Wm. C. Blanchard Co. v. Beach Concrete Co., Inc.

• Court: New Jersey Superior Court
• Writing for the Court: HERBERT
• Citation: Wm. C. Blanchard Co. v. Beach Concrete Co., Inc., 297 A.2d 587, 121 N.J.Super. 418 (N.J. Super. 1972)
• Decision Date: 29 November 1972
• Parties: WM. C. BLANCHARD CO., a New Jersey corporation, Plaintiff, v. BEACH CONCRETE CO., INC., a New Jersey corporation, Defendant Third-Party, Plaintiff, v. WASHINGTON PARK BUILDING, INC., a New Jersey corporation, Third-Party Defendant.

Page 418

121 N.J.Super. 418

297 A.2d 587

WM. C. BLANCHARD CO., a New Jersey corporation, Plaintiff, v. BEACH CONCRETE CO., INC., a New Jersey corporation, Defendant Third-Party, Plaintiff, v. WASHINGTON PARK BUILDING, INC., a New Jersey corporation,

Third-Party Defendant.

Superior Court of New Jersey Chancery Division.

Nov. 29, 1972.

John C. Heavey, Jr., Newark, for plaintiff (Carpenter, Bennett & Morrissey, Newark, attorneys).

Robert A. Baron, Englewood, for defendant.

Clyde A. Szuch and Richard L. Plotkin, Newark, for third-party defendant (Pitney, Hardin & Kipp, Newark, attorneys).

Merritt T. Viscardi, Springfield, for C.S.T. Erection Co. East (Apruzzese & McDermott, Springfield, attorneys).

Richard L. Amster, Newark, for Rockwin Corp., Eastern Schokbeton Division (Amster & Levin, Newark, attorneys).

HERBERT, J.S.C.

This case arises out of the construction of the new office building at Washington and James Streets in Newark which has now become the headquarters of the Blue Cross-Blue Shield organization. The owner of the property is defendant Washington Park Building, Inc. That corporation had a general contract with plaintiff Blanchard to construct the building in accordance with plans and specifications prepared by architects and engineers. Defendant Beach entered into a subcontract with plaintiff Blanchard by which Beach agreed to erect the structural concrete of the building. Blanchard also made a subcontract with Rockwin Corporation, Eastern Schokbeton Division, to manufacture prefabricated architectural concrete and to install it upon the building. Schokbeton furnished the prefabricated concrete members, but in turn subcontracted with C.S.T. Erection Co. East for their placement or erection.

A web of claims and cross-claims are involved in this situation. Much time and effort has been spent in an attempt to work out an arrangement whereby every claim of every contractor and subcontractor, as well as claims by and against the owner, would be presented in a single arbitration. The attempt has not succeeded and defendant Beach now moves for an order requiring that all issues between it and the plaintiff Blanchard be submitted to arbitration and that this action be stayed until the arbitration is completed. Plaintiff Blanchard has made a cross-motion for an order to consolidate all claims and defenses of Blanchard, Beach and Washington Park in a single arbitration proceeding. Plaintiff has also moved for leave to join as an additional defendant here Rockwin Corporation, Eastern Schokbeton Division, this being for the purpose of making the new defendant a party to an order for consolidated arbitration if there should be such an order entered.

An added complication is a suit brought in the Law Division of the Superior Court, Union County, Docket No. L 388--72 entitled: C.S.T. Erection Co. East and Eastern Schokbeton, a Division of Rockwin Corporation, plaintiffs, v. Washington Park Building, Inc., Wm. Blanchard Co., Welton Becket & Associates and Hospital Service Plan of New Jersey, defendants. I have been informed that in this Law Division action Washington Park and Hospital Service Plan intend to serve a third-party complaint upon Beach Concrete Co., and that the Blanchard company also intends to serve a third-party complaint upon Beach.

At earlier stages of the case it has been argued for Beach that all claims should be disposed of in a single proceeding. Beach has an arbitration clause in the subcontract between it and Blanchard, the general contractor. That clause does not encompass claims which others have against Beach or which Beach may wish to assert against those others. There is no arbitration clause anywhere in the contract documents which by its terms makes the entire web of claims and cross-claims (or even the greater part of that web) subject to a single arbitration or subject to consolidation if a series of separate arbitrations should be demanded. Nor is there any provision in the contract documents providing that a court or courts may take over the entire controversy in all its parts in the event that a complex of claims cannot be arbitrated in a single proceeding.

