Detroit Demolition Corp. v. Burroughs Corp., Docket No. 12833

• Decision Date: 21 February 1973
• Docket Number: No. 1,Docket No. 12833,1
• Citation: 45 Mich.App. 72,205 N.W.2d 856
• Parties: DETROIT DEMOLITION CORPORATION, a Michigan corporation, Plaintiff-Appellee, v. BURROUGHS CORPORATION, a Michigan corporation, Defendant-Appellant
• Court: Court of Appeal of Michigan — District of US

Page 856

205 N.W.2d 856

45 Mich.App. 72

DETROIT DEMOLITION CORPORATION, a Michigan corporation Plaintiff-Appellee, v. BURROUGHS CORPORATION, a Michigan corporation, Defendant-Appellant.

Docket No. 12833.

Court of Appeals of Michigan, Division No. 1.

Feb. 21, 1973.

Released for Publication April 13, 1973.

James M. Clabault, Vice Pres.--Legal, Burroughs Corp., and William L. Hooth, Elliot B. Glicksman, Detroit, for defendant-appellant.

Arthur James Rubiner, Southfield, for plaintiff-appellee.

Before QUINN, P.J., and V. J. BRENNAN and O'HARA, ^* JJ.

O'HARA, Judge.

Defendant Burroughs Corporation (hereinafter 'Burroughs') appeals of right from the judgment of the trial court confirming an arbitration award entered in plaintiff Detroit Demolition Corporation's (hereinafter 'Detroit') favor in the amount of $136,000.

The pertinent facts are as follows: On June 15, 1967, plaintiff and defendant executed a written agreement which provided that plaintiff would demolish two of defendant's buildings at a cost of $498,750. As demolition work proceeded it became apparent that it would be necessary to remove certain concrete fill not included within the original contract. After the parties had discussed the cost of this additional work, the original contract was modified by a written document called 'Change Order No. 4' which specified payment of an additional $133,200 to plaintiff to cover cost of removing this concrete floorfill. According to defendant's version of the facts, plaintiff completed all work on the demolition project about December 12, 1968, and on December 19, 1968, defendant made--and plaintiff accepted--the last payment under the contract which defendant contends constituted 'final payment' within the meaning of the contractual language, and included the additional sum agreed upon under Change Order No. 4.

Defendant states that nothing further was heard from plaintiff until March 3, 1969, when Burroughs received a letter from plaintiff's attorney asserting dissatisfaction with the compensation plaintiff received for its removal of the additional concrete fill. Defendant claims that a series of communications between the parties followed in which plaintiff indicated an intention to demand arbitration as to the allegedly deficient payment. Defendant, however, maintained that since all contract work had been completed and final payment had been tendered and accepted, no arbitrable dispute existed between the two parties.

On August 18, 1969, plaintiff filed a complaint and motion for an order to proceed with arbitration. Disposition of these pleadings is unclear: defendant claims that the motion was denied because the complaint did not allege the existence of an arbitrable dispute between the parties, while plaintiff contends that the motion was merely adjourned, not denied, in order to enable plaintiff to file an amended complaint. Later on March 6, 1970, plaintiff filed an amended complaint and motion for an order to proceed with arbitration, paragraph 3 of which provided:

'3. From time to time prior to the purported final payment pursuant to such agreement, plaintiff had made certain written demands (among others) upon defendant for the payment of various sums of money, viz:

(a) Claim of $49,875.00 representing a sum equal to 10% Of the full agreed price, necessitated by defendant's insistence that plaintiff use hand labor on certain aspects of plaintiff's work, rather than machine equipment.

(b) Claim of $207,000.00 representing removal of concrete fill at $1,35 per square foot. Such removal was demanded by defendant's architect after execution of the original agreement which was not required by said agreement.

(c) Claim for $1,931.22 for capping and backfilling a sewer line not required in such agreement.'

Defendant thereupon timely answered: denying that plaintiff had submitted any written claims prior to the alleged 'final payment'; denying that defendant was indebted to plaintiff in any amount; and, at hearings on plaintiff's motion held on March 6 and 13, alleged that no written claims had been made and that the claim specified in paragraph 3(b) of plaintiff's amended complaint had in any cases been settled by plaintiff's acceptance of 'Change Order No. 4' and its acceptance thereunder of $133,200 for removal of the concrete fill. These hearings were not recorded and thus not transcribed.

My order of March 13, 1970, the trial court ordered defendant to submit to arbitration of the claims set forth in plaintiff's amended complaint 'in the manner and according to the procedure provided in the 'General Conditions of the Contract for the Construction of Buildings' of the American Institute of Architects'. Defendant apparently did not seek to appeal from the trial court's order requiring it to arbitrate the dispute.

On May 22, 1970, after plaintiff filed a demand for arbitration with the American Arbitration Association, an arbitrator was subsequently appointed and hearings were held before him, and on September 9, 1971, the arbitrator filed an award which provided in pertinent part as follows:

'BURROUGHS CORPORATION * * * shall pay to DETROIT DEMOLITION CORPORATION * * * the sum of ONE HUNDRED THIRTY-SIX THOUSAND DOLLARS ($136,000).'

On October 5, 1972, plaintiff filed a motion to confirm the award of the arbitrator. In its answer defendant averred that it had commenced in the trial court an independent action against plaintiff to vacate said award, and, incorporating by reference the reasons delineated in its complaint in the second action, contended that the arbitration award constituted an invalid abrogation of 'Change Order No. 4' under which plaintiff had allegedly agreed to accept and had accepted $133,200 in full satisfaction of all claims under the contract. After hearings on plaintiff's motion, the trial judge issued an order confirming the arbitration award and entered a judgment against defendant in the amount of $136,000 plus costs. This appeal followed.

The essential question presented on appeal relates to whether or not defendant's failure to seek an interlocutory appeal from the trial court's order compelling arbitration and its participation in arbitration proceedings as ordered by the lower court effectively precludes appellate review of the trial judge's initial determination that the disputed claims were properly arbitrable under arbitration provisions contained in the contract between the parties.

Plaintiff first argues that defendant has waived any right to appeal by virtue of the language in the demolition contract which specified that '(t)he award rendered by the arbitrators shall be final, and judgment may be entered upon it in any court having jurisdiction thereof', citing Hoste v. Dalton, 137 Mich. 522, 100 N.W. 750 (1904). However, Hoste is inapposite since that case concerned the parties' stipulation to accept the decision of the circuit court as binding and final and therefore does not support Detroit's contention that finality of an arbitration...