O. Ahlborg & Sons, Inc. v. Interior Systems, Inc.
| Decision Date | 15 July 1987 |
| Docket Number | No. 86-54-A,86-54-A |
| Citation | 528 A.2d 739 |
| Parties | O. AHLBORG & SONS, INC. v. INTERIOR SYSTEMS, INC. ppeal. |
| Court | Rhode Island Supreme Court |
The sole question before the court in this appeal is whether there was a clearly written and expressed agreement to arbitrate between the parties. We conclude that there was an agreement to arbitrate between the parties under the rules of the American Arbitration Association, and for reasons other than those given by the trial justice we affirm the denial of the plaintiff's petition for arbitration brought pursuant to G.L.1956 (1985 Reenactment) § 10-3-4.
The plaintiff is O. Ahlborg & Sons, Inc. (Ahlborg), a Rhode Island construction company. The defendant and appellant before us is Interior Systems, Inc. (Interior), also a Rhode Island construction company. The record indicates that Interior was a subcontractor on Ahlborg's Westminster Place project. 1 Problems arose between the parties as the work progressed and Interior placed a mechanics' lien on the project. The filing of the lien caused the attorneys for the parties to enter into negotiations to resolve the dispute. The parties were having difficulty coming to an agreement on the method to be followed in arbitrating their differences.
After discussions between the attorneys, Interior's counsel prepared an agreement, executed by Interior, to resolve the dispute. By the terms of the agreement, Ahlborg was to pay Interior $54,783.40 representing progress payments, change orders, and partial retainage. 2 The parties further agreed that the balance of the retainage amounted to $28,302.90 plus certain extras. The written agreement provided that disputes between the parties "shall be arbitrated in accordance with the construction industry rules of the American Arbitration Association." In consideration of the payment and agreement to arbitrate, Interior was to release the mechanics' lien placed on the project.
On January 17, 1984, Interior's attorney forwarded to Ahlborg's attorney the proposed agreement executed by Interior along with an executed release of the mechanics' lien. The covering letter specifically stated:
On January 18, 1984 at 2:35 p.m., the release of the mechanics' lien was recorded and Ahlborg made payment of the amount called for in the agreement.
On January 19, 1984, the day after the lien release had been recorded, Ahlborg's attorney answered the letter of Interior's attorney by returning the agreement executed by Ahlborg with a covering letter indicating two changes had been made in the agreement and initialed by Ahlborg's counsel. These changes were of no consequence to this dispute.
Ahlborg's attorney's letter also stated:
None of the provisions of the above quoted paragraph were interlineated or added into the agreement when it was executed by Ahlborg and returned, as had been done with the minor changes previously referred to. The agreement neither made reference to the letter nor incorporated its provisions in any way. The provisions for arbitration under the American Arbitration Association rules for the construction industry, as set forth in the agreement signed by Ahlborg, were not crossed out or changed in any way. On two subsequent occasions Ahlborg's attorney requested that Interior's attorney initial and return additional copies of the agreement that had been signed by Ahlborg. Each copy contained the arbitration provisions unchanged from those originally proposed by Interior's attorney.
In later correspondence Ahlborg's attorney asked Interior's attorney, "Please give me a call when you want to get together to prepare the arbitration agreement." Interior's response to that request, in a cover letter containing a second unchanged and fully executed copy of the agreement, was "I shall forward you a detailed claim before commencing arbitration."
Some time passed and Ahlborg and Interior were unable to resolve their remaining differences. In July 1984 Interior filed a demand for arbitration with the American Arbitration Association pursuant to the rules...
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...occupies the shoes of its insured; and a party is presumed to know the contents of a document it signed. O. Ahlborg & Sons, Inc. v. Interior Systems, Inc., 528 A.2d 739, 742 (R.I.1987). Therefore, Aetna, as subrogee, cannot escape the limitation of liability clause in the service contract b......
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Wash. v. South County Post & Beam Inc
...that parties can manifest assent to written agreements by means other than signature alone. See O. Ahlborg & Sons, Inc. v. Interior Systems, Inc., 528 A.2d 739, 742 (R.I. 1987) ("Ahlborg signified its acceptance of the written and executed contract not only bysigning it but also by paying o......
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Mielke v. South County Post & Beam, Inc.
...of the contract by performing several express acts called for in the agreement that it had signed.") SCPB would have this Court read Ahlborg distinguishable on the ground that Ahlborg involved an agreement that was signed. However, such a reading ignores our Supreme Court's attention to the......