author: THOMPSON, Presiding Judge.

text:
    Blakely M. KITCHENS, Morgan D. Kitchens, and Kitchens Properties v. TURQUOISE PROPERTIES GULF, INC. Turquoise Properties Gulf, Inc. v. Blakely M. Kitchens, Morgan D. Kitchens, and Kitchens Properties.
    2090791.
    Court of Civil Appeals of Alabama.
    Nov. 12, 2010.
    Rehearing Denied Feb. 4, 2011.
    Certiorari Denied April 8, 2011 Alabama Supreme Court 1100577.

      Adam M. Milam and Shelley H. Milam of Milam & Milam, LLC, Fairhope, for appellants/cross-appellees Blakely M. Kitchens, Morgan D. Kitchens, and Kitchens Properties.
    Daniel G. Blackburn, Mark H. Taupeka, and Rebecca A. Gaines of Blackburn & Conner, P.C., Bay Minette, for appel-lee/cross-appellant Turquoise Properties Gulf, Inc.
   THOMPSON, Presiding Judge.

Blakely Kitchens, Morgan Kitchens, and Kitchens Properties (hereinafter collectively “the Kitehenses”) appeal from a judgment of the Baldwin Circuit Court (“the trial court”) denying their request for the trial court to consider additional compensatory damages in recalculating the amount of punitive damages awarded to them by an arbitrator. Turquoise Properties Gulf, Inc. (“Turquoise Properties”), cross-appeals from the same judgment, in which the trial court modified the arbitration order to increase the ratio of punitive damages to compensatory damages.

This dispute arose when the Kitehenses refused to close on the sale of three units in Turquoise Place, a condominium complex that Turquoise Properties was developing in Orange Beach. Because the parties challenge only the amount of damages awarded and not the arbitrator’s findings regarding liability on the claims and counterclaims the parties raised, a full recitation of the evidence presented is unnecessary. The facts relevant to this appeal are as follows:

On March 24, 2005, Morgan Kitchens (“Morgan”) and Blakely Kitchens (“Blake”), who are brothers, each entered into a purchase agreement to purchase two adjoining units in Turquoise Place. Each unit cost $1,200,900. Morgan and Blake each posted a letter of credit in the amount of $240,180, or 20% of the total purchase price, as a deposit on his respective unit.

Also on March 24, 2005, Kitchens Properties, a partnership between Morgan and Blake, entered into a purchase agreement for a third unit in Turquoise Place. The price for that unit was $1,215,900. Kitchens Properties posted a letter of credit in the amount of $243,180, or 20% of the total purchase price, on the unit it had agreed to buy.

As the Turquoise Place development neared completion, certificates of occupancy were issued for the Kitchenses’ units. In June 2008, Turquoise Properties sent the Kitchenses letters demanding that they close on the units they had agreed to purchase. At that time, however, the pool for the development had not been completed, and storage units and cabanas that had been part of the proposal for the Turquoise Place development had not been built because of a lack of interest in the structures. The storage units and cabanas were to be purchased separately from the residential units in Turquoise Place. The Kitchenses refused to close because, they said, the proposed storage units and cabanas were unique to Gulf Coast condominiums and were among the reasons the Kitchenses had decided to purchase units in Turquoise Place. Turquoise Properties offered to build storage units and cabanas for the Kitchenses if they agreed to close on their units. Nonetheless, the Kitchens-es refused to close because, they said, they were relieved from their obligations to purchase the units because Turquoise Properties had failed to deliver what had been promised in its sales brochure.

The purchase agreements provided that, in the case of a default by the purchaser, Turquoise Properties was entitled to retain 15% of the total purchase price of the unit. The Kitchenses had paid 20% of the total purchase price of each of the units. However, when the Kitchenses refused to close on any of the units, Turquoise Properties did not refund the additional 5% of the purchase price the Kitchenses had paid.

On March 24, 2008, the Kitchenses sued Turquoise Properties and its principal, Larry Wireman; Caribe Realty, the sales agent for Turquoise Place; and Wireman’s wife, Judy Ramey Wireman, who was a principal with Caribe Realty (collectively “the Turquoise Properties defendants”), alleging breach of contract, fraud, and violations of the Interstate Land Sales and Full Disclosure Act (“the ILSFDA”), 15 U.S.C. § 1701 et seq., and the Aabama Uniform Condominium Act (“the AUCA”), § 35-8A-101 et seq., Aa.Code 1975. The Kitch-enses later filed an amended complaint that, among other things, added U.S. Bank, N.A. as a defendant and alleged a claim of conversion against U.S. Bank and Turquoise Properties. As to the conversion claim, the Kitchenses claimed that, because the purchase agreements allowed Turquoise Properties to retain 15% of the total purchase price in the case of a default by the purchaser, and because they had paid 20% of the purchase price of each unit as their deposits, Turquoise Properties was unlawfully refusing to refund 25% of each deposit, or 5% of the total purchase price of each unit. The parties and the arbitrator referred to the money at issue as the “5% excess.” At the time the complaint was filed, U.S. Bank was holding the deposits in escrow.

The Turquoise Properties defendants filed a counterclaim against the Kitchenses alleging misrepresentation under the AUCA and the ILSFDA, deceit, defamation, interference with a contractual relationship, and claims under the Aabama Litigation Accountability Act, § 12-19-270 et seq., Ala.Code 1975. The Turquoise Properties defendants moved to compel arbitration, as provided in the purchase agreements. The trial court granted the motion, and the matter went to arbitration.

The arbitration hearing was held on June 10, 11, and 12, 2009. On June 15, 2009, the arbitrator entered an interim order directing U.S. Bank to refund $60,045 each to Morgan and Blake and $60,795 to Kitchens Properties, which represented 25% of the principal amounts of their deposits, plus interest. The arbitrator went on to say that payment of the refunds did not affect any pending claims, defenses, or rights to the remaining amounts on deposit. The money was paid to the Kitchenses on June 22, 2009.

On September 30, 2009, the arbitrator issued its final order. The arbitrator found in favor of the Turquoise Properties defendants on all the Kitchenses’ claims except for the conversion claim asserted against Turquoise Properties. He found in favor of the Kitchenses on all the Turquoise Properties defendants’ counterclaims. As to the conversion claim against Turquoise Properties, the arbitrator found that Turquoise Properties had wrongly withheld the 5% excess from the Kitchens-es because they had sought to enforce their rights against Turquoise Properties. In the order, the arbitrator found that the 5% excess had been improperly withheld for 13 months, and he ordered Turquoise Properties to pay 6% interest on the excess for that period. The arbitrator calculated that Morgan and Blake were both due $3,602.70 in interest and that Kitchens Properties was due $3,647.70 in interest.

In addition, the arbitrator held that Turquoise Properties’ “conversion of the [Kitchenses’] money was willful and intended to oppress and aggravate the [Kitchenses].” The arbitrator further held “that a 3:1 ratio for punitive damages is not excessive” and “that the proper measure of damages since the five percent (5%) excess has now been repaid is a multiple of the interest lost on said money rather than the amount withheld.” The arbitrator awarded Morgan and Blake damages of $10,808.10 each and awarded Kitchens Properties damages of $10,943.10. The balance of the Kitchenses’ deposits that were being held in escrow were ordered to be turned over to Turquoise Properties.

