IDC, Inc. v. McCain-Winkler Partnership

396 So. 2d 590, 1981 La. App. LEXIS 3724
CourtLouisiana Court of Appeal
DecidedMarch 11, 1981
Docket8077
StatusPublished
Cited by16 cases

This text of 396 So. 2d 590 (IDC, Inc. v. McCain-Winkler Partnership) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
IDC, Inc. v. McCain-Winkler Partnership, 396 So. 2d 590, 1981 La. App. LEXIS 3724 (La. Ct. App. 1981).

Opinion

396 So.2d 590 (1981)

I.D.C., INC., Plaintiff-Appellant,
v.
McCAIN-WINKLER PARTNERSHIP et al., Defendants-Appellees.

No. 8077.

Court of Appeal of Louisiana, Third Circuit.

March 11, 1981.

Cook, Yancey, King & Galloway, Herschel E. Richard, Jr. and James R. Jeter, Shreveport, for plaintiff-appellant.

*591 John G. Williams and Watson, Murchison, Crews, Arthur & Corkern, William P. Crews, Jr., Natchitoches, for defendants-appellees.

Before CULPEPPER, FORET and SWIFT, JJ.

FORET, Judge.

The sole issue before this Court on appeal is whether the trial court properly ordered a stay of these proceedings and directed the parties to arbitration.

I.D.C., Inc. (Plaintiff), in essence, asserted two causes of action in the court below. First, it sought recovery for damages arising from an alleged breach of a contract between it and defendants, McCain-Winkler Partnership, a Louisiana commercial partnership which has its principal place of business in Natchitoches Parish, and its members, Harold L. McCain, Jr. and Frank A. Winkler.

Then, by an amended petition, plaintiff asserted an alternative cause of action against George W. Minturn, the architect involved herein, and his professional liability insurer, Continental Casualty Company (Continental). The basis of plaintiff's alternative cause of action is that George Minturn was an alleged agent of the above mentioned partnership and its members who exceeded his authority.

The partnership and its members reconvened against the plaintiff for damages alleging numerous defects in the construction work. These parties also brought a third party demand against George Minturn and Continental alleging that certain acts of Minturn were unauthorized.

An action entitled Natchitoches Electric, Inc. v. Harold L. McCain, Jr., et al[1], Docket Number 45,854, in the Tenth Judicial District Court was consolidated for trial with this suit by joint motion of all parties.

FACTS

Plaintiff and McCain-Winkler Partnership entered into a written contract on January 4, 1978. Plaintiff was the general contractor who agreed to construct a restaurant (now the Captain's Galley) for the partnership with the basis of payment to be the cost of work plus 15% for overhead and profit. The contract provided that the maximum cost to the partnership would be no more than $250,000.00.

George Minturn was the architect on this project. Plaintiff alleged that as soon as construction on the project started, the partnership and the architect began making changes in the construction plans which ultimately resulted in the total cost of the project plus 15% being placed at $381,180.00. The partnership paid plaintiff $200,224.00.

Plaintiff instituted this action on May 28, 1979, seeking to recover the difference between final cost of the project and the amount which it was paid. Trial of this matter was set for August 4, 1980, and pre-trial conferences were held.

The trial date approached, and on the morning on which it was to begin, the various parties, except for plaintiff, made application to the trial court for an order staying the proceedings. The parties alleged that there were existing contractual provisions requiring an arbitration of the issues.

The trial court gave counsel time to study the law and present their arguments to the court. That afternoon, counsel and their clients appeared in open court before the trial judge so that a transcript could be made of the proceedings, and the court then gave its ruling staying the proceedings and directing the parties to proceed with arbitration in accordance with their agreements. Plaintiff appeals from that ruling.

THE STAY ORDER

Plaintiff contends that the trial court erred in granting defendants' application for a stay order and bases its contention on two principal arguments: First, that defendants *592 waived their right to demand arbitration by their resort to judicial proceedings connected with plaintiff's principal demand herein; and Second, that defendants' failure to include the existence of a contractual provision requiring arbitration as a ground for the dilatory exception of prematurity which they filed constitutes a waiver of their right to demand arbitration thereafter.[2]

We note at the outset that there is no contract between plaintiff and George Minturn (the architect) requiring arbitration of disputes arising between them. Therefore, we find that the trial court erred in staying the proceedings brought by plaintiff against this defendant.

Our use of the term "defendants" throughout the rest of this opinion will only refer to the partnership and its members. There is a written contract between plaintiff and defendants which does require a submission to arbitration of certain disputes arising between them.[3]

The trial court, in making its ruling, relied on the decision of the Supreme Court in Bartley, Inc. v. Jefferson Parish School Board, 302 So.2d 280 (La.1974) and LSA-R.S. 9:4201[4] which it held required a stay of the proceedings and an order to arbitrate "when the parties had agreed to arbitrate save upon such grounds as exist at law such as for the revocation of a contract".

Bartley, supra, was an action brought by a contractor against one of its subcontractors and the school board to compel arbitration of a dispute arising out of a building contract. The subcontractor and school board resisted arbitration and filed exceptions of no cause of action and of prematurity. The court found that there was a contract between the parties and, therefore, overruled the exception of no cause of action. The court then proceeded to discuss the defendants' exception of prematurity. The basis for the above mentioned dilatory exception was that plaintiff had failed to follow the procedures as set out in the contract between the parties for settling *593 disputes by arbitration.[5] Defendants also contended that Bartley (plaintiff in that action to compel arbitration) had waived its right to arbitrate under the contract.

The court in Bartley, supra, with respect to the above mentioned claim, stated, on page 283, that:

"We do not reach the merits of these claims of prematurity and waiver. We determine only that these questions of procedural arbitrability should not be decided by the courts, without having been submitted to the arbitrator, when a party sues to enforce an arbitration agreement.
As noted earlier, Section 4203 of the Louisiana Arbitration Law requires a court to order arbitration, once it finds that there has been an agreement to arbitrate and a failure to comply therewith. Since these triable issues have been here determined in favor of arbitration, the court must order arbitration. The issues of waiver and prematurity address themselves to the arbitrator. They cannot be utilized to prevent the aggrieved party from securing an order directing arbitration, as required by Section 4203. See Domke on Commercial Arbitration, Sections 17.01, 17.02 (1968)."

We find that Bartley, supra, can be distinguished from and is inapposite to the action before us for the following reasons: First, plaintiff in Bartley, supra, was specifically seeking to compel arbitration, whereas, plaintiff in this action seeks to recover damages for breach of contract and unauthorized acts of an agent. Second, defendants in Bartley,

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396 So. 2d 590, 1981 La. App. LEXIS 3724, Counsel Stack Legal Research, https://law.counselstack.com/opinion/idc-inc-v-mccain-winkler-partnership-lactapp-1981.