Hot Springs County School Dist. No. 1 v. Strube Const. Co.

• Decision Date: 11 March 1986
• Docket Number: Nos. 84-250,84-251,s. 84-250
• Parties: 31 Ed. Law Rep. 238 HOT SPRINGS COUNTY SCHOOL DISTRICT NO. 1, Appellant (Appellant), v. STRUBE CONSTRUCTION COMPANY, a/k/a Strube Construction, Inc., Appellee (Appellee). STRUBE CONSTRUCTION COMPANY, a/k/a Strube Construction, Inc., Appellant (Appellee), v. HOT SPRINGS COUNTY SCHOOL DISTRICT NO. 1, Appellee (Appellant).
• Court: Wyoming Supreme Court

Page 540

715 P.2d 540

31 Ed. Law Rep. 238

HOT SPRINGS COUNTY SCHOOL DISTRICT NO. 1, Appellant (Appellant), v. STRUBE CONSTRUCTION COMPANY, a/k/a Strube Construction, Inc., Appellee (Appellee).

STRUBE CONSTRUCTION COMPANY, a/k/a Strube Construction, Inc., Appellant (Appellee), v. HOT SPRINGS COUNTY SCHOOL DISTRICT NO. 1, Appellee (Appellant).

Nos. 84-250, 84-251.

Supreme Court of Wyoming.

March 11, 1986.

John A. Sundahl and Paul Kapp of Godfrey & Sundahl, Cheyenne, for Hot Springs County School Dist. No. 1.

William L. Miller and Holly Brown of Cent. Wyoming Law Associates, P.C., Riverton, for Strube Const. Co.

Before THOMAS, C.J., and ROSE, ^* ROONEY, ^** and CARDINE, JJ.

ROSE, Justice.

A dispute between Hot Springs County School District No. 1 (School District) and the Strube Construction Company (Strube) as a result of Strube's providing additional materials not originally called for in the agreement between the parties during the course of construction of a football field and running track in Thermopolis, Wyoming, resulted in the entry of an arbitration award in favor of Strube, in the amount of $71,500, on September 22, 1983. The School District, on October 13, 1983, filed a petition for review, notice of appeal and complaint to vacate the award in the district court. Strube filed a response and a motion to affirm the award on October 21, 1983. The district court entered its judgment confirming the arbitration award on August 28, 1984. Both parties have appealed to this court--the School District from the confirmation of the award and Strube from the district court's refusal to grant interest on the award from the date it was entered by the arbitrators. We shall affirm the district court's decision in both instances.

In its appeal, the School District has provided the following identification of the issues:

"1. Was there any agreement to arbitrate and, if so, was it for binding arbitration?

"2. Did the arbitrators lack jurisdiction to hear the matter?

"3. Did the arbitrators exceed their powers by disregarding the contractual provisions regarding written change orders and notice of their claims?"

In addition, Strube, in its appeal, raises the following issue:

"Whether Strube Construction is entitled to receive interest on the arbitration award from the date of the arbitration award rather than the date the judgment confirming the award was entered."

In May of 1982, the School District accepted Strube's bid to perform a portion of the construction work on a project calling for the replacement of an existing quarter-mile dirt track with a synthetic 400-meter track, and installation of a new football field in Thermopolis, Wyoming. The portion of the project awarded Strube included excavation and placement of base materials. During the course of construction, additional materials and labor not originally called for in the parties' contract were provided by Strube. Some of the additional costs engendered by this additional work were paid for by the School District pursuant to two change orders; however, the School District refused to honor all of the requests made by Strube for additional payment, and the present dispute ensued.

For purposes of this opinion, an extensive discussion of the contentions of the parties is not helpful. The primary issues involved in the dispute concerned responsibility of payment for additional fill material provided by Strube at the request of another contractor to install a crowned field instead of a flat field originally called for in the project. The project architect and engineer, Wilkins International, Ltd., determined that these additional costs were not the responsibility of the School District as the additional materials were not called for under the project specifications, and no written change orders for such materials were approved in accordance with the contract procedures. Strube submitted an application for payment for these additional materials, to which the architect/engineer responded on July 9, 1982, by a letter in which Strube was notified that the application for additional amounts would not be paid at that time, and that the architect/engineer recommended to the School District that it make an application for "hearing by and resolution by arbitration." ¹ This decision was confirmed in a letter from the School District's superintendent to Strube dated July 16, 1982, which provided in part:

"Please consider this letter as our formal written demand for arbitration pursuant to Section 101.16 of the Wyoming Public Works Standard Specifications, 1979 Edition, subject to formal approval by the Board of Trustees at their established meeting of July 21, 1982. Of course your contract with the Board requires you to continue on the job while these items are under arbitration."

