Thorgaard Plumbing & Heating Co. v. King County

Decision Date20 April 1967
Docket NumberNo. 38646,38646
CourtWashington Supreme Court
PartiesTHORGAARD PLUMBING & HEATING CO., Inc., a corporation, Respondent, v. COUNTY OF KING, State of Washington, Appellant.

Allen, DeGarmo & Leedy, Seth W. Morrison and Charles W. Butterfield, Seattle, for appellant.

Schweppe, Retier, Doolittle & Krug, Warren A. Doolittle, Seattle, for respondent.

STAFFORD, Judge. *

This is an appeal from an order confirming an arbitration award in favor of Thorgaard Plumbing & Heating Co., Inc. (hereinafter referred to as Thorgaard).

On November 27, 1961 Thorgaard entered into a contract with King County (hereinafter called the County) to perform all the heating and plumbing work on a new hangar and shop to be constructed at the King County Airport (Boeing Field). The contract was to be completed by July 5, 1962. However, the work was not finished until March 20, 1963.

Thorgaard alleged that the County, its architects and another prime contractor delayed the company 259 days beyond the original completion date. Thorgaard also asserted that by reason of the delay it was subjected to legal expenses in defending a suit for delay damages by one of its own subcontractors, Automatic Sprinkler Corporation.

Between March 26 and May 24, 1963 Thorgaard sent a series of letters claiming delay damages. These letters were later detailed, clarified and amended in September 1963 and June 1965. The record does not disclose their contents or to whom they were sent. However, the first four were acknowledged by the County's architects in a series of answering letters sent between March 28 and August 23, 1963.

The County accepted the work performed by Thorgaard on October 7, 1963. However, the subject of delay damage and legal expenses remained in dispute.

On May 14 and May 24, 1963 and again on March 15, 1965 Thorgaard demanded arbitration. Finally the County agreed to submit the dispute to arbitration pursuant to Article 40 of the contract. 1

Through a joint letter of their attorneys, the parties advised the arbitrators that they were appointed to hear a Dispute that had arisen over the contract of November 1961. The letter also included the rules of arbitration and provided for payment of the arbitrators.

Arbitration hearings were held July 20 and 21, 1965 at which time both Thorgaard and the County participated fully. However, prior to and during the hearing the County sought to withdraw from consideration Thorgaard's claim for legal expenses incurred in defense of the suit for delay damages.

On August 4, 1965 a majority of the arbitrators rendered their decision. They found Thorgaard's damages to be $18,540.44.

Three days later Thorgaard submitted a formal claim for payment of the arbitration award. The Board of County Commissioners rejected it on October 6, 1965.

Thereafter, Thorgaard filed a motion to have the trial court confirm the arbitration award pursuant to RCW 7.04.150. The County moved to vacate the award as provided in RCW 7.04.160(4) alleging that:

the arbitrators exceeded their powers, or so imperfectly executed them that a final and definite award upon the subject matter submitted was not made.

In the alternative they asked the trial court to correct the award pursuant to RCW 7.04.170, alleging that:

1. there was an evident miscalculation of figures or an evident mistake in the thing referred to in the award.

2. the arbitrators have awarded upon a matter not submitted to them.

Finally, for the first time of record, the County moved for a dismissal of the entire proceeding. It alleged that Thorgaard had failed to file a written claim with the Board of County Commissioners within 90 days of the damage occurring, as required by RCW 36.45.010.

The trial court denied the County's motions, confirmed the arbitration award and granted Thorgaard a judgment for $18,540.44 against the County.

The County assigns error to the trial court's refusal to dismiss the action. The claim was not filed with the Commissioners until August 7, 1965, immediately after the arbitration award. This, asserts the County, was far in excess of the statutory period. 2

The County supports its contention with several well established rules: RCW 36.45.010 applies to claims in contract. Puget Construction Co. v. Pierce Cy., 64 Wash.2d 453, 392 P.2d 227 (1964). The 90 days within which a claim must be filed begins to run no later than the date a county accepts the project (October 7, 1963 was the date of acceptance). Puget Construction Co. v. Pierce Cy., supra. The filing of a claim in accordance with the foregoing statute is a condition precedent to a right of action against a county (a claim was not filed until August 7, 1965). Caron v. Grays Harbor Cy., 18 Wash.2d 397, 139 P.2d 626, 148 A.L.R. 626 (1943). Compliance with the statute may not be waived by a county, Forseth v. City of Tacoma, 27 Wash.2d 284, 178 P.2d 357 (1947), and the courts may not ignore the 'nonclaim' statute. Caron v. Grays Harbor Cy., supra.