The Kitchenses filed with the arbitrator a motion to modify the arbitration award because of alleged computational errors. In support of their motion, the Kitchenses argued that, because Turquoise Properties had acted willfully and oppressively in withholding the 5% excess, they should have been awarded punitive damages, at a 3:1 ration, based upon the amount of the principal the arbitrator ordered returned to them in the interim order and not just on the interest awarded in the final order. The arbitrator denied the motion on November 3, 2009.

The Kitchenses timely appealed the arbitrator’s award to the trial court. On February 2, 2010, the Baldwin circuit clerk entered a judgment on the arbitrator’s award. The Kitchenses then filed a motion asking the trial court to modify, correct, or vacate the arbitration award as to the conversion claim against Turquoise Properties, asserting that the arbitrator had exceeded his authority, had exhibited evident partiality, and had engaged in misconduct or misbehavior that had prejudiced the Kitchenses’ rights by awarding inadequate damages. The Kitchenses asserted that punitive damages should have been calculated based on both the amount of the 5% excess that the arbitrator had ordered Turquoise Properties to refund to them and the interest that had accrued on the excess. Alternatively, the Kitchenses argued, the award was due to be modified because, they said, the arbitrator had miscalculated the amount of punitive damages, awarding them punitive damages based upon the amount of interest awarded, at a 2:1 ratio rather than the 3:1 ratio to which the Kitchenses contended they were entitled.

Upon consideration of the Kitchenses’ motion, the trial court entered a judgment increasing by one-third the amount of punitive damages awarded. In its judgment, the trial court stated as follows:

“[Tjhere seems to be an ambiguity in the award of monetary damages compared to the findings by the arbitrator. While the Court has concerns regarding the arbitrator’s grant of punitive damages on the interest accrued and not on the converted principle, this court is without authority to correct that portion of the award.
“However, the Court does have authority to modify the arbitration award to correct the ambiguity and evident miscalculation on the punitive ratio. The arbitrator specifically stated in the award that the [Kitchenses] are entitled to a 3:1 punitive ratio, yet the computation of the award applied a 2:1 punitive ratio. This ambiguity does not sufficiently determine the award and is an evident miscalculation.”

The trial court then recalculated the damages and ordered Turquoise Properties to pay Morgan and Blake each $14,410.80, representing $3,602.70 in compensatory damages and $10,808.10 in punitive damages, and to pay Kitchens Properties $14,590.80, representing $3,647.70 in compensatory damages and $10,943.10 in punitive damages, for a total award to the Kitchenses of $43,412.40. The Kitchenses timely appealed from the trial court’s judgment to this court; Turquoise Properties timely cross-appealed from the judgment.

“The standard of review applicable to a ruling on a motion to confirm or vacate an arbitration award was discussed in Maxus, Inc. v. Sciacca, 598 So.2d 1376, 1380-81 (Ala.1992):
“‘Where parties, as in this case, have agreed that disputes should go to arbitration, the role of the courts in reviewing the arbitration award is limited. Transit Casualty Co. v. Trenwick Reinsurance Co., 659 F.Supp. 1346 (S.D.N.Y.1987), affirmed, 841 F.2d 1117 (2d Cir.1988); Saxis Steamship Co. v. Multifacs International Traders, Inc., 375 F.2d 577 (2d Cir. 1967). On motions to confirm or to vacate an award, it is not the function of courts to agree or disagree with the reasoning of the arbitrators. Application of States Marine Corp. of Delaware, 127 F.Supp. 943 (S.D.N.Y.1954). Courts are only to ascertain whether there exists one of the specific grounds for vacation of an award. Saxis Steamship Co. A court cannot set aside the arbitration award just because it disagrees with it; a policy allowing it to do so would undermine the federal policy of encouraging the settlement of disputes by arbitration. United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960); Virgin Islands Nursing Association’s Bargaining Unit v. Schneider, 668 F.2d 221 (3d Cir.1981). An award should be vacated only where the party attacking the award clearly establishes one of the grounds specified [in 9 U.S.C. § 10]. Catz American Co. v. Pearl Grange Fruit Exchange, Inc., 292 F.Supp. 549 (S.D.N.Y.1968).’ ”

R.P. Indus., Inc. v. S & M Equip. Co., 896 So.2d 460, 464 (Ala.2004).

“The standard by which an appellate court reviews a trial court’s order confirming [or vacating] an arbitration award under the Federal Arbitration Act is that questions of law are reviewed de novo and findings of fact are reviewed only for clear error. See Ric-card v. Prudential Ins. Co., 307 F.3d 1277,1289 (11th Cir.2002).”

Hereford v. D.R. Horton, Inc., 13 So.3d 375, 378 (Ala.2009).

The Kitchenses’ Appeal

The Kitchenses correctly point out that a return of the money improperly withheld does not constitute a complete defense to a claim of conversion. See Pike v. Reed, 47 So.3d 253, 261 (Ala.Civ.App. 2009). However, Turquoise Properties is entitled to show the return of the 5% excess in mitigation of damages. Id. See also Brown v. Campbell, 536 So.2d 920, 922 (Ala.1988) (“[R]ecovery of the property by the plaintiff does not bar a suit for conversion but merely reduced the plaintiffs damages by the value of the property at the time of its return.”). This is true even if the court has compelled the return of the converted property. Roebuck Auto Sales, Inc. v. Wallace, 293 Ala. 231, 235, 301 So.2d 546, 549 (1974) (“ Tn any case, return of the chattel, whether consented to by the plaintiff or compelled by the court, does not bar the action, but goes merely to reduce the damages.’ ” (quoting Prosser on Torts, 98 (3d ed.1964))). “[A]n ‘award of punitive damages is within the sound discretion of the jury, considering all attendant circumstances.... The jury’s award is to punish the wrongdoer based upon the enormity of the wrong to the plaintiff, as well as the necessity to prevent similar wrongs from being committed in the future.’ Roberson v. Ammons, 477 So.2d 957, 961 (Ala.1985).” Bishop v. Chilton County, 990 So.2d 287, 290 (Ala.2008). See also Flint Constr. Co. v. Hall, 904 So.2d 236, 254 (Ala.2004) (“whether to award punitive damages was discretionary with the jury”).

The Kitchenses assert that the arbitrator’s award should have been vacated because, they say, the arbitrator exceeded his powers, exhibited partiality, exhibited misconduct or misbehavior that prejudiced their rights, and acted in manifest disregard of the law. Specifically, they argue, the 5% excess the arbitrator ordered Turquoise Properties to return to them in the June 2009 interim order constitutes compensatory damages that should have been included in the arbitrator’s calculation of punitive damages. In other words, the Kitchenses argue, the arbitrator should have awarded them $180,885 (the combined amount of the 5% excess for Morgan, Blake, and Kitchens Properties) plus interest on that amount of $10,853.10, for a total of $191,738.10 in compensatory damages, plus three times that amount, $575,214.30, in punitive damages, for total damages of $766,952.40.

In the purchase agreements, the parties explicitly agreed that arbitration of disputes would be governed by the Federal Arbitration Act (“the FAA”), 9 U.S.C. § 1 et seq. The FAA provides the following grounds for vacatur of an arbitration award:

“(1) where the award was procured by corruption, fraud, or undue means;
“(2) where there was evident partiality or corruption in the arbitrators, or either of them;
“(3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or
“(4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.”

9 U.S.C. § 10(a).

The Kitchenses assert that, in determining the amount of damages to be awarded to them, the arbitrator exceeded his powers in violation of 9 U.S.C. § 10(a)(4).

