Intern. River Ctr. v. Johns-Manville Sales

861 So. 2d 139, 2003 WL 22853770
CourtSupreme Court of Louisiana
DecidedDecember 3, 2003
Docket2002-CC-3060
StatusPublished
Cited by36 cases

This text of 861 So. 2d 139 (Intern. River Ctr. v. Johns-Manville Sales) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Intern. River Ctr. v. Johns-Manville Sales, 861 So. 2d 139, 2003 WL 22853770 (La. 2003).

Opinion

861 So.2d 139 (2003)

INTERNATIONAL RIVER CENTER, et al.
v.
JOHNS-MANVILLE SALES CORPORATION, et al.

No. 2002-CC-3060.

Supreme Court of Louisiana.

December 3, 2003.

*140 Victor J. Franckiewicz, Jr., Howard L. Murphy, Deutsch, Kerrigan & Stiles, New Orleans; John W. Waters, Jr., Bienvenu, Foster, Ryan & O'Bannon, New Orleans; Jack M. Allmont, Sessions, Fishman & Nathan, New Orleans; James L. Pate, LaBorde & Neuner, Lafayette, for Applicant.

Stephen M. Cooper, Diana S. Mitnik, Godfrey B. Parkerson, Plauche, Maselli, Landry & Parkerson, New Orleans, for Respondent.

TRAYLOR, Justice.

This matter stems from a contractual dispute concerning the manufacture and installation of the roof of the Hilton Riverside Hotel in New Orleans. We granted certiorari in order to determine which entity determines whether a contractual arbitration agreement has been waived by a party's actions—the courts or an arbitrator.

FACTS and PROCEDURAL HISTORY

International River Center (IRC), the owner of the Hilton Riverside Hotel in New Orleans, entered into a contract with the Henry C. Beck Company (Beck) to act as a general contractor in the hotel's construction in 1975. In 1985, IRC filed a damage suit alleging defects in the roof against Beck and the Johns-Manville Sales Corporation (JM), the manufacturer of the roofing system.

IRC did not serve the suit on Beck and JM until 1989. After being served, Beck filed a third party demand against Standard Roofing Company (SRC), the roofing subcontractor. IRC did not vigorously pursue the lawsuit and there were periods of dormancy until August 2000, when IRC retained new counsel. Thereafter, in January 2002, SRC filed a pleading entitled "Motion to Stay Pending Arbitration." In support, SRC relied on an arbitration agreement contained in the general contract between IRC and Beck. SRC argued that IRC had refused to comply with the arbitration clause and that any question of waiver of the right to arbitrate should be referred to the arbitrators. Beck and JM joined in SRC's motion.

IRC opposed the motion, arguing that the defendants had waived their right to arbitrate because depositions had been taken and documents had been produced, and because IRC would be prejudiced due to the significant delay which had occurred prior to SRC's invocation of the arbitration clause.

After a hearing, the trial judge denied the defendants' motion to stay the trial, stating that "an unreasonable time ha[d] passed" since suit had been filed and before *141 arbitration had been demanded. The defendants applied for supervisory writs from the trial court's ruling, which the court of appeal denied.

DISCUSSION

This issue is controlled by La. Rev.Stat. §§ 9:4201-4217, "The Louisiana Binding Arbitration Law."[1] As this court has stated many times, the starting point for the interpretation of any statute is the language of the statute itself. Cat's Meow, Inc. v. City of New Orleans, 98-0601 (La.10/20/98), 720 So.2d 1186, 1198. In the instant matter, where suit was brought prior to the invocation of the arbitration clause, La.Rev.Stat. § 9:4202, entitled "Stay of proceedings brought in violation of arbitration agreement," applies:

If any suit or proceedings be brought upon any issue referable to arbitration under an agreement in writing for arbitration, the court in which suit is pending, upon being satisfied that the issue involved in the suit or proceedings is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until an arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with the arbitration.

According to Section 4202, a court shall stay the trial of an action in order for arbitration to proceed if any party applies for such a stay and shows (1) that there is a written arbitration agreement and (2) the issue is referable to arbitration under that arbitration agreement, as long as the applicant is not in default in proceeding with the arbitration. Here, neither the fact that there is a written arbitration agreement, nor that the issue is referable to arbitration under that agreement, is in dispute. According to the plain language of the statute, then, the trial court "shall" stay the trial of the action until arbitration is had unless the applicant is in default in proceeding with the arbitration. The term "default" is not explicitly defined in the Louisiana Binding Arbitration Law; however, Section 4203 of the Law, entitled "Remedy in case of default; petition and notice; hearing and proceedings," provides clear guidance. The Section reads in pertinent part:

The party aggrieved by the alleged failure or refusal of another to perform under a written agreement for arbitration, may petition any court of record having jurisdiction of the parties, or of the property, for an order directing that the arbitration proceed in the manner provided for in the agreement. Five days' written notice of the application shall be served upon the party in default....

As stated in Section 4203, then, a party in default is a party who has "fail[ed] or refus[ed] ... to perform under a written agreement for arbitration." Here, the party in default is the plaintiff, IRC, or as it is stated in Section 4202, the defendants, Beck, JM, and SRC, are not parties in default and, thus, their motions to stay pending arbitration should have been granted according to the language of the statute and under the facts of this case.

La.Rev.Stat. § 9:4203, which generally pertains to those cases when a party defaults, prior to a suit having been filed, also allows a trial court to ascertain only *142 two basic facts before ordering arbitration. The second paragraph of the statute reads:

The court shall hear the parties, and upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not an issue, the court shall issue an order directing the parties to proceed to arbitration in accordance with the terms of the agreement. If the making of the arbitration agreement or the failure or refusal to perform is an issue, the court shall proceed summarily to the trial thereof.

As seen, Section 4203 makes clear that the only two issues with which the trial court may concern itself are (1) whether there is a dispute as to the making of the agreement and (2) whether a party has failed to comply with the agreement. If the trial court determines that those two facts are not in issue, the court "shall issue an order directing the parties to proceed to arbitration."

The language of both Section 4202, controlling when suit has been brought on the issue referable to arbitration, and Section 4203, controlling when such a suit has not yet been filed, mandates that the trial court shall order arbitration when the elements contained within the statutes are proved or not disputed. Neither statute allows the trial court to determine waiver issues.

Our jurisprudence supports this conclusion. We have previously examined the issue of waiver in arbitration cases on three occasions. In the case of Bartley, Inc. v. Jefferson Parish School Board,

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Cite This Page — Counsel Stack

Bluebook (online)
861 So. 2d 139, 2003 WL 22853770, Counsel Stack Legal Research, https://law.counselstack.com/opinion/intern-river-ctr-v-johns-manville-sales-la-2003.