ARBITRATION Between GRIFFITH COMPANY, a corporation, Plaintiff and Appellant, and SAN DIEGO COLLEGE FOR WOMEN, a corporation, Defendant and Respondent.
Plaintiff Griffith Company has appealed from a judgment affirming an award of arbitrators, which was that it recover nothing from defendant-respondent San Diego College for Women as a result of the arbitration of a controversy between them concerning Griffith's claim for damages for delays caused by respondent in the construction of its building.
By contract of July 28, 1950 Griffith Company undertook to furnish all labor and materials for the construction of a college for women in San Diego, the work to begin on August 1, 1950 and be completed by September 1, 1951. This was to be done upon a cost plus basis, the fee of the contractor fixed at 3 per cent, it being further expressly agreed by it that the maximum cost of the buildings should be $2,995,000. Actual completion of the job occurred in October, 1952, some 14 months after the contract limit had expired. Actual cost of construction exceeded the contract maximum by $99,355.79. Griffith Company claimed $354,369.95 to be due and payable, including a 3 per cent fee upon the entire cost of the work. A part of this claim was an item of $52,883.79 which had been certified by the architect as payable but nevertheless withheld by the defendant for some 9 months. Appellant's claim of a right to compensation in excess of the contract price was based upon the assertion that the delays and resulting additional costs were due to failure of the architect to furnish detailed drawings promptly as required by the contract.1
Pursuant to appropriate contract provision an arbitration was had. Appellant appointed Mr. E. S. McKittrick as arbitrator; respondent named Mr. J. Howard Ziemann, and those two agreed upon Mr. Paul B. Young as third arbitrator and chairman. Messrs. Young and Ziemann ruled, with Mr. McKittrick dissenting, that the contractor take nothing upon its claims and awarded judgment in favor of the owner. This award was upheld by the Los Angeles Superior Court and hence this appeal.
The familiar rule of review is that all conflicts must be resolved in favor of respondent and all permissible inferences be drawn in its favor. The rule is applicable here although the evidence consists entirely of affidavits and the court made no formal findings of facts. The reviewing court must assume such implied findings to have been made in respondent's favor as the evidence will sustain. 4 Cal.Jur.2d 495, § 614; Manson v. Wilcox, 140 Cal. 206, 209, 73 P. 1004. With this rule in mind the facts appear to be these:
The contract provided in Article 40 that any dispute thereunder ‘* * * shall be submitted to arbitration in accordance with the provisions, then obtaining, of the Standard Form of Arbitration Procedure of The American Institute of Architects * * *.’ That Standard Form of Arbitration Procedure contains these pertinent and controlling procedural restrictions: ‘11. Conduct of Hearing. The hearing shall be so conducted that the complaining party and its witnesses shall be heard and may be subject to questioning by the other party or by its counsel, and the defending party and its witnesses shall be heard and may be subject to questioning by the other party or by its counsel. Exhibits may be introduced at any time during the hearing. When all pertinent and material evidence has been submitted by the parties, the arbitrators shall formally close the hearing and proceed in private to their deliberations prior to making the award. Adjournments shall be taken for good cause shown. The hearing may be reopened at any time before the award is required to be made at the discretion of the arbitrators or upon the request of a party for good cause shown.
‘12. Submission of Proofs. Proofs shall be taken in the presence of the parties and in the presence of all the arbitrators, unless a party has absented itself by its own fault, after due notice that such proofs will be taken, or unless the parties have mutually authorized such proofs to be taken in their absence. Proofs to be submitted to the arbitrators may comprise testimony by the parties and by their witnesses, documents and exhibits, affidavits and such other material and pertinent evidence as the parties offer and as the arbitrators deem admissible. Proofs may be taken by the arbitrators at any time during the proceedings by making inspections of premises or materials or by ordering tests made of materials and by receiving such other evidence as they may require. Proofs shall be received in privacy unless the parties direct to the contrary. The arbitrators may, in their discretion, permit counsel to sum up and submit briefs, and the arbitrators may specify the time within which counsel must file such briefs. Proofs shall be taken under oath if the prevailing law so requires and may be taken under oath if the arbitrators so direct. * * *
‘14. Awards. The arbitrators shall decide, by a majority vote, any issue presented to them within the scope of the controversy, including the making of the award. The award shall be made in writing and shall be signed by all or by a majority of the arbitrators, and shall be acknowledged when the prevailing law so requires. The award shall be made within a period of thirty days from the closing of the proceedings and shall be delivered or mailed simultaneously to each party, and a copy thereof to the Architect.’
The procedure thus agreed upon became jurisdictional by way of limitation upon the arbitrators' actions. Bierlein v. Johnson, 73 Cal.App.2d 728, 733–735, 166 P.2d 644; Drake v. Stein, 116 Cal.App.2d 779, 785, 254 P.2d 613; Screen Cartoonists Guild v. Walt Disney Prod., 74 Cal.App.2d 414, 418, 168 P.2d 983.
