Court of Appeals Division II
State of Washington

Opinion Information Sheet

			

    IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

                                       DIVISION  II

DANIEL OMER, a single person,                                    No.  41565-8-II

                             Respondent,

       v.                                                  UNPUBLISHED OPINION

ANCO Investments, LLC, a Washington 
limited liability company; JOHN TAYLOR and 
"JANE DOE" TAYLOR, husband and wife and 
the marital community comprised thereof; 
ENDEAVOR, INC., d/b/a ENDEAVOR 
CONSULTANTS, INC., a Washington 
corporation; GORDY S. ENGLERT and 
"JANE DOE" ENGLERT, husband and wife 
and the marital community comprised thereof; 
and MAIN      STREET ESCROW, INC., a 
Washington corporation,

                             Defendants,

And

THE ALPS CREDIT UNION,

                              Appellant.

       Armstrong, J.  --  The Alps Credit Union appeals the trial court's order confirming an 

arbitration award in Daniel Omer's favor, arguing that the arbitrator (1) went beyond the scope of 

his authority under the parties' arbitration agreement, (2) was partial toward Omer, and (3) 

engaged in misconduct that prejudiced the Credit Union.  Finding no error, we affirm the trial 

court's order confirming the award. 

No.  41565-8-II

                                            FACTS

       In September 2007, Omer sold his vacant lot in Puyallup to Anco Investments LLC for 

$70,000.  John Taylor, owner of Anco Investments LLC,1 paid Omer $17,500 initially and agreed 

to pay the balance, approximately $52,000, under the terms of a promissory note Omer held.  The 

promissory note both Omer and Taylor signed stated that the "[s]eller shall be in a Second Lien 

Position." Clerk's Papers (CP) at 101.  The Payment Terms Addendum to the Purchase and Sale 

Agreement also stated that the indebtedness was secured by the promissory note and Omer's 

second lien position on the deed of trust. 

       On September 25, 2007, the Credit Union granted Taylor a $180,000 line of credit 

secured by a first position deed of trust.  Taylor also signed a promissory note for the loan,

agreeing to pay interest of 18 percent per annum and 30 percent per annum in the event of 

default.  The former director of the Credit Union, Kevin Wessell, declared that the purpose of the 

loan was to enable Taylor to purchase the vacant land and to build a home for resale at a profit.  

Taylor and the Credit Union signed a Speculative Construction Loan Agreement, which stated

that the loan was to enable the purchase of real property and the construction of a residence.

       Omer returned to Main Street Escrow on October 1, 2007, requesting changes to the 

Purchase and Sale Agreement to grant him a first lien position.  Omer also asked Taylor to agree 

not to file bankruptcy before paying off the property.  On October 3, 2007, Omer verbally 

authorized the escrow company to record the documents.2

1 We refer to John Taylor and Anco Investments LLC collectively as "Taylor."

2 Omer did not receive a first position lien or a commitment from Taylor that he would not file for 
bankruptcy protection.

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No.  41565-8-II

       The Credit Union loaned Taylor approximately  $50,000:          a $19,000 payment      on 

September 25, 2007, to Main Street Escrow; $21,000 to Taylor on October 25, 2007; and 

$10,400 paid to Taylor on January 8, 2008.

       Omer received the $17,500 down payment and one monthly payment of $385 on 

November 1, 2007.  The next month, Taylor defaulted on both the note held by Omer and the 

note held by the Credit Union.  The Credit Union non-judicially foreclosed and purchased the 

property at a trustee's sale in December 2008.  The Credit Union was the only bidder at the 

trustee's sale.

       Omer sued Taylor, Endeavor, Inc. d/b/a Endeavor Consultants, Gordy Englert, the Credit 

Union, and Main Street Escrow, alleging that they conspired to defraud him of $52,000 secured 

by his second position lien.3 Specifically, he claimed that (1) he was entitled to judicially foreclose 

on his deed of trust, (2) the defendants engaged in fraud, (3) the defendants conspired to place 

him in a second lien position, (4) the court should disregard Anco's and Endeavor's corporate 

veils, (5) Englert and Endeavor acted as agents of the Credit Union, and (6) Omer's lien against 

the property should restrain the trustee's sale.  

