Carter v. CATHEDRAL AVE. CO-OP., INC.

Decision Date31 August 1989
Docket NumberNo. 88-177.,88-177.
Citation566 A.2d 716
PartiesHope H. CARTER, et al., Appellants, v. The CATHEDRAL AVENUE COOPERATIVE, INC., Appellee.
CourtD.C. Court of Appeals

Eric A. Von Salzen, with whom Jeanne M. Crouse, Washington, D.C., was on the brief, for appellants.

Carol S. Rabenhorst, with whom C. William Tayler, Washington, D.C., was on the brief, for appellee.

Before ROGERS, Chief Judge, and STEADMAN and SCHWELB, Associate Judges.

STEADMAN, Associate Judge:

This appeal involves a dispute over the applicability of an arbitration provision in a lease to a dispute regarding the timeliness of notice given under a rental adjustment clause.1 We hold that the trial court erred in concluding that the disputed issue was not arbitrable. Accordingly, we reverse the trial court's judgment on the merits and remand for further proceedings consistent with this opinion.2

Hope Carter and John Hemphill, Jr. (the "Landlords") are parties to a 99-year ground lease for land located at 4101 Cathedral Avenue N.W. in the District with the Cathedral Avenue Cooperative, Inc. (the "Tenant"), which owns and operates a cooperative apartment building on that site. Article I, Section 4 of the lease3 provides for an adjustment of the ground rent upon the expiration of the first twenty-five years of the lease term, and every ten years thereafter. Notice must be given ninety days before the end of the current period by the party seeking a change in the ground rent. The instant dispute concerns the interplay between the ninety-day notice provision and language in the lease providing for notification where one of the parties seeks an alternative to the formula used for adjusting the rent. The Landlords, who gave timely notice of their general desire to increase the ground rent, did not within that ninety-day period likewise give notice of their view that the Producer Price Index4 was no longer an appropriate measure upon which to base rent calculations. The substantive issue for decision, therefore, is the nature and timing of the notice the Landlords were obligated by the lease to give regarding their dissatisfaction with the Index.5 Since we hold that this substantive issue is embraced by the arbitration clause of the lease, we intimate no view on the merits of the dispute, leaving its resolution to the arbitrator. See Ballard & Assocs. Inc. v. Mangum, 368 A.2d 548, 551 (D.C.1977) (whether parties have agreed to arbitrate disputes of a particular kind is question for judicial resolution).6

The Supreme Court has set forth the principle that arbitration clauses should be broadly construed. Thus, in AT & T Technologies v. Communications Workers, 475 U.S. 643, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986), the Court stated:

Where the contract contains an arbitration clause, there is a presumption of arbitrability in the sense that "an order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage."

Id. at 650, 106 S.Ct. at 1419 (quoting United Steelworkers v. Warrior & Gulf, 363 U.S. 574, 582-83, 80 S.Ct. 1347, 1353, 4 L.Ed.2d 1409 (1960)). Our own decisions, in cases outside the labor context, have recognized this same principle. See Poire v. Kaplan, 491 A.2d 529, 534 n. 8 (D.C. 1985) (rejecting challenge to arbitration award in dispute arising out of joint venture agreement to purchase apartment and parking space; citing principle that ambiguity as to whether a matter is within arbitrator's authority "must be resolved in favor of arbitration"); Sindler v. Batleman, 416 A.2d 238, 243 (D.C.1980) (appeal from denial of motion to vacate arbitration award in dispute arising out of joint venture agreement to build and maintain apartment building; noting that "case law... dictates that where there is an ambiguity as to whether a matter is within the scope of the arbitrator's authority, the question is to be resolved in favor of arbitration").

Applying this principle to the case at hand, we cannot say that the arbitration clause of the lease is "not susceptible of an interpretation that covers the asserted dispute." AT & T, supra at 650, 106 S.Ct. at 1419. We therefore must disagree with the trial court's view that the agreement was not ambiguous with respect to whether the question of timely notice of the applicability of the Index was arbitrable.7 Cf. Jessamy Fort & Ogletree v. Lenkin, 551 A.2d 830 (1988) (trial court found lease unambiguous and granted summary judgment; on appeal court disagreed, finding lease language subject to more than one reasonable interpretation and thus summary judgment inappropriate).

