|
The Ohio Court of Appeals held that an arbitrator exceeded his powers by applying an incorrect legal standard in denying a prevailing claimant’s request for attorney fees.
In Smith v. Palm Harbor Homes, Inc., No. 05 CA 31, 2006 WL 3199608 (Ohio Ct. App. Nov. 6, 2006), Smith bought a manufactured home from Palm Harbor. Shortly after the home was delivered, Smith complained that the home was damaged during delivery and did not conform to the display model.
When Smith refused to pay the balance of the purchase price, Palm Harbor filed an arbitration demand for the balance. Smith answered with a claim of her own, seeking the return of her partial payment along with incidental damages.
Following a three-day hearing, the arbitrator found Palm Harbor in breach of contract and granted Smith rescission of the sales contract. However, the arbitrator denied Smith’s request for incidental damages and her request for attorney fees.
Smith filed a motion to vacate the award, arguing that the arbitrator exceeded his powers in refusing to award Smith incidental damages and attorney fees. The trial court denied the motion and confirmed the award.
On appeal, the Court affirmed the trial court’s ruling that the arbitrator did not exceed his powers in refusing to award incidental damages because parts of Smith’s testimony and pleadings supported the arbitrator’s determination that Smith had elected rescission as her remedy for breach of contract.
However, the Court concluded that the arbitrator exceeded his powers in refusing to award attorney fees because the arbitrator applied an “erroneous legal standard” for an award of attorney fees under Ohio’s Consumer Sales Practices Act.
Subscribe to a free weekly update on ADR case law and
legislation
|