“In resolving a question concerning the authority of the arbitrators, courts must broadly construe the agreement and resolve all doubts in favor of the arbitrators. Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). Further, the Supreme Court has stated that if the national policy favoring the settlement of disputes by arbitration is to have any real substance, then it is essential that arbitrators have a great deal of flexibility in fashioning remedies. United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960). Thus there is a heavy burden on those claiming that the arbitrators’ awards exceed their authority, and the arbitrator is given broad latitude and discretion. Willoughby Roofing [& Supply Co. v. Kajima Int’l, Inc., 598 F.Supp. 353 (N.D.Ala.1984), aff'd, 776 F.2d 269 (11th Cir.1985)].”

H.L. Fuller Constr. Co. v. Industrial Dev. Bd. of Vincent, 590 So.2d 218, 223 (Ala.1991).

In R.P. Industries, Inc. v. S & M Equipment Co., supra, our supreme court considered the question whether arbitrators had exceeded their authority in awarding S & M Equipment interest and an attorney fee in a dispute arbitrated between the parties because, it was argued, the applicable state law did not provide for the award of such damages. In affirming the award, our supreme court quoted with approval an opinion of the United States Court of Appeals for the Second Circuit:

“ ‘An arbitrator exceeds his powers when he “rule[s] on issues not presented to [him] by the parties.” See Fahnestock & Co. v. Wattman, 935 F.2d 512, 515 (2d Cir.1991) (citation and quotation marks omitted); 9 U.S.C. § 10(a)(4). Section 10(a)(4) of the FAA “focuses on whether the arbitrator[ ] had the power, based on the parties’ submissions or the arbitration agreement, to reach a certain issue, not whether the arbitrator! ] correctly decided that issue.” DiRussa v. Dean Witter Reynolds, Inc., 121 F.3d 818, 824 (2d Cir.1997). MVL contends that the arbitrator exceeded his powers by calculating Primary Year EBITDA [income from operations before certain enumerated expense and income items] in accordance with his understanding of the parties’ intent, rather than in accordance with GAAP [generally accepted accounting principles]. The District Court concluded that § 10(a)(4) does not provide a basis for vacatur of the arbitration award because “MVL’s contention that Sherrill failed to apply GAAP is best characterized as a challenge to his application of the law, rather than a challenge under Section 10(a)(4).” (Order, Aug. 30, 2002, at 80.)
“ ‘We agree with the District Court. MVL does not contend that the arbitrator resolved an issue that the parties’ agreement did not authorize him to resolve. Indeed, the only issue that he resolved — the calculation of Primary Year EBITDA — was the precise issue that the Amendment authorized him to decide. (Amendment to Stock Purchase Agreement § 1(d); Letter from Sherrill to Morris and Smith of 8/15/01, at 4.) MVL does not argue that the arbitrator decided any issue other than the calculation of EBITDA; rather, MVL argues that he calculated EBITDA incorrectly. Even if MVL is correct, however, that argument provides no basis for vacating the award under § 10(a)(4). See DiRussa, 121 F.3d at 824 (“DiRussa’s real objection appears to be that the arbitrators committed an obvious legal error in denying him attorney’s fees. Section 10(a)(4) was not intended to apply to such a situation.”).’
“Hoeft v. MVL Group, Inc., 343 F.3d 57, 71-72 (2d Cir.2003). See also Nationwide Mut. Ins. Co. v. Home Ins. Co., 330 F.3d 843, 846 (6th Cir.2003); Buzas Baseball, Inc. v. Salt Lake Trappers, Inc., 925 P.2d 941 (Utah 1996); and Eljer Mfg., Inc. v. Kowin Dev. Corp., 14 F.3d 1250 (7th Cir.1994).”

R.P. Industries, Inc., 896 So.2d at 466-67.

In this case, the purchase agreements specifically provided that “[t]he parties agree that the arbitrator or arbitrators may grant any remedy or relief that an arbitrator deems just and equitable within the scope of the Agreement and subject to limitations of remedy as set forth in Section 4(b).” The limitations set forth in Section 4(b) of the purchase agreements are not applicable to this appeal.

The issues regarding whether Turquoise Properties was liable for conversion for refusing to return the 5% excess to the Kitchenses and, if so, the amount of damages to be awarded to the Kitchenses were explicitly submitted to the arbitrator for resolution. The arbitrator cannot be said to have exceeded his powers in determining the issues before him. The Kitchenses claim that the arbitrator exceeded his powers in determining the amount of damages is in reality a claim that the arbitrator made a legal error in determining the amount of damages to be awarded. As pointed out in the cases cited in R.P. Industries, supra, Section 10(a)(4) was not intended to encompass such situations.

The Kitchenses further assert that the arbitrator exceeded his authority because, they say, the amount of damages he awarded for the wrongful conversion of the 5% excess did not conform to Alabama law. In support of their contention, the Kitch-enses quote the following language from our supreme court’s recent opinion in Raymond James Financial Services, Inc. v. Hone a, 55 So.3d 1161, 1166 (Ala.2010): “[E]ven though agreements providing for the expanded judicial review of arbitration awards may not be enforceable under the FAA, they are nevertheless enforceable under Alabama common law because Alabama courts have consistently held that general contract law requires that arbitration agreements be enforced as written.” The Kitchenses argue that, because the purchase agreements between the parties specified that they were “subject to and governed by the laws of the State of Alabama,” the quoted language from Honea broadens the bases for judicial review of the arbitration award beyond the bases enumerated in § 10 of the FAA to further include any failure by the arbitrator to comply with state law. Therefore, the Kitchenses say, because, in their opinion, the arbitrator’s award did not comply with Alabama law, it was due to be vacated.

We first note that the language the Kitchenses quote from Honea is Honea’s argument; it is not the holding of our supreme court. Id. Moreover, we disagree with the Kitchenses’ reading of Ho-nea. At issue in that case was whether an agreement to expand the grounds for judicial review of an arbitration award, otherwise not enforceable under the FAA, was nonetheless enforceable “if those other grounds [were] authorized by state statute or by common law.” Id. at 1166. The arbitration agreement at issue, appearing in a provision entitled “Arbitration and Dispute Resolution,” contained the following language:

“ ‘(c) A court of competent jurisdiction may enter judgment based on the award rendered by the arbitrators. We agree that both parties will have a right to appeal the decision of the arbitrators if the arbitrators award damages that exceed $100,000; the arbitrators do not award damages and the amount of my loss of principal exceeds $100,000; or the arbitrators award punitive damages. In each of the foregoing cases, a court having jurisdiction will conduct a “de novo” review of the transcript and exhibits of the arbitration hearing.’ ”

Honea, 55 So.3d at 1168.

In Honea, Raymond James argued, among other things, that under the FAA and the Alabama Arbitration Act (“the AAA”), § 6-6-1 et seq., Ala.Code 1975, “courts may not engage in de novo review even if the parties had contractually agreed to such review.” Id. at 1168. Our supreme court disagreed, however, holding that,

“[u]nder the Alabama common law, courts must rigorously enforce contracts, including arbitration agreements, according to their terms in order to give effect to the contractual rights and expectations of the parties.... Applying that principle in this case requires us to give effect to the provision in the arbitration agreement authorizing a court having jurisdiction to conduct a de novo review of the award entered as a result of arbitration proceedings conducted pursuant to that same agreement.”