The clause relating to arbitration, contained in Article XII, provides in full as follows:

In case any dispute, disagreement, difference, or question shall arise at any time hereafter between the Landlord and the Tenant, or any person claiming under either of them, in connection with or in relation to the value of any property, ability or capacity of any property to produce net rentals, the amount of insurance coverage, the lawful use of the demised premises or the Improvements or any matter which is expressly referrable sic to arbitration under the terms hereof, then such dispute, disagreement, difference or question shall be submitted to and determined by arbitration at the choice of either the Landlord or the Tenant.

(Emphasis added.)

The arbitration clause then must be read in conjunction with Article I, Section 4 of the lease, which provides that a dispute over the applicability of the Index is subject to arbitration. The section in relevant part reads as follows:

If such Index shall be discontinued with no successor or comparable successor, or if either party with reasonable grounds therefor shall notify the other that such Index is no longer applicable for the purpose of this lease, the parties shall attempt to agree upon a substitute formula, but in the event the parties cannot agree then the matter shall be referred to arbitration as herein provided.

(Emphasis added.)

We think it is a reasonable interpretation of the lease to regard the question of when and how one party "shall notify the other that such Index is no longer applicable" as a "dispute ... in connection with or in relation to ... any matter which is expressly referrable sic to arbitration." Tenant conceded at oral argument that the reasonableness of the grounds asserted for challenging the Index would be arbitrable (the "with reasonable grounds therefor" clause). It is likewise a fair reading of the section to conclude that the presence or lack thereof of a "successor or comparable successor" would be subject to arbitration. It would be anomalous to construe the "shall notify" clause alone, which directly follows the clause conceded by Tenant to be subject to arbitration, to be the only provision in that sentence lying beyond the pale of arbitration.

To be sure, the arbitration clause in the instant case is less expansive than a clause providing for arbitration of "any differences arising with respect to the interpretation of this contract or the performance of any obligation hereunder," AT & T, supra, 475 U.S. at 650, 106 S.Ct. at 1419; or providing that "any controversy or claim arising out of or resulting from this agreement or the breach thereof, shall be settled by arbitration," Sindler v. Batleman, supra, 416 A.2d at 239, in that the parties agreed that only certain delineated areas of controversy would be subject to arbitration. However, in specifying these areas, the agreement sweepingly brought within the ambit of arbitrable issues "any dispute, disagreement, difference or question" arising "in connection with or in relation to" the specified areas.8

In light of the foregoing analysis and the...

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  • Meshel v. Ohev Sholom Talmud Torah
    • United States
    • Court of Appeals of Columbia District
    • March 10, 2005
    ...and, if so, whether the underlying dispute between the parties falls within the scope of the agreement. See Carter v. Cathedral Ave. Coop., Inc., 566 A.2d 716, 717-19 (D.C.1989); D.C.Code §§ 16-4301, 16-4302(a) (2001). Each of these determinations is governed by traditional principles of co......
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    • September 14, 2006
    ...the parties had agreed to arbitrate. See id. at 361 (citing D.C.Code § 16-4301,-4302 (a),-4303 (2001); Carter v. Cathedral Ave. Coop., Inc., 566 A.2d 716, 717-19 (D.C.1989); American Fed'n of Gov't Employees, Local 3721 v. District of Columbia, 563 A.2d 361, 362 (D.C.1989)). Noting that it ......
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    ...there is a well-established preference to arbitrate disputes when the parties have so agreed. See generally Carter v. Cathedral Ave. Coop., Inc., 566 A.2d 716, 719 n. 9 (D.C. 1989); Poire v. Kaplan, 491 A.2d 529, 534 n. 8 (D.C. 1985); Sindler v. Batleman, 416 A.2d 238, 343 (D.C. 1980). Thus......
  • CARTER v. CATHEDRAL AVE. CO-OP., INC., 92-CV-800
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    • Court of Appeals of Columbia District
    • May 31, 1995
    ...See Carter v. Cathedral Avenue Cooperative, Inc., 532 A.2d 681 (D.C. 1987) (Carter I), and Carter v. Cathedral Avenue Cooperative, Inc., 566 A.2d 716 (D.C. 1989) (hereinafter Carter II). This appeal involves a dispute over the procedure described in an arbitration provision — whether one pa......
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