Standard Roofing Co. v. John G. Johnson & Sons Const. Co.

• Decision Date: 08 December 1977
• Citation: 8 O.O.3d 281,376 N.E.2d 610,54 Ohio App.2d 153
• Parties: , 8 O.O.3d 281 STANDARD ROOFING COMPANY, Appellant, v. JOHN G. JOHNSON & SONS CONSTRUCTION COMPANY et al., Appellees.
• Court: Ohio Court of Appeals

Page 153

54 Ohio App.2d 153

376 N.E.2d 610, 8 O.O.3d 281

STANDARD ROOFING COMPANY, Appellant, v. JOHN G. JOHNSON & SONS CONSTRUCTION COMPANY et al., Appellees.

Court of Appeals of Ohio, Eighth District, Cuyahoga County.

Dec. 8, 1977.

Syllabus by the Court

A party to a contract containing an arbitration clause who brings an action for breach of the contract is entitled, under Civ.R. 41(A)(1), to dismiss the action prior to trial and proceed with arbitration provided the other party to the contract has not been prejudiced by the intervening proceedings in the trial court.

Ronald H. Isroff, Cleveland, for appellant.

Reynold L. Kenen, Cleveland, for appellees.

KRUPANSKY, Judge.

On November 10, 1975 plaintiff Standard Roofing Company (hereinafter referred to as Standard Roofing) filed a complaint against defendants John G. Johnson & Sons Construction Co. (hereinafter referred to as Johnson) and the American Arbitration Association, seeking an injunction restraining arbitration of a dispute between Standard Roofing and Johnson. The case was heard upon the following stipulations:

"1. On or about June 15, 1971 plaintiff Standard Roofing Company entered into a written agreement * * * with defendant John G. Johnson & Sons Construction Co. (hereinafter referred to as 'defendant Johnson') to perform certain roofing and sheet metal work at the Chapman Elementary School in Strongsville, Ohio. Plaintiff then entered into an oral agreement with Bay Furnace and Sheet Metal Company (hereinafter referred to as 'Bay') whereby Bay agreed to furnish certain labor and materials in connection with said roofing and sheet metal work.

"2. In connection with the performance of said work, Bay purchased certain grouting material from Jackson Tool Supply Company, Inc. (hereinafter referred to as 'Jackson') which material was manufactured by Metalcrete Manufacturing Company (hereinafter referred to as 'Metalcrete'). Said grouting material was then applied to the said Chapman Elementary School by Bay. Said grouting material was not the same material specified by the architect in its drawings nor the contract documents, and said substitution of the grouting material was done without the approval of or consent of the general contractor, and further, the parties have been informed by the architect that said substitution was done without its approval.

"3. On or about February 5, 1973, defendant Johnson filed a lawsuit against plaintiff (Standard Roofing) and Bay in this Court entitled 'John G. Johnson & Sons Construction Company, Plaintiff v. The Standard Roofing Company and Bay Furnace and Sheet Metal Company, Defendants,' bearing Case No. 914227 wherein defendant alleged that plaintiff and Bay, during the performance of the work, caused cracking of stone at the flashing reglet of said Chapman Elementary School. * * *

"4. In said lawsuit plaintiff (Standard Roofing) filed a cross-claim against Bay for negligence, breach of warranty and breach of contract and both plaintiff (Standard Roofing) and Bay filed Third Party Complaints against Jackson and Metalcrete for breach of warranty and negligence.

"5. Said lawsuit was set for trial for October 15, 1975. However, on October 1, 1975, defendant Johnson filed a Notice of Dismissal. * * *

"6. On or about October 20, 1975 Johnson filed a Demand for Arbitration * * * with defendant American Arbitration Association (hereinafter referred to as 'defendant Association'). On or about November 3, 1975, plaintiff received notice * * * from the Administrator of the defendant Association of the institution of arbitration proceedings relating to the damage to said Chapman Elementary School.

"7. Said agreement dated June 15, 1971 between plaintiff Standard Roofing Company and defendant Johnson * * * provides as follows:

"Article 13, Arbitration

" 'All claims, disputes and other matters in question arising out of, or relating to this contract, or the breach thereof, shall be decided by arbitration in the same manner, and under the same procedure as provided in the Contract Documents with respect to disputes between the owner and the contractor except that a decision by the architect shall not be a condition precedent to arbitration.' "

In addition to the above stipulations, the following documents were included in the record: The contract between Johnson and Standard Roofing, a copy of the complaint filed against Standard Roofing by Johnson, the notice of dismissal of that action, the arbitration demand, and the notice from the American Arbitration Association stating that arbitration proceedings had been instituted.

The lower court refused to enjoin the arbitration proceedings, holding Johnson had not waived the right to arbitrate its dispute with Standard Roofing.

Standard Roofing appealed from the denial of injunctive relief assigning a single error:

"The trial court erred in holding that the bringing of the prior lawsuit by defendant Johnson against plaintiff and its dismissal more than two and one-half years later and two weeks prior to the scheduled trial did not constitute a waiver on the part of the defendant Johnson of its right to arbitrate its dispute with plaintiff."

Johnson's action for breach of contract was dismissed under Civ.R. 41(A)(1) which states:

"Subject to the provisions of Rule 23(E) and Rule 66, an action may be dismissed by the plaintiff without order of court (a) by filing a notice of dismissal at any time before the commencement of trial unless a counterclaim which cannot remain pending for independent adjudication by the court has been served by the defendant ¹ or (b) by filing a stipulation of dismissal signed by all parties who have appeared in the action. Unless otherwise stated in the notice of dismissal or stipulation, the dismissal is without prejudice, except that a notice of dismissal operates as an adjudication upon the merits when filed by a plaintiff who has once dismissed in any court, an action based on or including the same claim."

Since a dismissal under this rule is without prejudice, a plaintiff may refile his complaint at any time within the applicable statute of limitations. Demanding arbitration following a voluntary dismissal without prejudice is analogous to refiling the complaint with the court.

Under Civ.R. 41 Standard Roofing could not have complained if Johnson had filed a second complaint in Common Pleas Court following the dismissal. Since preparation for arbitration is not substantially different than preparing a defense for litigation in court, we feel Standard Roofing has shown no prejudice in being denied an injunction to restrain arbitration.

Standard Roofing contends Johnson waived its right to arbitrate disputes under the contract by commencing an action in court. However, the two Ohio cases upon which Standard Roofing relies do not support its argument.

The first of these cases, Board of Education of the Addyston Village School District v. Nolte Tillar Bros. Construction Company (1943), 71 Ohio App. 469, 49 N.E.2d 99, was an appeal from the denial of a motion for judgment notwithstanding the verdict. The defendant was considered to have waived its right to arbitrate the dispute by waiting until after trial to raise the issue. In the present case, on the other hand, the action was dismissed by the plaintiff without prejudice prior to trial.

The second case upon which Standard Roofing relies is Gillette v. Brookhart (1954), Com.Pl., 123 N.E.2d 693, 70 Ohio Law Abs. 493, an action to enforce a contract in the Mercer County Common Pleas Court. The contract in question, a lease agreement, provided that any differences between the two parties would be deferred to a board of arbitrators. In the belief that the lessee had not complied...