Lee L. Saad Constr. Co. v. DPF Architects, PC

• Citation: 851 So.2d 507
• Parties: LEE L. SAAD CONSTRUCTION COMPANY, INC. v. DPF ARCHITECTS, P.C., et al.
• Decision Date: 27 November 2002
• Court: Supreme Court of Alabama

851 So.2d 507

LEE L. SAAD CONSTRUCTION COMPANY, INC. v. DPF ARCHITECTS, P.C., et al.

1010505.

Supreme Court of Alabama.

November 27, 2002.

Rehearing Denied January 31, 2003.

E.J. Saad of Atchison, Crosby, Saad & Beebe, Mobile, for appellant.

Philip H. Partridge, Thomas H. Nolan, Jr., and Misty T. Long of Brown, Hudgens, P.C., Mobile, for appellees DPF Architects, P.C., Lee Turberville, and Richard Mueller.

John M. Laney, Jr., of Laney & Foster, P.C., Birmingham, for appellees Lee Turberville, and Richard Mueller.

L. Graves Stiff III, J. Scott Dickens, and Catherine R. Steinwinder of Starnes & Atchison, L.L.P., Birmingham, for appellees Todd M. Capes and Capes Engineering, Inc.

Mark E. Spear and David P. Shepherd of Richardson, Spear, Spear & Hamby, P.C., Mobile, for appellee Larry Kerr.

J. Marshall Gardner of Vickers, Riis, Murray & Curran, L.L.C., Mobile, for appellee H.M. Yonge & Associates, Inc.

LYONS, Justice.

Lee L. Saad Construction Company, Inc. ("Saad Construction"), appeals from summary judgments against it. We affirm in part and reverse in part.

I. Facts and Procedural History

On October 27, 1997, Saad Construction entered into a contract with the Baldwin County Board of Education ("the Board") for the construction of an addition to the Spanish Fort Elementary School ("the Spanish Fort project"). DPF Architects, P.C. ("DPF"), was identified in the contract as the architect for the project, but DPF was not a party to the contract between Saad Construction and the Board. The Board and DPF had executed a separate contract in August 1997, under which DPF was to serve as the architect for the Spanish Fort project. DPF's contract with the Board provided that DPF would act as the Board's representative regarding the Spanish Fort project. DPF's project architects for the Spanish Fort project were Lee Turberville and Richard Mueller. DPF hired Todd M. Capes and his company, Capes Engineering, Inc., as the structural engineers for the Spanish Fort project and H.M. Yonge & Associates, Inc., as the project's electrical engineers.

On March 25, 1999, DPF conducted what was to be a final inspection of the Spanish Fort project. Turberville found a bulge in the lower portion of the eastern wall of the addition. He decided that the remaining work on the job should be stopped, and both Turberville and Mueller ordered Saad Construction to cease all work pending testing on the wall. According to DPF, the initial testing revealed that the wall was out of plumb. Over Saad Construction's objections, DPF conducted further testing and those additional tests, which included drilling holes in the wall, showed that the reinforcing steel had not been installed within the wall in accordance with the specifications in the construction contract. At DPF's request, Capes reviewed the test results and determined that the wall did not meet building-code requirements and did not comply with the specifications in Saad Construction's contract with the Board. Capes proposed two plans for remedial work on the wall. Turberville asked Saad Construction to fix the wall, implementing one of Capes's proposals. Saad Construction declined to use either of the plans proposed by Capes to perform the remedial work, and instead proposed a third plan. The Board rejected Saad Construction's plan and hired another contractor to complete the remedial work.

In April 1999, the Board sued Saad Construction and one of its suppliers, Jim Boothe Contracting & Supply Company ("Boothe Contracting"), seeking a declaratory judgment as to the rights and obligations of the parties under the construction contract and seeking to interplead certain funds it claimed were in dispute between the parties concerning the Spanish Fort project.¹ In its answer to the Board's complaint, Saad Construction demanded a jury trial on all issues for which a jury trial was appropriate. The Board then filed an amended complaint adding claims against Saad Construction relating to Saad Construction's work on another construction project at the Rosinton Elementary School, another school under the Board's supervision ("the Rosinton project"). Shortly thereafter, DPF and Turberville moved to intervene in the Board's action against Saad Construction; the trial court granted their motion.

