds challenging an arbitration award requires more than a late argument on nondisclosure. Challenger must point to corruption, fraud, or undue means. While A.R.S. 12-3023(A)(3) permits a trial court to vacate an arbitration award if the arbitrator refused to postpone the hearing on showing of sufficient cause, subcontractor never requested a postponement. There was some dispute on this, but under the AAA rules, subcontractor waived its request by not objecting in writing. Regardless, the arbitrator acted within his discretion by proceeding with the hearing.

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This opinion is difficult to unpack. The court of appeals begins with stating a motion to compel arbitration should be treated as a motion for summary judgment. A motion to preclude arbitration should be treated similarly. OK, makes sense. Here’s the situation. A contractor contracted with a property owner to remodel a building and parking lot. After the work was done, property owner refused to pay the final invoice. The contract included an arbitration clause, and the contractor filed both a lien and a separate claim with AAA. Meanwhile, the property owner obtained a statutory discharge of the lien bond from RLI Insurance Company. Contractor then adds RLI to the arbitration. RLI then filed a separate superior court action against the contractor arguing that the contractor’s lien was invalid because it was not perfected and timely foreclosed. Contractor moved to dismiss the superior court action stating that in binding itself to pay any outstanding monies owed under the lien, RLI was also bound by the arbitration clause. Thus, the trial court lacked jurisdiction. The trial court ruled for the contractor and dismissed the superior court action. The court of appeals reverses and holds RLI is not bound by the arbitration provision. While a surety bond frees up the property of the lien, and when a contractor forecloses the lien, the lawsuit is against both the property owner and the surety, these rights are distinct from the contract rights. RLI may proceed with contesting the lien for failure to perfect and timely foreclose.

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This is the notice of claim case we discussed a year ago when the court of appeals issued its opinion. The court of appeals held a notice stating the claimant would settle for “$1 million or applicable policy limits, whichever are greater” does not meet the sum certain statutory requirements. The Arizona Supreme Court agrees with the court of appeals’ decision although not all of its reasoning. From what we see, the Court did not like the court of appeals’ analogizing to Rule 68 and its apportionment language. We agree that analogy caused some head-scratching. The Court focuses on the uncertainty created when the offer referenced “applicable policy limits,” without telling us what policy that meant. The Court notes plaintiff’s attorneys gave conflicting interpretations. Overall, well-reasoned, and we appreciate the Court’s brevity. But what more can be said about the sum certain requirement?

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