Id. at 1169.

In this case, the language on which the Kitchenses rely in support of their contention that the purchase agreements provided for expanded judicial review of the arbitration award, i.e., that the purchase agreements are governed by Alabama law, does not appear in the arbitration provision of the purchase agreements. The arbitration provision in the purchase agreements states that the agreements “shall be governed by the [FAA].” Nothing in the arbitration provision itself allows for expanded judicial review of the arbitration award on state-law grounds.

To read Honea as the Kitchenses do would be to eviscerate the purpose behind arbitration, i.e., to settle disputes without the need for formal litigation. See § 6-6-1, Ala.Code 1975. As the United States Supreme Court explained in Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576, 588, 128 S.Ct. 1396, 170 L.Ed.2d 254 (2008), in concluding that contractual provisions allowing for expanded judicial review of an arbitration award are unenforceable:

“Instead of fighting the text [of the sections of the FAA providing for vaca-tur and modification of arbitration awards], it makes more sense to see the three provisions, §§ 9-11, as substantiating a national policy favoring arbitration with just the limited review needed to maintain arbitration’s essential virtue of resolving disputes straightaway. Any other reading opens the door to the full-bore legal and evidentiary appeals that can ‘rende[r•] informal arbitration merely a prelude to a more cumbersome and time-consuming judicial review process, ’ Kyocera [Corp. v. Prudential-Bache Trade Servs., Inc.], 341 F.3d [987] at 998 [ (9th Cir.2003) ]; cf. Ethyl Corp. v. United Steelworkers of America, 768 F.2d 180, 184 (C.A.7 1985), and bring arbitration theory to grief in post-arbitration process.”

(Emphasis added.)

Accordingly, we reject the Kitchenses’ assertion that Honea requires us to vacate the arbitration award on the basis that the award was not determined in compliance with state law. We conclude that the arbitrator did not exceed his powers in determining the amount of damages to be awarded to the Kitchenses on their conversion claim.

The Kitchenses also contend that, in determining damages, the arbitrator exhibited partiality in violation of § 10(a)(2) of the FAA. Our research has revealed no Alabama cases involving the alleged impartiality of an arbitrator in making a decision. We turn, then, to opinions of federal jurisdictions for guidance. In Hobet Mining, Inc. v. International Union, United Mine Workers of America, 877 F.Supp. 1011 (S.D.W.Va.1994), the United States District Court for the Southern District of West Virginia discussed the burden required of a party asserting that an arbitrator has exhibited partiality.

“In general, to demonstrate ‘evident partiality under the FAA, the party seeking vacation has the burden of proving that ‘a reasonable person would have to conclude that an arbitrator was partial to one party to the arbitration.’ Morelite [Constr. Corp. v. New York City Dish Council Carpenters Benefit Funds ], 748 F.2d [79] at 84 [ (2d Cir. 1984) ]; accord Peoples Sec. Life Ins. Co. v. Monumental Life Ins. Co., 991 F.2d 141, 146 (4th Cir.1993) (citing with approval the Morelite standard as quoted in Apperson [v. Fleet Carrier Corp.], 879 F.2d [1344] at 1358 [ (6th Cir.1989) ] (adopting Morelite standard); Austin South I, Ltd. v. Barton-Malow Co., 799 F.Supp. 1135, 1142 (M.D.Fla.1992) (applying Morelite standard); cf. Sunkist Soft Drinks v. Sunkist Growers, 10 F.3d 753, 758 (11th Cir.1993), petition for cert, filed, 63 USLW 3065 (July 6, 1994) (party alleging evident partiality must prove conduct creating ‘a reasonable appearance of bias’); Sheet Metal Workers Int’l Ass’n Local Union # 120 v. Kinney Air Cond. Co., 756 F.2d 742, 745 (9th Cir.1985) (party alleging evident partiality must establish ‘a reasonable impression’ of partiality). ‘The alleged partiality must be “direct, definite, and capable of demonstration rather than remote, uncertain or speculative.” ’ Peoples, 991 F.2d at 146 (quoting Health Servs. Mgt. Corp. v. Hughes, 975 F.2d 1253, 1264 (7th Cir.1992) (quoting Florasynth, Inc. v. Pickholz, 750 F.2d 171, 173-74 (2d Cir.1984)); see also Middlesex Mut. Ins. Co. v. Levine, 675 F.2d 1197, 1202 (11th Cir.1982) (quoting Tamari v. Bache Halsey Stuart, Inc., 619 F.2d 1196, 1200 (7th Cir.), cert. denied, 449 U.S. 873, 101 S.Ct. 213, 66 L.Ed.2d 93 (1980)). Moreover, the party asserting evident partiality ‘must establish specific facts that indicate improper motives on the part of the arbitrator.’ Peoples, 991 F.2d at 146.

Hobet Mining, 877 F.Supp. at 1018-19.

In this case, the Kitchenses base their claim that the arbitrator exhibited partiality on his refusal to award what they believe would be adequate damages after explicitly finding in favor of the Kitchenses on their conversion claim. In support of their contention that the arbitrator’s action shows partiality justifying a reversal of his award of damages, the Kitchenses cite Ex parte Courtney, 937 So.2d 1060 (Ala.2006), and Grimes v. Dodge, 816 So.2d 53 (Ala.Civ.App.2001). In Courtney, our supreme court determined that the jury’s award of damages was inadequate based upon the amount of damages the plaintiff had proven at trial. Courtney, 937 So.2d at 1064. In Grimes, this court reversed the jury’s award of damages because the jury had found the defendant liable for an accident in which the plaintiff was injured, but its award of damages did not include an amount at least as high as the amount proven by the plaintiffs uncontradicted evidence of damages. Grimes, 816 So.2d at 56. Neither case is applicable to the issue whether an arbitrator exhibited partiality in calculating punitive damages.

An arbitrator’s ultimate determination as to the amount of damages to be awarded in a given case cannot be the basis of a showing that the arbitrator exhibited partiality, that is, that the arbitrator was biased in favor of one party. In every case, an arbitrator will decide for one party or the other, but that decision does not demonstrate evident partiality or bias on the part of the arbitrator. Other than the arbitrator’s determination of the amount of punitive damages to award to them, the Kitchenses fail to identify conduct on the part of the arbitrator that could be construed as bias or partiality to one party over the other. For example, there is no contention that the arbitrator had a conflict or an interest in the outcome of the arbitration.

Similarly, the Kitchenses fail to identify any misconduct or misbehavior by the arbitrator that prejudiced their rights in violation of § 10(a)(3), other than their assertion that the arbitrator awarded the Kitchenses what they believed were inadequate damages. There is no contention that the arbitrator failed to give the Kitchenses a fair hearing, improperly limited discovery, improperly excluded or included evidence, or otherwise acted in a way that could be construed as misconduct. See, e.g., Rosensweig v. Morgan Stanley & Co., 494 F.3d 1328, 1333-34 (11th Cir.2007). Again, merely because an arbitrator reaches an ultimate decision with which one of the parties disagrees does not demonstrate misconduct. Otherwise, an arbitrator would be open to allegations of misconduct or impartiality and bias every time he or she decided a case. We conclude that the Kitchenses have failed to demonstrate that any of the grounds for vacatur of the arbitration award under § 10 of the FAA are present in this case.

