Brandon v. Hines, 79-1174.

CourtCourt of Appeals of Columbia District
Citation439 A.2d 496
Docket NumberNo. 79-1174.,79-1174.
PartiesWilliam L. BRANDON, Appellant, v. William J. HINES, Appellee.
Decision Date21 December 1981
439 A.2d 496
William L. BRANDON, Appellant,
William J. HINES, Appellee.
No. 79-1174.
District of Columbia Court of Appeals.
Argued October 30, 1980.
Decided December 21, 1981.

Page 497

James E. Burk, Washington, D. C., for appellant.

Arthur G. House, Bethesda, Md., for appellee.

Before NEWMAN, Chief Judge, and MACK and FERREN, Associate Judges.

FERREN, Associate Judge:

Appellant, a building contractor, sued for breach of a construction contract to renovate appellee's premises. The contract contained an arbitration clause. The trial court stayed the litigation pending arbitration, and the arbitrators ultimately rendered an award in appellant's favor. The trial court, however, denied appellant's motion to confirm the award as a judgment, vacated the award on the ground that the arbitration panel had decided the case out of time, and directed the parties to trial.

This case presents two questions of first impression for this court. The first is whether the trial court's order denying the motion to confirm the arbitration award, vacating the award, and directing the parties to trial is an appealable order. We hold that the order is an appealable interlocutory

Page 498

order "dissolving" an "injunction[]" under D.C.Code 1973, § 11-721(a)(2)(A).

The second question is -whether the trial court erred in vacating the award as untimely. We hold that when, as here, the court authorizes arbitration to proceed by "rule of court," each party's consent to a reasonable extension of time for rendering the award is presumed, unless a party promptly files a motion with the court objecting to continuation of the arbitrators' deliberations. Because appellee failed to inform the court of his challenge to the arbitrators' authority, and the arbitrators' two-week delay in rendering the award was reasonable, we reverse and remand the case for entry of judgment on the award.


On July 1, 1975, appellant, William L. Brandon, and appellee, William J. Hines, entered into a written agreement for Brandon to renovate Hines' townhouse at 1905 S Street, N.W. The contract contained an arbitration clause:


11.1 All claims, disputes and other matters in question between parties to this Agreement arising out of or relating to this Agreement or the breach thereof, shall be decided by arbitration. Each party shall designate an arbitrator; and the two designated arbitrators shall in turn designate a third arbitrator. Rules of arbitration shall be prescribed by the Construction Industry Arbitration Rules of the American Arbitration Association.

11.2 Notice of the demand for arbitration shall be filed in writing with the other party to this Agreement. The demand shall be made within a reasonable time after the claim, dispute or other matter in question has arisen. In no event shall the demand for arbitration be made after the date when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be, barred by the applicable statute of limitations.

11.3 The award rendered by the arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof.

In early October, 1976, Brandon submitted a final bill to Hines covering both the work specified in the contract and additional items requested during construction. Hines refused to pay, claiming that the work was unsatisfactory and that the bill listed as extras various items included in the basic contract.

On January 11, 1977, Brandon's attorney wrote to Hines, stating that Brandon "will be willing to undertake to arbitrate the construction contract dispute" and requesting that Hines "give formal notice of demand for arbitration in writing within the next five working days. . . ." The letter concluded:

If we do not receive your notice of demand for arbitration within five working days of the date of this letter, we will assume that you have chosen not to initiate arbitration and we will promptly initiate a civil lawsuit to determine the rights of the parties in this controversy.

On January 17 Hines replied that "it may be a little premature for arbitration in that . . . [i]t would be difficult to ascertain my damages at this time." Hines stated that he "would prefer to discuss a settlement without resorting either to arbitration or the courts. However, if action beyond negotiation is necessary, the courts may be the best way to do it."

Brandon filed suit on February 7, 1977, seeking money damages for breach of contract, payment for goods delivered to Hines, and enforcement of a mechanic's lien. On April 14, Hines served a motion to dismiss the complaint on the ground that the parties had agreed to arbitrate all disputes arising from the contract. Brandon opposed the motion on the grounds that Hines had waived his right to arbitrate and that, in any event, the court should not dismiss but merely stay the proceedings. On July 5, 1977, the trial court denied the motion to

Page 499

dismiss and ordered "that this case be pending arbitration to be initiated within 30 days." Neither party appealed this order.

