Bourlas Constr., Inc. v. Paxos

2014 Ohio 289

• Court: Ohio Court of Appeals
• Decided: January 27, 2014
• Docket: 2013CA00076
• Status: Published

Opinion

[Cite as Bourlas Constr., Inc. v. Paxos, 2014-Ohio-289.]

COURT OF APPEALS STARK COUNTY, OHIO FIFTH APPELLATE DISTRICT

BOURLAS CONSTRUCTION, INC. JUDGES: Hon. W. Scott Gwin, P.J. Plaintiff-Appellee Hon. William B. Hoffman, J. Hon. Patricia A. Delaney, J. -vs- Case No. 2013CA00076 MICHAEL PAXOS, ET AL.

Defendants-Appellants OPINION

CHARACTER OF PROCEEDING: Appeals from the Stark County Court of Common Pleas, Case No. 2013CV00350

JUDGMENT: Affirmed

DATE OF JUDGMENT ENTRY: January 27, 2014

APPEARANCES:

For Plaintiff-Appellee For Defendants-Appellants

GARY A. CORROTO MARIO GAITANOS EDMOND J. MACK 437 Market Avenue North MARIA C. KLUTINOTY EDWARDS Canton, Ohio 44702 Tzangas, Plakas, Mannos, Ltd. 220 Market Avenue South Eighth Floor Canton, Ohio 44702 Stark County, Case No. 2013CA00076 2

Hoffman, J.

{¶1} Defendants-appellants Michael Paxos, et al. (hereinafter “Paxoses”)

appeal the April 9, 2013 Order entered by the Stark County Court of Common Pleas,

which granted plaintiff-appellee Bourlas Construction, Inc.’s (hereinafter “Bourlas”)

Motion for Order Compelling Arbitration and Staying Action.

STATEMENT OF THE FACTS AND CASE

{¶2} On June 15, 2006, Bourlas and Michael and Maria Paxos executed a

contract for the construction of an addition to their home at 1625 Slate Run Circle,

Northeast, North Canton, Ohio (“the Contract”). The Contract price was $412,533.

{¶3} After construction began in July, 2006, the Paxoses requested Bourlas

make additional changes to the construction to be performed and the materials to be

used. Bourlas agreed and completed the requested changes. The Contract included a

provision relative to changes and additions thereto, which reads:

All changes or additions to the plans and specifications made after

the signing of this agreement shall be submitted from the owner to the

contractor and shall be approved in writing by the contractor, and both the

work and price therefore shall be approved in writing by the contractor and

owner before the work is done, or the materials are purchased. These are

called “change orders.” All change orders will be paid for in full by the

owner before the work will be done.

{¶4} The Contract specifically provided any change order would thereafter

“become part of this contract.” However, the parties never executed any written change

orders. All change orders were verbally requested and verbally approved. Stark County, Case No. 2013CA00076 3

{¶5} Bourlas completed the construction in early 2009. The Paxoses paid

Bourlas the entire Contract amount of $412,533, as well as $150,000, for additional

work. Approximately three years later, Bourlas advised the Paxoses they owed an

additional $450,000+ for the work performed pursuant to the change orders. The

Paxoses refused to pay the additional charges.

{¶6} Bourlas filed a complaint against the Paxoses, seeking declaratory

judgment, or, in the alternative, breach of contract, unjust enrichment/quantum meruit,

and breach of implied contract. Bourlas also filed a Motion for Order Compelling

Arbitration and Staying the Action. After the trial court granted them leave to plead, the

Paxoses filed an answer and counterclaim as well as a memorandum in opposition to

Bourlas’ motion to compel arbitration.

{¶7} Via order filed April 9, 2013, the trial court granted Bourlas’ motion to

compel arbitration, finding Bourlas’ claims were arbitratable pursuant to the terms of the

Contract.

{¶8} It is from this judgment entry, the Paxoses appeal, raising the following as

error:

{¶9} “I. THE TRIAL COURT ERRED IN ORDERING THE PARTIES TO

ARBITRATE A DISPUTE ARISING FROM A VERBAL AGREEMENT.”

I

{¶10} Arbitration is a matter of contract. Benjamin v. Pipoly, 155 Ohio App.3d

171, 2003–Ohio–5666, at ¶ 31–34. (Citations omitted.) In interpreting an arbitration

clause, courts must apply the fundamental principles of Ohio contract law. Id. If the

language of the contract is clear and unambiguous, the court's interpretation is a matter Stark County, Case No. 2013CA00076 4

of law. State ex rel. Parsons v. Fleming (1994), 68 Ohio St.3d 509, 511, 628 N.E.2d

1377.

{¶11} The Contract expressly required all disputes arising between the parties

be submitted to binding arbitration and reads as follows:

ARBITRATION. In the event that any dispute arise between the

parties to the meaning or in interpretations of any provisions of this

agreement and the exhibits attached, or if any disputes arise as to the

proper performance of any part of the work in the structure of the structure

and the parties are unable between themselves to resolve in such a

dispute, it is mutually agreed upon that the parties will submit said

disputes for arbitration. Any such arbitration shall be conducted with each

of the parties’ arbitrators. Any arbitrator appointed should be either a

registered architect or a competent structure contractor. A decision of any

two of the three arbitrators shall be conclusive on each issue that might be

submitted to arbitration.

{¶12} We find the arbitration clause at issue herein is clear and unambiguous.

However, the issue remains as to whether the trial court correctly found Bourlas' claims

concerning the verbal “change orders” were subject to the arbitration provision.

{¶13} The Paxos maintain Bourlas’ claims are not subject to the arbitration

clause because the parties did not contractually agree to arbitrate claims arising from

their verbal agreement. We disagree.

{¶14} We find the parties, through their course of conduct, mutually altered the

Contract by not requiring the change orders to be in writing, rather the change orders Stark County, Case No. 2013CA00076 5

could be verbally made and approved. Accordingly, we find the parties waived the

written change order provision. Although the parties waived this requirement, such

waiver did not waive the arbitration provision requiring “any dispute” be submitted to

arbitration. We find the change orders were not new individual contracts as argued by

the Paxoses but rather were “changes” to the contract. All of the change order work

flowed from the original Contract; therefore, any dispute relative thereto is subject to the

arbitration provision.

{¶15} Bourlas cites to this Court’s decision in Memmer Constr., Inc. v. Craig, 5th

Dist. App. No. 2002CA00144, 2002-Ohio-7008, for the proposition provisions of a

contract relative to change orders may be waived by the parties due to their course of

dealing. While we agree the parties herein, like the parties in Memmer, waived the

written change order provision of the Contract due to their course of dealing, we note

the parties in Memmer were not disputing the applicability of an arbitration provision. In

fact, the appellants in Memmer were appealing judgment following a bench trial.

{¶16} The Paxoses’ sole assignment of error is overruled.

{¶17} The judgment of the Stark County Court of Common Pleas is affirmed.

By: Hoffman, J.

Gwin, P.J. and

Delaney, J. concur