C. W. Jackson & Associates, Inc. v. Brooks

• Decision Date: 11 March 1981
• Docket Number: No. 74,74
• Citation: 289 Md. 658,426 A.2d 378
• Parties: C. W. JACKSON & ASSOCIATES, INC. v. David L. BROOKS et al.
• Court: Maryland Court of Appeals

Page 658

289 Md. 658

426 A.2d 378

C. W. JACKSON & ASSOCIATES, INC. v. David L. BROOKS et al.

No. 74.

Court of Appeals of Maryland.

March 11, 1981.

Dorothy M. Beaman and Richard W. Kiefer, Baltimore, for appellant.

James E. Carbine, Baltimore (Jefferson L. Mitchell and Weinberg & Green, Baltimore, on the brief), for appellees.

Argued before MURPHY, C. J., and SMITH, DIGGES, ELDRIDGE, COLE, DAVIDSON and RODOWSKY, JJ.

SMITH, Judge.

We are concerned in this case with an application of the Maryland Uniform Arbitration Act, Code (1974) §§ 3-201 to -234, Courts and Judicial Proceedings Article, to a building contract and the remedy of one party when the other party invokes equity jurisdiction but fails as to an uncontested portion of the award to do that which he has been directed to do by the arbitrator, such failure being at a time after which a party may seek to modify the award under the Act. We shall find error on the part of the Court of Special Appeals which concluded in C. W. Jackson & Associates v. Brooks, 46 Md.App. 63, 415 A.2d 640 (1980), that the Circuit Court for Baltimore County was without power to decide the issue before it. We likewise shall find error in the decision reached by the trial court.

C. W. Jackson & Associates, Inc., is a building contractor. In 1972 it and David L. Brooks entered into a contract for the construction of a new car sales and service facility in Baltimore County. Brooks Buick, Inc., was also involved. Disputes arose between the parties and litigation ensued. Ultimately an agreement was reached to submit the matter to arbitration. Donald Rothman, Esq., of the Baltimore bar, was the arbitrator. Central to the issue here is the roof and certain ductwork which was to be installed upon it, although there were other issues before the arbitrator. On this subject the arbitrator said:

Jackson clearly failed to fully meet the specifications in regard to this work. Owner's agent, Henry Adams, Inc., apparently failed to pick this up at the time (although it should have done so), and approved the installation. However, it is not clear that the conditions now complained of, that is, sagging and leaking, are in fact due to those failures to meet specifications which have been pointed out, or due to failure to meet specifications at all.

He found "a tremendous disparity in the bids submitted for correction." One contractor desired "$15,400 to replace insulation on all ductwork," while another "quote(d) $750 for additional coating on all rooftop duct insulation to 'assure a watertight seal' ..." (Emphasis by the arbitrator.) He referred to yet other bids in between those figures and then further observed:

The original subcontractor, Mills & Sons, Inc., has formally offered to make the repairs to the ductwork which Mr. Romine of Henry Adams, Inc. (Adams) specified as defects in his letter of April 29 1976, to the "complete satisfaction and approval" of Adams, and to reseal any joints not sealed with four inch wide vapor barrier tape where these joints are not so sealed, and to recoat the entire exposed duct surface on the roof at no expense to Brooks, all as specified and set forth in Jackson's Exhibit JJJ.

Although Brooks does not want Jackson or its subcontractor to do the work, I believe this is a fair manner in which to resolve the problem; provided, (1) it is done expeditiously at a time mutually agreeable to Adams and Mills within 90 days of the date of this award, or at a later date if weather prevents doing the work properly within 90 days, but in no event later than 120 days from the date of this award, and (2) it is certified by Adams as satisfactory.

The arbitrator specified under what circumstances the work by Mills was to be deemed satisfactory. He then commented:

It will be necessary for Mills to coordinate its work with that of the roofer employed by Brooks and should it fail to do so, its work shall not be deemed satisfactory. Allowance has been made to Brooks for the cost of roofing work in Item A.1.b. infra, and, in order to obtain a fully satisfactory result, Brooks will have to arrange with Adams or Mills to have whatever roofing work needs to be done in conjunction with Mills' work carried out concurrently with it.