       In an amended complaint, Omer added allegations that the trial court should pierce the 

3 Omer asserts that the Credit Union engaged in a fraudulent scheme.  According to Omer, 
Endeavor teaches classes on real estate investing that participants can finance through an in-house 
credit.  Englert teaches part of the class and identifies a "straw man."  Omer contends that "the 
'[s]traw [m]an,' was John Taylor."  Br. of Resp't at 1.  The straw man would purchase vacant 
real estate through seller financing and a promissory note secured by a second position line on the 
deed of trust.  Next, Endeavor would direct the straw man to use the Credit Union as the lender 
for the construction loan with a high interest rate.  Later, the straw man would default on the loan 
and the Credit Union would conduct a non-judicial foreclosure and purchase the property at a 
trustee's sale. Because the arbitrator did not find the Credit Union liable for fraud or for engaging 
in a criminal scheme, Omer's allegations of fraud are not relevant to this appeal.
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No.  41565-8-II

Credit Union's corporate veil and that the defendants violated RCW 9A.82.100 by engaging in a 

criminal profiteering scheme.  Omer sought relief in the amount of $52,000 at  eight percent

interest and his attorney fees. In neither his original nor his amended complaint did Omer allege 

any claims for breach of contract.

       On November 9, 2009, the Credit Union, Endeavor, and Taylor moved for summary 

judgment dismissal of Omer's claims of fraud, conspiracy, and violation of the Washington 

Criminal Profiteering Act, chapter 9A.82 RCW.  The trial court denied summary judgment.

       The parties then agreed to arbitrate the case and selected former Pierce County Superior 

Court Judge Robert H. Peterson as the arbitrator.  The "CR2A Agreement to Arbitrate" stated 

that arbitration was "for the purpose of deciding the claims in Pierce County Superior Court 

Cause No. 08-2-15380-6." CP at 486.    

       During the arbitration proceeding, the arbitrator  asked  whether Omer asserted a third-

party beneficiary claim.4 The Credit Union claims that the arbitrator asked Omer's counsel why 

he had not made a claim as a third-party beneficiary, while Omer claims that the arbitrator asked 

whether Omer was a third-party beneficiary.  In the arbitrator's final written decision, the 

arbitrator recognized that he "did raise the breach of contract theory as a possible theory of 

recovery . . ." CP at 573.  After the arbitrator raised the breach of contract theory, Omer moved 

to conform the pleadings to the evidence under CR 15(b), to include an unjust enrichment claim 

and a third-party beneficiary claim.  The Credit Union objected.  The arbitrator granted Omer's 

oral motion to amend the pleadings to include the third-party beneficiary claim.  

4 The arbitration proceeding was conducted without a court reporter.

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No.  41565-8-II

       In  his final decision, the arbitrator stated, "I as the arbitrator did raise the breach of 

contract theory as a possible theory of recovery and granted Plaintiff's motion to amend.  I 

decided for Plaintiff based on breach of contract but dismissed all three fraud theories which were 

alleged in the pleadings." CP at 616. The arbitrator entered a judgment for Omer in the amount 

of $52,115, plus  eight percent interest  per annum from November 1, 2007, to the entry of 

judgment.  The arbitrator denied Omer's request for attorney fees.  

       The trial court entered judgment confirming the arbitration award.  The trial court denied 

the Credit Union's cross-motion to vacate the award and granted Omer's motion to strike parts of 

Wessell's declaration in support of the Credit Union's cross-motion to vacate the arbitration 

award.5  

                                          ANALYSIS

                                I.  Review of Arbitration Award

       Washington public policy strongly favors finality of arbitration awards.  Davidson v. 

Hensen, 135 Wn.2d 112, 118, 954 P.2d 1327 (1998).          "As a rule, a contractual dispute is 

arbitrable unless the court can say with positive assurance that no interpretation of the arbitration 

clause could cover the particular dispute."  Stein v. Geonerco, Inc., 105 Wn. App. 41, 46, 17 P.3d 

1266 (2001) (citing Kamaya Co., Ltd. v. Am. Prop. Consultants, Ltd., 91 Wn. App. 703, 713, 

959 P.2d 1140 (1998)).  The broader the arbitration submission, "the less susceptible an award is 

to challenge as being beyond the scope of the submission, and in the absence of an express 

reservation,  the participants are presumed to agree that the arbitrator has the authority to 

5 The trial judge ordered that paragraphs 3, 5-8, and 10-13 be stricken from Wessel's declaration.  
The paragraphs in question included Wessell's recitation of what occurred during arbitration.

