KESSLER, Judge.
¶ 1 Atreus Communities Group ("Atreus") appeals the superior court's ruling confirming the arbitration award in favor of Stardust Development, Inc. ("Stardust") on Atreus's claim for breach of contract and fraudulent concealment. Atreus contends that the award should not have been confirmed because the arbitrator exceeded his authority by granting summary judgment rather than conducting an oral evidentiary hearing. Addressing a question of first impression in Arizona, we hold that under the arbitration agreement and the applicable rules adopted by that agreement, the arbitrator was authorized to grant summary judgment. Accordingly, we affirm the superior court's confirmation of the arbitration award.
¶ 2 In 2004, Stardust entered into a Joint Development and Escrow Agreement ("JDA") with several builders, including Atreus, for the construction of a residential development. Stardust was responsible for administering the construction and installation of certain improvements, including certain sewer and wells for water.
¶ 4 After a delay occurred in the completion of the well facilities and other infrastructure, Atreus initiated arbitration against Stardust, alleging breach of contract, breach of the covenant of good faith and fair dealing, and fraudulent concealment. Atreus contended that it had entered into contracts for sale of its homes, but it could not close on the contracts because of the lack of water services. Atreus claimed that Stardust had knowledge of but had failed to notify it of the delay. It claimed that, had it known of the delay, it would not have built the homes or entered into the contracts for sale.
¶ 5 Stardust filed a motion for summary judgment as to the breach of contract claim. In response, Atreus argued that summary judgment was not permitted in the arbitration proceeding because Section 9 of the JDA and the AAA Rules entitled the parties to a hearing and the right to present evidence.
¶ 6 The arbitrator found that the JDA and AAA Rules did not preclude summary judgment:
The arbitrator granted summary judgment to Stardust, finding that under the JDA, Stardust had the right, but not the obligation, to provide notice of an anticipated delay. The arbitrator also granted summary judgment on the breach of the covenant of good faith and fair dealing claim, finding that under the JDA, Atreus had expressly waived its right to seek indirect, consequential, punitive, or special damages caused by a breach under the JDA.
¶ 7 Stardust then moved for summary judgment on Atreus's claim for fraudulent concealment. The arbitrator granted the motion, finding:
¶ 8 The arbitrator awarded attorneys' fees to Stardust pursuant to the JDA in the amount of $150,000, plus costs in the amount of $26,727.60.
¶ 9 Pursuant to Arizona Revised Statutes ("A.R.S.") section 12-1511 (2003), Stardust filed an application in superior court to confirm the arbitration award and for entry of judgment. Atreus objected to the confirmation. It argued the arbitrator exceeded his powers and failed to conduct the hearing as provided in A.R.S. § 12-1505 (2003).
¶ 10 Stardust replied that: (1) The superior court could not reverse the decision on the merits because refusal to confirm an award was limited to the grounds statutorily permitted in A.R.S. § 12-1512(A); and (2) The JDA and AAA Rules permitted summary
¶ 11 Atreus moved for leave to file a supplemental brief, arguing that because it had the burden of proof in objecting to confirmation of the arbitration award, it should be given an opportunity to respond to Stardust's reply. Stardust objected, arguing that under A.R.S. § 12-1515 (2003), an application to confirm an arbitration award is treated as a motion and no authority supported allowing Atreus to file a surreply.
¶ 12 The superior court denied Atreus's motion to file a surreply and confirmed the arbitration award. The court entered a judgment in favor of Stardust, including attorneys' fees and costs in the amount of $176,727.60 for the arbitration proceedings and $13,175.90 for the confirmation proceedings. Atreus timely appealed.
¶ 13 Because Arizona's public policy favors arbitration to obtain a speedy and inexpensive disposition of a dispute, judicial review of an arbitration award is severely limited by statute. Einhorn v. Valley Med. Specialists, P.C., 172 Ariz. 571, 572-73, 838 P.2d 1332, 1333-34 (App.1992). The "boundaries of [an] arbitrator['s] powers are defined by the agreement of the parties." Smitty's Super-Valu, Inc. v. Pasqualetti, 22 Ariz.App. 178, 180, 525 P.2d 309, 311 (1974). In cases arbitrated subject to the parties' agreement and subject to the arbitrator not exceeding his or her powers, the arbitrator's decisions are final and binding as to both issues of fact and law, regardless of the correctness of the decision. Smitty's, 22 Ariz.App. at 180-81, 525 P.2d at 311-12. Just as the superior court reviews an arbitrator's award in the light most favorable to affirming, we review the superior court's decision in the light most favorable to upholding its decision regarding confirming the arbitrator's award and affirm unless we conclude that the superior court abused its discretion. Brake Masters Systems, Inc. v. Gabbay, 206 Ariz. 360, 364 n. 3, ¶ 12, 78 P.3d 1081, 1085 n. 3 (App.2003); Park Imperial, Inc. v. E.L. Farmer Constr. Co., 9 Ariz.App. 511, 513-14, 454 P.2d 181, 183-84 (1969).
