Summary 2005 WY 157

Summary of Decision issued December 8, 2005

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Case Name: Welty; Welty’s Inc., Welty’s General Store; & Welty’s General Merchants v. Brady (Bankruptcy Trustee for Johanna Welty)

Citation: 2005 WY 157

Docket Number: 05-73

Appeal from the District Court of Teton County, Honorable Nancy Guthrie, Judge

Representing Appellants (Defendants): Joe M. Teig and Paula A. Fleck of Holland & Hart, LLP, Jackson, Wyoming. Argument by Mr. Teig.

Representing Appellee (Plaintiff): Robert M. Shively and Amy M. Taheri of Shively, Taheri & Rochelle, PC, Casper, Wyoming. Argument by Mr. Shively.

Date of Decision: December 8, 2005

Issues: Whether the district court erred as a matter of law when it refused to vacate an arbitration award based on newly-discovered evidence that the award was procured by fraud. Whether the district court erred as a matter of law when it refused to vacate an arbitration award based on the mistakes of fact and law committed by the arbitration panel.

Holdings: Wyo. Stat. Ann. § 1-36-114 articulates the statutory bases for vacation of an arbitration award. In addition, the scope of judicial review of arbitration awards is very narrow. An award may be vacated if the appellant shows by clear and convincing evidence that the award was obtained by fraud, corruption, behavior beyond the bounds of natural justice, excess of authority, or a manifest mistake of fact or law appearing upon the face of the award. The Court reviewed the record without deference to the views of the trial court. Statements in the district court’s record showed they did consider the supplemental evidence and concluded Appellants had not met their evidentiary burden. The Court found that the district court properly denied Appellant’s motion to vacate the arbitration award on the basis of fraud.
Appellant’s claims of mistake of fact and law concern the weight and sufficiency of the evidence to support the arbitration award. The Court favors arbitration or other forms of alternative dispute resolution. The arbitration panel considered the elements of promissory estoppel in its decision. The panel concluded that Appellee had satisfied the elements consisting of (1) the existence of a clear and definite promise; (2) proof that the promisee acted to its detriment in reasonable reliance on the promise; and (3) a finding that injustice can be avoided only if the court enforces the promise. Appellant’s claims do not reach the level required to overturn an arbitration award. The Court deferred to the arbitrator’s right to consider the relevant equities of the parties and fashion an award. Appellants submitted the issue of the Welty’s Inc. responsibility to the arbitration panel. The Court has stated in other cases that the parties’ agreement defines the arbitrators’ authority. The Court concluded that the arbitration panel was within its authority when it considered the corporation’s responsibility for the loan and Appellant waived that argument by failing to submit it to the arbitration panel.
The final mistake of fact and law concerned Appellee’s failure to file a timely claim upon the estate after the death of Frank Welty, Jr. The Court noted that at the time of the death, Appellee did not have a claim against Frank Jr. because she did not yet know that her loans to the Appellants would not be repaid.

The decision was affirmed.

J. Kite delivered the opinion for the court.