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No.  41565-8-II

determine all issues of fact and law necessary to an ultimate decision."   21 Richard A. Lord, 

Williston on Contracts, Authority of Arbitrators § 57:77 (4th ed. 2001).

       Under the Washington Uniform Arbitration Act, chapter 7.04A RCW, the trial court has 

the limited power to confirm, vacate, modify, or correct an arbitration award.  Pegasus Constr. 

Corp. v. Turner Constr. Co., 84 Wn. App. 744, 747, 929 P.2d 1200 (1997) (quoting Barnett v. 

Hicks, 119 Wn.2d 151, 829 P.2d 1087 (1992)).  On appeal, we review only the face of the award 

to determine whether it manifests an erroneous rule of law or a mistaken application of law.  Boyd 

v. Davis, 127 Wn.2d 256, 263, 897 P.2d 1239 (1995).  We do not review the merits of the case 

and, ordinarily, will not consider the evidence before the arbitrator.  Davidson, 135 Wn.2d at 119.  

The arbitrator is the final judge of both the facts and the law.  Clark County Pub. Util. Dist. No. 1 

v. Int'l Bhd. of Elec. Workers, Local 125, 150 Wn.2d 237, 245, 76 P.3d 248 (2003).

                                   II. Arbitration Agreement

       The Credit Union argues that the trial court erred when it confirmed the arbitration award 

because the award was based on a breach of contract issue that was beyond the scope of the 

parties' submission to arbitration.6 Omer responds that the face of the arbitration award does not 

contain an error of law for us to review and that the parties' arbitration agreement granted the 

arbitrator full authority to decide the case.  

6 The Credit Union relies on Anderson v. Farmers Insurance Co., 83 Wn. App. 725, 730-31, 923 
P.2d 713 (1996), Price v. Farmers Insurance Co., 133 Wn.2d 490, 498-500, 946 P.2d 388 
(1997), and Sullivan v. Great American Insurance Co., 23 Wn. App. 242, 594 P.2d 454 (1979). 
Each case dealt with the scope of an arbitrator's authority  under an  underinsured  motorists 
provision of an insurance policy.  And in each case, the court enforced the specific limits and 
coverage set forth in the policy.  The arbitration agreement here lacks the specificity of the 
insurance contracts at issue in Anderson, Price, and Sullivan.   The cases do not support the 
Credit Union's position.  

                                               6 

No.  41565-8-II

       Parties are free to decide whether they want to arbitrate and what issues are to be 

submitted to arbitration.  Godfrey v. Hartford Cas. Ins., Co., 142 Wn.2d 885, 894, 16 P.3d 617 

(2001).  The arbitrator's authority is limited by the parties' arbitration agreement.  Price v. 

Farmers Ins. Co., 133 Wn.2d 490, 500, 946 P.2d 388 (1997).  To determine whether an issue 

was presented to the arbitrator, we examine the face of the award in light of the arbitration 

agreement and the demand for arbitration.  Hanson v. Shim, 87 Wn. App. 538, 546, 943 P.2d 322 

(1997).  The award does not include the arbitrator's reasons for the award.  Barnett, 119 Wn.2d 

at 156 (citing Westmark Props., Inc. v. McGuire, 53 Wn. App. 400, 403, 766 P.2d 1146 (1989)).

       Here, Omer's complaint before arbitration pleaded claims for fraud based on intentional 

misrepresentation, civil conspiracy, and criminal racketeering, and  also alleged that Endeavor 

acted as an agent for the Credit Union.  Omer sought monetary damages and "such other and 

further relief as the court deems just and equitable." CP at 13.  The parties' arbitration agreement 

stated, "The undersigned parties agree . . . to conduct an arbitration pursuant to RCW 7.04A for 

the purpose of deciding the claims in Pierce County Superior Court Cause No. 08-2-15380-6."  

CP at 486.   The parties chose not to limit the issues presented to the arbitrator. 

