This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2000).
STATE OF MINNESOTA
IN COURT OF APPEALS
Theodore West, et al.,
Heart of the Lakes Construction, Inc.,
Filed May 21, 2002
Hennepin County District Court
File No. D012931
Damon L. Ward, J. Sebastian Stewart, Blackwell Igbanuso Engen & Saffold, P.A., 3601 West 76th Street, Suite 250, Minneapolis, MN 55435-5242 (for appellants)
Benjamin R. Skjold, Duckson, Carlson, Bassinger & Mitchell, LLC, 333 South Seventh Street, Suite 2100, Minneapolis, MN 55402 (for respondent)
Considered and decided by Hanson, Presiding Judge, Schumacher, Judge, and Poritsky, Judge.
On appeal from the district court’s order confirming an arbitrator’s award, appellants allege that the award must be vacated because (a) the arbitrator exceeded the scope of his authority by deciding not to address certain claims; (b) the arbitrator violated the hearing requirements of Minn. Stat. §§ 572.12(b), .19(4) (2000) by refusing to allow cross-examination, admitting improper evidence, and not requiring respondent to provide exhibits before the hearing; (c) respondent committed fraud during the proceedings; (d) the arbitrator was biased against appellants; and (e) the arbitrator’s award is contrary to public policy because it violates the mechanic’s-lien law and was the product of a defective procedure. We affirm.
On May 5, 1999, Theodore and Amy West entered into a contract with Heart of the Lakes Construction, Inc. (HOLC) for the construction of the Wests’ home. The contract contained an arbitration clause stating that the parties agree that
any disputes arising regarding the terms of this Agreement or performances of the work shall be subject to binding arbitration in accordance with the Construction Industry Arbitration Rules, then in effect, of the American Arbitration Association and by Minn. Stat Chapter 572.08, et seq.
The contract provided that the only warranty provided was that required by Chapter 327A of the Minnesota statutes.
Construction started in June 1999, and the Wests moved into the home during the following November. The Wests claim they had numerous difficulties with HOLC, including non-responsiveness and unfinished work.
On May 5, 2000, the Wests executed a demand for arbitration with the American Arbitration Association (AAA), claiming $30,000 in damages. On May 15, 2000, the AAA notified the parties that, because of the small amount in controversy, the matter would proceed under the AAA’s Fast Track Rules. The fast-track rules provide for no discovery, except for exchanging copies of all exhibits that the parties intend to submit at the hearing. Also, additional discovery may be ordered by the arbitrator in extraordinary cases when the demands of justice so require.
After a preliminary telephone conference in which the Wests requested a formal hearing complete with direct testimony and cross-examination, the arbitrator stated that he was going to conduct the hearing at the West residence, where he could personally inspect the property. That hearing was conducted over two hours on June 21, 2000. At the hearing, the Wests discussed and showed the arbitrator the problems with the home; they did not submit any expert testimony. HOLC’s builders discussed the workmanship. At the insistence of the Wests, the parties agreed that the Wests were to submit final written arguments on or before July 1, 2000, and HOLC was to submit its final arguments ten days later. The Wests submitted a brief with additional evidence and requesting attorney fees if they were to prevail. Thereafter, HOLC submitted its response.
On October 16, 2000, at the Wests’ request, a second telephone hearing was held in which the arbitrator allowed, over HOLC’s objection, discovery and additional hearings pursuant to a set schedule. While the arbitrator’s subsequent letter, dated October 18, 2000, did not expressly state whether or not this discovery included depositions, the letter did not set out a deposition schedule. Both parties served written discovery, but the Wests also served notices of deposition. Upon objection, the arbitrator ruled that depositions were not allowed.
On November 27, 2000, a second evidentiary hearing was held. During this contentious hearing, both parties objected to the other party’s discovery submissions; the arbitrator denied any motion that he felt would impede the completion of the fast-track process. After the parties submitted additional oral testimony and documentary evidence, which was questioned by the lawyers, the parties and the arbitrator himself, the hearing was concluded.
On December 11, 2000, the arbitrator executed an award that granted part of the relief requested by the Wests and part of the relief requested by HOLC. The award consisted of requiring HOLC to give specific performance of a list of 12 repairs. Upon completion of these items, the Wests were directed to pay HOLC $2,053.00. HOLC was also directed to pay $6,045.00 for an itemized list of deficiencies. Finally, the Wests were directed to pay HOLC the sum of $7,293.47 for two liens and for exceeding the cabinet allowance. The arbitrator split the costs equally and directed that the parties were each responsible for their own attorney fees.