In addition to the grounds for vacatur enumerated in § 10 of the FAA, the Kiteh-enses contend that the award also may be vacated if the arbitrator acted in manifest disregard of the law. Our supreme court has already decided this issue adversely to the Kitchenses.

“In March of last year, the Supreme Court of the United States, in Hall Street Associates, L.L.C. v. Mattel, Inc., [552 U.S. 576 (2008) ], rejected the conclusion that it had adopted manifest disregard of the law as an additional, nonstatutory ground for relief from an arbitrator’s decision. The Supreme Court stated that such a reading was ‘too much for Wilko [v. Swan, 346 U.S. 427 (1953),] to bear’ and that the text of the Federal Arbitration Act ‘compels a reading of the § 10 and § 11 categories [of relief] as exclusive.’ 552 U.S. at [585], 128 S.Ct. at 1404. Under the Supreme Court’s decision in Hall Street Associates, therefore, manifest disregard of the law is no longer an independent and proper basis under the Federal Arbitration Act for vacating, modifying, or correcting an arbitrator’s award. In light of the fact that the Federal Arbitration Act is federal law, and in light of the Supremacy Clause of the Constitution of the United States, Art. VI, we hereby overrule our earlier statement in Birmingham News Co. [v. Horn, 901 So.2d 27 (Ala.2004),] that manifest disregard of the law is a ground for vacating, modifying, or correcting an arbitrator’s award under the Federal Arbitration Act, and we also overrule any such language in our other cases construing federal arbitration law.

Hereford v. D.R. Horton, Inc., 13 So.3d 375, 380-81 (Ala.2009) (containing a discussion on the evolution of “manifest disregard of the law” as a ground for vacating an arbitration award). Subsequently, in Volvo Trucks North America, Inc. v. Dolphin Line, Inc., 50 So.3d 1050, 1053 (Ala.2010), and Raymond James Financial Services, Inc. v. Honea, 55 So.3d at 1166, our supreme court reiterated its holding that, post-Hall Street, the specific grounds enumerated in § 10 of the FAA are the only grounds upon which an arbitration award may be vacated under the FAA.

As to whether the manifest-disregard-of-the-law standard applies to arbitration awards governed by the AAA, our supreme court has held that,

“when viewed in its entirety, this Court’s decision in Birmingham News [Co. v. Horn, 901 So.2d 27 (Ala.2004),] may not be read to adopt the manifest-disregard-of-law standard with respect to cases governed by the AAA. Furthermore, the standards stated in § 6-6-14[] are exclusive, and this Court has no authority to rewrite the statute to embrace the broader standard of manifest disregard of the law. See, e.g., Wal-Mart Stores, Inc. v. Patterson, 816 So.2d 1, 6 (Ala.2001) (‘The Court is not at liberty to rewrite statutes, Reed v. Board of Trustees for Alabama State Univ., 778 So.2d 791, 794 (Ala.2000), or “to substitute its judgment for that of the Legislature.” Baptist Health Sys., Inc. v. City of Midfield, 792 So.2d 1095, 1097 (Ala.2001) (internal quotations omitted).’).”

Volvo Trucks, 50 So.3d at 1054-55.

Despite the Kitchenses assertions to the contrary, our supreme court has made clear that manifest disregard of the law is not a proper basis on which to vacate an arbitration award. Although the trial court had reservations about the calculation of punitive awards based only upon the interest accrued during the time Turquoise Properties wrongfully withheld the 5% excess, we conclude that the trial court correctly determined that it did not have a legal basis to set aside the arbitration award.

Thus, for the reasons discussed above, we affirm the trial court’s judgment insofar as it refused to set aside the arbitrator’s award and to award the Kitchenses the amount of damages to which they believed they were entitled.

Turquoise Properties’ Cross-Appeal

Turquoise Properties cross-appealed from the trial court’s judgment insofar as it increased the amount of punitive damages awarded by one-third. The trial court agreed with the Kitchenses that the arbitrator had miscalculated the amount of punitive damages he had awarded, and it modified the award to reflect a 3:1 ratio of punitive damages to compensatory damages rather that the 2:1 ratio the arbitrator awarded. The Kitchenses argued to the trial court that the arbitrator’s award of punitive damages was due to be modified pursuant to § 11 of the FAA, which allows a court to modify or correct an arbitration award upon the application of any party to the arbitration “[w]here there was an evident material miscalculation of figures” or “[w]here the award is imperfect in matter of form not affecting the merits of the controversy.” 9 U.S.C. § 11(a) and (c). In support of their argument for modification of the damages award, the Kitchenses cited language in the arbitrator’s order, which says: “The Arbitrator agrees that a 3:1 ratio for punitive damages is not excessive.” That statement, they say, required the arbitrator to award punitive damages at a ratio of 3:1 rather than at a ratio of 2:1.

Turquoise Properties argues that the trial court did not have the authority to modify the amount of punitive damages awarded. It contends that the statement the Kitchenses rely on was merely a statement of opinion indicating that the maximum amount of punitive damages would not be excessive, but it asserts, the arbitrator chose not to award the maximum amount. It claims that there is no evident miscalculation in the amount of the award and that, thus, the trial court lacked the authority to modify the amount of damages awarded to the Kitchenses.

“[R]elief under Section 11(a) [of the FAA) is limited to ‘simple formal, descriptive, or mathematical mistake,’ Stroh Container Co. v. Delphi Industries, Inc., 783 F.2d 743, 749 (8th Cir. 1986), not disagreement over factual or legal decisions deliberately made. Most cases discussing Section 11(a) address the alleged miscalculation of figures. These cases make clear that the provision reaches only computational errors, not legal or factual mistakes concerning the amount of damages that should be awarded. E.g., Grain v. Trinity Health, Mercy Health Services Inc., 551 F.3d 374, 378-79 (6th Cir.2008) (error in determining start and stop dates for interest is not correctable under Section 11(a)); U.S. Energy Corp. v. Nukem, Inc., [(No. 96-1532, Oct. 22, 1998)] (10th Cir.1998) (flawed logic in the award of lost profits is not correctable under Section 11(a)); UHC Management Co. v. Computer Sciences Corp., 148 F.3d 992, 998 (8th Cir.1998) (damages award inconsistent with governing state law is not correctable under Section 11(a)); see also B.L. Harbert International, LLC v. Hercules Steel Co., 441 F.3d 905, 909 (11th Cir.2006) (Section 11(a) can be used to correct scrivener’s errors in stating the damages awarded). Simply put, Section 11(a) does not apply to ‘an interpretation of the law and facts as [the arbitrator] saw them.’ Capital Wholesale Electric, Inc. v. McCarthy Construction, [ (No. 93-16578, March 9, 1995) ] (9th Cir.1995); accord Apex Plumbing Supply, Inc. v. U.S. Supply Co., 142 F.3d 188, 194 (4th Cir.1998) (‘[C]ourts have held generally that even a mistake of fact or misinterpretation of law by an arbitrator provides insufficient grounds for the modification of an award’ under Section 11(a)).”

Waddell v. Holiday Isle, LLC (Civil Action No. 09-0040-WS-M, Aug. 4, 2009) (S.D.Ala.2009) (not published in F.Supp.3d).