Hearings were held by the arbitrators in Los Angeles and in San Diego on nine different occasions at which evidence and argument of counsel were received; briefs were presented by counsel for both parties. The matter was continued to September 30, 1953 for the purpose of deliberating upon the facts and the law pursuant to rule 11 of the Standard Form of Procedure, which says that after closing the hearing the arbitrators shall ‘* * * proceed in private to their deliberations prior to making the award.’ Chairman Young had previously advised his associates that he intended to seek legal confirmation of whatever opinion he might form and no objection was made by either of the other arbitrators. After considering the evidence and the briefs Mr. Young formulated a tentative opinion and then consulted an attorney, asked him to check that opinion to determine that it was not grossly erroneous so far as the law is concerned, and was later advised by said attorney that it was not erroneous. He then dictated that opinion to his secretary and, as he averred, ‘* * * the language and phraseology thereof were affiant's own except for the citations of legal authority contained therein which affiant obtained from said attorney * * *.’ At the beginning of the meeting of September 30th Mr. Young produced this opinion, announced that he had it in a sealed envelope which, though placed on the table before the arbitrators, was never opened until the last few minutes of a four and a half hour meeting. As phrased by Mr. Ziemann in one of his affidavits, Mr. Young stated that this tentative opinion had been prepared by himself ‘* * * excepting that he had consulted independent legal counsel regarding the statement of the elementary principles of liability appearing on pages 5 and 6 of his opinion, the same being quotations from Sections 3300 and 3301 of the Civil Code of the State of California and from the case of Austin v. Roberts, 130 Cal.App. 328, at page 333 [20 P.2d 97].’ Mr. Young also stated at the beginning of that meeting that he had not formulated a final, definite and irrevocable opinion, that he wished both the other arbitrators to present their views of the matter, that he had an open mind, that his opinion was subject to change but that he would not disclose it to them until they had had an opportunity fully to present their views. Thereupon Mr. McKittrick presented his views which were favorable to the contractor using notes which he had brought with him, and when he had finished Mr. Ziemann referred to his own notes and ‘* * * convincingly refuted various of the statements made by Mr. McKittrick.’ So far as appears from the record, but subject to an exception later mentioned, Mr. Young, during four hours or more of discussion, had nothing to say between the time that he produced his own opinion contained in the sealed envelope and the time that he announced at the conclusion of Mr. Ziemann's presentation that he had not changed his opinion. It was then presented to the two associates at about 4:30 p. m., each of them read it, Mr. McKittrick dissented, Mr. Ziemann announced concurrence and requested that an award be made immediately. Thereupon Messrs. Young and Ziemann signed the document which is captioned ‘Opinion of the Chairman, Board of Arbitration’ and bears this addendum: ‘I concur J. Howard Ziemann’ under date of September 30th. As Mr. McKittrick requested an additional meeting so that he could check with ‘my people’ the chairman ruled that an adjournment would be taken until the next day, October 1st, at 1 o'clock.
As above indicated, there is no showing that Mr. Young took any affirmative part in this discussion of September 30th; he did tell the other arbitrators to talk and that he would listen. The name of the attorney whom he had consulted was never disclosed, not then or at any later time, although appellant's counsel have persistently referred to the anonimity of this attorney. No assertion or affirmative suggestion has been made that he was a disinterested adviser and his portion of the written opinion was never disclosed to the other arbitrators until presented at the close of the discussion as a part of the Young decision. Mr. McKittrick during his extended remarks on that occasion could not possibly know what the chairman had in mind, what the unidentified lawyer had advised or what were the points which needed discussion. He avers that the chairman refused to listen to any discussion of the briefs of plaintiff (contractor), stating ‘That is merely the attorney's opinion.’ This is not denied.
The gist of the ruling is found in this paragraph: ‘It is the Chairman of the Boards conclusion that the Contractor may not recover because, First, it did not comply with the provisions in the contract pertaining to the filing of claims, and, Second, he is unable to ascertain what proportion of the costs, over and above the contract price, is attributable to the Owner's neglect, and what proportion is attributable to other factors.’
When the arbitrators convened on October 1st both Mr. Young and Mr. McKittrick announced that they had not changed their minds and had nothing further to say, except that Mr. McKittrick did then present on behalf of appellant-contractor a motion to reopen the hearings to afford the contractor an opportunity ‘* * * to show that the miscellaneous delays referred to by the Chairman of the Board had no substantial effect on the ultimate completion time * * *.’ This motion was based upon the ground that the chairman had indicated that he was not satisfied with the evidence as to what portion of the overall delay was attributable to the fault of the owner and what portion to other causes and ‘* * * at the conclusion of the hearings for the taking of testimony herein the Chairman stated that if the Board were not satisfied as to the evidence on any particular point the case could be or would be re-opened for further testimony * * *.’ The motion was denied upon the grounds that the contractor had had his day in court and had not served the motion upon the owner's attorneys or supported it by affidavit. Mr. McKittrick gave notice that he would file a dissenting opinion, which was done on the next day, October 2nd.
