Bonshire

In this case we hold that when the arbitration clause of a contract specifically prohibits the arbitrator from considering extrinsic evidence, the arbitrator acts in excess of his or her powers in receiving such evidence, over objection, and using it as a basis for the ensuing award.

Jack Bonshire appeals from a judgment confirming an arbitration award against him. He argues that the trial court should have granted his petition to vacate the award because the arbitrator exceeded his powers in admitting extrinsic evidence in contravention of an integration clause in the underlying contract. We agree that the arbitrator exceeded his powers and reverse.

Factual and Procedural Summary

In August 1994, Alan and Betty Lou Thompson and Jack and Barbara Ludt (Sellers) sold 100 percent of the shares in Viking Refrigeration, Inc., to Jack Bonshire and David Morgan (Buyers). Morgan is not a party to this appeal. The parties executed a form contract, which provided for a purchase price of $90,000. $30,000 was to be paid before the close of escrow, and the remainder was secured by a note for $60,000, with interest, payable over 36 months. Paragraph 2 of the contract provided that…