We do not read the arbitrator’s order as requiring an award of punitive damages at a ratio of 3:1 rather than 2:1, and we cannot conclude that the arbitrator miscalculated the amount of damages to award the Kitchenses. As previously mentioned, the award of punitive damages is within the discretion of the finder of fact, which, in this case, was the arbitrator. Flint Constr. Co. v. Hall, 904 So.2d at 254. The arbitrator was not required to award the Kitchenses any punitive damages. However, in addition to the 5% excess plus interest, the arbitrator specifically awarded Morgan and Blake Kitchens an additional $10,808.10 each and Kitchens Properties an additional $10,943.10. We cannot say that those awards were the basis of computational errors.

Accordingly, the trial court did not have authority pursuant to § 11 of the FAA to modify the arbitrator’s award. That portion of the judgment of the trial court modifying the amount of punitive damages awarded to the Kitchenses is reversed. For the reasons set forth above, the remainder of the trial court’s judgment refusing to vacate the arbitrator’s award is affirmed.

APPEAL — AFFIRMED.

CROSS-APPEAL — REVERSED AND REMANDED.

PITTMAN, BRYAN, THOMAS, and MOORE, JJ., concur.

      . From the case action summary, it appears that on February 2, 2010, the Kitchenses' conversion claim against U.S. Bank was dismissed.

      . In its initial brief on appeal, Turquoise Properties argues that in asking for compensatory damages in the amount of the 5% excess that was returned to them on June 22, 2009, the Kitchenses are seeking a double recovery of that amount. However, in the Kitchenses' reply brief, they make clear that they are not seeking a double recovery of the 5% excess; they are arguing only that the $180,885 that was returned to them after the arbitrator entered his interim order should be considered compensatory damages for the purpose of calculating punitive damages.

      "7 The 'reasonable person’ standard requires a showing of something more than the 'appearance of bias,’ but not the 'insurmountable' standard of 'proof of actual bias.’ Mor-elite, 748 F.2d at 84.”

      "1 The Supreme Court noted that the use of the phrase 'manifest disregard' in Wilko was particularly vague and that it could have had several possible meanings. The Court surmised that the use of the phrase 'manifest disregard,’ instead of intending to create ‘a new ground for review,' may merely have 'referred to the § 10 grounds collectively, rather than adding to them.... Or, as some courts have thought, "manifest disregard” may have been shorthand for § 10(a)(3) or § 10(a)(4), authorizing vacatur when the arbitrators were "guilty of misconduct” or "exceeded their powers.” ’ Hall Street Associates, 552 U.S. at [585], 128 S.Ct. at 1404. Relying on these latter two possible meanings, some courts have held that 'manifest disregard’ survives as a judicial gloss on the specific grounds for vacatur listed in § 10 of the Federal Arbitration Act. See Stolt-Niel-sen SA v. AnimalFeeds Int’l Corp., 548 F.3d 85, 94 (2d Cir.2008) (citing with approval decisions of other courts that have held that ‘manifest disregard’ survives as a gloss on the § 10(a) grounds of the Federal Arbitration Act). We do not address whether manifest disregard of the law remains as a judicial gloss on the grounds specified in § 10(a) of the Federal Arbitration Act or is merely 'shorthand for § 10(a)(3) or § 10(a)(4).’ We simply note that by the express language of the Supreme Court of the United States the text of the Federal Arbitration Act ‘compels a reading of the § 10 and § 11 categories [of relief] as exclusive.' 552 U.S. at [585], 128 S.Ct. at 1404.”

      . Section 6-6-14 of the AAA provides:
      "An award made substantially in compliance with the provisions of this division is conclusive between the parties thereto and their privies as to the matter submitted and cannot be inquired into or impeached for want of form or for irregularity if the award determines the matter or controversy submitted, and such award is final, unless the arbitrators are guilty of fraud, partiality, or corruption in making it.”

      . The arbitrator’s award of punitive damages of $10,808.10 to both Morgan and Blake and of $10,943.10 to Kitchens Properties reflects a 2:1 ratio of punitive damages to the interest accrued on the 5% excess during the time it was improperly withheld.


source: Caselaw Access Project

author: BRYAN, Judge.

license: Public Domain

text:
    Tasha ROBINSON and Eddie Robinson v. SOVRAN ACQUISITION LIMITED PARTNERSHIP et al.
    2090916.
    Court of Civil Appeals of Alabama.
    Feb. 11, 2011.
    Certiorari Denied April 15, 2011 Alabama Supreme Court 1100610.

      Stan Brobston of Brobston & Brobston, P.C., Bessemer; and Michael Lipscomb of Lipscomb & Lipscomb, Bessemer, for appellants.
    David C. Williams, Jr., of Porterfield, Harper, Mills & Motlow, P.A., Birmingham, for appellees.
   BRYAN, Judge.

Tasha Robinson and Eddie Robinson, the plaintiffs below, appeal from a summary judgment entered in favor of Sovran Acquisition Limited Partnership (“Sov-ran”), Uncle Bob’s Self Storage, Kathy Cruso, and Gary Vandervent, the defendants below. We affirm.

On March 1, 2008, Tasha Robinson entered into a rental agreement with Sovran in which she rented a storage unit at Uncle Bob’s Self Storage, a storage facility owned by Sovran. The rental agreement contained an exculpatory clause, which provided, in pertinent part:

“ALL PERSONAL PROPERTY IS STORED BY TENANT AT TENANT’S SOLE RISK. INSURANCE IS TENANT’S SOLE RESPONSIBILITY. TENANT UNDERSTANDS THAT OWNER WILL NOT INSURE TENANT’S PERSONAL PROPERTY. Any insurance protecting the personal property stored within the storage space against fire, theft or damage must be provided by the Tenant. Tenant expressly releases Owner from any losses, claims, suits and/or damages or right of subrogation caused by ... theft ... unlawful entry or any other cause whatsoever, nor shall Owner be liable to tenant and/or tenant’s guests for any personal injuries or property damage sustained by tenant and/or tenant’s guests while on or about owner’s premises.”

(Capitalization and bold typeface in original.)

"When the rental agreement was entered into, Vandervent, a Sovran employee, informed Tasha Robinson that the storage facility was protected by surveillance cameras 24 hours a day. The Robinsons subsequently began storing their personal property in the rented storage unit. On approximately July 22, 2008, Sovran began renovating the storage facility. The manager of the storage facility, Andrew Marc Ney, testified that “[t]he surveillance cameras that monitored the storage facility were functioning properly until the time that renovations began on or about July 22, 2008.” On approximately August 13, 2008, someone broke into the Robinsons’ storage unit and stole personal property belonging to them. According to Tasha Robinson, a Sovran employee informed her that the surveillance cameras did not record the break-in “due to renovation.”

The Robinsons subsequently sued Sovran and the other defendants, alleging claims of negligence, wantonness, fraud, deceit, and breach of contract. The Robinsons sought damages for the loss of their personal property that had been stolen from the storage unit while the surveillance cameras were inoperable. As we will discuss in more detail below, the defendants moved for a summary judgment on various grounds, and the trial court entered a summary judgment in their favor on all claims. The Robinsons appealed to the supreme court, and the supreme court transferred the appeal to this court, pursuant to § 12-2-7(6), Ala.Code 1975.

