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Arbitration Award Confirmed, Requiring Developer To Pay $1 Million in Brokers Commissions Immediately For Tenancy Beginning In August, 2002Laszlo N. Tauber, M.D. & Assoc. v. Trammell Crow Real Estate Services, Inc., No. 96-CV-1827 (D.C. Oct. 14, 1999) The D.C. Court of Appeals rejected a developer’s argument that an arbitrator exceeded his powers under a Commercial Leasing Agreement. The Agreement named Trammell Crow as the exclusive agent for locating suitable tenants in a building undergoing extensive renovation. Trammell Crow located a prospective renter who executed a lease agreement on February 8, 1996, with occupancy and payment to begin on August 1, 2002. Trammell Crow demanded payment of its commission from the date the lease was executed. The developer refused, contending that the Agreement did not require commission payments until the date the tenant took occupancy or commenced payment of rent, August 1, 2002. The Agreement provided in part that "[t]he obligation of the parties to submit a dispute to arbitration is not limited to disputes arising under those Articles of this Agreement which specifically provide for arbitration." Based on that language, the Superior Court granted Trammell Crow’s motion to compel arbitration. The arbitrator issued an award requiring the developer to make immediate commission payments of 50% of the total commission, the remaining 50% to be paid in installments after the tenant took occupancy. The arbitrator also required the developer to pay interest from the date of the award of 8.25%. On appeal, the developer argued that the arbitrator exceeded his powers, by misconstruing the Agreement. The Court rejected such arguments, stating that as long as the arbitrator is acting within the scope of his authority and even arguably construing or applying the contract, the arbitrator’s decision will not be overturned. In reviewing whether an arbitrator exceeded his powers, under D.C. Code §16-4311(a)(3) the Court will not review the arbitration award on the merits. Even if there were an ambiguity with respect to whether a matter was within the arbitrator’s authority, the question must be resolved in favor of arbitration. The Court concluded that all disputes were within the scope of the arbitration clause quoted above, and thus the arbitrator did not exceed his authority. |
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