David Co. v. Jim W. Miller Constr., Inc. - 444 N.W.2d 836 (Minn. 1989)

Rule:

Merely because the relief granted is equitable in nature does not, by itself, preclude arbitrators from employing it when otherwise appropriate. Indeed, it appears that Minn. Stat. § 572.21 (1998) contemplates "equitable" as well as "legal" remedies in that it provides that upon confirmation of an award, a "judgment or decree" shall be entered. Minn. Stat. § 572.21 (1988)

Facts:

Appellee developer contracted with appellant contractor to construct seven townhouses in a planned subdivision. After the completion of the first phase, a dispute arose over the workmanship of the structures. Pursuant to the contract, the parties submitted the dispute to arbitration. The arbitrator found for the developer and ordered the contractor to purchase the land on which the buildings were erected. The contractor challenged the arbitrator's ruling. The appellate court held that the arbitrator did not abuse his authority. The contractor sought review of the decision of the appellate court. 

Issue:

Under the circumstances, did the arbitrator abuse his authority in ruling in favor of the developer? 

Answer:

No.

Conclusion:

The court affirmed the order of the appellate court, holding that the arbitrator did not abuse his authority by fashioning an equitable remedy because Minn. Stat. § 572.21 (1988) provided that arbitrators could fashion such a remedy. According to the court, the broad scope of the arbitration clause permitted an equitable remedy. Furthermore, the award did not violate the public policy concerns contained in the Minnesota Statute of Frauds, Minn. Stat. § 513.04 (1988), and the award did not include items that were waived by making final payment.