Mr. Powers and Mr. Wells (attorneys for the contractor) joined Mr. McKittrick in swearing affirmatively and specifically that such a promise was made by the chairman. Mr. Wells' affidavit contains persuasive reasons for that matter having been impressed upon the minds of Mr. Powers and himself. In response the Young affidavit merely says ‘Affiant has no recollection of ever making that statement or any similar statement.’ Mr. Mahedy, one of the attorneys for the owner, used substantially the same language: ‘* * * that affiant has no recollection that the chairman of said arbitration panel stated in the presence of affiant, counsel for plaintiff and the other members of the said arbitration panel, the representatives of the parties, or anyone else, that if any member of the panel was not satisfied with the evidence on any one point, the case would be re-opened for the taking of further testimony.’ Mr. Ziemann's affidavit of November 6, 1953 quotes the pertinent portion of the motion to reopen, adverts to the fact that it had not been served and was not supported by any affidavit, and ignores the subject of the chairman's remark now under discussion. What Mr. Young and Mr. Mahedy said in this regard amounts merely to statements that they had no recollection whether the incident did or did not occur. Such testimony is not sufficient to create a conflict in the evidence. See Lasby v. Burgess, 88 Mont. 49, 289 P. 1028, 1032; Reid v. Holcomb, 63 Cal.App. 89, 94, 218 P. 76; People v. Dodge, 104 Cal. 487, 489, 38 P. 203; 19 Cal.Jur.2d § 486, p. 253; 32 C.J.S., Evidence, § 1037, pp. 1081, 1084, 1087. True, the Mahedy affidavit further says that he had examined the last volume of the transcript of the hearings and found nothing pertinent to the matter alleged by Messrs. Powers and Wells. But they had not averred that the incident took place in the presence of the stenographic reporter or that it was contained in the transcript and hence this observation of Mahedy adds nothing to his side of the issue. This court must hold, because of the absence of substantial conflict in the evidence, that the statement was made by the chairman as alleged by counsel for appellant. Rule 11, quoted above, provides for a reopening of the hearing at any time before the award is made ‘* * * at the discretion of the arbitrators or upon the request of a party for good cause shown.’ Whether appellant had brought itself within this requirement will be discussed later as will the effect of the denial of the motion.
Mr. Ziemann having been requested to prepare an award on the basis of the ruling of September 30th, an appointment was made for signing the same on the 2nd of October and the time set was apparently 2:00 p. m. True, Mr. McKittrick had told the chairman on the 1st that he would not sign the award and he made no specific request to be present at the signing or statement that he wished to discuss the form of the award; but this did not rule him out of participation in its preparation. See McCrary v. Harrison, 36 Ala. 577, 581; Daniels v. Ripley, 10 Mich. 237, 239–240; Moore v. Ewing, 1 N.J.L. 144, 1 Am.Dec. 195. He had not lost his status as arbitrator. He was interested and had a right to attempt to confine the award to disposition of matters which were in dispute, specifically he was interested in seeing that the award did not mistakenly withhold recovery of the item of $52,883.79 which had never been in dispute but which was, in effect, ruled out by the award as made.
Rule 14, here applicable, provides that the award shall be made in writing, signed by all or a majority of the arbitrators and shall be acknowledged ‘when the prevailing law so requires.’ That is the requirement of section 1287, Code of Civil Procedure. Also, the rule specifies that the award ‘* * * shall be delivered or mailed simultaneously to each party, and a copy thereof to the Architect.’
Mr. McKittrick arrived at Mr. Ziemann's office at 2:30 p. m. and neither of the other arbitrators was present. He was merely told that Mr. Ziemann had not returned from lunch. He was given no papers and no other information. In a few minutes, while McKittrick was waiting, a messenger from Mr. Young's office called to pick up some papers for him and was given the award, which never came back into Mr. Ziemann's possession, was signed by him, and necessarily this had been done before lunch. Mr. McKittrick, learning that the messenger was taking the award to Mr. Young, contacted the chairman who agreed to send him a copy of the award as soon as the papers arrived. Mr. McKittrick never did know the actual contents of the document until after Mr. Powers had called Mr. Young about 4 p. m. and had had the award read to his secretary over the telephone. In the meantime, at 3 p. m. the contents had been dictated over the telephone to the secretary of Mr. Martin, one of the San Diego attorneys for respondent. Mr. Martin was told that the award had not yet been signed but that he would be advised of the fact when it occurred. After talking to Mr. Powers, Young advised Martin that the award had been signed by Ziemann and himself. And this was then true. But it had not been acknowledged by Mr. Young and the contents furnished to the respective attorneys over the telephone and the copies later mailed to the parties bore a fictitious certification of acknowledgment of the Young signature, which was signed by a notary in the Ziemann office. Before releasing the contents of the document Mr. Young had called Mr. Ziemann's attention to the fact that he had a notary in his own office who could take his acknowledgment but Ziemann told him that ‘* * * he had already had the acknowledgment typed for the notary in the office of the said J. Howard Ziemann, and in order to save time he would send it along the way it was and have affiant sign the award as it was.’ The nature of the rush has not been explained. Respondent had withheld from appellant for some 9 months payment of $52,883.79 concededly owing to it, the arbitrators had decided that appellant was not to get that or any other sum claimed by it, and the record affords no basis for explanation of this hurry on the part of the arbitrators except a desire to win a ‘race to the courthouse’, as Mr. Mahedy (respondent's attorney) described the immediately ensuing events,—an urgent desire to place the impending court controversy in a court deemed to be favorable to respondent, the Superior Court of San Diego County; they did win that race and procured in that county a restraining order forbidding any proceeding to vacate or modify the award; the San Diego court ultimately held that it had no jurisdiction and dismissed the proceeding seeking confirmation of the award upon that jurisdictional ground. Incidentally, a copy of the award which was presented to that court purported to have been acknowledged by Mr. Young, who in that proceeding made an affidavit to the effect that he had done so.
