Skidmore, Owings and Merrill v. Connecticut General Life Ins. Co.

• Decision Date: 06 May 1963
• Docket Number: No. 130968,130968
• Citation: 197 A.2d 83,25 Conn.Supp. 76
• Court: Connecticut Superior Court
• Parties: SKIDMORE, OWINGS AND MERRILL v. CONNECTICUT GENERAL LIFE INSURANCE COMPANY.

Page 83

197 A.2d 83

25 Conn.Supp. 76

SKIDMORE, OWINGS AND MERRILL v. CONNECTICUT GENERAL LIFE INSURANCE COMPANY.

No. 130968.

Superior Court of Connecticut, Hartford County.

May 6, 1963.

Cooney & Scully, Hartford, for the plaintiff.

Robinson, Robinson & Cole, Hartford, for the defendant.

KLAU, Judge.

This is an action in which the plaintiff seeks a declaratory judgment determining whether the period of limitation has expired so as to bar an arbitration proceeding instituted by the defendant on July 31, 1962, against the plaintiff. By way of relief, in the event it is determined that the Statute of Limitations has expired, the plaintiff seeks a temporary and permanent injunction restraining the defendant from proceeding with such arbitration. After a hearing held August 31, 1962, on an order to show cause why a temporary injunction should not be issued, Meyers, J., denied the defendant's motion that the plaintiff be directed to proceed with arbitration and issued a temporary injunction restraining the defendant from proceeding with the arbitration which it had demanded of the plaintiff until further order of the court. To avoid unnecessary delay, the parties have entered into a stipulation that the arbitration proceedings heretofore instituted should, however, proceed to the point where a panel of arbitrators should be selected under the rules of the American Arbitration Association, but provided that no hearing in said arbitration proceedings should be had until judgment in this action was rendered.

There is no great dispute with respect to the facts as far as the present action is concerned. The plaintiff is a widely known partnership firm engaged in the practice of architecture and on May 5, 1953, entered into a written contract in this state with the defendant insurance company whereby the plaintiff agreed to render architectural and supervisory services in connection with the design and construction of the new home office building of the defendant in the town of Bloomfield. Under the agreement, the plaintiff was given responsibility for each phase of the planning and construction, was to prepare all drawings and specifications for the building, and was given the duty of complete supervision over the course of the 'Work.' One of the plaintiff's specific undertakings was to furnish the 'services of structural, heating, ventilating, air-conditioning, plumbing and electrical engineers.' The subject matter of the controversy here relates to the alleged breach of contract with respect to the heating and air-conditioning system.

In February, 1955, the plans for the heating, ventilating, and air-conditioning (HVAC) system were 'frozen' for the purposes of securing bids thereof. The purpose of freezing the HVAC plans was so that bids might be taken from potential subcontractors for the HVAC system on a uniform basis, without the confusion which would result from the necessity of making adjustments in the various bids to take account of design changes constantly being made. On March 9, 1955, the plaintiff sent a copy of the HVAC design and specifications, in their then form, to the defendant. No approval of these plans from a technical engineering point of view was asked and none was given, and plaintiff conceded that defendant was not qualified so to approve. The specifications, however, were accepted by the defendant prior to obtaining bids. Bids were secured from subcontractors, and in May, 1955, the general contractor engaged by the defendant entered into a subcontract for the HAVC system, and thereafter the general contractor undertook and completed the installation of the HVAC system, as designed by the plaintiff, in accordance with the design and specifications furnished by the plaintiff as aforesaid. While no changes were made after March 9, 1955, in the basic specifications for the pipe which subsequently corroded and thereby precipitated the underlying dispute between the parties, many changes were made in the plans of the HVAC system and in other aspects of the building subsequent to this date. In fact, changes thereafter made in the HVAC system resulted in an additional cost of $500,000.

In the early months of 1957, the defendant occupied said building as a home office and has continuously occupied it since that time. The defendant first became aware of the defective air-conditioning system shortly before June 10, 1960. On that date, the defendant notified the plaintiff that there was evidence of serious pipe corrosion in the heating and air-conditioning system which used, as a cooling agent, well water from ten wells constructed on the premises of the defendant. On that date and thereafter, meetings were held to determine the cause of this corrosion and the remedial steps which should be taken. A representative of the plaintiff attended several of these meetings, and plaintiff received copies of the minutes of all of them.