The Wests moved the district court to vacate the arbitration award. HOLC requested that the award be confirmed. On August 10, 2001, the district court confirmed the arbitration award, finding that the award was not procured by fraud or other undue means, there was no evidence that the arbitrator was evidently partial, the arbitrator had not exceeded his powers, and that even though the arbitrator may not have conducted himself in a professional manner, his misconduct with regard to manner and demeanor did not deprive the Wests of a fair proceeding.
This appeal followed.
On appeal, the Wests ask this court to reverse the district court, vacate the award, and remand the case for a new arbitration. The party seeking to vacate the award “has the burden of proving the invalidity of the arbitration award.” National Indem. Co. v. Farm Bureau Mut. Ins. Co., 348 N.W.2d 748, 750 (Minn. 1984). An appeal from an arbitration decision is subject to limited review and the reviewing court must exercise “[e]very reasonable presumption” in favor of the arbitration award’s finality and validity. State, Office of State Auditor v. Minnesota Ass’n of Prof’l Employees, 504 N.W.2d 751, 754 (Minn. 1993) (citation omitted). Furthermore, arbitrators are the final judges of both law and fact, and their awards “will not be reviewed or set aside for mistake of either law or fact in the absence of fraud, mistake in applying [their] own theor[ies], misconduct, or other disregard of duty.” Cournoyer v. American Television & Radio Co., 249 Minn. 577, 580, 83 N.W.2d 409, 411 (1957) (citation omitted).
With regard to arbitration awards made pursuant to an arbitration agreement, the district court has only such authority to vacate an award as is found in Minn. Stat. § 572.19, subd. 1 (2000). See Hunter, Keith Indus., Inc. v. Piper Capital Mgmt., Inc., 575 N.W.2d 850, 854 (Minn. App. 1998) (applying Minn. Stat. § 572.19, subd. 1 (1996), a predecessor statute). Those grounds are that:
(1) the award was procured by corruption, fraud or other undue means;
(2) there was evident partiality by an arbitrator appointed as a neutral or corruption in any of the arbitrators or misconduct prejudicing the rights of any party;
(3) the arbitrators exceeded their powers;
(4) the arbitrators refused to postpone the hearing upon sufficient cause being shown therefor or refused to hear evidence material to the controversy or otherwise so conducted the hearing, contrary to the provisions of section 572.12, as to prejudice substantially the rights of a party.
Minn. Stat. § 572.19, subd. 1. The Wests claim several violations of this statute.
The Wests first argue that the arbitrator exceeded his authority in granting his award. “Only where the arbitrators have clearly exceeded their powers must a court vacate an award.” National Indem., 348 N.W.2d at 750 (citations omitted). “Absent a clear showing that the arbitrators were unfaithful to their obligations, the courts assume that the arbitrators did not exceed their authority.” Hilltop Constr., Inc. v. Lou Park Apartments, 324 N.W.2d 236, 239 (Minn. 1982) (citations omitted).
When a party moves to vacate an arbitration award on the ground that the arbitrator exceeded his or her powers, the only reviewable question is whether the arbitrator addressed an arbitrable issue; a court may not examine the record or evidence underlying the arbitration award or otherwise delve into the merits of the award. Liberty Mut. Ins. Co. v. Sankey, 605 N.W.2d 411, 414 (Minn. App. 2000), review denied (Minn. Apr. 18, 2000). The scope of the arbitrator’s powers is a matter of contract to be determined from reading the arbitration agreement. Minnesota Ass'n of Professional Employees, 504 N.W.2d at 755. An award will be set aside only when the objecting party establishes that the arbitrator has clearly exceeded the powers in the arbitration agreement. County of Hennepin v. Law Enforcement Labor Services, Inc., Local No. 19, 527 N.W.2d 821, 824 (Minn. 1995).
Here, under the parties’ arbitration clause, all disputes arising regarding the terms of the agreement or performances of the construction work were to be heard and decided by the arbitrator. This arbitration clause is focused and clear. Because all of the issues addressed by the arbitrator related to the work performed and the terms of the parties’ agreement, the arbitrator acted within the scope of the agreement.