       The Credit Union's argument appears to specifically challenge the arbitrator's findings and 

reasons for the arbitration award.  For example, the Credit Union points to the arbitrator's 

preliminary decision to find in favor of Omer with regard to a third-party beneficiary breach of 

contract claim. . . ."7 Br. of Appellant at 20; CP at 612-13.  We are not concerned with the 

reasons for the arbitrator's decision, however, but with whether the face of the award is limited to 

7 The arbitrator's only mention of a third-party beneficiary claim is found in his preliminary 
decision.    
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No.  41565-8-II

the issues presented for arbitration. Price, 133 Wn.2d at 496-98.    Here, the arbitrator's final 

decision is the resulting award, not the preliminary decision that the Credit Union refers to.  And 

in the final decision, the arbitrator "decided for Plaintiff based on breach of contract." CP at 616-

17.  

       The parties agreed to arbitrate the "claims" in their pending superior court case, No. 08-2-

15380-6.  CP at 486.  The specific issue is whether we should construe "claims" as limited to the 

existing claims or to include those claims likely to arise in the ordinary course of litigating the 

parties' overall dispute. Here, we can easily find that the parties intended to resolve all their 

disputes stemming from the transaction between Omer, the Credit Union, and Taylor.  Also 

persuasive is that the parties did not choose to limit the procedural powers of the arbitrator as 

they could have.  Parties may provide in the arbitration agreement specific details regarding any 

limitations they might want to impose on the arbitrator's powers, or conversely, provide the 

arbitrator essentially unlimited discretion.  7 Richard A. Lord, Williston on Contracts, Obstructing 

Justice § 15:11 (4th ed. 2003).

       The agreement here is general and broad, thus allowing the arbitrator to rule on all issues 

of fact and law to resolve the matter.  See Cont'l Materials Corp. v. Gaddis Mining Co., 306 

F.2d 952, 954 (10th Cir. 1962) (in the absence of the parties expressly limiting the arbitrator's 

authority, the participants are presumed to agree that the arbitrator has the authority to determine 

all issues of fact and law necessary to an ultimate decision).   We cannot "say with positive 

assurance that no interpretation of the arbitration clause could cover" the amended claim for 

breach of contract.  Stein, 105 Wn. App. at 46.  We affirm the arbitration award.  

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No.  41565-8-II

                                   III. Arbitrator's Authority

       Next, the Credit Union asserts that the arbitrator showed partiality, engaged in 

misconduct, and exceeded his powers as arbitrator.  The Credit Union argues that because Omer 

did not originally plead a contract claim, (1) the arbitrator lacked the authority to suggest the third-

party beneficiary theory of recovery; (2) the arbitrator lacked authority to grant a CR 15(b) 

motion to amend; and (3) the arbitrator's conduct prejudiced the parties.

       RCW 7.04A.230 states:

       Upon motion of a party to the arbitration proceeding, the court shall vacate an 
       award if . . . (b) There was: (i) Evident partiality by an arbitrator appointed as a 
       neutral . . . (iii) Misconduct by an arbitrator prejudicing the rights of a party to the 
       arbitration proceeding . . . (d) [a]n arbitrator exceeded the arbitrator's powers.  

An arbitrator exceeds his powers when the arbitration award exhibits an error of law.  Broom v. 

Morgan Stanley DW Inc., 169 Wn.2d 231, 237, 236 P.3d 182 (2010).  The scope of the 

arbitrator's authority depends on the terms of the agreement to arbitrate.  Barnett, 119 Wn.2d at 

155.

       We have already rejected the Credit Union's contention that the arbitrator exceeded his 

authority under the arbitration agreement. And the Credit Union does not argue that it objected 

to the arbitrator's grant of the CR 15(b) motion on partiality or misconduct grounds. Rather, the 

Credit Union only generally objected to the motion to amend.  The Credit Union argued partiality 

and misconduct only after the arbitrator sent its preliminary decision. Without showing more than 

just an adverse decision and that it objected to the arbitrator's conduct on partiality and 

misconduct grounds, the Credit Union's arguments fail.  See S & S Const., Inc. v. ADC Props.

LLC, 151 Wn. App. 247, 260, 211 P.3d 415 (2009); Kempf v. Puryear, 87 Wn. App. 390, 393, 

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No.  41565-8-II

942 P.2d 375 (1997) (Division Three held that because the complaining party did not object to the 

claimed misconduct at the time of arbitration, assertions that the arbitrators refused to hear certain 

evidence, refused cross-examination, did not swear witnesses, and had ex parte contacts with both 

parties did not require vacating an arbitration award.).

