Holt & Holt, Inc. v. Choate Const. Co.

• Decision Date: 08 December 2004
• Docket Number: No. A04A2122.,A04A2122.
• Court: Georgia Court of Appeals
• Parties: HOLT & HOLT, INC. v. CHOATE CONSTRUCTION COMPANY.

271 Ga. App. 292

609 S.E.2d 103

271 Ga.App. 292

HOLT & HOLT, INC. v. CHOATE CONSTRUCTION COMPANY.

No. A04A2122.

Court of Appeals of Georgia.

December 8, 2004.

Maurice Egan, Eric Kane, Larry McCollum, Owen, Gleaton, Egan, Jones & Sweeney, LLP, Atlanta, for Appellant.

Jeffrey Nix, Ronald J. Stay, Jr., Sitites & Harbison, PLLC, Atlanta, for Appellees.

ELLINGTON, Judge.

Holt & Holt, Inc. ("Holt") appeals from an order of the Superior Court of Cobb County which granted partial summary judgment to Choate Construction Company and Fidelity & Deposit Company of Maryland¹ (collectively "Choate") as to $67,345 of the damages Holt claimed for subcontractor work performed. Holt also appeals the court's order staying arbitration proceedings pursuant to the terms of a contract between the parties. Finding no reversible error, we affirm.

Summary judgment is proper when there is no genuine issue of material fact remaining for jury resolution and the movant is entitled to judgment as a matter of law. OCGA § 9-11-56(c). A de novo standard of review applies to an appeal from a grant of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant. Matjoulis v. Integon Gen. Ins. Corp., 226 Ga.App. 459(1), 486 S.E.2d 684 (1997). Similarly, we review a grant of a motion to stay arbitration de novo to determine whether the trial court was correct as a matter of law. See Tigner v. Shearson-Lehman Hutton, Inc., 201 Ga.App. 713, 715, 411 S.E.2d 800 (1991). Further, the construction of a contract is also a question of law subject to de novo review. Deep Six, Inc. v. Abernathy, 246 Ga.App. 71, 73(2), 538 S.E.2d 886 (2000). Where contract language is unambiguous, construction is unnecessary and the court simply enforces the contract according to its clear terms. Caswell v. Anderson, 241 Ga.App. 703, 527 S.E.2d 582 (2000). So viewed, the record reveals the following relevant evidence.

On January 30, 2002, Holt entered into an agreement to perform drywall subcontractor work for general contractor Choate on a new high-rise building. The contract required Holt to perform and complete all work in accordance with the January 18, 2002 construction schedule incorporated into the agreement. The contract provided that all work "shall be subject to the final acceptance of the Contractor, Architect/Engineer and Owner." In the event that Holt failed to meet its obligations, the contract entitled Choate to issue written decisions terminating Holt's employment or supplementing its work with labor and materials, the cost of which would be deducted from payment due Holt. Finally, the contract required that "any claim, dispute, or controversy" between Choate and Holt "shall be conclusively resolved and settled" pursuant to the provisions of its claims and disputes article, which provided in relevant part:

[Holt] shall conclusively be bound by and abide by [Choate's] decision, unless [Holt] shall timely commence arbitration proceedings in strict accordance with the following provisions:

i. If [Holt] decides to appeal the decision of [Choate], then the controversy shall be decided by arbitration ..., and the arbitration decision shall be final and binding on both parties; provided, however, that arbitration proceedings shall be commenced by [Holt] not later than 30 days following [Holt's] receipt of notice of [Choate's] decision; otherwise, [Choate's] decision becomes final and binding.

On March 20 and April 12, 2002, Choate informed Holt that it was in default under the contract and that unless Holt immediately remedied its defective performance, Choate would hire additional or replacement contractors at Holt's expense. Although Holt argues it remedied any defective performance and obtained extensions of time to perform the work, it is undisputed that on May 29, 2002, Choate sent Holt a certified letter informing it of its decision to supplement Holt's work forces. This letter stated that it was the "contractor's decision to do so due to Holt's inability to maintain the project schedule as well as follow through on the many commitments made by [Holt]." The letter also advised Holt that "in accordance with your subcontract on this project, Choate intends to hold Holt fully responsible for all costs incurred by Choate due to the delays by your firm." Thereafter, Choate employed additional workers and also sent Holt three change orders setting forth the specific amounts Choate would be charging against Holt for the supplemental work. These June 12, July 2, and August 8, 2002 orders totaled $67,345.

On November 5, 2002, after Choate had "closed out" its prime contract with the owner, Holt filed a demand for arbitration with the American Arbitration Association alleging a breach of contract and seeking $152,529 in contract damages. On December 4, 2002, Choate initiated the instant litigation by filing a motion to stay arbitration in the Superior Court of Cobb County. Holt answered, seeking to compel arbitration, but also counterclaimed for $152,529 in contract damages. Choate amended its complaint to seek declaratory relief as to any counterclaimed amounts barred by the contract. On March 18, 2003, the superior court stayed arbitration, and on April 20, 2004, granted Choate partial summary judgment as to $67,345 in charges attributable to its May 29, 2002 decision. Holt appeals from the grant of partial summary judgment and the stay of arbitration.

1. Holt contends the trial court erred in granting partial summary judgment to Choate because material issues of fact remained as to whether Choate's May 29, 2002 letter was a "contractor's decision" as contemplated by the parties' contract. Holt contends the letter was ineffective as a "formal decision" because it did not employ such terminology, contain "customary content," or give Holt adequate notice that it had 30 days to challenge the decision pursuant to the contract. We resolved these very issues when we construed substantially the same contract language in Choate Constr. Co. v. Ideal Electrical Contractors, 246 Ga.App. 626, 628(3), 541 S.E.2d 435 (2000). The plain language of the contract places the burden on Holt "to arbitrate any decision made by Choate or be bound by it. It does not, however, use any language modifying the word `decision.' "Id. Consequently, the courts will not read into the contract any condition precedent qualifying what "decision" means. Id. In the instant case, the certified letter informed Holt of Choate's decision to supplement its work force and to charge those costs against Holt. It was, therefore, a written contractor's decision within the plain language of the contract. Id. Moreover, Holt, as a party to the contract it signed, is presumed to know that it had 30 days within which to arbitrate that decision. Intl. Indem. Co. v. Smith, 178 Ga.App. 4, 5(1), 342 S.E.2d 4 (1986) ("[O]ne who signs a contract is presumed to know its...