On this afternoon of October 2nd the arbitrators forgot, if they had not previously done so, the role of impartiality and quasi judicial responsibility which they had assumed with the office. ‘Since arbitrators and umpires are selected, not as agents of the parties but to act in a quasi judicial capacity in the place of a court, in the ordinary case they must, like a court, be impartial and nonpartisan so as to render equal and exact justice to the parties.’ (3 Am.Jur. § 89, p. 918.) There was no simultaneous delivery or mailing of the award and as above indicated there was never any acknowledgment of the same by Mr. Young,—that is to say, never until after the litigation had been started in both San Diego and Los Angeles Counties. Then someone undertook to cure these defects by having an acknowledgment placed on the award on October 29, 1953 and delivering same to the parties on November 6, 1953.
Mr. Mahedy, respondent's attorney, having been advised at 4:10 p. m. on October 2nd of the fact that the award had been signed by Messrs. Young and Ziemann filed on behalf of respondent a petition for confirmation in the San Diego court at 4:19 p. m. Mr. Powers in Los Angeles succeeded in filing a motion to vacate the award at 5 p. m. of the same day. Appellant necessarily incurred expenses for attorneys, and the like, in resisting the San Diego proceeding which, as above stated, was dismissed for want of jurisdiction. No attempt to review this order was made.
This series of events, violative of the terms of the submission and hence of appelllant's rights, cannot be condoned. The primary misconduct was that of the chairman in taking legal advice separately and from an undisclosed source, followed by assistance of that same attorney in the preparation of the opinion which was ultimately adopted by the majority. The Alabama Supreme Court remarked in Black v. Woodruff, 193 Ala. 327, 69 So. 97, 100, that arbitrators may have the assistance of an attorney in drafting their award ‘* * * provided they do not resort to the counsel of either party. Morse on Arb. 275. But to take advice or assistance of counsel for either party in the absence of the other may even endanger the award.’ Although given many opportunities to do so respondent has never disclosed the identity of this consulting attorney nor made any suggestion that he was a disinterested adviser. The ruling in Sapp v. Barenfeld, 34 Cal.2d 515, 212 P.2d 233, 238, which sanctions an ex parte factual investigation by a Board of Arbitrators (acting together) is limited to consultation with “disinterested persons of acknowledged skill”. That case does not afford any support for separate and secret consultation with outsiders by a single member of the board. Nor does Simons v. Mills, 80 Cal. 118, 22 P. 25, sanction such conduct. It deals only with joint consultation with an outsider.
Section 1286, Code of Civil Procedure, provides: ‘When more than one arbitrator is agreed to, all the arbitrators shall sit at the hearing of the case, unless, by consent in writing, all parties shall agree to proceed with the hearing with a less number.’ Rule 12, which requires all proofs to be taken in the presence of all of the arbitrators, implies the same procedure with respect to discussions of the law. This is the plain import of the requirement ‘proceed in private to their deliberations prior to making the award.’ And we hold that to be the established law regardless of any contractual provision to that effect. The cases are not entirely uniform in their holdings but they turn upon the particular facts presented and the better reasoning supports the conclusion just indicated.
The basic principal is thus stated in 6 Williston on Contracts, Revised Edition, § 1929, p. 5394: ‘Nevertheless, even in those instances where a majority may make an award, it will be void if all of the arbitrators do not participate in the entire proceedings.’
S. J. Stewart (Electric) v. Mansura Cotton Oil Mill, La.App.1933, 148 So. 496, holds that an award made by two out of three arbitrators (known as ‘amicable compounders' in that jurisdiction), without consultation with the third was invalid. The court said, 148 So. at page 500: ‘And where it appears that in violation of an agreement by the compounders to meet at a certain time, after the taking of testimony by them has been concluded, for the purpose of discussing the case and weighing the evidence introduced, one of the arbitrators and the umpire in concert, during the absence of the other arbitrator, reach a decision in the case, which is opposed, not concurred in, by the absent arbitrator, such decision amounts to fraud against a litigant unfavorably affected thereby, and will be annulled by the court.’
