Windowmaster Corp. v. BG Danis Co.
| Decision Date | 09 January 1981 |
| Docket Number | No. C-2-80-901.,C-2-80-901. |
| Parties | WINDOWMASTER CORP. and Safeco Insurance Company of America, Plaintiffs, v. B. G. DANIS COMPANY, Defendant. |
| Court | U.S. District Court — Southern District of Ohio |
John J. Petro, Columbus, Ohio, for plaintiffs.
Jon M. Sebaly, Dayton, Ohio, for defendant.
This is an action for declaratory judgment pursuant to 28 U.S.C. § 2201 and for injunctive relief, arising out of a construction contract and a performance bond executed in conjunction therewith. The case has been submitted to the Court on a stipulation of facts, accompanying exhibits, and cross-motions for summary judgment.
The parties have stipulated to the following facts, and they shall be accepted as true for the purposes of this case.
1. Plaintiff WindowMaster Corporation (hereinafter WindowMaster), is a corporation organized and existing under the laws of the state of Florida with its principal place of business in the state of Florida.
2. Plaintiff Safeco Insurance Company of America (hereinafter Safeco), is a corporation organized and existing under the laws of the state of Washington with its principal place of business in the state of Washington.
3. Defendant B. G. Danis Company (hereinafter Danis) is a corporation organized and existing under the laws of the state of Ohio with its principal place of business in the state of Ohio.
4. The controversy between the respective parties involves a sum in excess of $10,000 exclusive of costs and interest.
5. On or about August 6, 1973, and again on or about September 3, 1974, WindowMaster as subcontractor, entered into contracts with Danis, as general contractor, by the terms of which WindowMaster was to manufacture and install a curtain wall and a curtain wall system as a part of the "Phase I" construction at Good Samaritan Hospital in Dayton, Ohio. (Exhibits A and B)
6. These contracts incorporate by reference the "conditions of contract, general and supplementary conditions of the contract for construction and special conditions." (Exhibit C)
7. On or about September 18, 1973, Safeco as surety, and WindowMaster as principal, executed and delivered to Danis as obligee, a subcontract bond. (Exhibit D)
8. WindowMaster gave Danis a guarantee on June 2, 1977, with respect to the material and workmanship for the curtain wall and curtain wall system which WindowMaster had, by that time, manufactured and installed as a part of the Phase I construction at Good Samaritan Hospital in Dayton, Ohio. (Exhibit E)
9. On or about August 14, 1980, Danis filed with the American Arbitration Association a demand for arbitration against both WindowMaster and Safeco. (Exhibit F)
The Court further finds the following facts to be undisputed by the parties. The subcontracts between WindowMaster and Danis were entered into in the state of Ohio.
Article XX of the subcontract provides as follows:
In the event of any disagreement arising under this agreement between the parties hereto, such disagreement shall, upon written notice of either party to the other party be referred to arbitration. The arbitration shall be conducted under the provision for arbitration provided in these specifications. If these specifications do not provide for arbitration provisions the arbitration shall be conducted under the provisions for arbitration of the American Institute of Architects obtaining on the date of this agreement first above written. The subcontractor shall not cause a delay of the subcontractor's work during any arbitration proceedings, except by agreement with the general contractor.
The "provision for arbitration in the specifications" referred to in Article XX, is paragraph "7.10 arbitration" in the general contract between Danis and Good Samaritan Hospital. It provides:
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 accordance with the construction industry arbitration rules of the American Arbitration Association then obtaining unless the parties mutually agree otherwise. This agreement to arbitrate shall be specifically enforceable under the prevailing arbitration law. The award rendered by the arbitrators shall be final and judgment may be entered on it in accordance with applicable law in any court having jurisdiction thereof.
A dispute arose between contractor Danis and subcontractor WindowMaster concerning an alleged failure by WindowMaster to perform the contract as specified. Danis thereupon filed a demand for arbitration on August 11, 1980, with the American Arbitration Association, naming not only WindowMaster but also Safeco as parties upon whom their demand was made.
On or about September 5, 1980, Safeco made a formal demand upon Danis to be dismissed from the arbitration proceeding contending that it is not subject to the arbitration agreement between the primary parties.
Jurisdiction of this Court is not disputed and is exercised pursuant to 28 U.S.C. § 1332 governing disputes between persons of diverse citizenship.
The contract having been executed and performed in the state of Ohio is governed by Ohio choice of law rules, which provide that Ohio law governs the rights of the parties thereto.
Plaintiffs WindowMaster and Safeco move this Court to enter summary judgment in their favor declaring that Safeco is not a party to any arbitration agreement between WindowMaster and Danis and may not be compelled to arbitrate or participate in any arbitration of disputes between WindowMaster and Danis; and that Danis may not demand or conduct any arbitration proceeding against Safeco in respect to disputes between WindowMaster and Danis or in respect to any claim which Danis may assert against Safeco under the subcontract bond. Plaintiffs' position is that Safeco, not a signatory to either of the two contracts between WindowMaster and Danis, has not agreed to arbitrate any claims by Danis against Safeco arising out of those construction contracts. Accordingly, they argue, Safeco cannot be held to arbitration since there is no agreement in writing for arbitration. Ohio R.C. 2711.03. Plaintiffs do not dispute that WindowMaster is bound to arbitrate, but state that any claim Danis may have against Safeco cannot be presented in such a forum.
Danis insists that Safeco, as a surety of WindowMaster, may be governed by an arbitration clause notwithstanding that it is not a signatory to such a provision.
The subcontract bond binds...
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