The actual design of the HVAC system had been undertaken by well-known mechanical engineers, Syska and Hennessey, selected by the plaintiff and approved by the defendant. This was in accordance with the terms of the agreement entered into between the plaintiff and the defendant. The pipes specified and actually installed for the heating and air-conditioning system were copper coils, and the corrosive action thereof was in all probability due to the chemical content of the water used in connection with the heating and air-conditioning system and obtained from the wells driven for this purpose. The plaintiff and the firm of Syska and Hennessey, the plaintiff's subcontractor who actually designed the HVAC system, both obviously entirely familiar with the building, were retained by the defendant to devise a means of altering the HVAC system in light of the corrosion problem. Changes in the system were subsequently made.

On July 31, 1962, defendant demanded, pursuant to the arbitration clause contained in the contract of May 5, 1953, that the plaintiff arbitrate the question whether the corrosion in the HVAC system was due to a breach by plaintiff of its duties under this contract.

The contract for architectural services referred to above contained the following clause with respect to arbitration: 'L. Arbitration. All questions in dispute under this Agreement shall, at the choice of either party, be submitted in accordance with the procedures then obtaining of the American Arbitration Association.' The claim or relief sought and the defendant's demand for arbitration are as follows: 'Claimant alleges breach of contract on the part of Skidmore, Owings & Merrill in failing to use reasonable care and skill in discharging its duties as architect of the Home Office Building of Connecticut General, located in Bloomfield, Connecticut, pursuant to a contract between the parties executed at Hartford, Connecticut, on May 5, 1953, to wit: As a result of faulty design and construction the heating and air-conditioning system has become badly corroded and its useful life substantially shortened, requiring claimant to expend large sums in repairs and permanently reducing the value and usefulness of its building.'

The plaintiff refused to arbitrate and instituted the present action seeking the declaratory judgment referred to above. During the course of the trial, the plaintiff agreed and the parties stipulated that no claim of laches was or could be raised with respect to the timeliness of the defendant's demand on July 31, 1962, for arbitration.

The plaintiff claims that the arbitration proceeding is barred by the Statute of Limitations because the cause of action, if the defendant has any, which is the basis for the arbitration proceedings arose in 1955 when the plaintiff submitted its specifications for the HVAC system and the defendant approved them. Since the pipe installed was that specified, the wrong, the plaintiff claims, occurred at the time the specifications were submitted, even though the damage flowing from the allegedly defective pipe was not discovered by the defendant until June, 1960. The plaintiff claims that such a cause of action, being essentially one based on negligence, is barred by § 52-584 of the General Statutes, which bars any action to recover damages for injury to property unless it is brought within one year from the date when the injury was first sustained or not more than three years from the date of the act or omission complained of. Under such circumstances, the cause of action would have been barred, the plaintiff claims, not later than 1958.

The plaintiff further claims that if § 52-584, supra, is not applicable for the reason that the defendant's cause of action is one based upon a breach of contract, nevertheless the defendant is barred by the Statute of Limitations set forth in § 52-576 of the General Statutes, which bars any action on a contract in writing not under seal (as is the present contract) and not brought within six years next after the right of action accrues. The plaintiff asserts that even under this Statute of Limitations the defendant's right of action is barred, since more than six years elapsed between March, 1955, the date the plaintiff submitted the HVAC plans and specifications to the defendant, and July 31, 1962, the date on which the defendant made its demand for arbitration; this demand the plaintiff construes as constituting the commencement of an 'action' by the defendant.

It is the defendant's claim that the Statute of Limitations is not applicable to bar the arbitration proceeding which it demanded on July 31, 1962, pursuant to the arbitration clause in its agreement with the plaintiff, for the following reasons: (1) The arbitration proceeding which it invoked by its demand does not constitute the bringing of an action within the meaning of the phrase as used in the Statute of Limitations above cited, and therefore the Statute of Limitations cannot be invoked to enjoin the arbitration; (2) even if the demand...