A copy of this letter was not submitted to the American Arbitration Association as required to initiate arbitration proceedings before that group. In any event, Strube did not recognize its contract as incorporating the referenced section of the Wyoming Public Works Standard Specifications which required submissions of disputes to binding arbitration within 30 days, and continued to attempt to negotiate its claims directly with the School District. These negotiations were unsuccessful, and led to the architect/engineer writing a letter on September 21, 1982, terminating the contract "because of multiple violations of and/or breach of contract." In a follow-up letter dated October 1, 1982, by the architect/engineer, some 25 asserted violations of the agreement by Strube were identified. A reading of this document reflects that relationships between Strube and the architect/engineer had deteriorated as a result of the dispute, and the architect/engineer was angered by Strube's attempts to negotiate directly with the School District.

A formal request for arbitration was made by Strube in October of 1982 in letters to the School District and the American Arbitration Association. In the letter to the American Arbitration Association, a copy of which was also sent to the School District, Strube's attorney noted:

" * * * Strube Construction has never acknowledged or admitted the Wyoming Public Works Standard Specifications are part of the contract documents in this matter. Strube, however, submits the matter to arbitration voluntarily and in the event the Wyoming Public Works Standard Specifications are found to be applicable the matter would need to be arbitrated. Therefore, in order to get the matter resolved, Strube is submitting to arbitration." (Emphasis added.)

In response to Strube's demands for arbitration, the School District, through its attorney in a letter to the American Arbitration Association dated November 10, 1982, opposed the demand for arbitration on the ground that the demand was untimely. In addition, the School District asserted a counterclaim against Strube and other contractors on the project in the event arbitration was allowed to proceed.

In a second letter, dated December 16, 1982, the School District's present counsel entered his appearance on its behalf and requested that all further correspondence be directed through his office. ² This letter continued:

"It is my understanding that Strube withdrew its arbitration claim. It is my understanding that the position of the American Arbitration Association is that there is no longer a claim on the part of Strube. We have always claimed that Strube did not file the claim in time and therefore is barred. This becomes particularly true if Strube attempts to reassert the claim.

"The School District intends to proceed against its claims, but nevertheless, against Strube, his mining company as well as Hummer and Arrow [other contractors on the project] and their companies." (Bracketed material added.)

Strube, in a letter dated December 21, 1982, vigorously denied withdrawal of its arbitration claim, and requested that all the various claims and counterclaims be combined for resolution. In response to a request by the regional director of the American Arbitration Association, Strube's counsel, on January 7, 1983, wrote a letter clarifying Strube's position with regard to the American Arbitration Association's ability to proceed with arbitration. Strube reiterated its position that its contract with the School District did not include the provisions of the Wyoming Public Works Standard Specifications which required submission of disputes to binding arbitration within 30 days after such disputes arose. Further, Strube argued that, even if such submission was required, it had sought arbitration in a timely manner. A copy of this letter was sent to the School District's counsel.

After the matter had been set for hearing, the School District filed its formal counterclaim against Strube, dated August 5, 1983. In this counterclaim, the School District acknowledged the existence of its contract with Strube and charged that Strube, without approval, had changed the project concept from one which did not require additional fill material to one requiring a large amount of such material. This action, the School District asserted, precipitated the additional claims made by Strube and the other contractors for additional compensation, and caused the School District to incur additional expenses of approximately $100,000. In addition, the School District asserted that some of the work done by Strube was performed negligently, and that Strube failed to timely complete its work resulting in damages to the School District in the amount of $80,000.

The matter proceeded to hearing before a panel of three arbitrators, selected by the parties, beginning August 22, 1983. At the outset of this hearing, the School District made a motion to dismiss for the reason that Strube's demand for arbitration was not filed within 30 days as required by the Wyoming Public Works Standard Specifications, which specifications, the School District argued,...