Neither Article 40 of the contract nor RCW 7.04 et seq. requires the filing of a claim as a condition precedent to arbitration. Yet, RCW 36.45.010 makes such a claim a condition precedent to a right of action against a county.

Few state courts have had an opportunity to explore the area of apparent conflict between a 'nonclaim' and an 'arbitration' statute. It is a case of first impression for this court.

RCW 36.45.010 requires the filing of 'All Claims for damages * * * within ninety days from the date that the damage occurred * * *' (Italics ours.) RCW 36.45.030 provides that no 'action shall be maintained on any Claim for damages until it has been presented to the board of county commissioners * * * but such Action (e.g. on the claim for damages) must be commenced within three months * * *.' (Italics ours.)

An Action is a prosecution In a court for the enforcement or protection of private rights and the redress of private wrongs. Ginzberg v. Wyman, 272 Mass. 499, 172 N.E. 614 (1930); Muirhead v. Johnson, 232 Minn. 408, 46 N.W.2d 502 (1951); City of Madison v. Frank Lloyd Wright Foundation, 20 Wis.2d 361, 122 N.W.2d 409 (1963); Brooks v. Ulanet, 116 Vt. 49, 68 A.2d 701 (1949). It is clear that by using the word 'action' in the foregoing section the legislature had a Lawsuit in mind. This is consistent with RCW 4.04.020, which provides:

There shall be * * * but one form of Action for the enforcement or protection of private rights and the redress of private wrongs, which shall be called a civil Action. (Italics ours.)

Thus the legislature has prescribed the conditions under which a county may be sued. Cook v. Clallam Cy., 27 Wash.2d 793, 180 P.2d 573 (1947). If one intends to bring an action (e.g., a lawsuit) against a county, he must do so in the manner provided by RCW 36.45.010. However, this has nothing to do with a statutory arbitration proceeding. 3

For many years this court has recognized that municipal corporations are authorized to arbitrate their disputes. Jackson v. City of Walla Walla, 130 Wash. 96, 226 P. 487 (1924); 5 Am.Jur.2d Arbitration and Award §§ 67, 68, pp. 569, 570. Adoption of the arbitration statute in 1943 and its later amendment in 1947 did not alter this power.

RCW 7.04 et seq. provides a means by which disputants may dispose of controversies other than by an action in court. They may resort to arbitration.

An arbitration proceeding is not had in a court of justice. It is not founded on the filing of a claim or complaint as they are generally understood. The very purpose of arbitration is to Avoid the courts insofar as the resolution of the dispute is concerned. Son Shipping Co. v. De Fosse & Tanghe, 199 F.2d 687 (2 Cir. 1952). 4 It is a substitute forum designed to reach Settlement of controversies, by extrajudicial means, Before they reach the stage of an Action in court. RCW 7.04.010 makes this purpose evident:

Two or more parties may agree * * * To submit to arbitration * * * any controversy which may be the Subject of an action existing between them at the time of the agreement * * * or they may include * * * a provision to Settle by arbitration Any controversy thereafter arising between them out of or in relation to such agreement. * * * (Italics ours.)

RCW 7.04.030 makes it clear that there is a difference between an action and an arbitration proceeding; 5 that arbitration is a substitute for, rather than a mere prelude to, litigation. If either party attempts to initiate an action contrary to the arbitration contract, the other party may move to have the action stayed and the court in which the action is pending

Shall * * * stay the Action * * * until an Arbitration has been had in accordance with the agreement. RCW 7.04.030. (Italics ours.)

While arbitration is similar to a judicial inquiry in that witnesses are called and evidence is considered, the standards of judicial conduct and efficiency to which a panel of arbitrators will be held are markedly different from those resting by law and tradition upon judicial officers. Northern State Constr. Co. v. Banchero, 63 Wash.2d 245, 386 P.2d 625 (1963). The proceeding is in a forum selected by the parties in lieu of a court of justice. The object is to Avoid, what some feel to be, the formalities, the delay, the expense and vexation of ordinary litigation. Son Shipping Co. v. De Fosse & Tanghe, supra. It depends for its existence and for its jurisdiction upon the parties having contracted to submit to it, and upon the arbitration statute.

The fact that a party to the arbitration may apply to the court for confirmation of the award 6 is not to be equated with the bringing of an Action for the collection of compensation, within the meaning of RCW 36.45.010. It is no more than a motion for an order to enforce an award of compensation already made by the arbitrators, pursuant to contract. If the award is not modified, vacated or corrected, the court 'shall grant such an order.' 7 In such...

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