SW Legal studies in Business

Arbitrator Has Discretion to Award Attorney Fees
Description Nevada high court held that an arbitrator did not manifestly disregard the law by including attorney fees to the prevailing party in a construction contract dispute. While such awards are not common in litigation, the arbitrator acted within the guidelines of the arbitration association.
Topic Alternate Dispute Resolution
Key Words Arbitration; Damages; Attorney Fees
C A S E   S U M M A R Y
Facts Clark County School District (CCSD) contracted with Richardson Construction for renovation work on a school. Richardson subcontracted with Rolling Plains Construction to do the fireproofing work. After Rolling Plains was finished, a dispute arose with CCSD and Richardson over the quality of the work and payment due. The matter went to arbitration as required by the contract. The arbitrator held for Rolling Plains and ordered it be paid $168,000 by Richardson and CCSD, and included attorney fees in the award. CCSD took the case to court, where the judge confirmed the award. CCSD appealed.
Decision

Affirmed. In Nevada, an arbitration award may be reviewed to determine if the decision represents manifest disregard of the law. That is, obvious errors of law may be overturned. While the "American Rule" generally does not allow the prevailing party in a suit to be awarded attorney fees, to grant such fees is not manifest disregard of the law. While the contract between CCSD and Richardson prohibited such fee shifting, Rolling Plains was not a party to that contract, so the arbitrator was not bound by that limitation. American Arbitration Association rules state that an "arbitrator may grant any remedy or relief, including equitable relief, that the arbitrator deems just and equitable and within the scope of the agreement of the parties." The arbitrator followed that guideline.

Citation Clark County School District v. Rolling Plains Construction, Inc., 16 P.3d 1079 (Sup. Ct., Nev., 2001)

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