Brandon initiated the arbitration proceeding two weeks later by sending to Hines and filing with the American Arbitration Association (AAA) a demand for arbitration seeking the recovery requested by the complaint as well as costs and attorney's fees. By the end of November, a panel of three arbitrators had been chosen: Brandon and Hines each designated one arbitrator, and the two party-appointed arbitrators chose a third panel member.

On January 18, 1978, Hines moved to set aside the stay of litigation pending arbitration on the ground that Brandon was an unlicensed contractor, and the Home Improvement Licensing Regulations, 5Y DCRR § 2.1 (1970), therefore, rendered the contract (including the arbitration clause) void and unenforceable. Brandon opposed the motion on the ground that the Home Improvement Licensing Regulations did not apply, and that even if they did, the question of the validity of the contract was one for the arbitrators. At the court's suggestion, the first arbitration hearing, set for January 27, was postponed. The court ultimately denied the motion to set aside the stay.

The arbitration panel held hearings on March 30, April 6, and April 26, 1978. The parties filed over 250 pages of exhibits and pre- and post-hearing briefs. In accordance with AAA rules, the AAA declared the hearings closed on June 12, 1978, and informed the panel and the parties that "[t]he Panel will have thirty (30) days or until on or before July 12, 1978, within which to render the award."

Close to the end of this thirty-day period, by letter of July 10, 1978, the AAA notified counsel for the parties that the arbitrators had informed the AAA of their need for additional time and had requested an extension of a minimum of 30 days. The letter stated, "We hope you will agree to the extension. Enclosed is an extra copy of this letter containing a form of authorization which you may use by signing and restayed turning it to this office. Thank you in advance for your cooperation." The authorization read, "I hereby consent to the extension of time requested by the Arbitrator to ____ for making his award," followed by date and signature lines.

By letter of July 13, 1978, the day after the original time limit for rendering the award had expired, Hines' attorney advised the AAA that his client did not consent to the requested extension. Hines' attorney reiterated this position in letters to the AAA dated July 18 and 19, 1978. On July 21, Hines served and filed his answer to Brandon's original complaint, as well as a counterclaim for breach of contract seeking $10,000 compensatory and $10,000 punitive damages.

Hines' party-appointed arbitrator refused to participate in any further proceedings. By letter of July 20, 1978, the other two arbitrators notified the AAA of their decision, ascribing various reasons to the delay and explaining their view that the 30-day time limitation for rendering the award was "procedural in nature and designed to discourage unreasonable delays." (Emphasis in original.) On July 27, 1978, the two arbitrators rendered a formal award in favor of Brandon in the amount of $17,710.97, plus interest, and allocated the costs of the proceedings 75 per cent to Hines and 25 per cent to Brandon.

On August 28, Brandon answered Hines' counterclaim, invoking the arbitration award as an affirmative defense. After seeking and receiving leave to amend his complaint to add a claim for confirmation of the award on January 11, 1979, Brandon moved the court to confirm the award and to enter judgment accordingly. Hines opposed the motion on the ground that the award was untimely and irregular and asked the court to vacate the award.

After a hearing, the trial court ruled on July 12, 1979, that the arbitrators had lacked authority to render an award after July 12, 1978, and that Hines had not waived that time limitation. Accordingly, the trial court denied Brandon's motion to

Page 500

confirm, vacated the award, and directed the parties to "proceed in the litigation of this case."

On July 23, 1979, Brandon served a motion to amend the July 12 order to return the case to the arbitrators or to certify the case for immediate appeal in accordance with D.C.Code 1973, § 11-721(d). The trial court denied this motion on October 31, 1979. On November 14, 1979, Brandon filed a notice of appeal from the July 12 order denying his motion to confirm the award and from the October 31 order denying his motion to amend the earlier order.


The first question is whether the trial court's order — denying appellant's motion to confirm the arbitration award, vacating the award, and ordering the parties to litigation — is appealable. In order to place our discussion in perspective, we begin with a look at the role of the trial court in the arbitration process....

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