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Gainesville Mechanical, Inc. v. Air Data, Inc.

Court of Appeals of Georgia, First Division

June 19, 2019

GAINESVILLE MECHANICAL, INC.
v.
AIR DATA, INC.

          BARNES, P. J., MERCIER and BROWN, JJ.

          BROWN, JUDGE

         Gainesville Mechanical, Inc. appeals from an order of the superior court confirming an arbitration award in favor of Air Data, Inc. Gainesville Mechanical contends that the superior court erred by failing to conclude that the arbitrator's written award demonstrates a manifest disregard of the law. For the reasons explained below, we disagree and affirm.

         Absent one of the statutory grounds listed in OCGA § 9-9-13 (b), a superior court must confirm an arbitration award; on appeal, this Court "will not reverse an order confirming an award unless the appellant demonstrates that a statutory ground exists." Airtab v. Limbach Co., 295 Ga.App. 720, 721 (673 S.E.2d 69) (2009). The only statutory ground relevant to this case is whether the rights of Gainesville Mechanical "were prejudiced by . . . [t]he arbitrator's manifest disregard of the law." OCGA § 9-9-13 (b) (5). "[A]s provided in the statute, a showing of prejudice is required" and "the burden of proof is on the one seeking to set aside an award." Bennett v. Builders II, 237 Ga.App. 756, 757 (3) (516 S.E.2d 808) (1999). In this case, the arbitrator's award reflects that it received evidence over the course of six days of hearings, but the record before us does not include a transcript of the arbitration proceedings. Accordingly, Gainesville Mechanical attempts to show prejudice from the arbitrator's alleged manifest disregard of the law solely from the face of the arbitrator's 14-page "Final Award."

         In its order, the arbitrator summarized the evidence briefly and determined that Gainesville Mechanical paid Air Data only $32, 000, less than half the $72, 770 it was entitled to under its contract.[1] It also determined that due to the directive of a general contractor on the construction project, Gainesville Mechanical instructed Air Data to work 7 days a week for 10 hours a day for an extended period of time. Additionally, the arbitrator concluded that Gainesville Mechanical required Air Data to conduct testing on mechanical systems before the building was enclosed and even before Gainesville Mechanical's work and that of other trades was complete in the very areas where Air Data was asked to test. Gainesville Mechanical ultimately fired Air Data and hired another contractor to perform the work at a cost of over $149, 985, at a time when the building was opened and occupied and the work could be performed by a single employee.

         After outlining these facts, the arbitrator concluded that

[w]hile only rarely governing a construction dispute, the Arbitrator determines that the facts of this case call for the application of the legal doctrine of cardinal change. . . . While the term cardinal change is primarily utilized in Federal Government construction cases, Georgia and other states often adopt other terminology such as quantum meruit, abandonment of contract, and fundamental breach. A Nevada decision explained: The cardinal change doctrine serves to provide a breach remedy for contractors who are directed to perform work which is not within the general scope of the contract and which is not redressable under the contract. Thus a cardinal change occurs when the work is so drastically altered that the contractor effectively performs duties that are materially different from those which the contractor originally bargained.
(Punctuation omitted; emphasis omitted.) Later in his order, the arbitrator stated:
Based upon the Arbitrator's findings as to the above pertinent occurrences on the project, the final step is to assign damages resulting from these occurrences.
Air Data claims entitlement to:
1.Compensatory damages of $258, 704.
2. Interest of $144, 000 through December 17, 2017.
3. $151, 384 for attorneys' ...

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