Thompson v. Jespersen

Opinion

GATES, J.

In July 1986 John and Anelisa Thompson (the Thompsons) contracted with Carl Jespersen and Jespersen Construction Co., Inc. (Jespersen) for the construction of a single family residence. Their agreement provided for arbitration, subject to certain exceptions not here relevant, of “[a]ll claims, disputes and other matters in question between the Contractor and the Owner arising out of, or relating to, the Contract Documents or the breach thereof . . . .”

Dissatisfied with Jespersen’s performance of its obligations under the contract, the Thompsons in April 1988 submitted a demand for arbitration in which they claimed they had suffered significant damages.

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Jespersen denied the allegations and made a counterclaim for nearly $120,000.

After the matter had proceeded to hearing, the arbitrators filed their award requiring Jespersen to pay the Thompsons only $10 in damages, but $75,000 in attorney’s fees.

The Thompsons thereafter petitioned the trial court to enter judgment confirming this award. In response, Jespersen requested that it be corrected by deleting the grant of fees, which it contended, as it had during the arbitration, was beyond the jurisdiction of the arbitrators. When the court upheld the award in its entirety, Jespersen appealed, seeking resolution of a single issue that is, apparently, one of first impression, i.e.: whether arbitra

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tors have the authority to award attorney’s fees in the absence of a provision therefor in either the arbitration contract or the submission to arbitration.

As has frequently been pointed out, the powers conferred upon an arbitrator are exceptionally broad. “The arbitrator’s findings on questions of both law and fact are conclusive. [Citation.] A court cannot set aside an arbitrator’s error of law, no matter how egregious. [Citations.] Nor can courts interfere with the award by examining ‘the merits of the controversy, the sufficiency of the evidence supporting the award, or the reasoning supporting the decision.’ [Citation.] An error of fact by the arbitrator cannot form the basis of court review. [Citation.]”