Carter v. CATHEDRAL AVE. CO-OP., INC., No. 88-177.

• Docket Nº: No. 88-177.
• Citation: 566 A.2d 716
• Case Date: August 31, 1989
• Court: Court of Appeals of Columbia District

566 A.2d 716

Hope H. CARTER, et al., Appellants,
v.
The CATHEDRAL AVENUE COOPERATIVE, INC., Appellee.

No. 88-177.

District of Columbia Court of Appeals.

Argued May 15, 1989.

Decided August 31, 1989.

Rehearing and Rehearing En Banc Denied December 21, 1989.

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

566 A.2d 717

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

566 A.2d 718

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

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