## Facts

- A developer hired a general contractor to build seven townhouses in two phases under a construction contract containing a broad arbitration clause covering all disputes arising out of or relating to the contract, except certain claims waived by final payment.
- During Phase I, construction problems occurred repeatedly, delays extended beyond the contractual completion date, and substantial defects were later discovered.
- Defects included extensive water infiltration, structural and building-code violations, and workmanship problems that reduced the value of the buildings and created potential future liability exposure to the developer.
- The parties submitted the dispute to a three-arbitrator panel without limiting the remedies available; the developer asserted contract and tort-based claims and sought damages.
- After hearings and a site inspection, the arbitrators found widespread defects and issued an award requiring the contractor to purchase the improved property from the developer for a specified amount, with an alternative money award if the developer could not convey clear title.
- The contractor sought to vacate the award, arguing the arbitrators exceeded their powers by ordering a forced purchase of real property and by awarding items allegedly waived by final payment under the contract.

## Issues

1. Whether arbitrators acting under a broad “arising out of or relating to” arbitration clause exceeded their powers by ordering the contractor to purchase the property as a remedial measure.
2. Whether alleged contract waiver provisions tied to final payment limited the arbitrators’ authority such that inclusion of certain damages required vacatur for excess of powers.

## Decision

- The Minnesota Supreme Court affirmed confirmation of the arbitration award.
- The court held the arbitrators did not exceed their powers by imposing the sell-back remedy because the arbitration clause and the parties’ submission conferred broad remedial authority.
- The court rejected the contractor’s reliance on final-payment waiver language as a basis for vacatur, treating any dispute over the waiver’s meaning and application as a matter for arbitral interpretation rather than a jurisdictional limit on arbitral power.

## Legal Principles

- Under a broad arbitration agreement, arbitrators have wide discretion to fashion remedies reasonably related to the dispute submitted, even if the remedy is atypical or equitable in form.
- Judicial review of arbitration awards is highly limited; courts do not revisit the merits of the arbitrators’ contract interpretation or remedy selection unless the challenger shows the arbitrators exceeded their powers under the arbitration statute.
- Where parties submit a dispute to arbitration without expressly restricting remedies, the absence of a party’s specific request for a particular form of relief does not, by itself, deprive arbitrators of authority to award it.
- Contract provisions such as final-payment waivers are ordinarily for arbitrators to interpret and apply; alleged interpretive error does not justify vacatur absent a clear excess of authority.

## Conclusion

The court upheld an arbitration award compelling a contractor to buy back defectively constructed property, concluding that a broadly worded arbitration clause and an unrestricted submission authorized arbitrators to craft such relief and that alleged misapplication of final-payment waiver provisions did not establish that the arbitrators exceeded their powers.


David Co. v. Jim W. Miller Constr., Inc., 444 N.W.2d 836 (Minn. 1989)