O&K GLASS CO. v. INNES CONST. CO., INC.

• Citation: 2000 ND 56,608 N.W.2d 236
• Decision Date: 21 March 2000
• Docket Number: No. 990252.,990252.
• Parties: O&K GLASS CO., Plaintiff and Appellee, v. INNES CONSTRUCTION CO., INC., Defendant and Appellant.
• Court: North Dakota Supreme Court

608 N.W.2d 236
2000 ND 56

O&K GLASS CO., Plaintiff and Appellee,
v.
INNES CONSTRUCTION CO., INC., Defendant and Appellant

No. 990252.

Supreme Court of North Dakota.

March 21, 2000.

608 N.W.2d 237

Ralph F. Carter, Moosbrugger, Dvorak & Carter, Grand Forks, for defendant and appellant

Tracy A. Gompf (argued) and Jeff A. Bredahl, Bredahl & Associates, P.C., Fargo, for plaintiff and appellee.

MARING, Justice.

[¶ 1] Innes Construction Co., Inc. ("Innes") appeals from a trial court order denying its motion to vacate an arbitration award in favor of O&K Glass Co. ("O&K"), and also from the judgment entered by the trial court. We affirm.

I.

[¶ 2] Innes was awarded a contract to construct a skyway on the University of North Dakota ("UND") campus in Grand Forks, North Dakota. Innes built the steel skyway frame and subcontracted with O&K for the installation of glass and acrylic panels. O&K subcontracted with Skytech Systems ("Skytech") to manufacture the panels. Several months after execution of the subcontract between O&K and Skytech, Innes and O&K entered into a Joint Payment Agreement, which provided all sums due from Innes to O&K "for material and/or labor furnished by [Skytech]... shall be paid by means of a check... made payable jointly to" O&K and Skytech. The stated purpose of this agreement was to induce Skytech to provide labor and materials for the project.

[¶ 3] Delays occurred both before and after the arrival of the panels. First, problems at Skytech's plant resulted in a later shipping date than anticipated. Then, when the panels arrived, they had been improperly packaged so O&K's crews were required to re-sort the panels to determine

608 N.W.2d 238

their placement. In addition, the panels did not strictly conform to the steel framing Innes had previously installed; therefore O&K was forced to remanufacture the panels to fit them into the frame, which O&K asserted resulted in substantial delays. Finally, O&K claimed adverse weather conditions caused other delays: crews could not work on rainy days because some of the adhesive materials required for installation of the panels could not be used in the rain, and further, O&K's owner did not want workers to be put at risk by using power tools outdoors in the rain. O&K also claimed the panels could not be installed on especially humid days because the humidity would be trapped between the panels

[¶ 4] Innes disputed weather caused the delays, asserting O&K fell behind schedule because it did not sufficiently staff the site. Innes claimed O&K contracted to supply two crews working 6 days a week for 10 hours per day; yet sometimes only a few workers were at the site, and they worked much more limited hours than promised. Initially, Innes sought informal extensions from UND to give O&K time to complete the work. Then, Innes informed O&K it was bringing in another company, Fargo Glass and Paint ("Fargo Glass"), to help finish the job. Innes claimed O&K walked off the job site, leaving Fargo Glass to complete the work. O&K claimed Innes stopped paying for the installation; after inquiring whether Innes planned to start paying again, O&K ceased performing, which it asserted was its right under the subcontract.

[¶ 5] O&K demanded arbitration as provided in its subcontract with Innes, and Innes also submitted an arbitration claim against O&K. The arbitrator found Innes and O&K, through the Joint Payment Agreement, agreed to be jointly and severally liable to Skytech. Based on that agreement, the arbitrator imputed knowledge of the terms of O&K's subcontract with Skytech to Innes. The arbitrator also found, due to the terms of that subcontract and the nature of the problems at Skytech's plant, the only recourse against Skytech was rejecting its late tendered performance, which neither Innes nor O&K did. The arbitrator concluded Innes waived the original installation schedule both by accepting the goods and by asking UND for extensions, and thus O&K was entitled to a new start date for performance of the installation work once the materials...