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An Arizona appellate court has upheld a REALTOR® arbitration award, reversing a trial court decision.
A dispute arose between two REALTORS® who were members of the Lake Havasu Association of REALTORS® ("Association") over who was the procuring cause for a sale of property. Pursuant to the membership rules of the Association, the dispute was submitted to the Association's arbitration process. The arbitration panel ("Panel") ruled in favor of Joel Selman d/b/a Selman & Associates and Chuck Abbot ("Prevailing Party") and against John C. Stacey, Sr., Gary F. Baumkirchner, Larry Grisham, and McCulloch Realty Corporation ("Losing Party"), and the Association's Procedural Review Hearing Tribunal affirmed the award made by the Panel. The Losing Party appealed this ruling to the Superior Court in Mohave County ("Trial Court"). The Trial Court refused to confirm the Panel's award to the Prevailing Party, and sent the matter back to the Association for additional arbitration proceedings. The Prevailing Party appealed the Trial Court's ruling.
The Arizona Court of Appeals, Division One, reversed the Trial Court's rulings and sent the matter back to the Trial Court for entry of judgment in favor of the Prevailing Party. The court found that the articulated policy of the state of Arizona is to favor arbitrations, and that judicial review of an arbitration award is limited by statute. The Losing Party had successfully argued to the Trial Court that the Panel had exceeded its powers (one of the times when the statute allows a court to deny confirmation of an arbitration award) by improperly excluding someone from the arbitration proceedings and also that the Panel had improperly excluded unverified witness statements.
The appellate court first examined the Association's rules and regulations. These set forth the process that the Association is to follow when conducting an arbitration. The court ruled that as long as the Panel followed these rules, the Panel's award could not be disturbed by the Trial Court. Since the rules and regulations gave the Panel the power to regulate the hearing, this power gave the Panel control over the admittance of evidence and also control over who could participate in the hearing. Therefore, the Panel did not exceed its power when it made these rulings, and so the Trial Court did not have the authority to refuse to confirm the arbitration award made by the Association. Therefore, the court reversed the Trial Court decision and ordered it to confirm the Association's arbitration award to the Prevailing Party.
Stacey v. Selman, No. 1 CA-CV 00-0144 (Ariz. Ct. App. Oct. 17, 2000). [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.]
Editor's Note: NAR Legal Affairs, with the support of the Legal Action Committee, submitted an amicus curiae (friend of the court) brief with the court seeking the reversal of the trial court's decision.