Wessell Bros. Foundation Drilling Co. v. Crossett Public School Dist. No. 52
| Decision Date | 09 December 1985 |
| Docket Number | No. 85-148,85-148 |
| Citation | 701 S.W.2d 99,287 Ark. 415 |
| Parties | , 29 Ed. Law Rep. 834 WESSELL BROTHERS FOUNDATION DRILLING COMPANY, Appellant, v. CROSSETT PUBLIC SCHOOL DISTRICT NO. 52 et al., Appellees. |
| Court | Arkansas Supreme Court |
Barber, McCaskill, Amsler, Jones & Hale, Little Rock, for appellant.
Griffin, Rainwater & Draper, Crossett, Friday, Eldredge & Clark, Little Rock by Michael G. Smith, for appellees.
In 1978 the Crossett Public School District contracted with John Sanders, Inc., an architectural firm, to prepare plans and specifications for the construction of a school building. The contract was awarded to Advance Construction, Inc. and Advance subcontracted the foundation work to Wessell Brothers Foundation Drilling Company, Inc.
When the building began to show serious structural defects, the district brought suit against Sanders and Advance. Advance then filed a third-party complaint against Wessell and all parties agreed to arbitration. An arbitration agreement was entered into and the issues were submitted to a three member board. Ultimately the arbitration board awarded $850,000 to the district, which it divided among the defendants in proportion to the responsibility it assessed against each: Advance Construction, Inc. $552,500, Wessell Brothers, $255,000, and John Sanders, Inc., $42,500.
After arbitration a dispute arose as to whether the judgment should provide for joint and several liability and while Circuit Judge Paul K. Roberts had that issue under advisement he suffered a heart attack. On December 7, 1984, Chief Justice Webster Hubbell, pursuant to Ark.Stat.Ann. § 22-142, assigned Judge H. A. Taylor to Ashley County to serve in Judge Roberts's place. But on December 10, before that transfer order was received, the lawyers of Ashley County elected Mr. W. P. Switzer Special Circuit Judge pursuant to Article 7, Section 21 of our Constitution, and on December 28, 1984, Special Judge Switzer entered a judgment providing for joint and several liability. Wessell moved to set the judgment aside on the grounds of Judge Taylor's prior assignment to Ashley County. While that motion was pending Judge Taylor set aside the first judgment and entered a judgment on February 27, 1985, identical in all respects to the earlier judgment, the effect being that the district was deprived of ten percent interest on the $850,000 for about sixty days.
Wessell has appealed, raising two points of error: The court erred in entering a judgment against Wessell under the pleadings and, in the alternative, the court erred in entering a joint and several judgment. By cross-appeal Sanders and the district also argue that a joint and several judgment should not have been entered and the district further contends the judgment entered on December 28, 1984 should not have been set aside.
Addressing the first point, Wessell maintains a judgment in favor of the district should not have been entered against Wessell, a third-party defendant, because the school district failed to amend its complaint to state a cause of action against Wessell. It is argued that Advance has a claim for indemnity from Wessell for any amounts it is required to pay to the district but the district has no direct cause of action against Wessell. Wessell relies on this language in the arbitration agreement:
All parties hereby agree to submit to arbitration under the Construction Industry Arbitration Rules of the American Arbitration Association the controversies which exist between them and which controversies are more specifically described in the complaint, answers, third-party complaints, counterclaims, and cross-complaints which are filed in the previously mentioned litigation.
Wessell contends under this provision the issues are to be resolved by the board under the pleadings, thereby precluding any direct liability by Wessell to the district. We disagree.
The same rules of construction and interpretation apply to arbitration agreements as apply to agreements generally, thus we will seek to give effect to the intent of the parties as evidenced by the arbitration agreement itself. 5 Am.Jur.2d § 14; and see Prepakt Concrete Co. v. Whitehurst Bros., 261 Ark. 814, 552 S.W.2d 212 (1977). It is generally held that arbitration agreements will not be construed within the strict letter of the agreement but will include subjects within the spirit of the agreement. Doubts and ambiguities of coverage should be resolved in favor of arbitration. 5 Am.Jur.2d § 14; Uniform Laws Annotated, Vol. 7, Uniform Arbitration Act, § 1, Note 53 ().
We think the intent of the parties is clearly evidenced in the language of the agreement when it states "All parties hereby agree to submit to arbitration ... the controversies which exist between them and which controversies are more specifically described in the [pleadings]." This statement does not in any way suggest that arbitration is to be strictly controlled by the pleadings, but rather, that the pleadings will further explain the issues involved in the dispute. It would be a strained interpretation and contrary to the intent of the parties entering into arbitration to read the agreement as Wessell urges.
The intent of the parties to submit all controversies which existed between them to arbitration is further evidenced in paragraph twelve of the agreement:
12. The order of proof shall be as follows: Crossett Public School District No. 52 shall first present its claims against all other parties. John Sanders and/or John Sanders, Inc., shall present their defenses to the claims which they have against them and to present any claims which they have against the other parties. Advance Construction shall then present its defenses to the claims made against it and to present any claims which it may have against the other parties. Finally, Wessell Brothers Foundation Drilling Co., Inc., shall present its defenses to the claims made against it and to present any claims which it has against the other parties. (our emphasis)
In view of the above language we believe the parties intended to put before the board all disputes among themselves with respect to the subject matter of the litigation and did not intend to bind themselves to the formalities of the pleadings.
In the alternative, Wessell submits it was error to enter a joint and several judgment and we agree. The decision of the arbitration board in this case is carefully explained. The award sets out the "division of payment" to be made by each defendant and the amount each shall contribute, followed by the findings supporting the board's award. A paragraph is devoted to each party, detailing the responsibility of each and in what manner performance was inadequate. There is no mention or suggestion of joint liability. Given the thorough manner in which the award was articulated, we believe the absence of any mention of joint liability is not unintended. The agreement has clearly not directed joint liability in this award. See, generally, 49 C.J.S. § 440 Judgments. Should there be any doubt, we are persuaded in any case by the form and language of the award that the intention of the arbitrators was to direct several liability only, and we will resolve any ambiguity in keeping with that intention. Any ambiguity in an award must be settled in the way that will coincide with the apparent intention of the arbitrators. 5 Am.Jur.2d, supra.
Joint and several liability is of a different character and legal significance than independent liability and the finding of joint liability can radically change...
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