Evident Partiality or Misconduct
The Wests next argue that the arbitrator’s conduct at the hearing constituted “misconduct” sufficient to vitiate the arbitrator’s award. “Whether challenged conduct constitutes ‘evident partiality’ or prejudicial misconduct is a legal question reviewed de novo.” Aaron v. Illinois Farmers Ins. Group, 590 N.W.2d 667, 669 (Minn. App. 1999) (citations omitted). Our cases do not make a clear distinction between evident partiality and prejudicial misconduct, but generally, “evident partiality” arises when a neutral arbitrator has contacts with a party or with another arbitrator that might create an impression of possible bias. Id.; see, e.g., L & H Airco, Inc. v. Rapistan Corp., 446 N.W.2d 372, 377 (Minn.1989) (impression of bias arising from one arbitrator's prior business relationship with one of the parties). Evident partiality is not the same as actual bias because even the appearance of bias is unacceptable. Pirsig v. Pleasant Mound Mut. Fire Ins. Co., 512 N.W.2d 342, 344 (Minn. App. 1994). The burden of establishing facts that create a reasonable impression of partiality is on the party challenging the award. Id. at 343.
Misconduct does not have asignificantly different focus. The lone case articulating the meaning of prejudicial misconduct under our arbitration statutes likens misconduct to corruption, as opposed to a mere mistake of law. See Papenfuss v. Abe W. Mathews Engineering Co., 397 F.Supp. 165, 166 (W.D. Wis. 1975) (“The court should not overturn an arbitrator’s award in the absence of serious misconduct, as reflected in the Wisconsin and Minnesota statutes * * * . Thus, for example, an award may be upset because of corruption, but an award should not be overturned for mere mistake of fact or law.”).
Here the complained-of behavior consists of the arbitrator’s alleged failure to permit cross-examination, enforce the discovery requests, and exclude improper evidence. But nothing in the record gives any indication that the arbitrator’s decisions regarding testimony, discovery, and evidence was motivated by anything other than the desire to expedite the proceedings on an informal basis—recognized as one of the virtues of arbitration. See Ballentine Books, Inc. v. Capital Distrib. Co., 302 F.2d 17, 21 (2d Cir. 1962) (listing speed and informality as among the “virtues of arbitration”) (citations omitted). Unlike the cases where evident partiality is found, there is no evidence of an improper relationship between the arbitrator and HOLC. Although the arbitrator may have spoke harshly to the Wests, he treated HOLC in a similar manner, and while this may have been unprofessional, it was not evidence of bias.
We note, specifically, that the Wests’ argument that the failure to allow cross-examination was misconduct is without merit. Notwithstanding the unpublished case of Greenway Cooperative Services v. Frontier Commodities, Inc., 2000 WL 665387 (Minn. App. 2000), this court has never held that an arbitrator must allow for formal cross-examination. The fact that the arbitrator may have, at some point, stopped listening to the Wests’ objections, or may have told them to stop bickering is not misconduct.
Corruption, Fraud, or other Undue Means
The Wests also argue that the arbitration award was procured by fraud and undue means. In Minnesota, the judiciary does not reexamine the merits of an arbitration award or consider whether it is inadequate. Beebout v. St. Paul Fire & Marine Ins. Co., 365 N.W.2d 271, 273 (Minn. App. 1985), review denied (Minn. May 31, 1985). To invalidate an award, any inadequacy must be so gross as to justify a legitimate inference and finding of fraud. Id. The fraud must be established by “clear allegations and proof.” Id. (citing Mork v. Eureka-Security Fire & Marine Ins. Co., 230 Minn. 382, 391, 42 N.W.2d 33, 38 (1950)). “Undue means” within the Uniform Arbitration Act generally refers to an improper relationship between one of the parties and the arbitrator, and definitely requires evidence of impartiality.
Here, the Wests argue that the deficiencies that they claim were present in the hearings constitute undue means and that the lien waiver produced by HOLC was fraudulent. Fraud is shown by “direct evidence or by proving such a state of facts as leads the mind to the conclusion that the award was influenced by dishonest motives.” Kaufman Jewelry Co. v. Firemen's Ins. Co. of Newark, N.J., 168 Minn. 431, 432, 210 N.W. 289, 290 (Minn. 1926). Although the arbitrator erred in awarding HOLC money for the lien waiver (see our discussion in the section entitled The Mechanic’s Lien) the Wests have provided no evidence of dishonest motives on the part of the arbitrator, as opposed to a mere mistake, and the Wests have provided no evidence of fraud or undue means with regard to any other aspect of the arbitrator’s decision.
The Wests also argue that the arbitration award violates public policy. Their first basis for this conclusion is that the mechanic’s-lien award was in violation of mechanic’s-lien law. However, if the power of the arbitrator is to have any effect, a mere error of law cannot be equated to a violation of public policy. The Wests’ argument that public policy was violated by the alleged failure to allow cross-examination confuses a legal requirement with public policy. The public policy to be furthered by arbitration is the efficient, speedy, and relatively inexpensive resolution of disputes. Correll v. Distinctive Dental Services, P.A., 607 N.W.2d 440, 445 (Minn. 2000); Independent Sch. Dist. No. 279 v. Winkelman Bldg. Corp., 530 N.W.2d 583, 588 (Minn. App. 1995), review denied (Minn. Jul. 20, 1995). The independence of the arbitrator and our case law illustrate that, with regard to arbitration, public policy favors expediency over accuracy.