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No.  41565-8-II

                                   IV. Policy Considerations

       The Credit Union next argues that we should vacate the judgment confirming the 

arbitration award for policy reasons.  In making this argument, the Credit Union repeats its 

challenge to the scope of the arbitrator's authority and argues that the arbitrator's conclusion is 

"completely lacking in legal basis." Br. of Appellant at 26-28 (emphasis omitted).  But limiting 

judicial review to the face of the award is a shorthand description for the policy that courts should 

accord substantial finality to arbitrator decisions.  Davidson, 135 Wn.2d at 118.

       The Credit Union argues that the arbitrator misapplied third-party beneficiary contract 

principles.  But to reach this issue, we would have to go behind the face of the arbitration award

and we have no authority to do so.  

                                         V. Declaration

       The Credit Union argues that the trial court erred in striking portions of the declaration of 

Wessell, former director of the Credit Union, which it submitted in support of the Credit Union's 

cross-motion to vacate the arbitration award.

       A trial court's limited authorityto confirm, vacate, modify, or correct an arbitration award 

arises from statute.  RCW 7.04A.220-.240; Hanson, 87 Wn. App. at 545.  Judicial review of an 

arbitration award is exceedingly limited.  Davidson, 135 Wn.2d at 119.  As we have discussed 

above, courts can consider only the face of the award in addressing a claim of legal error.  Boyd,

127 Wn.2d at 262-63.  If the claimed error does not appear on the face of the award, a court 

cannot vacate or modify the award.  Davidson, 135 Wn.2d at 119.  

       The Credit Union provided a declaration by Wessell in support of its cross-motion to 

                                               11 

No.  41565-8-II

vacate the arbitration award.  The trial court struck multiple paragraphs of Wessell's declaration.  

In the paragraphs at issue, Wessell (1) identified the defendants and set forth the legal issues 

alleged in Omer's first amended complaint; (2) reiterated the scope of the arbitration agreement 

and argued that "[t]he fact is Alps never agreed or intended to provide the [a]rbitrator with the 

authority to amend pleadings to conform to the evidence and decide new, unpled claims like the 

third-party beneficiary claim"; (3) stated that the "Alps, Mr. Englert, and Mr. Omer all testified 

that the Plaintiff never spoke with or corresponded with any of the Defendants before he signed

the closing documents concerning the Property at Main Street Escrow"; (4) narrated that the 

arbitrator asked Omer as to why he did not plead a third-party beneficiary claim and that Omer 

subsequently moved to amend his pleadings; (5) declared that the third-party beneficiary theory 

was new; and (6) summarized the arbitration award.  CP at 509-11.

       On appeal, the Credit Union provides no relevant authority to support its assertion that the 

trial court improperly struck portions of the Wessell declaration or that the declaration is pertinent 

to our limited review of the arbitration award.  Wessell's declaration reports either basic facts 

from the superior court pleadings, the Credit Union's interpretation of the arbitration agreement, 

or what occurred in the arbitration. The trial court already had the pleadings and the arbitration 

agreement before it, and a court will not consider the parties' subjective beliefs about what they 

intended to arbitrate. Saluteen-Maschersky v. Countrywide Funding Corp., 105 Wn. App. 846, 

854, 22 P.3d 804 (2001) (citing City of Everett v. Estate of Sumstad, 95 Wn.2d 853, 855, 631 

P.2d 366 (1981)).  Nor could the trial court consider evidence from the arbitration or statements 

about what occurred during the arbitration. See Davidson, 135 Wn.2d at 119, 122.  The Credit 

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No.  41565-8-II

Union's attempt to present this material to the trial court violates the well-established law that 

judicial review of the award is limited to the face of the award.  See Davidson, 135 Wn.2d at 118-

19.  

       Affirmed.

       A majority of the panel having determined that this opinion will not be printed in the 

Washington Appellate Reports, but will be filed for public record in accordance with RCW 2.06.040, it 

is so ordered.

                                                 Armstrong, J.
We concur:

Quinn-Brintnall, J.

Penoyar, C.J.

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