The seeds of this controversy were sown in the concluding portion of the award in which he stated:

Brooks shall be entitled to withhold $16,000 from the amount otherwise due Jackson under this Award until either (1) Mills declines to do the work as specified herein, in which case it shall so notify Brooks in writing within fifteen days of the date of this Award and Brooks shall be entitled to retain the $16,000, or (2) Mills performs the work within the time specified herein and Adams certifies that it is satisfactory in writing, at which time said amount shall be paid over to Jackson. Should Mills perform the work within the time allowed, but Adams fail or refuse to certify that it is satisfactory, Jackson shall have the right to apply either to the Circuit Court for Baltimore County or to this arbitrator for determination of whether Adams' certification was unreasonably withheld. Should the court or arbitrator find that such certification was unreasonably withheld, Jackson shall be entitled to receive from Brooks not only the principal sum of $16,000 but also interest thereon at the rate of 8% per annum, from the date of this Award plus his costs and attorneys' fees attendant upon the collection of such money.

The award was made on November 15, 1977. On December 14, 1977, Brooks invoked the provisions of Code (1974), §§ 3-223 and 3-224, Courts and Judicial Proceedings Article, requesting the Circuit Court for Baltimore County to vacate, modify or correct the award of arbitration. As Judge Wilner pointed out for the Court of Special Appeals, 46 Md.App. at 66-67, 415 A.2d 640, Brooks "made no complaint about that part of the award dealing with the roof or the ductwork; its petition was silent as to those matters." Brooks' petition asked the equity court to "(a)ssume continuing jurisdiction of the subject matters ..." Jackson answered on January 4. It denied the allegations of the petition and requested that the award be confirmed. Since no reference was made in the petition to the ductwork or roofing repairs, the answer had no reason to make reference to either.

On the same day that the answer was filed the parties met for the purpose of arranging for the coordination of the roof and ductwork repair. They concluded that it would be impossible to schedule this work within the time limit specified in the award. Therefore, they requested the arbitrator to extend the time limits. On January 20 he passed an order reciting this fact and stating Accordingly, provided all parties so stipulate and agree in writing, the time for certification that the duct work on the roof and its covering referred to at page 9, I A 1 (a), of the Award of November 15, 1977, is hereby extended to June 15, 1978.

In April 1978 Mills and a roofing contractor procured by Brooks met on the job. No work was done. Brooks later testified that he and the roofing contractor could not agree upon a price.

On June 14, 1978, Jackson filed what was styled as a petition to modify the award of arbitration. It will be noted that this was one day prior to the deadline set by the arbitrator's extension of time. The petition recited that which Brooks concedes to be true, namely that Brooks had not proceeded with repair of the roof. It was claimed "(t)hat though Jackson and Mills ha(d) repeatedly sought a decision from Brooks as to the extent of the roof to be repaired or replaced, Brooks ha(d) failed and refused to so advise," thus "prevent(ing Jackson and Mills) from performing the duct work due entirely to the failure of Brooks to comply with the terms of the Award." Accordingly, Jackson requested that the award be modified to pay Jackson the $16,000 then being withheld and that Jackson and Mills "be relieved of any further responsibility for the performance of the duct work ..." No answer to that petition was ever filed.

It would appear that efforts to find a satisfactory roofing contractor continued in the interim between the filing of Jackson's petition and the hearing held almost a year later. These efforts were unsuccessful, however. Mills went out of business and into receivership in that period.

When the matter came on for hearing in the Circuit Court for Baltimore County, there were three issues regarded by all as before the court. Two of them were decided adversely to Brooks, from which no appeal was taken. On this issue the trial judge said in pertinent part:

Clearly, the arbitrator, in fashioning his award in this manner, allowed Jackson the opportunity to have the ductwork contractor perform the necessary repairs at no cost, and upon the failure to correct such defects, provided for damages to Brooks in the amount of $16,000.00. It is uncontroverted that the repair work has not been completed and that Mills is no longer available to perform the necessary repairs. The Court finds, therefore, that the Award shall be modified to allow Brooks to retain the $16,000.00 as damages resulting from the defective ductwork. Having found the Arbitrator's award to be in the alternative, repair or damages, the Court's action in this regard is clearly mandated under Courts and Judicial Proceedings Article, Section 3-223(3), as not affecting the merits of the controversy. In so ruling, the Court specifically finds that any delay on the part of Brooks in failing to provide a roofing contractor was not of such magnitude as to defeat Brooks' entitlement to damages for the defective ductwork.

Jackson appealed to the Court of Special Appeals. That court held that since "(Jackson's) petition was not filed within 90 days of delivery of the award; nor ... was the issue presented in it raised in defense to (Brook's) petition or otherwise before the court(,) ... (t)he court ... had...