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Virginia Beach BOR v. Goodman Segar Hogan: Virginia Supreme Court Outlines Standard of Review for Confirmation/Vacation of Arbitration Awards

In Virginia Beach Board of REALTORS®, Inc. v. Goodman Segar Hogan, Inc., the Supreme Court of Virginia reviewed the trial court's decision to vacate a Board arbitration award. The supreme court noted the limited circumstances under which an award may be vacated, reversed the trial court, and upheld the award.

Goodman Segar Hogan (GSH) filed a petition for declaratory judgment requesting that the court set aside the arbitration award on the following grounds: (1) the award was not signed by the entire arbitration panel, and (2) GSH was entitled to retain the commission it had received. GSH also sought to permanently enjoin the Norfolk/Chesapeake Board of REALTORS® from taking any further action against them. The trial court set aside the award, ruling that the award was "fatally defective upon its face in that it was not appropriately or timely signed by all members of the panel and . . . invalid and unenforceable and should be set aside . . . " Krygus appealled.

GSH cited Fraley v. Nickels, 121 Va. 377, 93 S.E. 636 (1917), and argued that the facts in Fraley required that the award be set aside. In examining Fraley, the supreme court noted that when the parties submitted to arbitration, the parties selected two arbitrators (one each) and the selected arbitrators were required, by statute, to appoint a third. According to the law, the three person panel was to hear the evidence, make an award, and have it confirmed by the court. However, the award filed contained the signatures of only two persons and no reference was made as to whether a third arbitrator participated in the proceeding. As a result, the confirmation of the award by the trial court in Fraley was reversed.

The court reasoned that, in this case, the facts revealed that each arbitrator took part in the resolution of this dispute, even though the chairman was the only one who actually signed the award. The court noted that the award itself repeatedly referred to the entire arbitration panel, not just the chairman. The court held that the fact that an otherwise valid arbitration award was only signed by chairman of the arbitration, did not invalidate the award. The award was confirmed.

Virginia Beach Board of REALTORS®, Inc. v. Goodman Segar Hogan, Inc., 224 Va. 659, 299 S.E.2d 360 (1983).