In its answer to the Board's amended complaint, Saad Construction raised as an affirmative defense that the Board was contractually obligated to submit disputes related to the construction contract to the Alabama Building Commission. Saad Construction's contracts with the Board concerning both the Spanish Fort project and the Rosinton project contained identical paragraphs numbered 44; paragraph 44 stated:

"Except as hereinabove provided, any dispute, claim or question concerning the meaning of contract documents, or concerning a breach of the contract, shall be submitted to the Director [of the Alabama Building Commission] and his decision shall be final, binding and conclusive on the parties to the contract. He shall have executive [sic] authority to enforce and make effective such decisions or orders as the Contractor fails to carry out promptly."

Pursuant to paragraph 44, Saad Construction also filed a motion to compel arbitration "with respect to any dispute, claim, or question concerning the interpretation or meaning of the contract documents, or concerning a breach of the contract, involving Spanish Fort Elementary School and/or Rosinton Elementary School." The Board objected to Saad Construction's motion to compel arbitration. In pertinent part, the Board argued:

"[U]pon provision of the issues Saad desires to arbitrate, it is clear that Saad makes allegations of tort claims. These tort claims of the parties are beyond the scope of the provisions of paragraph 44 and any `arbitration' of this matter pursuant to paragraph 44 will still require the Court to resolve the tort issues between the parties."

(Emphasis original.) In support of its argument, the Board cited decisions of this Court to the effect that a party may be required to submit to arbitration only those issues it has specifically agreed to arbitrate.² The Board continued:

"By its very terms, the language of paragraph 44 only relates to questions concerning the interpretation or meaning of the contract documents or concerning a breach of the contract. The allegations of Saad that the Board has engaged in wrongful conduct and is responsible for the acts of the architect by respondeat superior and is guilty of a trespass and has engaged in `wrongful acts and/or negligence' are all allegations of tortuous [sic] conduct which are not subject to resolution by the Director pursuant to the language of paragraph 44."

The Board attached to its objection to the motion to compel arbitration a letter from the director of the Alabama Building Commission ("the director") dated June 4, 1999, addressing the scope of his decisions as arbitrator. The director stated: "Please understand that I will not hear matters that are being decided in court." The director continued:

"Based on the correspondence that I am presently receiving from you, it appears that I should clarify the scope of decisions rendered by the Director. The Director does not determine a correct or acceptable remedy to an alleged or proven deficiency, but will determine whether work directed by an owner or design professional is for the account of the contractor or the owner."

On July 26, 1999, Saad Construction filed a supplemental motion to compel arbitration; the motion stated:

"Saad Construction insists on arbitration of appropriate issues between Saad Construction and the Board in accordance with the appropriate provisions of the Rosinton and Spanish Fort Contracts. Saad Construction has never and does not now consent to arbitration of issues between the contractor, Saad Construction, and the architect, DPF, or any other person who is not a party to the Rosinton and Spanish Fort Contracts' arbitration provisions. There is no contract containing an arbitration provision requiring arbitration between Saad Construction and any person other than the Board, which said contract is applicable to the Rosinton Project and/or the Spanish Fort Project."

The trial court granted Saad Construction's motion to compel arbitration with the Board. Its order stated:

"The defendant's motion to compel arbitration as provided for in paragraph 44 of the contract is granted to the extent set out in this contract. All proceedings in this court are stayed pending said arbitration."

Before the arbitration hearing, both Saad Construction and the Board submitted their claims to the director. In its submission to the director, Saad Construction argued:

"1. [T]he Board authorized and/or ratified the conduct of the Architect who wrongfully seized the building and declared the building to be `structurally unsound.' The conduct of the Board, directly and/or by its Architect constituted a breach of contract....

"2. [T]he Board, directly and/or through its Architect, conducted a series of destructive tests on the eastern interior walls.... These tests were [conducted] after [those] walls had been accepted, without exception.... The Board has demanded that Saad pay for the testing. Saad contends that the Board is responsible for the cost of the tests.... Saad also claims that the conduct of the Board, directly and/or through its Architect, delayed and prevented Saad from expeditious completion of punch-list items....

"3.... Saad contests the existence of any deficiency meriting remedial work on the subject wall. Saad protested the failure and refusal of the Board to provide information requested concerning the design, engineering and evaluation of the subject wall and information concerning the details of the justification for the demanded remedial action. Saad appealed the Board's demand for remedial work to the Director in accordance with the terms of the contract. Within days of the appeal, the

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