Lawton v. Cain

• Decision Date: 01 December 1964
• Docket Number: No. 10286,10286
• Citation: 172 So.2d 734
• Parties: Douglas C. LAWTON, d/b/a Lawton and Son, Contractor, Plaintiff-Appellee, v. Frank A. CAIN, Defendant-Appellant.
• Court: Court of Appeal of Louisiana — District of US

Page 734

172 So.2d 734

Douglas C. LAWTON, d/b/a Lawton and Son, Contractor Plaintiff-Appellee, v. Frank A. CAIN, Defendant-Appellant.

No. 10286.

Court of Appeal of Louisiana, Second Circuit.

Dec. 1, 1964.

On Rehearing March 17, 1965.

McIntosh, Hester & Gilfoil, and Voelker, Regland & Fox, Lake Providence, for appellant.

Hamilton & Carroll, Oak Grove, for plaintiff-appellee.

McHenry, Snellings, Breard, Sartor & Shafto, Monroe, for third-party defendant-appellee.

Before HARDY, AYRES and BOLIN, JJ.

BOLIN, Judge.

Plaintiff contracted to build an office and medical clinic for the defendant. After the architect certified the construction had been satisfactorily completed, Lawton & Son sued Dr. Cain for the alleged unpaid balance due under the contract. Following the disposal of some preliminary pleadings, defendant answered, denying the debt; filed a reconventional demand, a third party petition and supplemental petition by which he asserted claims for damages for alleged faulty construction against plaintiff-contractor, the architect and the respective surety and insurer of each. The parties made defendants in reconventional demand filed exceptions of no cause and no right of action, prematurity, improper accumulation of actions and improper joinder of parties, which were sustained resulting in dismissal of defendant's reconventional demand and third party petition. From this judgment defendant appeals.

The exceptions filed by the plaintiff-contractor and his surety, Central Surety and Insurance Corporation, were sustained by the trial judge based on his conclusion the written building contract made submission to arbitration a condition precedent to the defendant's reconventional demand.

The contract agreement was a three-page instrument but Lawton contends a seventy-nine page book of specifications became a part thereof by reference. Assuming for the sake of argument the 'Specifications' were a part of the contract, the following provisions thereof become pertinent:

'* * * As the Architect is the interpreter of the conditions of the Contract, he is the judge of its performance.

'Except as above or as otherwise expressly provided in the Contract Documents, all the Architect's decisions are subject to arbitration.

'All disputes, claims or questions subject to arbitration under this contract shall be submitted to arbitration. It is mutually agreed that the decision of the arbitration (sic) shall be a condition precedent to any right or legal action that either party may have against the others.'

Based principally upon the above provisions, the trial judge held Dr. Cain was required to submit to arbitration any claims he had relative to the alleged faulty construction rather than litigating them in his reconventional demand. In his written reasons for judgment the district judge said:

'Under the wording of the contract between plaintiff and defendant, it is obvious that all decisions of the architect are subject to arbitration. Prt 19(a) of the specifications states: 'As the architect is the interpreter of the conditions of the contract, he is the judge of its performance.' The architect's acceptance of the building as completed, made on November 24, 1962, was, unquestionably, a judgment made by him as to the performance of the contract. The defendant obviously disagress with this decision of his architect. This being the case, the contract positively required the defendant, Dr. Frank A. Cain, if he desired to press his disagreement with his architect, to demand arbitration as to the decisions with which he disagreed. Part 20 of the Specifications, at page 18 thereof, provides: 'It is mutually agreed that the decision of the arbitration shall be a condition precedent to any right or legal action that either party may have against the others.'"

The statutory law of arbitration in Louisiana as set forth in LSA-R.S. 9:4201 et seq., recognizes the validity of arbitration clauses in written contracts. Again assuming for the sake of argument that the arbitration provision in the 'Specifications' was in conformity with the Louisiana Statute, the crucial question is whether the right to demand arbitration as a condition precedent to institution of legal proceedings was waived by the contractor when he instituted the present suit.

The general rule is that the right to arbitrate, even though the contracting parties make it a condition precedent to instituting legal action, may be waived by the parties.

17A C.J.S. Contracts § 515(11), page 889:

'a. The right to enforce an arbitration agreement and stay proceedings at law pending arbitration may be lost or waived, notwithstanding a provision that decision by arbitration shall be a condition precedent to a right of legal action; and once abandoned or waived, it cannot be recaptured.

'There is no set rule as to what constitutes a waiver or abandonment of the right to arbitrate. The question depends on the facts of each particular case, and usually must be determined by the trier of facts. * * *'

'b. * * * Thus, bringing suit based on the contract without relying on the arbitration provision may constitute a waiver thereof, or a revocation of the arbitration provision.' (Numerous cases cited in footnote.)

See also Am.Jur.2d, Vol. 5, Arbitration and Award, § 51, page 556, which states generally:

'The right to arbitrate given by a contract may be waived, even in those jurisdictions where a contract for arbitration is irrevocable. Such a waiver of arbitration may come before as well as after the commencement of litigation. The waiver may be either by express words or by necessary implication. Thus, where one party waives his right to arbitration, his conduct is clearly inconsistent with a claim that the parties were obligated to settle their differences by arbitration.'

The record reflects the contractor filed suit on January 15, 1963, at which time he was well aware that Dr. Cain was contending his clinic building had not been properly constructed. On the dates of June 11, 1962, August 27, 1962 and September 27, 1962, defendant wrote letters to Paul Stewart, his architect, setting forth numerous complaints about the faulty way the building was being constructed. On November 1, 1962, Dr. Cain again wrote Stewart a letter wherein he referred to the previous letters and complaints made to him and said therein, among other things, 'I have no intention of making any further payment until all of these defects have been corrected and the building ready for occupancy.' Copies of this letter were sent to Lawton and his surety. After Dr. Cain learned the architect had issued a certificate of satisfactory compliance on November 24, 1962, he wrote him a letter on January 5, 1963, discharging him as his architect and a copy of this letter was likewise mailed to the contractor.

In view of the above chronological events, it is evident plaintiff filed suit against defendant for the alleged balance due on a building contract when he had been repeatedly put on notice that defendant was emphatically contending the workmanship was faulty. Therefore, under the provisions of the contract agreement and specifications it was the duty of plaintiff to submit such disputes and claims to arbitration prior to instituting legal proceedings. However, he did not choose to do so, but rather elected to litigate his claim in the forum of...