Rockland County v. Primiano Const. Co., Inc.

• Decision Date: 08 July 1980
• Citation: 409 N.E.2d 951,51 N.Y.2d 1,431 N.Y.S.2d 478
• Parties: , 409 N.E.2d 951 In the Matter of Arbitration between the COUNTY OF ROCKLAND, Respondent, and PRIMIANO CONSTRUCTION CO., INC., Appellant.
• Court: New York Court of Appeals Court of Appeals

Page 478

431 N.Y.S.2d 478

51 N.Y.2d 1, 409 N.E.2d 951

In the Matter of Arbitration between the COUNTY OF ROCKLAND Respondent and PRIMIANO CONSTRUCTION CO., INC., Appellant.

Court of Appeals of New York.

July 8, 1980.

Eugene Schaffel, New York City, for appellant

Marc L. Parris, County Atty. (Martin Hurwitz, New York City, of counsel), for respondent.

OPINION OF THE COURT

JONES, Judge.

It is for the courts to determine whether the parties agreed to submit their disputes to arbitration, if so, whether the particular dispute comes within the scope of their agreement, and finally whether there has been compliance with any condition precedent to access to the arbitration forum. In this instance we conclude that the owner and the general contractor under their construction contract agreed that a claim by the latter for damages sustained in consequence of delays in construction allegedly caused by the owner is to be resolved by arbitration without prior reference to the architect. We also conclude that the county's contention that the demand for arbitration was not made within the contractual period of limitations is to be resolved by the arbitrator.

The County of Rockland and Primiano Construction Co., Inc., entered into a contract pursuant to which Primiano agreed to construct the Core Facilities Building at the Rockland County Health and Social Services Complex at Pomona, New York. Following execution by the county and Primiano of a certificate of substantial completion of the project as of January 19, 1977 Primiano contended that the county had not performed its obligations under the contract and that in consequence of the county's breach Primiano had suffered substantial delay damages. On September 20, 1978 the contractor served a demand that its claim for delay damages be resolved in arbitration.

The county made a timely application for an order staying arbitration on the grounds that under the terms of their contract the contractor was required first to refer its claim to the architect for his decision and that the parties had not agreed to arbitration until after the architect had made his decision and that, in any event, the demand for arbitration had not been timely made. Primiano cross-moved to compel arbitration in accordance with its demand. Special Term denied the county's application, holding that reference to the architect was not a prerequisite to arbitration and that the issue of the timeliness of the demand presented a question for determination by the arbitrator. It accordingly granted the contractor's cross motion to compel arbitration. On appeal by the county the Appellate Division, 72 A.D.2d 746, 421 N.Y.S.2d 260, reversed, granting the county's motion to stay arbitration and denying Primiano's cross motion. We now reverse and reinstate the order of Special Term.

A general statement of the applicable principles of law will be useful as a preliminary to our analysis of the issues presented on this appeal. On motions to stay or to compel arbitration there are three threshold questions to be resolved by the courts: whether the parties made a The parties are entitled first to a judicial determination whether there was a valid agreement to arbitrate. If the court determines that the parties had not made an agreement to arbitrate, that concludes the matter and a stay of arbitration will be granted or the application to compel arbitration will be denied (e. g., Schubtex, Inc. v. Allen Snyder, Inc., 49 N.Y.2d 1, 424 N.Y.S.2d 133, 399 N.E.2d 1154; Matter of Marlene Inds. Corp. (Carnac Textiles), 45 N.Y.2d 327, 408 N.Y.S.2d 410, 380 N.E.2d 239; Matter of Riverdale Fabrics Corp. (Tillinghast-Stiles Co.), 306 N.Y. 288, 118 N.E.2d 104; Matter of Doughboy, Ind. (Pantasote Co.), 17 A.D.2d 216, 233 N.Y.S.2d 488). Similarly, if the court concludes that, while the parties may have made a valid agreement to arbitrate, the particular agreement that they made was of limited or restricted scope and the particular claim sought to be arbitrated is outside that scope, there will likewise be a stay of arbitration or a denial of the motion to compel arbitration (e. g., Gangel v. De Groot, 41 N.Y.2d 840, 393 N.Y.S.2d 698, 362 N.E.2d 249 (arbitration agreement limited to disputes regarding the "execution" of an insurance policy); Matter of ITT Avis v. Tuttle, 27 N.Y.2d 571, 313 N.Y.S.2d 394, 261 N.E.2d 395 (arbitration agreement limited to controversies over questions of fact arising under employment contract); see Information Sciences v. Mohawk Data Science Corp., 43 N.Y.2d 918, 403 N.Y.S.2d 730, 374 N.E.2d 624 (claims with respect to defaults in payment excluded from arbitration agreement)).

valid agreement to arbitrate, whether if such an agreement was made it has been complied with, and whether the claim sought to be arbitrated would be barred by limitation of time had it been asserted in a court of the State (CPLR 7503, subd. (a); 7502, subd. (b); see Matter of United Nations Dev. Corp. v. Norkin Plumbing Co., 45 N.Y.2d 358, 362-363, 408 N.Y.S.2d 424, 380 N.E.2d 253; see, generally, McLaughlin, Practice Commentaries, McKinney's Cons.Laws of N.Y., Book 7B, CPLR 7503; Siegel, New York Practice, § 590; Weinstein-Korn-Miller, Manual, CPLR, p. 13-7). We are here concerned only with the first two of these threshold questions.

