Servomation Corp. v. Hickory Const. Co.

• Decision Date: 04 September 1984
• Docket Number: MILLER-BROOKS,No. 8325SC1012,8325SC1012
• Citation: 70 N.C.App. 309,318 S.E.2d 904
• Court: North Carolina Court of Appeals
• Parties: SERVOMATION CORPORATION, Plaintiff, v. HICKORY CONSTRUCTION COMPANY, Defendant and Third Party Plaintiff, v.ROOFING COMPANY, Third Party Defendant.

Page 904

318 S.E.2d 904

70 N.C.App. 309

SERVOMATION CORPORATION, Plaintiff, v. HICKORY CONSTRUCTION COMPANY, Defendant and Third Party Plaintiff, v. MILLER-BROOKS ROOFING COMPANY, Third Party Defendant.

No. 8325SC1012.

Court of Appeals of North Carolina.

Sept. 4, 1984.

Rudisill & Brackett by Keith T. Bridges, Hickory, for plaintiff appellee.

Patrick, Harper & Dixon by Stephen M. Thomas, Hickory, for defendant appellant Hickory Const. Co.

PHILLIPS, Judge.

The central issue presented by this appeal is whether the trial court erred in refusing to direct plaintiff to seek arbitration and to stay the lawsuit pending the conclusion thereof. We preliminarily note that an order denying arbitration, though interlocutory, is appealable immediately because it involves a substantial right that might be lost if appeal is delayed until the lawsuit is concluded. Sims v. Ritter Construction, Inc., 62 N.C.App. 52, 302 S.E.2d 293 (1983).

The contract between the parties contains the American Institute of Architects Document A201, entitled "General Conditions of the Contract for Construction," several provisions of which relate to settling claims and disputes thereunder. Article Two provides that any matters in dispute between the contractor and the owner relating to execution or progress of the work or interpretation of the contract shall be initially referred to the architect, and that any matter so referred, except those relating to artistic effect, "shall be subject to arbitration upon the written demand of either party," once the architect has rendered, or has had a reasonable time to render, a written decision. Article Seven provides that "[a]ll claims, disputes and other matters in question arising out of, or relating to, this Contract or the breach thereof ...," subject to certain exceptions not here applicable, "shall be decided by arbitration ... unless the parties mutually agree otherwise." This section also sets out the procedure for obtaining arbitration. Finally, A201 provides that duties, obligations, rights and remedies imposed or available pursuant to the contract shall be "in addition to and not a limitation of" any imposed or available by law.

Although G.S. 1-567.3(a) and (d) authorize the court to stay litigation and compel arbitration where parties have contracted to arbitrate their disputes, the right to arbitrate, as other contract rights, "may be impliedly waived through the conduct of a party to the contract clearly indicating such purpose." Adams v. Nelsen, 67 N.C.App. 284, 287, 312 S.E.2d 896, 899 (1984). The contract between plaintiff and defendant provided for mandatory arbitration of disputes thereunder, and the question is whether defendant's participation in the lawsuit in the manner and to the extent shown by the record constituted a waiver of its right to enforce the agreement to arbitrate. In Cyclone Roofing Co. v. LaFave Co., 67 N.C.App. 278, 312 S.E.2d 709 (1984), this Court found that defendant had waived arbitration as a matter of law by participating in that lawsuit considerably less than defendant participated in this one. In that case, defendant's participation consisted only of invoking the court's jurisdiction by filing a permissive cross-claim and demanding a jury trial both on plaintiff's claim and its cross-claim. In this case, however, in addition to filing an answer and third party complaint for indemnity, defendant submitted some 61 interrogatories to plaintiff, many of which had numerous sub-questions, all of which were answered by plaintiff before defendant moved for a stay. Furthermore, the stay motion was not even filed until more than a year after the suit was filed, and then did not demand arbitration straight out, but rather requested it "in the alternative," in the event summary judgment on the other...