“In reviewing the disposition of a motion for summary judgment, ‘we utilize the same standard as the trial court in determining whether the evidence before [it] made out a genuine issue of material fact,’ Bussey v. John Deere Co., 531 So.2d 860, 862 (Ala.1988), and whether the movant was ‘entitled to a judgment as a matter of law.’ Wright v. Wright, 654 So.2d 542 (Ala.1995); Rule 56(c), Ala. R. Civ. P. When the movant makes a prima facie showing that there is no genuine issue of material fact, the burden shifts to the nonmovant to present substantial evidence creating such an issue. Bass v. SouthTrust Bank of Baldwin County, 538 So.2d 794, 797-98 (Ala.1989). Evidence is ‘substantial’ if it is of ‘such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved.’ Wright, 654 So.2d at 543 (quoting West v. Founders Life Assurance Co. of Florida, 547 So.2d 870, 871 (Ala.1989)). Our review is further subject to the caveat that this Court must review the record in a light most favorable to the nonmovant and must resolve all reasonable doubts against the movant. Wilma Corp. v. Fleming Foods of Alabama, Inc., 613 So.2d 359 (Ala.1993); Hanners v. Balfour Guthrie, Inc., 564 So.2d 412, 413 (Ala.1990).”

Hobson v. American Cast Iron Pipe Co., 690 So.2d 341, 344 (Ala.1997).

In moving for a summary judgment, the defendants asserted that the exculpatory clause in the rental agreement barred the Robinsons’ negligence claim. On appeal, the Robinsons argue that the exculpatory clause does not bar them negligence claim. In making that argument, the Robinsons do not contend that the exculpatory clause is invalid. See, e.g., Morgan v. South Cent. Bell Tel. Co., 466 So.2d 107, 116-18 (Ala.1985) (establishing criteria for determining whether an exculpatory clause affects the public interest and is therefore invalid). Rather, the Rob-insons argue that the exculpatory clause cannot be enforced given the facts of the alleged negligence in this case. More specifically, the Robinsons argue that the exculpatory clause does not bar a claim based on the defendants’ “active” negligence, as opposed to “passive” negligence. The Robinsons contend that the defendants committed active negligence because, the Robinsons say, the defendants disabled the surveillance cameras while the storage facility was being renovated. The Robinsons argue that the record on appeal contains substantial evidence of active negligence by the defendants and, therefore, that the exculpatory clause does not bar the negligence claim.

In Baker v. Wheeler, Lacey & Brown, Inc., 272 Ala. 101, 128 So.2d 721 (1961), our supreme court construed Armi v. Huckabee, 266 Ala. 91, 94 So.2d 380 (1957), as having established a rule that an exculpatory clause contained in a residential lease may shield a landlord from liability for passive negligence but not active negligence. Following Baker, our appellate courts applied this distinction between active and passive negligence in certain cases concerning exculpatory clauses in residential leases. See Matthews v. Mountain Lodge Apartments, Inc., 388 So.2d 935 (Ala.1980); Walston v. Birdnest Apartments, Inc., 395 So.2d 45 (Ala.1981); and Irvin v. Houston, 444 So.2d 878 (Ala.Civ. App.1984). Although no Alabama case has addressed the issue, the distinction between active and passive negligence, at least in the context of exculpatory clauses contained in residential leases, no longer appears relevant given the recent enactment of the Alabama Uniform Residential Landlord and Tenant Act, § 35-9A-101 et seq., Ala.Code 1975 (“the Act”). The Act broadly prohibits and makes unenforceable, in a residential-lease agreement, any provision in which the tenant “agrees to the exculpation or limitation of any liability of the landlord arising under law.” § 35-9A-163(a)(4), Ala.Code 1975; see also § 35-9A-163(b), Ala.Code 1975; Comment to § 35-9A-163, Ala.Code 1975 (indicating the need to protect an uninformed tenant who may surrender or waive rights against a landlord for damages arising from a landlord’s negligence); and Fuentes v. Owen, 310 So.2d 458, 459 n. 1 (Fla.Dist.Ct.App.1975) (stating that, under a Florida statute containing similar language as that found in § 35-9A-163(a)(4), an exculpatory clause would not shield a residential landlord from liability for negligence).

The Robinsons argue that the active/passive dichotomy articulated in Baker should be applied in this case to prevent the enforcement of the exculpatory clause as to their negligence claim. However, the cases relied on by the Robinsons concern the specific context of exculpatory clauses in residential leases entered into before the adoption of the Act in 2007. Of course, unlike Baker and subsequent cases relying on Baker, this case does not involve a residential lease; rather, it involves the rental of a self-storage unit. As noted, in the context of residential leases, the distinction between active and passive negligence no longer appears relevant given the adoption of the Act; the Robinsons now ask us to revive that distinction and to apply it in a new context. We decline to apply to this case the distinction between active and passive negligence found in Baker. In doing so, we note that making distinctions between active and passive negligence in determining whether to uphold an exculpatory clause has been criticized as “somewhat artificial and arbitrary.” College Mobile Home Park & Sales, Inc. v. Hoffmann, 72 Wis.2d 514, 520, 241 N.W.2d 174, 177 (1976). See also Edward C. Fisch, Note, Exculpatory Clauses in Standard Form Leases: A Need for Direct Judicial Action, 28 U. Pitt. L.Rev. 85, 87 (1966) (noting that some courts “make the dubious distinction between active and passive negligence” in determining whether to uphold an exculpatory clause). Because we conclude that any distinction between active and passive negligence is inapplicable in this case, the Robinsons’ argument that the exculpatory clause does not bar their negligence claim fails. Therefore, the Robinsons have not established that the trial court erred in entering a summary judgment on their negligence claim.

Next, the Robinsons argue that the trial court erred in entering a summary judgment on their wantonness claim. Our supreme court has defined “wantonness” “ ‘as the conscious doing of some act or the omission of some duty, while knowing of the existing conditions and being conscious that, from doing or omitting to do an act, injury will likely or probably result.’ ” Bozeman v. Central Bank of the South, 646 So.2d 601, 603 (Ala.1994) (quoting Stone v. Southland Nat’l Ins. Corp., 589 So.2d 1289, 1292 (Ala.1991)). The Robin-sons do not cite any evidence indicating that the defendants acted with the requisite consciousness that the Robinsons’ personal property was likely to be stolen or would probably be stolen merely because the security cameras had become inoperable. Accordingly, the Robinsons have not established that the trial court erred in entering a summary judgment on their wantonness claim. See, e.g., Ex parte Essary, 992 So.2d 5, 12 (Ala.2007) (equating wantonness to “reckless indifference to a known danger likely to inflict injury”).

Next, the Robinsons argue that the trial court erred in entering a summary judgment on the their claims alleging fraud and deceit. In their complaint, the Robinsons made the following allegations regarding those claims:

“4. [On March 1, 2008, when] the parties negotiated the [rental] agreement, the Defendants represented to the [Robinsons], or one of them, that [the storage facility was] secure and protected by continuous surveillance by means of video cameras owned and/or maintained by the Defendants.
“5. Further, at the time of the negotiation ..., the [Robinsons] inspected the [storage facility,] which [the Robin-sons] were considering for the storage of their personalty. At said time and in said place, the [Robinsons] observed surveillance cameras situated upon said premises.
“6. The representations made by the Defendants were false and the Defendants knew that they were false or said representations were made recklessly and|7]or negligently but with the intent that the [Robinsons] rely upon them.
“7. The [Robinsons] reasonably relied upon the representations made by the Defendants and entered into [the rental] agreement^] and [the Robinsons] stored valuable personalty [in the rented storage unit].
“8. In fact, on and for some time prior to August 12 or 13[,] 2008, said surveillance cameras were inoperable or not functioning properly. As a result, third persons were allowed to enter upon said premises without [being] subjected to surveillance or being detected. While upon said premises[,] ... said third parties took possession of [the Robinsons’] personalty[,] permanently depriving [them] thereof.
“9. Further, the defendants had a duty to inform the [Robinsons] that said surveillance cameras were inoperable or not functioning properly so that [the Robinsons] could make other arrangements for their storage of said personalty-
“10. As a result of the Defendants[’] fraudulent misrepresentations, deceit and failure to advise the [Robinsons] of the true facts, the [Robinsons] suffered the loss of their personal property and suffered mental anguish.”

