Architectural Innovations, Inc. v. D'Urso

696 A.2d 91, 303 N.J. Super. 133, 1997 N.J. Super. LEXIS 320
CourtNew Jersey Superior Court Appellate Division
DecidedJuly 9, 1997
StatusPublished

This text of 696 A.2d 91 (Architectural Innovations, Inc. v. D'Urso) is published on Counsel Stack Legal Research, covering New Jersey Superior Court Appellate Division primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Architectural Innovations, Inc. v. D'Urso, 696 A.2d 91, 303 N.J. Super. 133, 1997 N.J. Super. LEXIS 320 (N.J. Ct. App. 1997).

Opinion

The opinion of the court was delivered by

VILLANUEVA, J.A.D.

(retired and temporarily assigned on recall).

Plaintiff appeals from an order denying injunctive relief to restrain a “Homeowners Buyers Warranty” arbitration proceeding involving alleged defects in the home plaintiff constructed for John and Jean D’Urso (“defendants”). We affirm.

On January 25, 1994, the defendants entered into a contract with Marius Gudelis and his corporation, Architectural Innova[135]*135tions, Inc. (plaintiff), for the construction of a five-bedroom house at 5 Goose Point Drive, Colts Neck, New Jersey for $441,575. This price did not include the cost of the land, which the defendants had purchased separately. As construction of the house neared completion, the defendants contended that the house was not constructed in a satisfactory manner. Defendants refused to pay the final payment of $48,573.25 when plaintiff demanded it because, according to defendants, the house was not complete.

Plaintiff filed a demand for arbitration to obtain payment of the balance of the money plaintiff claimed was due ($81,522.22, plus fees). Paragraph IV-m of the contract between plaintiff and defendants provided that either party “may submit any dispute to this contract to arbitration in accordance with the American Arbitration Association’s Construction Industry Arbitration Rules.”

Defendants, in their Answering Statement to the Demand for Arbitration with Demand for Set Off and Counterclaim, requested the following:

THE CLAIM OE RELIEF SOUGHT (the amount, if any): The Respondent/counterclaimant seeks the disallowance of the purported extras and upgrades in the sum of $32,948.97, the repair of all defective items of workmanship, the completion of all incomplete items, the reduction of the balance due on contract for $48,573.25 and the sum of $23,543.54 for expenses incurred or to be incurred by the respondent/counterelaimant as a result of the claimant’s breach of contract, a sum sufficient to perform proper repairs of the structurally deficient basement floor which has been estimated to approximate the sum of 820,000, legal fees, arbitration fees and expenses, witness fees and any other damages incurred as the result of claimant’s breach of contract.

An arbitration hearing took place in February and March 1995, over the course of eight days. John Rudderow, of the American Arbitration Association, was the arbitrator. Both sides provided expert and lay witnesses, as well as an on-site inspection, to support their positions. Only certain portions of the transcript of the proceedings are presently in existence.

On April 3, 1995, John Rudderow issued his one-page decision. The decision did not incorporate a finding of what claims had been considered, nor did it include a statement addressing what claims [136]*136had been either specifically accepted or rejected by Rudderow. The arbitration award stated:

1. JOHN D’URSO AND JEAN D’URSO, hereinafter referred to as the RESPONDENT, shall pay to ARCHITECTURAL INNOVATIONS, INC., hereinafter referred to as CLAIMANT, the sum of THIRTY THOUSAND SEVEN HUNDRED DOLLARS ($30,700.00).
2. Each party is to pay his or her Attorney Fees.
3. The administrative fees and expenses of the AAA shall be borne equally by the parties and shall be paid as directed by the Association.
4. This Award is in full settlement and consideration of All Claims and Counterclaims submitted to this arbitration.

Defendants subsequently filed a demand for arbitration under the “2-10 Home Buyers Warranty” policy. The defendants’ Home Buyers Warranty states, in pertinent part:

If the Homeowner(s) have submitted their complaints to the Builder and Home Buyers Warranty as described under III[,] “What the Homeowner Must Do,” the Builder will have 30 days to inspect the home and to respond to the Homeowner(s) as to what action the Builder intends to take and the time by which the defect will be corrected ... If the Homeowner(s) and Builder do not reach an agreement, if the builder does not make the repairs promptly or if the Homeowner is not satisfied with any repair of defects made by the builder, either the Builder or the Homeowner(s) may request an impartial third party arbitration with a Home Buyer Warranty approved arbitration service which will be conducted in accordance with their rules and regulations.

The American Arbitration Association Rules for Home Warranty Arbitration provide:

These rules shall apply whenever the parties have agreed to arbitrate under them, or under any existing home-owner warranty or insurance dispute settlement program providing for administration by the American Arbitration Association (AAA). These rules shall be applied as set forth under the certificate of participation, insurance policy, or other applicable documentation. They apply to the extent that they are not inconsistent with applicable statutes or with the agreement of the parties.

Along with their demand for arbitration under the Home Buyers Warranty, the defendants included a list, which addressed items that the defendants contended had not been previously considered in the earlier arbitration proceeding and also included some items that were allegedly discovered after the award had been made by the arbitrator.

[137]*137On April 25, 1995, the American Arbitration Association issued its award and approved a number of the new claims that the defendants had listed. ' The award did not require plaintiff to pay money damages, but rather, required plaintiff to repair the defects.

In a letter dated August 21, 1995, the plaintiff made a request for a clarification of the Construction Industry Arbitration award. The plaintiff demanded that the American Arbitration Association direct the arbitrator of the Construction Industry Arbitration, John Rudderow, to issue a clarification. Rudderow issued a clarification of his April 3, 1995 decision in the form of a Disposition of Application for Clarification of Award. The clarification provides:

The award was in full settlement of all items discussed during the eight (8) days of this Arbitration ease, which can be listed from the punch lists that were submitted, C-6-A, C-6-B, C-6-C, C-6-D, C-6-E, C-6-F, C-6-G and C-7 all submitted as Exhibits on February 7, 1995, and discussed during the course of the hearings.

On September 25, 1995, plaintiff, after filing suit in the Superior Court, obtained an order to show cause to confirm the original Construction Industry Arbitration Award and obtained restraints which temporarily stayed the Home Buyers Warranty arbitration and set a continued hearing before the court.

An October 25, 1995 order required that defendants “bear the burden of adducing evidence or other proofs that demonstrate and otherwise prove that the claims and defects itemized ... were not considered or included within the claims and defects itemized and annexed as part of the Defendants’ Demand for Arbitration with Demand for Set-Off and Counterclaim____”.

After a final hearing on December 14, 1995, Judge McGann rendered an oral opinion. On January 23, 1996, Judge McGann signed an order which states:

1. The Home Buyer’s Warranty action commenced by ...

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Bluebook (online)
696 A.2d 91, 303 N.J. Super. 133, 1997 N.J. Super. LEXIS 320, Counsel Stack Legal Research, https://law.counselstack.com/opinion/architectural-innovations-inc-v-durso-njsuperctappdiv-1997.