Wolfston v. Eastside Bend, LLC.

ORS 36.705(1)(a) states: “the court shall vacate an award made in the arbitration proceeding if … [t]he award was procured by corruption, fraud or other undue means.”

Respondent Eastside Bend, LLC entered into a real estate sale agreement conveying a platted subdivision with 76 lots it owned in Bend, Oregon, which was subsequently assigned to Petitioners. The agreement called for the sale to occur in three phases, requiring Petitioners to make closing payments as they purchased each group of lots. The parties closed the first two phases after Petitioner was granted extensions on the closing dates in exchange for additional deposits and fee payments. Petitioner was unable to secure funding for the final phase and again sought an extension of the phase three closing date of August 24, 2019, which was not obtained. Petitioners brought four arbitration claims against Eastside for failing to deliver the 23 phase three lots, and brought an arbitration claim against Eastside’s real estate agent, Kelleher, claiming he sabotaged the closing to secure a deal with Eastside to develop those lots for the benefit of his construction company. The arbitration panel rejected all Petitioner’s claims in October 2020. In January 2021, Petitioners discovered through a City of Bend construction permit portal that Kelleher’s construction company was listed as the contractor on Eastside’s building permit applications for the development of the 23 phase three lots dated September 8, 2019. Petitioners subsequently sought a new arbitration hearing, arguing that Respondents failed to produce ordered discovery evidence and fraudulently disclaimed Kelleher’s involvement at the original hearing. The arbitration panel rejected Petitioners request, who then sought to vacate the arbitration award in the circuit court. ORS 36.705(1)(a) states: “the court shall vacate an award made in the arbitration proceeding if … [t]he award was procured by corruption, fraud or other undue means.” The trial court denied Petitioner’s motion to vacate, finding they did not meet their evidentiary burden. Petitioners appealed. The Court reasoned that the evidence on the precise timing of when Kelleher’s construction company became the builder for the development of the 23 phase three lots was ambiguous. Thus, the Court held that although a reasonable factfinder “certainly could find otherwise based on the evidence,” the record did support the trial court’s determination. Affirmed.