Geo. V. Nolte & Co. v. Pieler Const. Co.

• Citation: 54 Wn.2d 30,337 P.2d 710
• Decision Date: 09 April 1959
• Docket Number: No. 34806,34806
• Court: United States State Supreme Court of Washington
• Parties: GEO. V. NOLTE & CO., a corporation, Respondent, v. PIELER CONSTRUCTION CO., a corporation, Appellant, Geo, V. Nolte and Fred M. Harris, doing business as Geo. V. Nolte & Co., Additional Respondents.

Page 30

54 Wn.2d 30

337 P.2d 710

GEO. V. NOLTE & CO., a corporation, Respondent, v. PIELER CONSTRUCTION CO., a corporation, Appellant Geo, V. Nolte and Fred M. Harris, doing business as Geo. V Nolte & Co., Additional Respondents.

No. 34806.

Supreme Court of Washington, Department 1.

April 9, 1959.

Lycette, Diamond & Sylvester, Lyle L. Iversen, Seattle, for appellant.

Sherwood & Forrest, Livesey, Kingsbury & Livesey, Bellingham, for respondent.

OTT, Justice.

Myers, Major & Co., a copartnership (hereinafter referred to as Myers), was the successful bidder for the construction of a Federal housing administration project at the Naval Air Station on Whidbey island. April 24, 1952, Myers, the prime contractor, entered into a subcontract with Pieler Construction Co. (herinafter referred to as Pieler) for the construction of certain streets, curbs, sidewalks, utilities, site improvements, and landscaping on the project, for a total of $246,500.

On or about May 19, 1952, Geo. V. Nolte and Fred M. Harris, doing business as Geo. V. Nolte & Co. (subsequently incorporated and hereinafter referred to as Nolte), entered into a written agreement with Pieler to construct, according to the plans and specifications, the curbing and sidewalks of the Pieler subcontract, for the flat sum of $40,152.25.

The prime contract provided that, if a disagreement should arise between the parties thereto, such dispute must first be submitted for arbitration as 'a condition precedent to any right of legal action that either party may have against the other.' This provision was carried, by reference, into the other contracts involved.

Nolte constructed the curbs and sidewalks, in full compliance with the plans and specifications, nearly two years before the completion of the prime contract, and was paid $33,547.90 on account. The FHA inspector refused to accept the curbs and sidewalks because, in the interim, the sidewalks had become broken and cracked and the curbs had sunk below the elevation specified. The prime contractor, Myers, notified the subcontractor, Pieler, of the FHA rejection. Pieler requested Nolte to repair the damages and make the construction acceptable to the FHA inspector, or Pieler would do it and charge Nolte for it. Nolte insisted it had constructed the curbs and sidewalks according to the plans and specifications; that the sidewalks, through no fault of Nolte, had become broken because of the activity of trucks driving over the finished sidewalks without proper protection; and that the curbs had sunk because the engineers' plans had not required adequate ballast before construction. Nolte refused to do the work again unless the additional work and materials would be paid for. Pieler notified Nolte that it had elected to do the rehabilitation work and would recover from the persons responsible for the damage. The cost of the rehabilitation was $7,082.22.

Pieler requested arbitration with Myers for claims aggregating $34,223.60 as its subcontractor, and included its claim for rehabilitation expense of the sidewalks and curbs. At the arbitration hearing, Pieler called Mr. Nolte as its witness, who testified that his company had performed the contract with reference to the construction of the sidewalks and curbs in accordance with the plans and specifications. No evidence was presented refuting the Nolte testimony. The arbitrators denied $5,642.39 of Pieler's claim for these items, for the reasons that there was some evidence of improper impaction along the line of the curbs, and they could not determine from the evidence what portion of the damage to the sidewalks was due to trucks driving over them as distinguished from other causes and what portion of the rehabilitation work was accomplished by Meyers and what portion by Pieler. Pieler permitted the judgment of award to become final.

September 2, 1954, Pieler informed Nolte of the Myers-Pieler arbitrators' award and notified Nolte that it was withholding the amount disallowed from the balance due Nolte. October 15, 1954, Nolte commenced its first action (Island county cause No. 3364) to recover the balance due it from Pieler. Pieler's affirmative answer, filed January 4, 1955, alleged that its contract with Nolte provided for arbitration as a condition precedent to the maintenance of a civil action, and that Nolte had not requested arbitration. Pieler also cross-complained against Nolte for sums due it under the contract. Nolte's written offer to arbitrate during the pendency of this proceeding, dated February 24, 1955, was refused by Pieler March 7, 1955. May 26, 1955, Nolte's reply to Pieler's answer alleged its offer to arbitrate had been refused. December 2, 1955, Pieler moved for summary judgment, alleging that Nolte's failure to arbitrate prior to bringing the action barred it from the maintenance thereof. March 5, 1956, the court filed its memorandum opinion on the motion for summary judgment, in which it held, inter...