The Mechanic’s Lien
Lastly, much of the Wests’ argument was devoted to questions regarding the arbitrator’s treatment of the mechanic’s lien. It appears from the record that the arbitrator ordered the Wests to pay HOLC for the cost of paying off a mechanic’s-lien waiver despite the fact that such was not their responsibility; it was HOLC’s responsibility to provide the home unencumbered by such liens. This result appears to have resulted from confusion surrounding whether HOLC had, in fact, already paid the lien. As noted, we do not doubt that the arbitrator erred in awarding HOLC money for the lien. Nevertheless, we are without authority to correct this error.
Evidence that the arbitrator made an error with regard to the lien does not satisfy any of the requirements for vacating an arbitration award found in Minn. Stat. § 572.19. There has been no showing that there was “evident partiality” by the arbitrator, that the arbitrator exceeded his powers, or that the award was procured by “fraud, corruption, or undue means.”
Nor are we able to modify the award – as opposed to vacating it – to correct this error. First, because the Wests neither argued the issue in the district nor on appeal, they failed to preserve this issue for appeal. See Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) (holding that this court will generally not consider matters not argued and considered below); Melina v. Chaplin, 327 N.W.2d 19, 20 (Minn. 1982) (issues not briefed on appeal are waived).
Second, even if we were to reach the motion to modify issue, Minn. Stat. § 572.20 and case law make clear that this is not the type of error that can be corrected using this provision. The grounds for modifying an arbitration award are narrow. Kersting v. Royal Milbank Ins., 456 N.W.2d 270, 274 (Minn. App. 1990). Relevant to this case, Minn. Stat. § 572.20 only provides for modification or correction of an arbitration award if:
(1) There was an evident miscalculation of figures or an evident mistake in the description of any person, thing or property referred to in the award;
* * * *
(3) The award is imperfect in a matter of form, not affecting the merits of the controversy.
Minn. Stat. § 572.20, subd. 1. The grounds stated in section 572.20, subdivision 1(1) and 1(3) are limited to mistakes of form, description, or calculation. Adler v. Safeco Ins. Co., 413 N.W.2d 566, 568 (Minn. App. 1987). Substantive corrections such as the one at issue here are not allowed under Minn. Stat. § 572.20. See, e.g., Crosby-Ironton Fed’n of Teachers, Local 1325 v. Indep. School Dist. No. 182, Crosby-Ironton, 285 N.W.2d 667, 669 (Minn. 1979) (“The correction sought in this case, from a $600 salary increase to $650, does affect the merits of the controversy and is not just a matter of form.”); Adler, 413 N.W.2d at 568 (power under Minn. Stat. § 572.20 does not include correcting substantive errors, therefore “many errors will escape remedy in that the court system possesses extremely limited powers of review”). An arbitrator’s mistakes of law or fact are beyond the power of the court to modify. Kersting, 456 N.W.2d at 274. The court’s power to modify an arbitration award is purely statutory. Minnesota Licensed Practical Nurses Ass'n v. Bemidji Clinic, Ltd., 352 N.W.2d 65, 67 (Minn. App. 1984). Minn. Stat. § 572.20 does not allow a court to correct the errors of which the Wests complain. We are without power to modify the award.
* Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.
 The Wests’ attempt to take some of their claims outside the power of the arbitrator is unsupported. Although the contract provided that chapter 327A of the Minnesota statutes provides the exclusive remedy under the contract, and that the only warranties were those imposed by that chapter, Minn. Stat. § 327A.06 (2000), provides that those statutory warranties are “in addition to all other warranties imposed by law or agreement.” The fact that there are no other warranties by agreement leaves only whatever other warranties are imposed by law, but nevertheless does not affect the arbitrator’s power. Although Minn. Stat. § 327A.06 provides that the chapter 327A remedies are not to be “construed as limiting the remedies in any action not predicated upon breach of the [chapter 327A] statutory warranties imposed,” the fact that the parties’ agreement clearly and unequivocally grants the arbitrator the exclusive power to decide all disputes means that even if warranties or remedies beyond those found in chapter 327A existed, the arbitrator was authorized to decide those as well. The arbitrator clearly decided all claims. In his award, he stated, “This Award is in full settlement of all claims submitted to this Arbitration. All claims not expressly granted herein are, hereby denied.”
