Chillum-Adelphi Volunteer Fire Dept., Inc. v. Button & Goode, Inc.

• Decision Date: 25 May 1966
• Docket Number: No. 325,CHILLUM-ADELPHI,325
• Parties: VOLUNTEER FIRE DEPARTMENT, INC. v. BUTTON & GOODE, INC.
• Court: Maryland Court of Appeals

Page 509

242 Md. 509

219 A.2d 801

CHILLUM-ADELPHI VOLUNTEER FIRE DEPARTMENT, INC. v. BUTTON & GOODE, INC.

No. 325.

Court of Appeals of Maryland.

May 25, 1966.

Edward A. Waldmann, Hyattsville, for appellant.

Robert A. Gingell and Lawrence E. Speelman, Silver Spring (Ritterpusch & Gingell, Silver Spring, on the brief), for appellee.

Before PRESCOTT, C. J., and MARBURY, BARNES and McWILLIAMS, JJ., and MATTHEW S. EVANS, Special Judge.

BARNES, Judge.

This suit was brought by Button & Goode, Inc. (appellee) to enforce an arbitration award entered after Button & Goode and Chillum-Adelphi Volunteer Fire Dept. Co. (appellant) had submitted to arbitration proceedings in regard to a dispute which arose concerning whether Chillum-Adelphi could keep certain sums due Button & Code under a contract for the erection of a fire house. This money was retained by Chillum-Adelphi as liquidated damages occasioned because of Button & Goode's delay in completing construction of the building. Button & Goode was granted summary judgment in its suit to enforce the arbitration award. This appeal followed.

On April 30, 1962 Button & Goode (contractor) and Chillum-adelphi (owner) entered into a construction contract whereby Button & Goode agreed to erect two buildings for Chillum-Adelphi. Plans and specifications had been drafted by the owner's architect, Philip W. Mason. The arbitration proceedings and this suit are concerned only with one of the two buildings, the other having been fully completed as required by the contract.

Article 2 of the construction agreement provided that work to be performed under the contract was to commence upon written notice; and the building was to be substantially completed 180 calendar days from the date of such notice. Article 45 of the American Institute of Architects' General Conditions of Contracts, made part of the construction agreement in this case by Article 1 of that agreement, ¹ provided that the time in which the contractor agreed to complete the work was of the essence of the contract, and failure to complete the work within the time specified would entitle the owner to deduct as liquidated damages out of any money which may be due the contractor under the contract, the sum of $50.00 for each calendar day in excess of the 180 days until the building should be substantially completed.

The owner's architect specified that one of the buildings was to be constructed of pre-cast concrete framing. Button & Goode could not commence work until that material was delivered to the building site, and the long and protracted delay of Nitterhouse Concrete Products, Inc. (Nitterhouse) in delivering the concrete frames caused a delay in completing the building beyond the 180 days agreed upon as the time within which construction was to be substantially completed. Chillum-Adelphi retained $21,426.48 of the contract price as damages occasioned because of Button & Goode's delay in substantially completing the building.

Article 40 of the General Conditions of Contracts provided that the owner and contractor would submit all disputes, claims or questions arising under the contract to arbitration under the procedure then obtaining in the Standard Form of Arbitration Procedure of the American Institute of Architects (AIA). Button & Goode filed a demand for arbitration with the American Arbitration Association (AAA). Chillum-Adelphi objected to the arbitration procedure provided by the AAA; however, the parties agreed to submit their dispute to arbitration by the AAA provided that the procedure complied with that of the AIA whereby the parties would be given the opportunity to examine and cross-examine all witnesses and introduce exhibits at any time during the hearing.

It was agreed between Button & Goode and Chillum-Adelphi that the issues to be decided by the board of arbitrators would be: (1) What damages, if any, should be assessed against the contractor in this case, and (2) Was the building completed at the time of arbitration.

A hearing was held by the board of arbitrators on August 26, 1964. The arbitrators found that the owner's architect had specified that pre-cast concrete materials of Nitterhouse's manufacture be used in construction of the building, that the contractor had made repeated attempts to have some other company substituted for Nitterhouse to supply the pre-cast concrete frames, but the architect refused to authorize a change because he expected delivery from Nitterhouse sooner than from another company since the order had been pending there for such a long time. Furthermore, a change of suppliers would have necessitated a change in the plans of the building.

