Graham Contracting, Inc. v. Flagler County

• Decision Date: 15 December 1983
• Docket Number: No. 83-1256,83-1256
• Citation: Graham Contracting, Inc. v. Flagler County, 444 So.2d 971 (Fla. App. 1983)
• Parties: GRAHAM CONTRACTING, INC., a Florida corporation, Petitioner, v. FLAGLER COUNTY, Respondent.
• Court: Florida District Court of Appeals

Page 971

444 So.2d 971

GRAHAM CONTRACTING, INC., a Florida corporation, Petitioner, v.FLAGLER COUNTY, Respondent.

No. 83-1256.

District Court of Appeal of Florida Fifth District.

Dec. 15, 1983.

Rehearing Denied Feb. 9, 1984.

Ernest H. Eubanks of Pitts, Eubanks & Ross, P.A., Orlando, for petitioner.

Noah C. McKinnon, Jr., Bunnell, and Cynthia S. Tunnicliff of Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A., Tallahassee, for respondent.

COWART, Judge.

This case involves a contractual right to have disputes arising out of the contract resolved by arbitration and whether that right has been impliedly waived under the circumstances.

Petitioner, Graham Contracting, contracted with Flagler County to build an addition to the Flagler County Courthouse.The contract required arbitration of "all claims, disputes and other matters in question between the parties ... arising out of or relating to this agreement or the breach thereof."The contract also required that a demand for arbitration be made "within a reasonable time after the claim, dispute or other matter in question has arisen."

Graham Contracting commenced work in May of 1982.On June 22, 1982, while pilings were being installed to support the addition to the courthouse, the foundation of the existing courthouse shifted, damaging the old courthouse.Flagler County instructed Graham Contracting to cease work until further notice.On December 22, 1982, Flagler County served a complaint on Graham Contracting.On January 11, 1983, Graham Contracting served a motion to dismiss the complaint for failure to state a cause of action.On March 31, 1983, a meeting between Graham Contracting and Flagler County was held to discuss completion of construction.Graham Contracting was advised that Flagler County would request completion of construction.On April 13, 1983, Graham Contracting submitted documentation of additional costs that it would incur due to the delay in construction caused by the county instructing Graham Contracting to cease work in June of 1982.Flagler County refused to pay these additional costs and Graham Contracting served a demand for arbitration pursuant to the contract.On April 29 1983, Graham Contracting filed a motion in the trial court to compel arbitration.On May 16, 1983, a hearing was held on Graham Contracting's motion to compel arbitration and on its earlier filed motion to dismiss for failure to state a cause of action.The trial court dismissed Flagler County's first complaint but denied Graham Contracting's motion to compel arbitration.Graham Contracting then filed this petition for writ of certiorari.¹We grant the petition.

In the instant case, the contract required that the demand for arbitration be made "within a reasonable time after the claim, dispute or other matter in question has arisen."The trial court found that a dispute became apparent on June 22, 1982, when the foundation of the old courthouse shifted and Graham Contracting was told to cease work until further notice.The court then found that Graham Contracting's demand for arbitration made ten months later was not made within a reasonable period of time, relying on Lyons v. Krathen, 368 So.2d 906(Fla. 3d DCA1979), cert. den., 378 So.2d 346(Fla.1979), andBickerstaff v. Frazier, 232 So.2d 190(Fla. 1st DCA1970), cert. dismissed, 238 So.2d 110(Fla.1970).In Lyons v. Krathen a written demand was made on a contractor to correct certain defects.The contractor waited nine months after the demand before filing a motion to compel arbitration.In Bickerstaff v. Frazier, the owners were put on notice of a dispute as to the amount due the contractor for final payment under the contract when the contractor served and recorded his claim of lien for labor and materials furnished under the construction contract.The court held the owners waived their right to arbitrate by waiting until four months later to demand arbitration.By contrast, in the instant case no claim was made, and no dispute arose, on June 22, 1982, when Graham Contracting was told to cease work until further notice.The contract does not require the demand for arbitration be made merely because it has become apparent that there is a potential dispute between the parties.The dispute between the parties first crystallized on December 22, 1982, when Flagler County served its complaint on Graham Contracting.While Graham Contracting's initial demand for arbitration was not filed until April 13, 1983, nearly four months later, we do not believe that four months is, as a matter of law, an unreasonable delay.We note that the third and fourth district courts of appeal have adopted the view that the issue of whether a demand for arbitration is timely according to the meaning of the contract is a question to be decided in arbitration.SeeFederated Department Stores, Inc. v. Pavarini Construction Company, Inc., 425 So.2d 1212(Fla. 4th DCA1983);Rinker Portland Cement Corp. v. Seidel, 414 So.2d 629(Fla. 3d DCA1982).We believe that a waiver of the right to arbitrate should not be implied from mere inaction unless the delay has given the party seeking arbitration an undue advantage or has resulted in prejudice to another.SeeCarcich v. Rederi A/B Nordie, 389 F.2d 692(2d Cir.1968).

Respondent also contends that Graham Contracting waived its right to arbitration by filing its motion to dismiss Flagler County's complaint for failure to state a cause of action.In R.W. Roberts Construction Company v. Masters and Company, 403 So.2d 1114(Fla. 5th DCA1981), this court held that a defendant had waived its right to arbitrate by filing a motion to dismiss and to tr...