In Stefano Berizzi Co. v. Krausz, 239 N.Y. 315, 146 N.E. 436, 437, 438, it was held that a factual investigation made by a sole arbitrator in the absence of the parties constituted prejudicial misconduct. That was not a consultation about a minor matter, prevailing costs, as in the Sapp case, supra, but the conduct of an experiment as to the salability of a certain product. ‘The new policy does not mean that there is to be an inquisition rather than a trial, and that evidence unknown to the parties and gathered without notice may be made the basis of the judgment. * * * There would be little profit in fixing a time and place of hearing, if the arbitrators were at liberty when the hearing was over to gather evidence ex parte, and rest their award upon it. * * *
‘If misbehavior be assumed, we cannot doubt upon this record that prejudice resulted. The plaintiff, knowing nothing of the evidence, had no opportunity to rebut or even to explain it. * * * We do not mean, of course, that an award will be vitiated by investigations in the absence of the parties if directed toward facts of trifling importance or facts of such a nature as to preclude reasonable contest.’
In Fred J. Brotherton, Inc., v. Kreielsheimer, 1951, 8 N.J. 66, 83 A.2d 707, 709, it was held that an investigation made by one arbitrator in violation of the governing agreement requiring joint action constituted misconduct.
Supporting our conclusion, see Citizens' Ins. Co., of Pittsburg v. Hamilton, 48 Ill.App. 593, 597; Saffir v. Wilson, Sup., 100 N.Y.S.2d 263, 264; Seaboard Surety Co. v. Commonwealth, 350 Pa. 87, 38 A.2d 58, 60; E. Millius & Co. v. Regal Shirt Corp., Sup., 113 N.Y.S.2d 385, 386; Hewitt v. Village of Reed City, 124 Mich. 6, 82 N.W. 616, 50 L.R.A. 128; Cleland v. Hedly, 5 R.I. 163, 170; Moshier v. Shear, 102 Ill. 169, 175.
In principle there is no difference between a separate inquiry upon the law and one directed to the facts.
People v. Gilbert, 22 Cal.2d 522, 528, 140 P.2d 9, is not persuasive in respondent's favor. It dealt with the action of a single judge who had drafted a ruling in advance of hearing evidence upon the sole question of degree of the crime of one who had plead guilty to a charge of murder. It was held that this did not establish a claim that he had prejudged the effect of the evidence. But the case did not involve the seeking of private advice by the judge or conduct of one of a group of judges which had a bearing upon his ruling and was kept secret from his associates. The case presents no true analogy to the situation at bar.
The Sapp v. Barenfeld case, 34 Cal.2d at page 523, 212 P.2d at page 239 states that arbitrators ‘* * * may base their decision upon broad principles of justice and equity, and in doing so may expressly or impliedly reject a claim that a party might successfully have asserted in a judicial action.’ But we find no such liberal views reflected in the arbitrators' ruling at bar. It is purely legalistic, turning upon the incidence of the burden of proof on damages and upon the question of waiver of the contractor's right to recover through failure to make prompt claims for damages as the work progressed. It is not inferable from this record that the legal advice on which Mr. Young relied was conducive to a determination upon the broad, equitable principles to which the Sapp opinion refers.
We conclude that Mr. Young was guilty of misconduct in consulting this attorney of unrevealed identity, misconduct of such gravity as to require a vacation of the award. Although this misconduct of the chairman would be sufficient to require vacation of the award if it stood alone, it was followed by a series of violations of the agreed arbitration rules which, considered separately, might not be enough to vitiate the award but, viewed in the aggregate, lend emphasis and gravity to the cardinal dereliction of the chairman, and amount to reversible misconduct on the part of the majority arbitrators.
Denial of a reopening after rendering the decision and before making the award was violative of the previously expressed intention of the chairman to do the fair thing in order to act on the real merits in the event of dubiety on the part of the arbitrators as to significance of any of the important evidence. They properly could have treated that prediction or promise of the chairman as good cause within the meaning of the rule. But as the motion was not supported by any affidavit or designation of specific evidence to be offered, we cannot say that the denial was in and of itself improper. Pacific Vegetable Oil Corp. v. C. S. T. Ltd., 29 Cal.2d 228, 241, 174 P.2d 441. Reflected in the light of the manner of previously reaching a decision this denial does take on a dubious character as the connecting link between past and future violations of appellant's rights. Non constat but that appellant's efforts to secure a revision of the ruling would have been successful in point of fact or of law.