¶ 14 The standard of review and procedure to review an arbitrator's interpretation of the parties' arbitration agreement and the arbitrator's decision as to his powers is less clear. When parties dispute the arbitrator's power in interpreting the arbitration agreement (at least to decide if an issue is arbitrable), the court must use the same standard used in resolving summary judgment motions: it must hold an evidentiary hearing unless the standard for granting summary judgment is met or neither of the parties requests an evidentiary hearing. Brake Masters, 206 Ariz. at 365, ¶¶ 14-15, 78 P.3d at 1086. Cf. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944, 947-48, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995) (in determining whether parties agreed if arbitrator could decide his or her own jurisdiction, court should require "clea[r] and unmistakabl[e] evidence that they did so" and appellate court will affirm findings of fact unless they are clearly erroneous but review a trial court's conclusion of law de novo). However, if it is clear that the arbitration agreement or rules incorporated therein authorized the arbitrator to interpret the agreement, then the trial court must defer to the arbitrator's decision as to his power unless it is clearly erroneous. Brake Masters, 206 Ariz. at 367, ¶¶ 20-21, 78 P.3d at 1088. Such a deferential standard is consistent with the concept that when parties submit their dispute to arbitration they have "substituted a different tribunal and a different
¶ 15 We need not decide what standard of review to use to determine if the arbitrator erred in determining he had the authority to grant summary judgment, which in this case is the arbitrator's interpretation of the parties' agreement. Under an abuse of discretion, de novo, or manifest disregard of the law standard, the arbitrator was authorized to award summary judgment under the JDA and AAA Rules.
¶ 16 Given the narrow judicial power to review substantive decisions by an arbitrator, supra ¶ 13, Atreus argues: (1) The arbitrator exceeded his powers by wrongfully denying it a hearing and granting summary judgment, and the superior court erred in confirming the award; and (2) The superior court wrongly denied it the opportunity to file a surreply to Stardust's application for confirmation of the arbitration award. We disagree with Atreus.
¶ 17 Atreus argues that because the JDA and AAA Rules do not explicitly authorize summary judgment, the arbitrator was prohibited from granting Stardust's motion for summary judgment. Applying the reasoning in Brake Masters, we think that the JDA's reference to and incorporation of rules is sufficient to preclude First Options' clear and convincing evidence standard to determine the arbitrator's powers. Brake Masters, 206 Ariz. at 366-67, ¶ 19, 78 P.3d at 1087-88. Pursuant to the terms of the JDA and those incorporated rules, the arbitrator in this case was authorized to grant summary judgment.
¶ 18 The superior court must reverse a decision by an arbitrator that is outside the bounds of the parties' agreement. A.R.S. § 12-1512(A)(3); see Snowberger v. Young, 24 Ariz.App. 177, 179, 536 P.2d 1069, 1071 (1975); Smitty's, 22 Ariz.App. at 180, 525 P.2d at 311. Arizona Revised Statutes § 12-1512 provides in pertinent part:
Section 12-1505, in turn, provides in pertinent part:
¶ 20 To determine the arbitrator's powers in this case, we start with the terms of the JDA and the AAA Rules adopted by the JDA. As we held in Brake Masters, an arbitration agreement need not expressly address the issue of an arbitrator's powers if the agreement incorporates by reference rules which address this issue. 206 Ariz. at 366-67, ¶ 19, 78 P.3d at 1087-88. Once that occurs, the arbitrator's decision as to his powers is subject to a deferential standard of review. Id. at 367, ¶¶ 20-21, 78 P.3d at 1088.
¶ 21 While nothing in the JDA or AAA Rules addresses summary judgment, they both grant the arbitrator broad powers, including the power to grant any relief which a superior court could grant. Consistent with courts in other jurisdictions, we conclude those powers include the right to summary judgment.
