In re the Arbitration between Liebhafsky & Comstruct Associates, Inc.

100 A.D.2d 764, 474 N.Y.S.2d 723, 1984 N.Y. App. Div. LEXIS 17865

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: April 5, 1984
• Status: Published

Opinions

Order of Supreme Court, New York County (David H. Edwards, J.), entered September 26, 1983, which denied petitioners’ application for a stay of arbitration, is affirmed, without costs. f On July 31, 1981, petitioners-appellants Douglas S. Liebhafsky and Wendy Cimbel contracted with respondent Comstruct Associates, Inc., a general contractor, for renovation of their Manhattan townhouse. The work, to be completed by November 15, 1981,,at a price of $221,600, was governed by the “General Conditions of the Contract for Construction” of the American Institute of Architects (AIA). 11 Subparagraph 2.2.9 of the “General Conditions” provides that “[cjlaims, disputes and other matters in question between the Contractor and the Owner relating to the execution or progress of the Work or the interpretation of the Contract Documents shall be referred initially to the Architect for decision which he will render in writing within a reasonable time.” Subparagraph 2.2.12 of the “General Conditions” provides that such matters submitted to the architect are subject to arbitration upon the written demand of either party made on or after “(1) the date on which the Architect has rendered a written decision, or (2) the tenth day after the parties have presented their evidence to the Architect or have been given a reasonable opportunity to do so, if the Architect has not rendered his written decision by that date.” Subparagraph 7.9.1 of the “General Conditions” stipulates that “[a]ll claims, disputes and other matters in question between the Contractor and the Owner arising out of, or relating to, the Contract Documents or the breach thereof * * * shall be decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association”. | In early 1982, the respondent contractor unilaterally issued approximately 20 change orders related to the work being done at petitioners’ townhouse. Subparagraph 12.1.1 of the “General Conditions” mandates that change orders be signed by the owner and the architect. Subsequent to the issuance of the change orders, petitioners complained to respondent Comstruct of a stairway bracing that did not pass inspection, inadequate on-site supervision, and insufficient record keeping. Petitioners then terminated the contract on March 23, 1982, after receiving certification from the architect that sufficient cause exists to terminate pursuant to subparagraph 14.2.1 of the “General Conditions”. 11 On November 9, 1982, respondent served the petitioners with a demand for arbitration, seeking $151,899 allegedly due because of the change orders and $176 outstanding from the original contract price. Petitioners then commenced this action to stay arbitration, arguing that respondent did not submit the dispute to the architect for determination, pursuant to subparagraphs 2.2.9 and 2.2.12, prior to commencing the arbitration proceeding. Furthermore, petitioners allege that, because they properly terminated the contract, respondent was not entitled to final payment until the work was completed by a substitute contractor. 11 In Matter of County of Rockland (Primiano Constr. Co.) (51 NY2d 1), the construction work in dispute was governed by “General Conditions” similar to those in the case at bar. Approximately 20 months after a certificate of substantial completion was issued by the petitioner County of Rockland and the respondent Primiano Construction, Primiano demanded arbitral resolution of its claim against Rockland for damages caused by substantial delay. (Supra, at p 6.) Rockland, like the petitioners here, asserted that Primiano’s claim must first be referred to the architect under subparagraph 2.2.7, which is identical to subparagraph 2.2.9 in this case. The Court of Appeals ruled (p 11) that “ ‘claims, disputes and other matters in question between the Contractor and the Owner’ which must first be referred to the architect are those ‘relating to the execution or progress of the work’ (subpar 2.2.7). Claims asserted after substantial completion of the work do not fall within the scope of subparagraph 2.2.7.” 11 Here, although no certificate of substantial completion was executed by the parties, the petitioners terminated the contract and the respondent ceased construction before any demand for arbitration was made. Because the scope of the architect’s authority is limited to the “operational phases of the construction” (51 NY2d, at p 11), respondent’s claim was thus not subject to initial review by the architect. (See Matter ofPigott Constr. Int. v Rochester Inst, of Technology, 84 AD2d 679.) 11 In this case, the contractor’s claims are for money due on the contract and do not relate to execution or progress of the work or to interpretation of the contract documents under subparagraph 2.2.9. This subparagraph controls specific matters within the ken of the architect. Here, as in Primiano, respondent’s assertions are “claims, disputes and other matters in question” controlled by subparagraph 7.9.1 and should proceed directly to arbitration. Concur — Kupferman, J. P., Silverman and Alexander, JJ.