Century 21 Estates v. Jim Steele et.al.: Indiana Court Upholds Board Arbitration Award

Note: This is an unreported decision and may not be cited as legal authority. Please consult with counsel before relying on this case.

An Indiana court has ruled in favor of a REALTOR® association and the brokers who prevailed in an arbitration proceeding (the "Prevailing Brokers"). The broker who did not prevail in the arbitration, the ("Nonprevailing Broker") sought judicial review of the arbitration award and filed a lawsuit against both the Prevailing Brokers and the Greater Northwest Indiana Association of REALTORS® (the "Association"). The Association’s only involvement was that it had conducted the arbitration proceeding.

Since the parties had agreed to binding arbitration, the Prevailing Brokers filed a Motion for Summary Judgment; the Association filed a Motion to Dismiss. According to the attorney, who represented the Association in this action, Indiana law only allows a limited procedural review of arbitration awards. This is the same standard for the review of an arbitration award by a REALTOR® association’s board of directors (see NAR’s Code of Ethics and Arbitration Manual, Section 53(d)). Like Indiana, most jurisdictions limit the basis for appeals only to those grounds contained in their arbitration act, and do not allow their courts to reconsider the facts presented at the hearing. In this case, the Nonprevailing Broker only disputed the actual award; he did not claim that there had been a procedural defect in the arbitration process.

Since the licensees had agreed to binding arbitration, the court ruled for the Prevailing Brokers, ordering a judgment against the Nonprevailing broker in the amount of the arbitration award. As far as the claim against the Association, the court found it contained nothing upon which relief could be granted and ruled in favor of the Association. Both also were awarded attorney fees. The court did not mince words when it stated that "this case is a classic example of a plaintiff and plaintiff’s attorney who feel they can waste the time and resources of opposing parties and the judiciary because they are unhappy with the result of a process to which they agreed. If alternative dispute resolution is going to mean anything in this system, this type of case must be dealt with appropriately."

Century 21 Estates v. Jim Steele et.al., Porter, Indiana Superior Court. [Note: This opinion was not published in an official reporter and therefore should not be cited as authority. Please consult counsel before relying on this opinion.]