¶ 22 Courts in other states have decided an arbitrator is authorized to grant summary judgment when the governing rules do not expressly address summary judgment in the arbitration proceeding. Those courts have held that when the parties' arbitration agreement and governing rules are silent as to whether an arbitrator can grant summary judgment, the arbitrator is authorized to do so unless the party opposing summary judgment is denied the fair opportunity to present its case. See Campbell v. Am. Family Life Assurance Co. of Columbus, Inc., 613 F.Supp.2d 1114, 1119 (D.Minn.2009) (holding "summary judgment is permissible in arbitration"); Hamilton v. Sirius Satellite Radio Inc., 375 F.Supp.2d 269, 278 (S.D.N.Y.2005) (confirming an arbitration award based on summary judgment without discussion of arbitrator's ability to grant summary judgment); Schlessinger v. Rosenfeld, Meyer & Susman, 40 Cal.App.4th 1096, 47 Cal.Rptr.2d 650, 655, 658 (1995) (determining that under California arbitration statutes and AAA rules "the arbitrator [has] implicit authority to rule on [summary adjudication] motions," which are similar to summary judgment motions); Stifler v. Weiner, 62 Md.App. 19, 488 A.2d 192, 195 (1985) (holding that while there is no statutory provision allowing or prohibiting summary disposition in arbitration, it is allowed when factually appropriate). Contra White v. Preferred Research, Inc., 315 S.C. 209, 432 S.E.2d 506, 507 n. 2 (S.C.App.1993) (deciding that a summary judgment motion was not proper in arbitration because it "is not a judicial proceeding governed by the rules of civil procedure"). In these cases, the parties' agreements and governing rules are very similar to the agreement and AAA Rules agreed upon by Atreus and Stardust.
¶ 23 We agree with the reasoning of the above cases that an arbitrator has the implied power to grant summary judgment. The purpose of arbitration is to permit parties to agree to a more expedited and less costly means to resolve disputes than litigation in the courts. Harrington v. Pulte Home Corp., 211 Ariz. 241, 252, ¶ 42, 119 P.3d 1044, 1055 (App.2005). Summary judgment by an arbitrator is consistent with that purpose when the parties do not expressly prohibit summary judgment in their agreement, provided the parties receive a fair
¶ 24 Atreus proffers four arguments to support its position that the JDA and AAA Rules do not permit an arbitrator to grant summary judgment. We disagree with Atreus's arguments.
¶ 25 First, Atreus argues that Section 9(f) of the JDA and Rule 45 of the AAA Rules prohibit summary judgment. We disagree. Section 9(f) and the AAA Rules, respectively, authorize the arbitrator to grant any remedy or relief that an Arizona court could grant or any remedy or relief within the scope of the JDA. While "summary judgment" has been defined as a "[p]rocedural device [for] . . . the speedy disposition of a controversy without the need for a trial," Black's Law Dictionary 1476 (8th ed. 1999), Arizona courts employ a more general meaning to those terms, referring to summary judgment as a remedy or relief. See Antonsen v. Superior Court, 186 Ariz. 1, 7, 918 P.2d 203, 209 (App.1996) (finding "remedy is summary judgment" where stranger attempts to obtain paternity testing and presumptive parents assert paternity in husband); Continental Ins. Co. v. McDaniel, 160 Ariz. 183, 185, 772 P.2d 6, 8 (App.1988) ("summary judgment relief was denied"); Cecil Lawter Real Estate School, Inc. v. Town & Country Shopping Ctr. Co., 143 Ariz. 527, 540, 694 P.2d 815, 828 (App. 1984) (Haire, J., concurring in part and dissenting in part) ("[E]xistence of substantial evidentiary conflicts precludes the availability of the summary judgment remedy."), disapproved on other grounds by Gust, Rosenfeld & Henderson v. Prudential Ins. Co. of Amer., 182 Ariz. 586, 898 P.2d 964 (1995); Allied Mut. Ins. Co. v. Peck, 3 Ariz.App. 582, 584, 416 P.2d 1003, 1005 (1966) ("[F]acts relevant to the construction of the insurance contract are undisputed, and summary judgment is a proper remedy"). Under this more lenient usage, Section 9(f) and AAA Rule 45 provide the arbitrator with broad authority, including the power to resolve the dispute by summary judgment.