The Robinsons contend that their complaint stated claims alleging both fraud and deceit. The elements of fraud are:

“(1) a false representation (2) of a material existing fact (3) relied upon by the plaintiff (4) who was damaged as a proximate result of the misrepresentation. Earnest v. Pritchett-Moore, Inc., 401 So.2d 752 (Ala.1981). If fraud is based upon a promise to perform or abstain from performing in the future, two additional elements must be proved: (1) the defendant’s intention, at the time of the alleged misrepresentation, not to do the act promised, coupled with (2) an intent to deceive. Clanton v. Bains Oil Co., 417 So.2d 149 (Ala.1982).”

Coastal Concrete Co. v. Patterson, 503 So.2d 824, 826 (Ala.1987). See also § 6-5-101, Ala.Code 1975 (stating the elements of fraud). “In promissory fraud, the material existing fact that is misrepresented is the defendant’s state of mind, when the defendant represents that he intends to perform some act although he does not in fact intend to perform it.” Spring Hill Lighting & Supply Co. v. Square D Co., 662 So.2d 1141, 1149 (Ala.1995).

The Robinsons’ complaint may be read as alleging that, when the rental agreement was signed in March 2008, the defendants misrepresented that the storage facility was then protected by surveillance cameras. However, as the defendants argued in the trial court, the record contains no evidence establishing that the storage facility was not protected by surveillance cameras when the rental agreement was entered into. Conversely, the manager of the storage facility, Ney, testified that the surveillance cameras “were functioning properly” before renovations to the storage facility began in July 2008. Also, Tasha Robinson testified that, on the day she signed the rental agreement, she observed a video monitor indicating that the surveillance camera monitoring the entrance to the storage facility was functioning. Insofar as the fraud claim alleged that the defendants misrepresented that the surveillance cameras were functioning when the rental agreement was entered into, that claim fails because there is no evidence indicating that the defendants made a false representation concerning that existing fact. See, e.g., Singleton v. Protec tive Life Ins. Co., 857 So.2d 803, 814 (Ala.2003).

The Robinsons’ complaint alleged that the defendants represented that the storage facility would be “protected by continuous surveillance.” Insofar as the Robin-sons’ fraud claim is based on an alleged promise to maintain the surveillance cameras, the complaint appears to have alleged a promissory-fraud claim. To establish promissory fraud, the Robinsons were required to establish, among other things, that the defendants did not intend, when the rental agreement was entered into, to continue to use surveillance cameras at the storage facility. See Coastal Concrete Co., 503 So.2d at 826. However, the Robinsons presented no evidence indicating that the defendants, when the rental agreement was entered into, intended not to use surveillance cameras in the future. Therefore, the Robinsons’ promissory-fraud claim fails.

The Robinsons also argue that the trial court erred in entering a summary judgment on their deceit claim, made pursuant to § 6-5-104, Ala.Code 1975. That section, entitled “Deceit — Fraudulent deceit,” provides, in pertinent part:

“(a) One who willfully deceives another with intent to induce him to alter his position to his injury or risk is liable for any damage which he thereby suffers.
“(b) A deceit within the meaning of this section is ...:
“(3) The suppression of a fact by one who is bound to disclose it....”

It appears that the Robinsons contend that the defendants are liable for deceit under § 6 — 5—104(b)(3) because, the Robin-sons say, the defendants failed to notify them that the surveillance cameras were not functioning during the renovation of the storage facility. Before the trial court, the defendants asserted that they owed no duty to inform the Robinsons that the surveillance cameras were inoperable during the renovation of the storage facility. The Robinsons contend that the question whether the defendants owed the Robin-sons such a duty is a jury question. However, whether the defendants owed the Robinsons a duty to inform them that the surveillance cameras were inoperable is a question of law to be determined by the trial court. State Farm Fire & Cas. Co. v. Owen, 729 So.2d 834, 840 (Ala.1998) (“The judge should decide whether, assuming as truth all of the plaintiffs factual assertions, they are sufficient to give rise to a legal duty.”). See also Flying J Fish Farm v. Peoples Bank of Greensboro, 12 So.3d 1185, 1192 (Ala.2008).

In arguing that the defendants owed them a duty to inform them that the surveillance cameras had become inoperable, the Robinsons cite general principles regarding the suppression of material facts. However, the Robinsons do not explain how those general principles relate to the facts of this case to create a duty owed by the defendants with regard to the deceit claim. The Robinsons do not cite authority establishing that the defendants owed them a duty to disclose under the specific facts of this case. An appellate court does not “create legal arguments for a party based on undelineated general propositions unsupported by authority or argument.” Spradlin v. Spradlin, 601 So.2d 76, 79 (Ala.1992). Therefore, we conclude that the Robinsons have not established that the trial court erred in entering a summary judgment on their deceit claim.

In a single sentence in their brief, the Robinsons summarily contend that the trial court erred in entering a summary judgment on their breach-of-contract claim.

‘“When an appellant fails to properly argue an issue, that issue is waived and will not be considered. Boshell v. Keith, 418 So.2d 89 (Ala.1982).’ Asciro v. Devereaux, 686 So.2d 1222, 1224 (Ala.Civ. App.1996). ‘An appeals court will consider only those issues properly delineated as such, and no matter will be considered on appeal unless presented and argued in brief. Ex parte Riley, 464 So.2d 92 (Ala.1985).’ Braxton v. Stewart, 539 So.2d 284, 286 (Ala.Civ. App.1988).”

Tucker v. Cullman-Jefferson Counties Gas Dist., 864 So.2d 317, 319 (Ala.2003). Therefore, we do not consider that issue further.

In conclusion, the Robinsons have not established that the trial court erred in entering a summary judgment in favor of the defendants on the Robinsons’ claims.

AFFIRMED.

THOMPSON, P.J., and PITTMAN, THOMAS, and MOORE, JJ., concur.

      . “An exculpatory clause 'reliev[es] a party from liability resulting from a negligent or wrongful act.’ Black's Law Dictionary 608 (8th ed.2004).” Fox Alarm Co. v. Wadsworth, 913 So.2d 1070, 1076 (Ala.2005).

      . The defendants do not argue that the exculpatory clause bars the wantonness claim. See Barnes v. Birmingham Int’l Raceway, Inc., 551 So.2d 929, 933 (Ala. 1989) (stating that the exculpatory clause in that case, although valid as to negligent conduct, was invalid as to wanton or willful conduct).

      . Insofar as the Robinsons’ brief may be read as arguing that they alleged, in addition to the deceit claim, a fraudulent-suppression claim under § 6-5-102, Ala.Code 1975, our discussion regarding duty equally applies. See § 6-5-102 (stating that a duty to disclose material facts is an element of fraudulent suppression).