DiMambro-Northend Associates v. Blanck-Alvarez, Inc., MAMBRO-NORTHEND
| Decision Date | 30 November 1983 |
| Docket Number | MAMBRO-NORTHEND,INC,No. 40098,BLANCK-ALVARE,40098 |
| Citation | 309 S.E.2d 364,251 Ga. 704 |
| Parties | DiASSOCIATES et al. v.et al. |
| Court | Georgia Supreme Court |
Peter R. Weisz, Jay L. Lubetkin, Stokes, Shapiro, Fussell & Genberg, Atlanta, for DiMambro-Northend Associates, et al.
H. Wayne Phears, Maureen M. Middleton, Vaughn, Phears & Murphy, Atlanta, for Blanck-Alvarez, Inc., et al.
This case arises out of a dispute between two partners collaborating on a water management facility construction project for the city of Atlanta. The principal question is whether an arbitration provision included in the collaboration agreement between the partners covers the dispute at issue. The trial court ruled that the arbitration provision did not apply and appointed a receiver. We reverse.
In 1979 appellant DiMambro-Northend Associates entered into a collaborative agreement (characterized by the parties as "the collaborative") with Blanck-Alvarez for a construction project, while also complying with the city's minority business enterprise (MBE) requirements. Under the city of Atlanta's MBE plan, a contractor who, in bad faith, failed to maintain at least 25% minority participation on his project could be subject to liquidated damages of $3,000 per day.
Pursuant to the agreement, Blanck-Alvarez became a 25% financial participant in the collaborative, was vested with day to day responsibility for job-site matters, and was obligated to perform certain construction work on the project.
DiMambro-Northend became a 75% financial participant and was vested with overall management and control of the collaborative. With the knowledge and approval of DiMambro-Northend, Blanck and Alvarez were also hired independently as the project engineer and the project superintendent, respectively. Profits and losses of the collaborative were to be allocated in the same 75/25 ratio.
During the course of the project disputes arose which were not resolved in a timely manner and in February 1982, Blanck-Alvarez ceased to participate in the collaborative and Blanck and Alvarez ended their work as superintendent and project engineer before the completion of the project. In September 1982, Blanck-Alvarez filed a petition for the appointment of a receiver in superior court, complaining that the city of Atlanta's intent to assess $3,000 per day liquidated damages for violation of MBE regulations necessitated DiMambro-Northend's removal as manager of the project, that DiMambro-Northend was converting partnership property to its own use, that DiMambro-Northend was charging excessive management fees and interest on capital provided for this collaborative, that Blanck and Alvarez had been fired, that DiMambro-Northend had usurped control and day to day management of the worksite, and various other breaches of the contract between the parties to the collaborative. At that time about 85% of the project had been completed.
The superior court heard the matter two days later, but before an order was entered, DiMambro-Northend sought to remove to federal district court, based on diversity jurisdiction. The removal was denied and the case remanded in December 1982. In the meantime, DiMambro-Northend sued the city of Atlanta in October 1982, seeking to enjoin the assessment of liquidated damages. The city never answered and the parties quickly reached a settlement resulting in the withdrawal of the liquidated damages assessment. Also in October 1982, DiMambro-Northend filed a motion to stay the Blanck-Alvarez action pending arbitration pursuant to the pertinent clause of the contract between them.
On March 4, 1983, DiMambro-Northend filed a demand for arbitration with the American Arbitration Association against Blanck-Alvarez. The superior court acted on March 9, when it entered an order appointing a receiver and denying DiMambro-Northend's motion to stay pending arbitration finding that the issues presented were not subject to arbitration. DiMambro-Northend appeals to this court.
DiMambro-Northend makes eight enumerations of error which are divided into two groups. The first three involve the trial court's interpretation of the scope and applicability of the contract's arbitration clause, and the remaining five involve the issue of whether the court erred in appointing a receiver.
1. DiMambro-Northend contends that the court erred in denying its motion to stay pending arbitration because the arbitration clause of the agreement covers the disputes at issue in the suit and because the...
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...has applied FAA's mandatory stay provision, 9 USC § 3, to actions brought in a Georgia court. DiMambro-Northend Assoc. v. Blanck-Alvarez, Inc., 251 Ga. 704, 707(1), 309 S.E.2d 364 (1983). 9 USC § 3 provides in applicable part, the court in which such suit is pending, upon being satisfied th......
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...is subject to any additional limitations under state law." Id. at 11, 104 S.Ct. at 858. Similarly, in DiMambro-Northend Assoc. v. Blanck-Alvarez, 251 Ga. 704, 309 S.E.2d 364 (1983), our own Supreme Court recognized " 'a Congressional declaration of a liberal federal policy favoring arbitrat......
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