¶ 26 Second, we disagree with Atreus's argument that while the JDA authorized the application of the Arizona Rules of Civil Procedure, it did so only in the context of conducting discovery. Section 9(e) of the JDA provides:
¶ 27 The reference to the rules of civil procedure is not limited to discovery. Rather, we construe Section 9(e) as requiring the arbitrator to afford the parties not only discovery in accordance with the rules of civil procedure but the hearing as well, which would implicitly allow the arbitrator to apply summary judgment where no material fact existed requiring an evidentiary hearing. This is consistent with the underlying purpose of arbitration and with AAA Rule 31, which grants the arbitrator the discretion to vary the manner in which the parties present evidence, provided the arbitrator affords "a full and equal opportunity to all parties for the presentation of any material and relevant evidence."
¶ 28 Further, AAA Rule 33 supports our conclusion that the AAA Rules envision an arbitrator granting summary judgment. That rule provides that "[t]he parties may offer such evidence as is relevant and material to the dispute and shall produce such evidence as the arbitrator may deem necessary to an understanding and determination of the dispute." Rule 33 authorizes the arbitrator to determine what evidence is necessary to decide the matter at issue, implying that the arbitrator can determine when evidence presented is sufficient to resolve the dispute.
¶ 29 Third, Atreus contends the arbitrator could not grant summary judgment because an oral hearing is required by A.R.S. § 12-1505(2), which entitles the parties "to be heard, to present evidence material to the controversy and to cross-examine witnesses appearing at the hearing," id., "unless otherwise provided by the agreement." A.R.S. § 12-1505. We disagree.
¶ 30 Section 12-1505(2) gives the parties the right to cross-examine witnesses who appear at the hearing, but does not necessarily require a hearing. See, e.g., Schlessinger, 47 Cal.Rptr.2d at 656-57 (finding nearly identical language entitling parties to a hearing means that they have an opportunity to present their sides of the case, but not necessarily at an oral hearing with live testimony and "entitles a party to cross-examine witnesses if they appear at a hearing" but that "it does not give a party an absolute right to present oral testimony in every case"). Further, "unless otherwise provided by the agreement," the statute is subject to the agreement of the parties, which is subject to interpretation by the arbitrator. A.R.S. § 12-1505(2). Moreover, just as in a trial hearing, the parties participating in a summary judgment hearing are permitted to present argument and material evidence. AAA Rule 34 authorizes the arbitrator to consider witness testimony by affidavit over objection, which undermines Atreus's argument that only live oral testimony is permitted.
¶ 31 Finally, Atreus argues that AAA Rule 39 provides for waiver of the hearing only on the parties' agreement, which did not occur here. Rule 39 provides:
Although this provision provides a means for the parties to waive the hearing upon agreement, it does not address, and so does not preclude, one party from seeking summary judgment. Nor does it preclude the arbitrator, upon concluding that no issues of material fact exist, from determining that the matter can be resolved by summary judgment.
¶ 32 For the reasons stated above, the arbitrator did not err in granting Stardust's motions for summary judgment and the superior court did not err in confirming the arbitrator's award.
¶ 33 Atreus argues that the superior court erred in not permitting it to file a surreply to address Stardust's arguments in its reply to its application for confirmation of the arbitration award. Atreus contends that, because it had the burden of proof to show that the award should not be confirmed, it should have been given "the last word."
¶ 34 The party seeking confirmation of an award must file and serve an application in the same manner as complaints are filed and served in civil actions. A.R.S. § 12-1511. The party opposing the confirmation must file a pleading and make an adequate showing in opposition based upon one of the grounds specified in A.R.S. § 12-1512. A.R.S. § 12-1512(A). The application, although served in the manner in which a summons is served, is treated as a motion "and shall be heard in the manner and upon the notice provided by law or rule of court for the making and hearing of motions."
¶ 35 Pursuant to A.R.S. § 12-1514 (2003), Stardust seeks an award of its attorneys' fees and costs on appeal. It is within the discretion of this Court to award attorneys' fees on appeal. Steer v. Eggleston, 202 Ariz. 523, 528, ¶ 25, 47 P.3d 1161, 1166 (App.2002). In exercise of that discretion, we deny Stardust's request as to fees, but award it taxable costs on appeal upon timely compliance with Arizona Rule of Civil Appellate Procedure 21.
¶ 36 The superior court's decision confirming the arbitration award is affirmed.
CONCURRING: DANIEL A. BARKER, Judge