Harmon v. Schwartz

242 A.2d 490, 250 Md. 165, 1968 Md. LEXIS 713
CourtCourt of Appeals of Maryland
DecidedMay 29, 1968
DocketNo. 247
StatusPublished

This text of 242 A.2d 490 (Harmon v. Schwartz) is published on Counsel Stack Legal Research, covering Court of Appeals of Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Harmon v. Schwartz, 242 A.2d 490, 250 Md. 165, 1968 Md. LEXIS 713 (Md. 1968).

Opinion

Hammond, C. J.,

delivered the opinion of the Court.

Harmon, the appellant, built a house for the Schwartzes and a dispute arose as to whether Harmon had been paid in full the agreed price plus the cost of extra work and as to whether he had performed fully and well. Harmon filed suit in 1960 and on June 12, 1964, in the midst of the trial of the case Harmon and the Schwartzes entered into an agreement written in longhand in the court house, entitled “Arbitration Agreement.” It provided:

“Agreement to Submit Case to Arbitration.
“The parties hereto do hereby agree to submit the dispute in the above styled cause to arbitration, by a majority vote or award of two of the three arbitrators to be hereafter named. One arbitrator to be named by plaintiff one by defendants, and those named shall choose the third. The parties shall each name their arbitrator within one * * * week from this day and the arbitrators shall choose the third arbitrator within * * * three * * * weeks from the date hereto. Hearings shall be promptly made and the defendants shall make property available for inspection. Arbitrators shall notify parties of time and place of taking evidence at least one week in advance thereof and may continue hearings from day to day or time to time. The arbitrators shall determine all issues in said case and interest on money from date due.
“The parties agree that the determination is to be in accordance with the rules governing contracts generally as well as custom of the trade. Each party to pay for their arbitrator & split cost of third.”

Each side picked an experienced and reputable builder as its arbitrator and these two selected a lawyer whose only par[168]*168ticipation, with the acquiescence of the parties, seems to have been as a coordinator of the efforts of the experts. On March 3,1967, each builder wrote the lawyer that the other

“and myself have gone over and reviewed the plans, specifications and contract, and then together we physically inspected the Schwartz property.'
“As a result of the inspection and verifications we are in mutual agreement that Mr. Harmon is not entitled to any monies.”

Harmon and his lawyer were sent copies of the letters of the two builders on March 7, and on April 26 Harmon filed a petition to vacate the arbitrators’ award alleging in material part that :

“4. That Louis Perlmutter was named by the defendants as their arbitrator, and Lester M. Redmiles was named by the plaintiff. That in turn they chose Leonard S. Blondes, an attorney, to be the third arbitrator. That the arbitrators, Louis Perlmutter and Lester M. Redmiles, met at the premises constructed by the plaintiff for the defendants with the defendant, Stuart Schwartz. .
“5. That neither the plaintiff nor his attorney were notified of the time and place of the meeting, and that extras in the amount of work done and materials furnished by the plaintiff were not pointed out to the arbitrators. The only version of what was done was that given by Stuart Schwartz, the defendant. That the arbitrators did not have sufficient facts or testimony before them to make an intelligent and fair decision in the matter.
“8. That after having viewed the premises, the plaintiff did not have an opportunity to discuss with the arbitrators what extras or other things they were taking into consideration and which items were pointed out to them as work done by the plaintiff which he claims compensation for.” ’

[169]*169After taking testimony Judge Powers held that:

“the arbitration agreement entered into between the parties was substantially complied with by the arbitrators, and that after the award the plaintiff in this case was, by reason of his conduct up to that point, no longer in a position to object to the award because the award was unfavorable to him.”

We think Judge Powers’ conclusions were correct.

The arbitration agreement provided that “hearings shall be promptly made and defendants shall make the property available for inspection. Arbitrators shall notify parties of time and place of taking evidence at least one week in advance thereof and may continue hearings from day to day or time to time.” The meaning that the quoted language appears to offer is that a distinction was intended and made between hearings at which testimony -would be taken and the parties were to be present and a physical inspection of the property by the expert builders at which they could put values on the work Harmon had done, without the required presence of the parties.

In similar situations we have held that impartial deciders of controversy, within the limits of their delegated authority, may act and decide upon their own knowledge and special skills and upon their own investigations made in the absence of both or one of the parties. In Litman v. Holtzman, 219 Md. 353, we said that this is true where the intent of the disputants and the character of the questions and issues to be answered make the procedure, regardless of the label that has been bestowed upon it, an appraisal or “an * * * arbitration in the nature of an appraisal,” Parr Construction Co. v. Pomer, 217 Md. 539, 544, rather than a true arbitration. Litman involved a determination submitted to independent experts of the reasonable cost of a construction company’s work on a dwelling and the complaint was the experts had talked to and received information from the president of the company without the presence of the home owners. We said (pp. 359-60) :

“These legal labels [arbitration or appraisal] have significance [in the determination of procedural re[170]*170quirements], because where the agreement is to arbitrate differences or disputes, those who are to decide act quasi-judicially and may receive the evidence or views of a party to the dispute only in the presence of, or upon notice to, the other side, and may adjudge the matters to be decided essentially only on what is presented to them in the course of an adversary proceeding. On the other hand, where the intent of the submission is that the impartial determiners are primarily to ascertain facts, they may act upon their own knowledge and special skills and upon their own investigations ; they are not required to hear evidence from, or the views of, a party only in the presence of, or upon notice to, the other side; and they are allowed a wide discretion as to procedures and sources of information, within the limits of the agreement defining their authority. * * *
* * *
“Whether the procedures required are those of an arbitration or those of an appraisal is to be found from the intent of the disputants or from the character of the questions and issues to be answered, or both. The name the parties call the proceeding, or those who are to give the answers, is not decisive. It is generally held, particularly in the more recent cases, that where the submission to others is for the determination of prices, values, quantities, qualities or the verification of the performance of a construction or engineering contract, the agreement is likely to partake of the character of, and be governed by the rules as to, an appraisal.”

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Related

Litman v. Holtzman
149 A.2d 385 (Court of Appeals of Maryland, 1959)
Parr Construction Co. v. Pomer
144 A.2d 69 (Court of Appeals of Maryland, 1958)

Cite This Page — Counsel Stack

Bluebook (online)
242 A.2d 490, 250 Md. 165, 1968 Md. LEXIS 713, Counsel Stack Legal Research, https://law.counselstack.com/opinion/harmon-v-schwartz-md-1968.