Willis Flooring, Inc. v. Howard S. Lease Const. Co. & Associates, 6736

• Decision Date: 07 January 1983
• Docket Number: No. 6736,6736
• Citation: 656 P.2d 1184
• Court: Alaska Supreme Court
• Parties: WILLIS FLOORING, INC., a/k/a Willis Flooring Company, Appellant, v. HOWARD S. LEASE CONSTRUCTION CO. & ASSOCIATES, Appellee.

Page 1184

656 P.2d 1184

WILLIS FLOORING, INC., a/k/a Willis Flooring Company, Appellant, v. HOWARD S. LEASE CONSTRUCTION CO. & ASSOCIATES, Appellee.

No. 6736.

Supreme Court of Alaska.

Jan. 7, 1983.

Betty L. Johnson, Wade, Ditus & Hammond, Anchorage, for appellant.

Kenneth R. Atkinson, Atkinson, Conway, Bell & Gagnon, Anchorage, for appellee.

OPINION

Before BURKE, C.J., RABINOWITZ, MATTHEWS and COMPTON, JJ., and CRANSTON, ^* Superior Court Judge.

MATTHEWS, Justice.

Willis Flooring, Inc. subcontracted to install a floor for Howard S. Lease Construction Co. & Associates, a partnership. One provision of the subcontract dated July 18, 1978, states in part:

Contractor, at its sole option, shall have the right to require Subcontractor to arbitrate any and all claims, disputes, and other matters in question between the Contractor and the Subcontractor arising out of or related to the Subcontract or the breach thereof. Subcontractor agrees that, upon the written demand of Contractor based on a contention of a duty of Subcontractor to indemnify Contractor, it will become a party to any arbitration proceeding involving Contractor, and any third party.

A dispute arose, arbitrable under this clause. Lease demanded arbitration. Willis objected that the arbitration clause was not binding, on three separate grounds: first, that the July 18 subcontract was terminated and a novation occurred on October 25, 1979; second, that the arbitration clause in the July 18 subcontract was not binding because it was not executed by all the partners; ¹ and third, that the arbitration clause was invalid because it was unilateral. The arbitrators decided the arbitration agreement was binding and a hearing was held. Willis appeared and participated at an arbitration hearing, under protest. Lease was awarded $41,500 by the arbitrators, and brought a complaint in superior court to confirm the award. See AS 09.43.110. The award was confirmed on Lease's motion for summary judgment and Willis appeals.

The sole issue presented is whether the arbitration provision is unenforceable for lack of mutuality. ²

Willis suggests that the clause in suit is not "a provision in a written contract to submit to arbitration a subsequent controversy between the parties." ³ It contends that the unilateral option to arbitrate is unenforceable because it lacks mutuality, citing a line of authority to that effect from New York. ⁴ Willis adds that it is inequitable to coerce a party to arbitrate.

The option to arbitrate is a provision in a written contract to submit a controversy to arbitration. It is thus literally within the meaning of AS 09.43.010 which states that such a provision is valid.

Further, the objection that the option lacks mutuality is without merit. ⁵ As one clause in a larger contract, the option clause is binding to the same extent that the contract as a whole is binding. Consideration for the option clause was included in the consideration for the entire transaction, just as consideration for every other clause was included. ⁶ This was a unitary, integrated contract, not a series of independent agreements. "If the requirement of consideration is met, there is no additional requirement of ... (c) 'mutuality of obligation'." Restatement (Second) of Contracts § 79 (1981). ⁷

We see no unfairness, nor any coercion, inherent in this resolution of the case. The entire controversy relating to the subcontract between the parties was submitted to arbitration. Arbitration is not so clearly more or less fair than litigation that it is unconscionable to give one party the right of forum selection. The bargain that Willis voluntarily entered into is enforceable.

AFFIRMED.

* Cranston, Superior Court Judge, sitting by assignment made pursuant to article IV, section 16 of the Constitution of Alaska.

1 See AS 32.05.040(c)(5).

2 Willis has not briefed the two arguments made in the superior court based on novation and AS 32.05.040(c)(5). Accordingly, they are waived.

3 AS 09.43.010 provides:

Arbitration agreements valid; application of chapter. A written agreement to submit an existing controversy to arbitration or a provision in a written contract to submit to arbitration a subsequent controversy between the parties is valid, enforceable and irrevocable, except upon grounds which exist at law or in equity for the revocation of a contract. However, this chapter does not apply to a labor-management contract unless it is incorporated into the contract by reference or its application is provided for by statute.

4 See, e.g., Miner v. Walden, 101 Misc.2d 814, 422 N.Y.S.2d 335, 339 (N.Y.Sup.Ct.1979); Cored Panels, Inc. v. Meinhard Commercial Corp., 71 A.D.2d 544, 420 N.Y.S.2d 731 (1979); Arcata Graphics Corp. v. Silin, 59 A.D.2d 1007, 399 N.Y.S.2d 738, 738-39 (19...