The merits of the award are not before us. Crofoot v. Blair Holdings Corp., 119 Cal.App.2d 156, 185–186, 260 P.2d 156.2 But the fact, if it be so, that the chairman received erroneous advice from the anonymous attorney is of considerable significance. First, as to the burden of proof. The arbitrators' opinion does amount to a holding that the owner's delays were a proximate cause of most, though not all, of the contractor's excess costs. Appellant relies upon this sentence: ‘The Contractor's evidence indicates that the job was delayed throughout its entire life because of the Owner's failure to promptly furnish plans and information necessary to the Contractor.’ Standing alone it does not specifically hold that the job was held up throughout its entire progress by defaults of the owner, and it is to be contrasted with this language: ‘The Owner has introduced evidence to prove that many other factors, such as labor disputes, material shortages, contractor delays, etc., contributed to the over-all delay of the job. The Chairman of the Board is of the opinion that all of these factors contributed in some degree to delay the job. * * *
‘We also conclude that certain labor disputes, material shortages, difficulties with supplies, and contractor delays contributed to some extent in the over-all delay in completing the job.’ Fairly construed this language amounts to a determination that, in the main, the architect's delays were responsible for the 14 months overtime but that causes for which the owner was not chargeable likewise contributed to some undetermined extent.
Respondent in support of the holding that this precludes any recovery by the contractor relies upon a line of cases which support this statement of Allen v. Gardner, 126 Cal.App.2d 335, at page 340, 272 P.2d 99, at page 102: ‘Uncertainty as to the fact of damage, that is, as to the nature, existence or cause of the damage, is fatal. But the same certainty as to the amount of the damage is not required.’ Cases such as Austin v. Roberts, 130 Cal.App. 328, 20 P.2d 97 and Wade v. Thorsen, 5 Cal.App.2d 706, 713, 43 P.2d 592, lend considerable support to the application of that rule at bar and the placing of the burden of proof upon the contractor. This is also true of certain rulings of the Court of Claims, Coath & Goss, Inc. v. United States, 101 Ct.Cl. 702; B-W Construction Co. v. United States, 100 Ct.Cl. 227, and J. J. Kelly Co. v. United States, 107 Ct.Cl. 594, 69 F.Supp. 117. Cases involving attempts to enforce liquidated damage clauses furnish some analogy, and it appears to be the rule that no apportionment will be made when the owner is shown to be partly at fault for the delays. See Gogo v. Los Angeles, etc., Flood Control Dist., 45 Cal.App.2d 334, 344, 114 P.2d 65, and annotation in 152 A.L.R. 1349, 1359.
But respondent's reference to California Orange Co. v. Riverside P. C. Co., 50 Cal.App. 522, 195 P. 694, points to a line of decisions which seem to indicate that in this state the burden rests upon the owner-respondent in circumstances such as those now under discussion to make a segregation of the damage or to pay all of it. This California Orange Co. decision was differentiated in Slater v. Pacific American Oil Co., 212 Cal. 648, 300 P. 31, wherein it was held that one whose property had been damaged by deposits of oil and other hydrocarbon substances originating upon the lands of two or more independent wrongdoers could not recover from any of them without producing evidence of the amount of damage inflicted by the individual defendant's own separate wrong. But the Slater case in turn has been distinguished and disregarded so often that Professor Prosser in Law of Proximate Cause in California, 38 California Law Review 369, at page 388, says: ‘* * * the California courts and others have said many times that the defendant cannot escape liability because his own wrong has made it impossible to measure the damages. Although this state has the only case3 the writer has ever found in which the plaintiff was denied recovery for lack of evidence, it is almost certainly out of line and cannot be accepted as the present law. Beginning in 1940, the intermediate courts have taken the bull by the horns and adopted the suggestion of several writers, that where it is clear that a defendant has been at fault and that he has caused some part of the plaintiff's damages, the burden of proof should rest on him to show the extent of his contribution, and that if he cannot sustain it he should be liable for the entire loss.’ And Summers v. Tice, 33 Cal.2d 80, 199 P.2d 1, 5 A.L.R.2d 91 lends considerable support to this conclusion. In that case two hunters had fired in the direction of plaintiff and the shot from one of their guns had struck him. Plaintiff was unable to prove the identity of the hunter who had shot him. The Supreme Court held that the burden was upon each defendant to produce evidence which would exonerate him of the charge. In the course of so doing the court quoted, with apparent approval, from Dean Wigmore's Select Cases on the Law of Torts, section 153, as follows: ‘When two or more persons by their acts are possibly the sole cause of a harm, or when two or more acts of the same person are possibly the sole cause, and the plaintiff has introduced evidence that the one of the two persons, or the one of the same person's two acts, is culpable, then the defendant has the burden of proving that the other person, or his other act, was the sole cause of the harm. (b) * * * The real reason for the rule that each joint tortfeasor is responsible for the whole damage is the practical unfairness of denying the injured person redress simply because he cannot prove how much damage each did, when it is certain that between them they did all; let them be the ones to apportion it among themselves. Since, then, the difficulty of proof is the reason, the rule should apply whenever the harm has plural causes, and not merely when they acted in conscious concert. * * *’ This seems to leave the California rule in this shape: If defendant is shown with reasonable certainty to have caused some damage to plaintiff by tort or breach of contract, or if he is shown prima facie to be one of a group of joint tort-feasors with whom a wrong originated, the burden rests on the defendant to show that his act did not contribute at all to the damage or that some other cause for which the defendant was not responsible did produce an identifiable and identified portion of it. ‘It is well settled that one who contributes to a damage cannot escape liability because his proportional contribution to the result may not be accurately measured.’ Reclamation Dist. No. 833 v. American F. Co., 209 Cal. 74, 80, 285 P. 688, 690. ‘Where parties contribute to damage which has been caused by their acts and the acts of another they cannot escape liability because their proportionate contribution is not accurately measured.’ Switzer v. Yunt, 5 Cal.App.2d 71, 79, 41 P.2d 974, 978.
