Confirmation of an arbitration award; Fraudulent misrepresentation related to a real property seller’s disclosure statement; Exemplary damages; Mitigation of damages

The court concluded that most of the issues raised by plaintiff-Yaffa in challenging the arbitration award for defendants-Williamses were unreviewable, and that he failed to meet his burden to show they did not make reasonable efforts to mitigate their damages. Thus, the court affirmed the trial court’s order confirming the arbitration award. The case arose from the Williamses’ purchase of a home from Yaffa. The “arbitrator determined that Yaffa had fraudulently misrepresented that the septic system was in working order when he sold the home.” The Williamses were awarded exemplary damages and costs. Yaffa filed a complaint in the trial court to vacate the award. The trial court found “no error or violation of any law in the arbitrator’s decision.” Yaffa argued that the trial court erred in affirming the award because the Williamses failed to show he made a fraudulent misrepresentation. He first challenged the reasonable reliance element. The court noted “the arbitrator did not credit the evidence suggesting that the Williamses reliance on Yaffa’s representation was not reasonable. Instead, based on his view of the evidence, the arbitrator found that the reliance was reasonable.” This was a factual finding the court could not review. Yaffa next contended the arbitrator erred in determining his representation was fraudulent. Again, he sought a determination by the court “that the arbitrator erred by applying the correct legal framework to erroneous factual findings. Such a review of the arbitrator’s award by the trial court or by this Court is not required or authorized.” Likewise, his challenge to the award of exemplary damages was “not an argument about an error of law apparent on the face of the arbitrator’s award, but rather a challenge to the arbitrator’s thought process in applying the proper legal framework to the facts.” Thus, the court had to defer to the arbitrator’s opinion. Finally, Yaffa asserted “the Williamses failed to mitigate their damages because they did not address the septic tank problem immediately upon discovering that the toilet did not function.” However, the evidence did not establish that they “could have immediately remedied the septic problem. Nor does the record support a finding that the damages would have been minimized if [they] had installed a new septic system instead of manually removing human waste from the toilet.”