Article 18 of the General Conditions provided that the owner's architect should extend the time for the completion of the building if the contractor be delayed in the progress of the work 'for any cause beyond the contractor's control'. The arbitrators found that Chillum-Adelphi was bound by the decision of its agent, its architect Mr. Mason, to use a product in the construction of the building which proved to be unavailable. The contractor was therefore not responsible for any delay in construction until January 11, 1963, the date Nitterhouse delivered the concrete frames. Under the circumstances, the delay was 'beyond the contractor's control' and the architect should have extended the time for completion of the job.

After the pre-cast framing was delivered, Button & Goode proceeded promptly to resume work on the job. The building was substantially completed on August 10, 1963, 211 days after the framing was received from Nitterhouse.

The arbitrators found that Button & Goode was entitled to 180 days from January 11, 1963 for the completion of the job. Since the contractor required 211 days to substantially complete the building from the date the pre-cast frames were delivered, Chillum-Adelphi was entitled to $1,550.00 as liquidated damages, or $50.00 per day for 31 days. Chillum-Adelphi had retained $21,426.48 from the amount due the contractor under the construction agreement. The board of arbitrators therefore awarded Button & Goode $19,876.48 and divided the costs equally between the parties.

Button & Goode filed a petition for judgment on the arbitration award pursuant to Maryland Rule E6. Thereafter, a motion for summary judgment was filed. The trial court entered summary judgment on the arbitration award for $20,591.00. ² Chillum-Adelphi opposed summary judgment in the trial court and here on appeal on the theory that the arbitrators went beyond the issues submitted to them for determination, no evidence existed to support the arbitrators' findings, and a genuine dispute exists between the parties as to a material fact in that it is alleged that the arbitration hearing was not conducted in accordance with Maryland Rules E2 to E4.

Button & Goode has moved under Maryland Rule 835 b to dismiss this appeal. It is the appellee's contention that the lower court was exercising appellate jurisdiction in reviewing the award before entering judgment upon it. No Maryland statute applicable to the parties in this case authorizes an appeal from the judgment of a nisi prius court enforcing an award granted under a private arbitration agreement. ³ If a court enforcing such an award were to act as an appellate tribunal, no appeal could be taken to this Court from a decision rendered by that forum. Code (1957) Art. 5, § 1; Board of Medical Examiners v. Steward, 203 Md. 574, 102 A.2d 248 (1954); Johnson v. Board of Zoning Appeals, 196 Md. 400, 76 A.2d 736 (1950).

In the early case of State, use of Hickley v. Stewart, 12 Gill & J. 456 (1842) our predecessors held that an appeal will lie from the judgment of a nisi prius court setting aside an arbitration award. See also Grove v. Swartz, 45 Md. 227 (1870). Although the jurisdictional issue had not been raised, appeals to this Court from the enforcement or vacation of arbitration awards have been taken and heard many times in the past. City of Baltimore v. Allied Contractors, Inc., 236 Md. 534, 204 A.2d 546 (1964); O'Ferrall v. DeLuxe Sign Co., 158 Md. 544, 149 A. 290 (1930); McDonald v. Real Estate Board of Baltimore City, 155 Md. 377, 142 A. 261 (1928); Dominion Marble Co. v. Morrow, 130 Md. 255, 100 A. 292 (1917); Roberts Brothers v. Consumers Can Co., 102 Md. 362, 62 A. 585 (1905).

The General Assembly has enacted the Uniform Arbitration Act which, among other things, defines the jurisdiction of the courts in enforcing, vacating and correcting arbitration awards. Acts of 1965, ch. 231. Code (1965 Cum.Supp.) Art. 7, §§ 1-23. However, according to the provisions of the Act it is not to apply retroactively to arbitration agreements made prior to June 1, 1965. The Act, therefore, is not applicable to this case where the arbitration agreement was made prior to that date and we will decide this appeal under the prior rules governing the enforcement of private arbitration awards.

At common law, an arbitration award became a cause of action in favor of the prevailing party. The award could be sued on as a contract, and the function of a court in entering judgment upon it was to determine whether the award, which was not self-enforcing, was entitled to be enforced as a judgment of court. 5 Am.Jur.2d Arbitration & Award § 184, page 655; 1 Poe, Pleading & Practice (Tiffany's ed.) § 657, page 684; 6 Williston on Contracts § 1927, page 5389 (1938).

An arbitration award is the decision of an extra-judicial tribunal 'which the parties themselves have created, and by whose judgment they have mutually agreed to abide.' Continental Milling & Feed Co. v. Doughnut Corp. of America, 186 Md. 669, 674, 48...