Whether these considerations were presented to the arbitrators is not disclosed by the record. Whether they would have changed the result we cannot know. Surely the arbitrators should have permitted appellant's attorneys to present these or similar views to the chairman in an effort to enable him to judge the soundness of the secret advice he had received or to do justice in a broad fashion such as suggested in the Sapp case, supra. The advice upon which Mr. Young acted in this regard was bad advice.
The matter of waiver of damages is involved in some obscurity which a reopened hearing might have dissipated. Article 16 of the contract provides: ‘Claims for Extra Cost.—If the Contractor claims that any instructions by drawings or otherwise involve extra cost under this contract, he shall give the Architect written notice thereof within a reasonable time after the receipt of such instructions, and in any event before proceeding to execute the work, except in emergency endangering life or property, and the procedure shall then be as provided for changes in the work. No such claim shall be valid unless so made.’ And Article 31 provides: ‘Damages.—If either party to this Contract should suffer damage in any manner because of any wrongful act or neglect of the other party or of anyone employed by him, then he shall be reimbursed by the other party for such damage.
‘Claims under this clause shall be made in writing to the party liable within a reasonable time at the first observance of such damage and not later than the time of final payment, except as expressly stipulated otherwise in the case of faulty work or materials, and shall be adjusted by agreement or arbitration.’ Appellant insists that the demands for progress payments which were made from time to time under Article 16 gave the necessary notice. As the architect had the right to withhold certification when costs threatened to exceed the agreed maximum (Article 26(d)), it seems that requests made for payments for the original job in excess of the prescribed maximum of $2,995,000 would be properly considered as notices of damage claimed, for there was no other basis for claiming costs in excess of that amount. But the matter is complicated by a large amount of extras, something like $500,000 worth, which were included in the architect's certificates actually issued, and the evidence before us is insufficient to afford basis for an inference as to when the requests for payment for the original work began to exceed the prescribed maximum. It may well be that this point, if not already developed at the arbitrators' hearings, would have a material influence toward an award based upon broad equities untrammeled by legal niceties.
After denial of the motion for reopening came the drafting of the award and its execution. Although Mr. McKittrick had called specific attention to the conceded item of $52,883.79, which was included in the $152,239.58 mentioned in the arbitrators' opinion, that award denied any recovery whatever. This alone would have required a modification under Code of Civil Procedure, section 1289(a) had the $52,883.79 not been paid and accepted after the award was under attack in the court.
The award was not acknowledged by Mr. Young at all until after the proceeding to vacate was well under way. The major purpose of an acknowledgment had been served, however, by his statement to the attorneys for each party on October 2nd that he had signed the award. (See 1 Cal.Jur.2d § 3, p. 461.) And the omission would not be important, because not prejudicial, Manson v. Wilcox, 140 Cal. 206, 208, 73 P. 1004; Popcorn Equipment Co. v. Page, 92 Cal.App.2d 448, 451, 207 P.2d 647; Pacific Vegetable Oil Corp. v. C. S. T., Ltd., supra, 29 Cal.2d 228, 240–241, 174 P.2d 441, were it not for the atmosphere in which the fictitious acknowledgment was certified and presented to the court as a basis for respondent's hurried attempt at confirmation of the award. These same considerations apply to the studied lack of simultaneous delivery of the award to the respective parties.
The majority arbitrators were guilty of misbehavior through which the rights of appellant were prejudiced and the award cannot be sustained.
