Conejo Valley Unified School Dist. v. William Blurock & Partners, Inc.

• Decision Date: 12 November 1980
• Citation: 111 Cal.App.3d 983,169 Cal.Rptr. 102
• Court: California Court of Appeals Court of Appeals
• Parties: CONEJO VALLEY UNIFIED SCHOOL DISTRICT, Petitioner and Appellant, v. WILLIAM BLUROCK & PARTNERS, INC., a California Corporation, and Strecker Construction Company, a California Corporation, Respondents. Civ. 57894.

Page 102

169 Cal.Rptr. 102

111 Cal.App.3d 983

CONEJO VALLEY UNIFIED SCHOOL DISTRICT, Petitioner and Appellant, v. WILLIAM BLUROCK & PARTNERS, INC., a California Corporation, and Strecker Construction Company, a California Corporation, Respondents.

Civ. 57894.

Court of Appeal, Second District, Division 3, California.

Nov. 12, 1980.

Dorothy L. Schechter, County Counsel, and Gary Byron Roach, Asst. County Counsel, Ventura, for petitioner and appellant

Morris & Polich, Douglas C. Purdy and Suzan J. Radin, Los Angeles, for respondent William Blurock & Partners, Inc.

No appearance for respondent Strecker Const. Co.

KLEIN, Presiding Justice.

Petitioner and appellant Conejo Valley Unified School District (District) appeals from the denial of its petition for an order to compel arbitration under Code of Civil Procedure section 1281.2 ¹ and to consolidate separate arbitration proceedings under Code of Civil Procedure section 1281.3. ² The appeal lies.

FACTS

On March 11, 1975, the District and respondent William Blurock & Partners, Inc. (Blurock) entered into a written contract wherein Blurock, an architectural firm, agreed to provide all necessary architectural services, including drawings and specifications, in connection with the District's intention to construct a new high school. The contract provided for arbitration of any dispute that might arise under it.

The District thereafter awarded Strecker Construction Company (Strecker) the site preparation contract for the high school. During the site preparation work, Strecker experienced difficulty in following and interpreting Blurock's plans and specifications relative to generating and stockpiling excess materials, which materials were to be accumulated during the grading process.

At the completion of the site preparation work, Strecker filed a claim against the District in the amount of $189,370 plus interest for rehandling of materials due to alleged misrepresentations in the plans. The District then made a demand for arbitration pursuant to American Arbitration Association (AAA) construction industry arbitration rules, seeking indemnification against Blurock for all amounts due Strecker under its claim. The District and Strecker have agreed to arbitrate their dispute "as provided for in their contract."

The District demanded arbitration of this same dispute with Blurock, but Blurock refused, claiming no dispute had risen under its agreement with the District.

The March 11, 1975, contract between the District and Blurock contains language relating to arbitration as follows:

"All questions in disput (sic) under this agreement shall be subjected to arbitration at the election of either party. Such arbitration shall be conducted in accordance with the rules of the American Arbitration Association in so far (sic) as the same are

not in conflict with the laws of the State of California."

CONTENTION

The District contends that the claim by Strecker against the District arising out of a question concerning the accuracy and completeness of the drawings and specifications prepared by Blurock creates a "dispute" under the agreement between the District and Blurock, and therefore the trial court erred in denying the District's petition for an order to compel arbitration between them and to consolidate separate arbitration proceedings.

DISCUSSION

One issue presented on this appeal is whether Strecker's claim against the District for a substantial sum in excess of the contract price arising from the rehandling of materials due to "... alleged misrepresentations in the specifications and drawings for the ... construction site preparation ..." created a dispute under the agreement between the District and Blurock which was properly the subject of arbitration, contrary to the trial court's finding that "(t)his dispute does not arise out of the agreement between (District) and (Blurock)."

Preliminarily, we note that we are not bound by the trial court's interpretation of the contract between the parties, since the trial court herein did not consider any extrinsic evidence. In addition to oral argument, the trial court read and considered the petition for an order to compel arbitration and to consolidate separate arbitration proceedings, the memorandum of points and authorities in support of said petition, together with the exhibits attached thereto, and the memorandum of points and authorities in opposition.

As the court in Integrated, Inc. v. Alec Fergusson Electrical Contractor (1967) 250 Cal.App.2d 287, 58 Cal.Rptr. 503, observed:

"The interpretation of a written instrument is solely a judicial function unless it turns upon credibility of extrinsic evidence. (Citation.) An appellate court is not bound by a trial court's construction of a written instrument where such construction is based solely on the instrument without extrinsic evidence.... (Citations.)" (Id., at pp. 293-294, 58 Cal.Rptr. 503.)