 In Greenway Coop, the court held that the ex parte admission of evidence gave the impression of partiality and was therefore a basis for vacating the award. Id. at *3. While, in that case, it may be accurate to say that the improper admission of evidence effectively deprived the objecting party of its ability to cross-examine, the Wests’ argument is unpersuasive. In Greenway Coop, the unavailability of cross-examination was not the basis for vacating the award; rather it was the impression of bias created by the ex parte contact. Id. In the present case, the Wests were present as all of the evidence was presented to the arbitrator.
 At one point the arbitrator apparently told counsel for the Wests to “shut up.”
 See, e.g., Safeco Ins. Co. of America v. Stariha, 346 N.W.2d 663, 666 (Minn. App. 1984) (existence of unrelated and remote attorney-client relationship between a neutral arbitrator and counsel for a party to the arbitration proceedings is not evidence of “undue means” requiring vacation of arbitration award under Minnesota statute where it was neither long-standing nor repeated, the representation was in an unrelated proceeding, and the arbitration award at issue was result of a unanimous agreement among the arbitrators); Nasca v. State Farm Mut. Auto. Ins. Co., 12 P.3d 346, 350 (Colo. App. 2000) (“other undue means,” within the meaning of the Uniform Arbitration Act, includes a party-appointed arbitrator’s non-disclosure of a substantial business relationship with the party), cert. denied (Colo. Oct. 23, 2000); Gerl Const. Co. v. Medina County Bd. of Comm’rs, 493 N.E.2d 270, 276 (Ohio App. 8 Dist. 1985) (fact that arbitrator, who served on panel to resolve dispute between contractor and county arising out of sewer-line project, failed to disclose to the parties, pursuant to construction-industry arbitration rules, that his architectural firm had once provided architectural-engineering services to county as a subcontractor on a wastewater treatment plant project was insufficient basis to vacate arbitration award, and that record did not demonstrate an award, which was unanimous, procured by fraud or undue means).
 See Commonwealth Coatings Corp. v. Continental Cas. Co., 393 U.S. 145, 147 89 S. Ct. 337, 338 (1968) (section of United States Arbitration Act authorizing vacation of award if procured by corruption, fraud, or undue means or if partiality by arbitrator was evident shows desire of Congress to provide not merely for any arbitration but for an impartial one).
 This court’s opinion in Hunter, Keith Industries, Inc. v. Piper Capital Management Inc., 575 N.W.2d 850 (Minn. App. 1998), does not lead us to another conclusion. In that case, we declined to apply the doctrine of “manifest disregard of the law.” See id. at 855(declining to adopt doctrine where it is clear that the doctrine would not apply anyway because the record did not reveal that arbitration panel knew the law and consciously disregarded it). Id. at 856. As in Hunter, here there is no evidence that the arbitrator “appreciate[d] the existence of a clearly governing principle but [chose] to ignore it.” Id. at 855 (quotation omitted). Although the Wests argue that the flawed result is evidence of such a “manifest disregard,” it is clear that the record—beyond the final result—must show that the arbitrator knew the law and expressly disregarded it. Id. Arbitrators who incorrectly interpret the law have not manifestly disregarded it; they have merely made a legal mistake. Id. at 857. “[E]ven when an award is affected by an error of law, that error does not provide a basis for vacating an arbitration award.” EEC Property Co. v. Kaplan, 578 N.W.2d 381, 387 (Minn. App. 1998), review denied (Minn. Aug. 31, 1998) (citations omitted). A fortiori, even if the arbitrator’s error here is construed as an error of fact, such an error is not a basis for vacating the award. Arbitrators are the final judges of both law and fact and their awards will not be reviewed or set aside for mistakes in either law or fact in the absence of the fraud, mistake in applying their own theories, misconduct or other disregard of duty. Cournover, 249 Minn. at 580, 83 N.W.2d at 411.
Although the Wests’ district court motion was titled to vacate or modify the award, in fact, the Wests only briefed the motion to vacate. Motions to vacate are governed by Minn. Stat. § 572.19; motions to modify are governed by Minn. Stat. § 572.20 (2000). At no point (before the district court or before this court) did the Wests’ briefs address the different standards relevant to motions to modify. HOLC did not discuss the motion to modify, nor did the district court address the motion to modify. Even in the initial motion to the district court, the request to modify is addressed only with passing reference and without any authority. In the entire file, the only reference for either this court or the district court to consider modifying the award is one sentence in the two-page motion to vacate stating, “[i]n the alternative, petitioners seek to modify the arbitration award based upon all the above reasons and for evident mistakes in the arbitration award.” This is wholly inadequate.