Aberdeen Golf & Country v. Bliss Const.

932 So. 2d 235, 2005 Fla. App. LEXIS 14231, 2005 WL 2138798
CourtDistrict Court of Appeal of Florida
DecidedSeptember 7, 2005
Docket4D04-2545
StatusPublished
Cited by17 cases

This text of 932 So. 2d 235 (Aberdeen Golf & Country v. Bliss Const.) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Aberdeen Golf & Country v. Bliss Const., 932 So. 2d 235, 2005 Fla. App. LEXIS 14231, 2005 WL 2138798 (Fla. Ct. App. 2005).

Opinion

932 So.2d 235 (2005)

ABERDEEN GOLF & COUNTRY CLUB, Appellant,
v.
BLISS CONSTRUCTION, INC., Appellee.

No. 4D04-2545.

District Court of Appeal of Florida, Fourth District.

September 7, 2005.

*236 Mara Shlackman and Hinda Klein of Conroy, Simberg, Ganon, Krevans & Abel, P.A., Hollywood, for appellant.

Kenneth G. Spillias and Kevin S. Hennessy of Lewis, Longman & Walker, P.A., West Palm Beach, for appellee.

AMENDED OPINION

FARMER, J.

We have a nonfinal order refusing to compel arbitration. The dispute arose from an aborted contract for the construction of a new $2 million facility at a private club. The contract between the owner of the club and the general contractor (GC) contained an alternative dispute resolution (ADR) provision that included arbitration. When the owner terminated the contract before completion, the GC commenced litigation and alleged that the owner's premature termination caused damages. The owner responded with a demand for arbitration. The trial judge found that the owner had forfeited any right to arbitration by its conduct leading up to the GC's suit. We affirm.

Like all contracts, each arbitration agreement is unique. Although it may employ some standard terms, the contract must be construed and understood in light of its whole text, context, structure and purpose. As with all contracts, the entire undertaking must be considered.

Some arbitration provisions are intended to operate as an irrevocable substitute for litigation in court. These survive full performance by one party, leaving only the other party's covenant for future dispute. For example, an arbitration provision in the purchase of a product, say an automobile, may be intended to apply even after the buyer has fully performed by *237 payment and all that remains is the seller's warranty. In that instance arbitration may be intended as a complete alternative to proceedings in a court on warranty claims surviving the closing.

In other contracts, however, performance may involve many tasks over a long duration toward a single defined goal. One example is the construction of a commercial building. It is impossible to build anything substantial overnight or all alone. The complexity of a substantial commercial edifice requires multiple vendors completing an interrelated series of dependent tasks. The participation of many must be carefully coordinated, because the work of one hinges on the finished work of another. Yet there are a thousand ways in this relay of goods and services for time to be stolen. Here arbitration may have a different use: it may instead be intended as a means of postponing—even if not ultimately avoiding—litigation in court while the parties make progress toward their contractual goal. The issue is whether this case involves this latter kind instead of the former.

It is unlikely that many $2 million commercial construction projects have been finished without conflicts during progress. The owner of real property and a GC share two primary concerns. Time and money.[1] Disputes arising during construction may result in lost time. They structure their contract so the whole job does not come crashing to a halt with every dispute. They aim to keep the project going and to avoid wasting time and money in litigation to resolve disputes about individual parts of the plan or the specific tasks. Litigation is ill-suited to resolve them because courts spend time in ways horrifying commercial parties. This is not a criticism, for we are deliberative institutions bound by procedures allowing parties to make their cases fully. So in a construction contract, the parties may choose an ADR system whose real purpose is for construction to continue through the dispute.

The ADR provision in this agreement may be briefly outlined. It starts with an umpire of sorts, the architect[2] and, if a party disagrees with his decision, then to mediation[3] and, if nothing works to the satisfaction of all, to arbitration.[4] Notably *238 this ADR provision does not specify anywhere that arbitration, as such, is a condition precedent to litigation.

That this ADR provision was meant to function during the progress of the contract is seen in certain key provisions, all of which must be read as part of a single piece. One section requires any dispute to be initiated by notice to the architect within 21 days after it has occurred and, in any event, not later than 30 days before the final payment. This is obviously meant to insure that all disputes will be resolved before completion, or laid on the table when it comes time for the owner to make the final payment on the contract price, perhaps with an adjustment for any unresolved dispute. Another section emphasizes that "[p]ending final resolution of a claim . . . the Contractor shall proceed diligently with performance of the Contract and the Owner shall continue to make payments in accordance with the Contract documents." [e.s.] In short, the contract requires both sides to continue to perform through disputes, with the goal that most things will be resolved as they arise or with the final payment. Critically, another section of the contract expressly limits the grounds for either party terminating the entire contract before completion. Essentially the GC may terminate if the owner fails to make a draw payment certified as due by the architect. The owner may terminate if the GC and the subs fail to carry on construction diligently.

Significantly the contract specifies that, after notice from the complaining party, an initial decision by the architect is a condition precedent "to mediation, arbitration or litigation of all Claims." [e.s.] If the parties meant for arbitration to supplant all litigation—even after a termination before full completion—they would not have inserted litigation, the emphasized word, because their intent then would have been to eliminate litigation entirely. Again, the arbitration clause does not state that it is a precondition to litigation. In fact, nothing in the contract specifies that the arbitration provision is irrevocable and replaces all litigation in court. Altogether, these specific provisions and omissions make clear that this ADR system was meant to function in place of the courts while progress was being made on the contract.

From this whole text, context and structure, the only reasonable construction is that the ADR provision was not meant to survive an absolute termination of the contract before completion. Any total termination of the contract before the clubhouse was built would obviously be the utter negation of the very purpose of the contract in the first place, and thus also the rationale behind an ADR provision designed to speed dispute resolutions during construction in order to bring about a successful completion of the contract. If either party terminated, all bets would be off and either could have its day in court.

The dispute that ended in the utter destruction of the agreement began with the GC's discovery of mold in part of the old clubhouse being rebuilt. As the contract requires, the GC gave notice to the architect and claimed that the presence of the mold should change the approved schedule and increase the contract price for successful completion of the clubhouse. The architect confirmed the mold and agreed that it had caused delays that could affect the price.

If the owner disagreed with the architect's decision on mold, the owner was *239

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Cite This Page — Counsel Stack

Bluebook (online)
932 So. 2d 235, 2005 Fla. App. LEXIS 14231, 2005 WL 2138798, Counsel Stack Legal Research, https://law.counselstack.com/opinion/aberdeen-golf-country-v-bliss-const-fladistctapp-2005.