Parekh Const., Inc. v. Pitt Const. Corp.
| Citation | 31 Mass.App.Ct. 354,577 N.E.2d 632 |
| Decision Date | 10 September 1991 |
| Docket Number | No. 89-P-1337,89-P-1337 |
| Parties | PAREKH CONSTRUCTION, INC. v. PITT CONSTRUCTION CORP. |
| Court | Appeals Court of Massachusetts |
W. Arthur Garrity, III, Boston, for plaintiff.
John J. Spignesi, Winchester, for defendant.
Before SMITH, JACOBS and GILLERMAN, JJ.
Parekh Construction, Inc. (Parekh), appeals from a judgment of the Superior Court denying its application to vacate an arbitration award and confirming the award in favor of Pitt Construction Corp. (Pitt). Parekh argues four grounds for reversal. They are (1) there was no agreement to arbitrate between the parties, (2) the judge erred when she did not hold an evidentiary hearing on the question of arbitrability of the dispute, (3) the arbitrator committed error when he refused to reopen the arbitration proceedings and allow Parekh to present evidence, and (4) the arbitrator was not impartial. We affirm the judge's actions.
We set out the following facts as background for our analysis. Pitt, a site contractor, was a subcontractor for Parekh on two projects. On each project, Pitt was to perform landscaping and other work. One of the projects was located at New Boston Street in Woburn (New Boston project); the other project was the construction of a water pipe (Waterline project) that was to be connected to one end of the New Boston project.
On the New Boston project, Parekh entered into a subcontract with Pitt dated May 28, 1985, which contained a provision requiring arbitration of all disputes in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association. 1 There was also evidence that in January, 1986, Parekh prepared and signed a draft subcontract for the Waterline project containing the identical arbitration clause.
Pitt completed both jobs by July, 1986, and billed Parekh separately for each project. On March 15, 1988, after repeated demands for payment, Pitt, by letter, notified Parekh that the outstanding balance under both projects totalled $110,551.24, and requested payment. When Parekh did not respond, Pitt filed on July 27, 1988, a written demand for arbitration respecting both projects with the Boston office of the American Arbitration Association (Association).
Commencing on July 27, 1988, various notices were sent to Parekh by the Association concerning the forthcoming arbitration hearing. They included notices to answer, to choose an arbitrator, and to produce documents. The notices were sent by certified mail, return receipt requested. The return receipts were signed by an agent of Parekh, but there were no responses to the various notices.
On August 17, 1988, the Association notified both parties that hearings before the arbitrator had been scheduled for November 2 and 3, 1988, at the Association office. On November 2, 1988, Pitt and its counsel appeared at the Association's office. No one appeared on behalf of Parekh. It was then discovered that Parekh had not been formally served with the demand for arbitration. On that date, Parekh was formally served with the demand for arbitration, certified mail, return receipt requested. Again, there was no response from Parekh, except for the signed receipt. In its complaint filed to vacate the award, Parekh admitted that it had received this notice.
On November 29, 1988, the Association issued a notice to both parties advising that a preliminary hearing had been scheduled for January 3, 1989 at the Association's office. On that date, Pitt's counsel appeared, but no one appeared on behalf of Parekh.
On January 3, 1989, the Association sent notice to both parties advising that another hearing had been scheduled for January 13, 1989 at the Association's office. According to the return receipt, that notice was received by Parekh on January 5, 1989. On January 13, 1989, Pitt and its counsel again appeared before the arbitrator. No one appeared on behalf of Parekh, nor was there any communication from Parekh to the Association, the arbitrator, or Pitt. The arbitrator elected to proceed in accordance with rule 30 of the Construction Industry Arbitration Rules of the Association set out in the margin. 2
Pitt introduced nineteen exhibits at the hearing, including the two subcontracts that contained the arbitration clauses. 3 In addition, Pitt presented oral testimony in regard to the work it had performed on the two projects and the amount owed by Parekh. At the close of the hearing, Parekh was advised by letter dated January 13, 1989, that the arbitrator would afford it an additional seven days from the date of the letter to submit to the arbitrator in writing, through the Association, any evidence Parekh may wish to have the arbitrator consider in the matter.
By letter dated January 20, 1989 (the seventh day), Parekh wrote to the Association claiming that it was By letter dated January 20, 1989, the Association notified both parties that, by direction of the arbitrator, the proceedings were declared closed as of that date. On February 8, 1989, the arbitrator after reviewing the January 20 letter from Parekh, declined to reopen the arbitration hearing and awarded to Pitt the sum of $95,303.34, plus interest, representing the amount owed by Parekh to Pitt on both the New Boston and Waterline projects.
On March 7, 1989, Parekh filed in the Superior Court a complaint and motion to vacate the arbitration award. G.L. c. 251, §§ 12(a )(2) and (5). A hearing on the motion was conducted before a Superior Court judge on May 16, 1989. On May 17, 1989, the judge denied Parekh's motion to vacate the arbitration award. In accordance with G.L. c. 251, § 12(d ), the judge confirmed the award and entered judgment on June 8, 1989, in the amount of $126,203.90. Parekh claimed an appeal.
Parekh then filed on June 26, 1989, a motion to alter or amend the judgment. Mass.R.Civ.P. 59(e), 365 Mass. 828 (1974). That motion was denied. 4
1. The existence of the arbitration agreement on the Waterline project. Conceding that there was an arbitration agreement on the New Boston project, Parekh argues, on appeal, that it never entered into an agreement with Pitt to arbitrate any dispute in regard to the Waterline project; it claims that the judge committed error when she confirmed that portion of the arbitration award relating to the Waterline project. We disagree.
As a preliminary matter, we address Pitt's contention that Parekh could not raise the question of arbitrability of the dispute for the first time on its application to vacate the award.
In Massachusetts, the question whether the parties have agreed to arbitrate a dispute may be raised either prior to or during the arbitration proceedings by way of an application in the Superior Court. G.L. c. 251, § 2(b ). 5 The issue may also be raised in the Superior Court after the arbitrator has made an award "if the issue was not adversely determined in proceedings under [G.L. c. 251, § 2(b ) ] and the party did not participate in the arbitration hearing without raising the objection...." G.L. c. 251, § 12(a )(5). 6 Here, Parekh did not raise the issue of arbitrability prior to or during the proceedings, and did not participate in the arbitration proceedings. 7 Therefore Parekh could properly raise the issue on its application to vacate the arbitrator's award. 8
Both parties submitted documentary evidence on the issue of arbitrability at the hearing on Parekh's application to vacate the award. Parekh's evidence took the form of an affidavit from its president. In it, he admitted, among other things, that Parekh had hired Pitt as a subcontractor to perform site and other work on the Waterline project but denied that the parties had executed a written subcontract for the project. Pitt submitted the record of the arbitration proceedings, the transcript of the hearings, and the exhibits which included the copy of the Waterline project subcontract, signed by Parekh's president.
From the judge's denial of Parekh's application to vacate the arbitration award, it is implicit that she concluded that the parties had agreed to arbitrate any dispute arising from the Waterline project. We have examined the evidence...
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