Singer Company v. Tappan Company
Decision Date | 20 October 1975 |
Docket Number | Civ. A. No. 75-757. |
Citation | 403 F. Supp. 322 |
Parties | In the Matter of the Arbitration between the SINGER COMPANY, Petitioner, and The TAPPAN COMPANY, Respondent. |
Court | U.S. District Court — District of New Jersey |
Riker, Danzig, Scherer & Debovoise, Newark, N. J., Winthrop, Stimson, Putnam & Roberts, New York City, of counsel, for petitioner.
PRELIMINARY
Presented is the issue of arbitrability of a certain dispute between the parties. For the reasons hereinafter set forth, I find in favor of the petitioner and grant its motion to compel arbitration. The cross motion of the respondent is denied.
On May 6, 1975 the Singer Company (Singer) commenced this diversity action, 28 U.S.C. § 1332, proceeding under the United States Arbitration Act (the Act), 9 U.S.C. §§ 1-14 (1970), by a Motion to Compel Arbitration and seeking an order directing respondent, The Tappan Company (Tappan), to proceed to arbitration under a certain Agreement to Purchase (Agreement), dated February 25, 1972, and annexed to Singer's Petition as Exhibit A.1 Tappan then filed a Cross-Motion to Dismiss for Absence of an Indispensable Party, and its Answer and Demand for a Jury Trial. Having heard oral argument, I requested and received additional submissions from the parties which have waived further oral argument.
On February 9, 1972 Tappan and American Standard Inc. (American) entered into an Agreement of Purchase and Sale (American Agreement), Tappan acquiring the assets of five American divisions, the Environmental Comfort Systems Group (ECSG). Thereafter, Singer acquired from Tappan under their Agreement two of the ECSG divisions, The Commercial Air Conditioning Division (CACD) and the Wilmington Coil Division (WCD). Tappan concedes the making of this Agreement, which embodies an arbitration provision; but it denies that the issues here in dispute were intended by the parties to be arbitrable under that provision.
Under Section 2.2 of the Agreement Singer and Tappan were to deliver to Arthur Young & Co. (AY), American's accountant, and later to Peat, Marwick, Mitchell & Co. (PMM), Singer's accountant, a combining divisional balance sheet of ECSG as of January 31, 1972, "prepared in accordance with generally accepted accounting principles consistent with those applied in the preparation of the August 31, 1971 combining divisional balance sheet of ECSG." PMM was to review that portion of the January 31, 1972 combining divisional balance sheet and AY report pertaining to the sale to Singer, defined as the Closing Balance Sheet, to determine "compliance thereof with the principles which the parties have agreed above shall be followed in its preparation. . . ."
If PMM, after such review, raised objections which were not resolved by agreement of the accounting firms, or of the parties, the "matter" was to be "referred to arbitration." Thus I find that it is the question of whether the Closing Balance Sheet was "prepared in accordance with generally accepted accounting principles consistent with those applied in preparation of the August 31, 1971 balance sheet of ECSG" which the parties intended to be referred to arbitration under the Agreement should a dispute in connection therewith go unresolved.
Pursuant to Section 2.2, PMM re-received the financial report on April 28, 1972; and on May 10, 1972, by letter to Ernst & Ernst (E&E), Tappan's accountant, raised objections thereto.
On May 26, 1972, in response to Tappan's oral request for a meeting to discuss PMM's objections, Singer's L. J. Clark wrote to L. B. Ellison of Tappan agreeing to a meeting, but stating that ". . . I feel the subject of this meeting should be discussion of the selection of an arbitrator as defined in . . . the agreement". See Exhibit B to Ellison Affidavit.
That meeting took place on June 5, 1972. Attending were representatives of Tappan, Singer, and the three accounting firms. The parties to the meeting, including Clark, agreed that, instead of proceeding to arbitration at once, the three accounting firms "should be able to satisfy many of the questions, or objections" in PMM's letter of May 10, 1972. See Ellison letter to Clark, dated June 12, 1972, Exhibit C to Ellison Affidavit. Of major significance as bearing upon the matter at bar, Ellison wrote in part:
The June 22, 1972 meeting referred to in Ellison's letter was never held, and, for the several reasons set forth in the August 22, 1975 affidavit of Singer's Clark, nothing further was submitted to respondent by PMM. Instead, Singer retained another accounting firm to investigate and review, and advise Singer on, the disputed items. As to this, and to explain Singer's delay in invoking the arbitration provisions, Mr. Clark has averred (Id.):
Singer's delay in invoking arbitration has been argued by Tappan as inconsistent with certain specific provisions of their Agreement, as follows:
Section 8.5 which provides that certain actions under the Agreement must be taken "promptly" and "as early as practicable".
Tappan's contentions with respect to the applicability of these provisions to this proceeding will be discussed in more detail hereinafter.
Returning to the chronological development, on February 13, 1975 Singer's counsel wrote as follows to Tappan (Exhibit E to Ellison Affidavit):
To continue reading
Request your trial-
Becker Autoradio U.S.A., Inc. v. Becker Autoradiowerk GmbH
... ... dismissed, 364 U.S. 801, 81 S.Ct. 27, 5 L.Ed.2d 37 (1960); Singer Co. v. Tappan Co., 403 F.Supp. 322, 328-29 (D.N.J.1975); Litton, RCS, Inc ... ...
-
Burke County Public Schools Bd. of Ed. v. Shaver Partnership
... ... Co., defendant contracted for plaintiff's services as an opera singer. A dispute arose and defendant, citing the arbitration clause in the ... (North Carolina) Public Schools Board of Education" and "Shaver & Company, a Partnership." Further, it specifically lists Lee J. Brockway as one ... 1959); Singer Co. v. Tappan Co., 403 F.Supp. 322 (D.C.N.J.1975), aff'd mem., 544 F.2d 513 (3d Cir ... ...
-
Creative Telecommunications, Inc. v. Breeden
... ... Lectromelt Furnace, 471 F.2d 556 (3d Cir. 1972); Singer Co. v. Tappan Co., 403 F.Supp. 322 (D.N.J.1975), aff'd 544 F.2d 513 (3d ... Page 1243 ... Rain v. The Donning Company/Publishers, Inc., 964 F.2d 1455, 1461 (4th Cir. 1992) (holding that the ... ...
-
Mercury Const. Corp., In re
... ... The appellant Mercury Construction Company (hereafter Mercury) 1 sought in this action arbitration under the ... 564, 568, 80 S.Ct. 1343, 1346, 4 L.Ed.2d 1403 (1960) ... 10 Singer Company v. Tappan Company, 403 F.Supp. 322, 332-34 (D.N.J. 1975), aff'd., ... ...