If, however, it is concluded that the parties did make an agreement to arbitrate and that the particular claim sought to be arbitrated comes within the scope of their agreement, there then may be a second threshold question for judicial determination-has the agreement that they made been complied with? This calls for a judicial determination as to whether there is any preliminary requirement or condition precedent to arbitration to be complied with and, if so, whether there has been compliance with such requirement or condition precedent. Thus, the parties may have erected a prerequisite to the submission of any dispute to arbitration, in effect a precondition to access to the arbitral forum. ¹ In such event the reluctant party may be forced to arbitration only if the court determines that this portion of the agreement to arbitrate has been complied with-for example, where the parties agreed that disputes must first be submitted to a partnership for determination (Matter of Opan Realty Corp. v. Pedrone, 36 N.Y.2d 943, 373 N.Y.S.2d 549, 335 N.E.2d 854); or where contractual limitations are expressly made conditions precedent to arbitration by the terms of the arbitration agreement (Matter of Raisler Corp. (New York City Housing Auth.), 32 N.Y.2d 274, 344 N.Y.S.2d 917, 298 N.E.2d 91; see Matter of United Nations Dev. Corp. v. Norkin Plumbing Co., 45 N.Y.2d 358, 364, 408 N.Y.S.2d 424, 380 N.E.2d 253, supra ).

If the court concludes that the parties made a valid agreement to arbitrate, that Sharply to be distinguished from conditions precedent to arbitration are procedural stipulations that the parties may have laid down to be observed in the conduct of the arbitration proceeding itself-conditions in arbitration, e. g., limitations of time within which the demand for arbitration must be made, or requirements as to parties on whom or as to the manner in which service of the demand for arbitration shall be made. As would be expected, questions as to whether there has been compliance with such procedural regulations and, if not, what the consequences shall be, are for resolution by the arbitrator as incidental to the conduct of the arbitration proceeding (e. g., Cooper v. Ateliers de la Motobecane, S. A., 49 N.Y.2d 819, 427 N.Y.S.2d 619, 404 N.E.2d 741; Matter of United Nations Dev. Corp. v. Norkin Plumbing Co., 45 N.Y.2d 358, 408 N.Y.S.2d 424, 380 N.E.2d 253; supra ; Matter of Triborough Bridge & Tunnel Auth. (District Council 37), 44 N.Y.2d 967, 408 N.Y.S.2d 328, 380 N.E.2d 160; see Matter of Raisler Corp. (New York City Housing Auth.), 32 N.Y.2d 274, 344 N.Y.S.2d 917, 298 N.E.2d 91, supra; semble contra, Matter of Niagara Mohawk Power Corp. (Perfetto & Whalen Constr. Corp.), 40 N.Y.2d 986, 390 N.Y.S.2d 928, 359 N.E.2d 436, affg on mem at 52 A.D.2d 1081, 384 N.Y.S.2d 1021).

the dispute sought to be arbitrated falls within its scope, and that there has been compliance with any agreed on conditions precedent to arbitration, judicial inquiry is at an end (absent any issue as to bar by limitation of time) and the parties should be directed to proceed to arbitration.

It is recognized that both conditions precedent to access to the arbitral forum (falling within the judicial ambit) and procedural regulations or conditions in the arbitration proceedings (falling to the arbitrator) may be verbally referred to indiscriminately as "conditions precedent" to arbitration. Such loose description, however, obscures analysis and clarity. Whether the particular requirement falls within the jurisdiction of the courts or of the arbitrators depends on its substance and the function it is properly perceived as playing-whether it is in essence a prerequisite to entry into the arbitration process or a procedural prescription for the management of that process. Under the first heading will come provisions which in point of time are intended to be preliminary to the institution of any arbitration proceeding and in a precise sense are unrelated to it, e. g., a requirement that before any demand for arbitration can be made the dispute between the parties be referred to the architect or to the partnership-"conditions precedent" in the literal meaning of that term. Under the second heading will come provisions relating to the conduct of the arbitration proceeding itself, i. e., requirements or conditions in arbitration, e. g., that the demand be made within a specified time, ² or be served in a specified manner or on specified persons. Beyond that it is to be remembered that inasmuch as the entire arbitration process is a creature of contract, the parties by explicit provision of their agreement have the...