This proceeding exemplifies a condition which has become much too prevalent in this jurisdiction and which strikes at the integrity of the arbitration process. We refer to the appointment, acceptance and service of partisans in the role of arbitrators. The arbitrator named by Griffith Company was its own president.4 The one named by respondent College had been consulted, he and his associate, by the Bishop of the Church and through him the respondent was induced to arbitrate upon the understanding that Mr. Ziemann should act as one of the arbitrators. The trial judge described him as partisan, and so did counsel for appellant; counsel for respondent opined that ‘Ziemann selected by the defendant would be inclined to go along with him (Young) and that would be natural.’ Mr. Ziemann was undoubtedly partisan and his conduct of October 2nd bears no other complexion. The arbitration process is essentially judicial in its nature. 3 Am.Jur. § 89, p. 918, 6 C.J.S., Arbitration and Award, § 1, p. 153. No one should act or be permitted to serve who cannot be entirely impartial and objective in the performance of his duties. The New York Court of Appeals in American Eagle Fire Ins. Co. v. New Jersey Ins. Co., 240 N.Y. 398, 405, 148 N.E. 562, 564, has well stated the matter: ‘But, first, the practice of arbitrators of conducting themselves as champions of their nominators is to be condemned as contrary to the purpose of arbitrations, and as calculated to bring the system of enforced arbitrations into disrepute. An arbitrator acts in a quasi judicial capacity, and should possess the judicial qualifications of fairness to both parties, so that he may render a faithful, honest, and disinterested opinion. He is not an advocate whose function is to convince the umpire or third arbitrator. He should keep his own counsel, and not run to his nominator for advice when he sees that he may be in the minority. When once he enters into an arbitration he ceases to act as the agent of the party who appoints him. He must lay aside all bias, and approach the case with a mind open to conviction and without regard to his previously formed opinions as to the merits of the party or the cause. He should sedulously refrain from any conduct which might justify event the inference that either party is the special recipient of his solicitude or favor.’
Reversal of the judgment under review cannot carry an instruction to recommit the matter to the arbitrators; their function has ceased. Flannery v. Sahagian, 134 N.Y. 85, 31 N.E. 319, 320; 5 Cal.Jur. § 43, p. 114; 6 C.J.S., Arbitration and Award, § 51, p. 192; 3 Am.Jur. § 913, p. 924. They initially had, under rule 14, thirty days after ‘closing of the proceedings' for the making of their award. Proceedings were closed on July 16, 1953 but the 30-day period was extended to 90 days after filing of the last brief. That date we do not have but it seems clear that the time could not have expired later than December 13, 1953, for the last brief had been filed before September 14th. Section 1288, Code of Civil Procedure, provides: ‘Where an award is vacated and the time, within which the agreement required the award to be made, has not expired, the court may, in its discretion, direct a rehearing by the arbitrators.’ Where the prescribed time for their action has expired the matter cannot be re-submitted to the arbitrators. Hauck v. Rochester Taxicab Co., 127 Misc. 759, 217 N.Y.S. 2; Goerke Kirch Holding Co. v. Goerke Kirch Co., 116 N.J.L. 427, 185 A. 376; 6 Williston on Contracts, Rev.Ed. § 1927A, p. 5390; 6 C.J.S., Arbitration and Award, § 113, p. 263.
The Griffith Company appealed not only from the judgment confirming the award but also from an order denying its motion to vacate the award and from the minute order of December 22, 1953, denying the motion to vacate and granting the motion to confirm. These minute orders are not appealable, Code Civ.Proc. § 1292, and the purported appeal therefrom is dismissed. The judgment confirming award, which was entered on January 4, 1954, is reversed.
1. It is elemental that one whose own fault prevents performance by the other party to the contract cannot take advantage of a breach induced by his own misconduct. See Bewick v. Mecham, 26 Cal.2d 92, 99, 156 P.2d 757, 157 A.L.R. 1277; Orton v. Embassy Realty Associates, 91 Cal.App.2d 434, 438, 205 P.2d 427; Overton v. Vita-Food Corp., 94 Cal.App.2d 367, 371, 210 P.2d 757; 9 Am.Jur. § 50, p. 37.
2. We do not sustain appellant's contention that the arbitrators' ruling was so grossly erroneous as to require vacation on the basis of manifest mistake of law. The cited case of Utah Construction Co. v. Western Pacific Railway Co., 174 Cal. 156, 162 P. 631, 634 was decided upon the expressed assumption that under the terms of the submission agreement the arbitrator ‘was empowered only to decide correctly as to the law’; the court further said it would ‘proceed upon that theory without deciding the point.’ There was no such requirement at bar. And the Utah Construction Co. case is inapplicable. The presently prevailing view is expressed in Sapp v. Barenfeld, supra, 34 Cal.2d 515, 523, 212 P.2d 233, 239: ‘Arbitrators, unless specifically required to act in conformity with rules of law, may base their decision upon broad principles of justice and equity, and in doing so may expressly or impliedly reject a claim that a party might successfully have asserted in a judicial action.’ (Emphasis added.) The matter is made clear in Crofoot v. Blair Holdings Corp., supra, 119 Cal.App.2d at pages 156, 185, 260 P.2d 156. Arbitrators, so long as they keep within jurisdictional limitations, are clothed with the prerogative of error, just like a court of last resort. Muldrow v. Norris, 2 Cal. 74, cannot be accepted as expressive of the rule now prevailing; the contrary expressions of the Sapp and Crofoot decisions forbid.
3. The author here refers by footnote to the Slater case.
4. This case was submitted and decided upon a record which affirmatively showed Mr. McKittrick to be president of appellant Griffith Company. After the opinion was filed counsel stipulated that that showing was incorrect and inadvertent and the court made an order correcting the record to show him to be president of E. S. McKittrick Company, Inc.
ASHBURN, Justice pro tem.
PARKER, WOOD, Acting P. J., and VALLÉE, J., concur.