The same rule of appellate review applies to arbitration provisions of contracts. (B. L. Metcalf General Contractor, Inc. v. Earl Erne, Inc. (1963) 212 Cal.App.2d 689, 693, 28 Cal.Rptr. 382.) Thus, "(w)e are free to make our own independent interpretation of the terms of the contract and its application to the instant dispute. (Citations.)" (Berman v. Dean Witter & Co., Inc. (1975) 44 Cal.App.3d 999, 1003, 119 Cal.Rptr. 130.)

The contract between the District and Blurock specifically provides that "(t) he Architect shall prepare from the approved design development documents, working drawings and specifications setting forth in detail and prescribing the work to be done, and the materials, workmanship, finishes, and equipment required for ... site work." It also requires that "(t)he Architect will endeavor to secure compliance by contractors with the contract requirements," while not guaranteeing performance.

The contract thus requires Blurock to prepare adequate plans which set forth in detail with accuracy and clarity what is expected of the site work contractor and how the contractor is to go about performing the work. The contract also calls for Blurock to supervise the work toward compliance with the contract. When Strecker, the site work contractor, claims that the plans were faulty in some important aspects, causing Strecker to expend substantial additional sums in attempting to comply with Strecker's interpretation of the plans, a dispute is created between the District and Blurock concerning the accuracy, completeness and clarity of the plans as submitted and whether Blurock properly endeavored to secure compliance.

The District is in no position to defend the plans of its architect. It hired Blurock's expertise in this area and relied on Blurock to prepare adequate plans. Clearly Blurock must come forward with explanations to the District and in answer to Strecker's allegations in an effort to resolve the dispute.

In its demand for arbitration with Blurock, the District is seeking indemnification against Blurock for all amounts due Strecker under the latter's claim. If Strecker were to collect against the District in the existing arbitration proceeding for alleged misrepresentation in the plans, the District could then force Blurock to arbitrate the "dispute" as to whether the plans and specifications it drew were in fact so misleading as to cause damage to Strecker, for which the District in turn had to pay and for which Blurock would be ultimately responsible. It logically follows that the dispute should be resolved in one proceeding, not two.

In the light of the admitted fact situation herein, to interpret the pertinent contractual provisions any other way would be to exalt form over substance. (Civ.Code, § 3528; American Center for Education, Inc. v. Cavnar (1978) 80 Cal.App.3d 476, 490, 145 Cal.Rptr. 736.)

Since public policy favors arbitration, any doubts we might entertain as to the District's right to arbitrate must be resolved in favor of ordering arbitration. (Charles J. Rounds Co. v. Joint Council of Teamsters No. 42 (1971) 4 Cal.3d 888, 892, 95 Cal.Rptr. 53, 484 P.2d 1397; Player v. Geo. M. Brewster & Son, Inc. (1971) 18 Cal.App.3d 526, 534, 96 Cal.Rptr. 149.)

Further, general arbitration provisions similar to the one between the District and Blurock, which provide for the arbitration of all questions in dispute under an agreement, have been held to require the parties to arbitrate any dispute growing out of the contract and its performance. (Morris v. Zuckerman (1967) 257 Cal.App.2d 91, 96, 64 Cal.Rptr. 714; B. L. Metcalf General Contractor, Inc. v. Earl Erne, Inc., supra, 212 Cal.App.2d at p. 691, 28 Cal.Rptr. 382.)

The trial court erred in not finding that Strecker's claim against the District based upon alleged faulty architectural plans created a "dispute" under the contract between the District and Blurock so as to call for arbitration thereof.

Since we conclude that the District's petition for an order to compel arbitration should have been granted, it follows that an order to consolidate separate arbitration proceedings into one proceeding was entitled to due consideration.

We are not persuaded by Blurock's argument that the retroactive application of section 1281.3, allowing for consolidation, would unconstitutionally impair the contractual obligations of compliance with the agreed method of selecting an arbitrator, and thus a vested right.

Granted, the contract between the District and Blurock was entered into in March of 1975, at a time prior to the 1978 effective date of section 1281.3, which provides for a statutory procedural remedy for consolidation of separate arbitration proceedings. We are also aware that prior to the enactment of section 1281.3, there was no statutory procedural remedy by which to consolidate separate arbitration proceedings. (See Atlas Plastering, Inc. v. Superior Court (1977) 72 Cal.App.3d 63, 140 Cal.Rptr. 59.)

However, a retroactive law is not invalid per se. The Supreme Court in ...