Beach now departs from its former position that there should be a single proceeding to determine all parts of the complex controversy and presses its motion for an order requiring only arbitration of the claims between Beach and Blanchard. It takes the position that it is entitled to such an order by reason of the arbitration clause in its subcontract with Blanchard and our statute (N.J.S.A. 2A:24--1 et seq.) relating to enforcement of contracts for arbitration. In taking that position Beach has to be willing to present elsewhere its claims against parties other than Blanchard and to defend elsewhere the claims others may have against it. Following such a course will subdivide the entire case and rather obviously will make it necessary to go over the same proofs and deal with substantially the same subject matter and issues more than once. There might also be conflicting decisions by different arbitration panels or between a court decision and an arbitrator's award. Though handling all of the claims and cross-claims in a single proceeding before a single tribunal would be far from simple, that procedure in my judgment would be simpler than the duplication of effort, the possible conflicts and the over-all complications of piece-by-piece solutions.

Thus, the questions presented are:

Is Beach entitled to an order for an arbitration of all Beach-Blanchard claims and only those claims?

Or--Can a single consolidated arbitration of all claims between all parties be ordered?

Or--Can all parties to the present action and to the action in the Law Division, Union County, be required to litigate in one of those actions every existing claim and defense?

The 'General Conditions' of the prime contract between Washington Park Building, Inc. and plaintiff Blanchard contain the following paragraph relating to arbitration:

7.10.1 All claims, disputes and other matters in question arising out of, or relating to, this Contract or the breach thereof, except as set forth in Subparagraph 2.2.9 with respect to the Architect's decisions on matters relating to artistic effect, and except for claims which have been waived by the making or acceptance of final payment as provided by Subparagraphs 9.7.5 and 9.7.6, 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 upon it in accordance with applicable law in any court having jurisdiction thereof.

Beach's motion relies upon the following language found in a set of 'General Conditions' which are incorporated in the Beach-Blanchard contract:

85. ARBITRATION

(a) Disputes, claims, or questions subject to arbitration under this Contract, shall be submitted to arbitration in accordance with the provisions then prevailing, of the Construction Industry Arbitration Rules of the American Arbitration Association. This agreement so to arbitrate shall be specifically enforceable under the prevailing arbitration law, and judgment upon the award rendered may be entered in the highest court of the forum, State or Federal, having jurisdiction. It is mutually agreed that the decision of the arbitration shall be a condition precedent to any right of legal action that either party may have against the other.

(b) Disputes arising from the following causes are excluded from resort to arbitration:

(1) Decisions of the Architect on matters relating to artistic effect.

(2) Claims Waived by the making or acceptance of final payment as stipulated above, Article 83.

Although this language from the Blanchard-Beach subcontract does not attempt to define matters 'subject to arbitration,' I think the only sensible interpretation, and one that will give the clause an effective meaning, is to read it with reference to the arbitration clause of the Washington Park-Blanchard prime contract and have it apply to 'All claims, disputes and other matters in question arising out of, or relating to, this Contract or the breach thereof * * *,' except for the exclusions expressly noted.

Arbitration, as commonly understood, is a proceeding voluntarily initiated by the parties, and at common law its basis is their voluntary act.' 5 Am.Jur.2d, Arbitration and Award, § 9, at 526 (1962). Cf. In re Smith,381 Pa. 223, 112 A.2d 625, 55 A.L.R.2d 420 (Sup.Ct.1955) app. dism., Smith v. Wissler, 350 U.S. 858, 76 S.Ct. 105, 100 L.Ed. 762 (1955). In general, there was no enforcement at common law of agreements to arbitrate. 5 Am.Jur.2d, Arbitration and Award, § 36, at 548. The power of New Jersey courts to order performance of an agreement to arbitrate depends upon our statute, N.J.S.A. 2A:24--1, which originated as L.1923, c. 134, p. 291 et seq.

The language of the statute supports the view that a court's power to order performance depends upon, and is limited to, the agreement of the parties. N.J.S.A. 2A:24--1 speaks exclusively of a contract or agreement 'to settle by arbitration a controversy' and declares that it 'shall be valid, enforceable and irrevocable, except upon such grounds as exist at law or in equity for the revocation of a contract.' Section 2A:24--4 provides for a stay of any action pending before a New Jersey court 'upon an issue arising out of an agreement providing for the arbitration thereof,' and further provides that the stay is to continue 'until an arbitration has been had in accordance with the terms of the agreement.' Section 2A:24--3 provides that the enforcement order of a court shall be 'that the arbitration proceed in the manner provided for in the agreement.'

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