Loomis, Inc. v. Cudahy

656 P.2d 1359, 104 Idaho 106, 1982 Ida. LEXIS 322
CourtIdaho Supreme Court
DecidedOctober 1, 1982
Docket13291
StatusPublished
Cited by37 cases

This text of 656 P.2d 1359 (Loomis, Inc. v. Cudahy) is published on Counsel Stack Legal Research, covering Idaho Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Loomis, Inc. v. Cudahy, 656 P.2d 1359, 104 Idaho 106, 1982 Ida. LEXIS 322 (Idaho 1982).

Opinions

DONALDSON, Justice.

A contract was entered into between the appellant-third party plaintiff Audrie B. Cudahy and the respondent-third party defendant John R. Smith on February 2,1976. Smith was to perform for compensation by Cudahy services as an architect in the construction of a single-family dwelling. The contract contained an arbitration clause.1 It also recited that the house would be built on a particular lot, but in fact the house was built on a different lot. Upon Smith’s recommendation, Cudahy entered into a construction contract with a contractor. A performance bond was issued by Ronald W. Liese and Liese & Associates Insurance, Inc. purportedly as agents for United Pacific Insurance Company. The contractor defaulted and another contractor Loomis came in and contracted with Liese to complete the house on a time and materials basis. When his final bill of approximately $14,000.00 was not paid, Loomis filed a mechanic’s lien against the property and later filed an action to foreclose on the claim of lien against Cudahy. In turn, Cudahy filed a third-party complaint against Smith and others. A default judgment was entered against Smith which later was set aside.

Pursuant to the provisions of I.C. § 7— 902(a) an evidentiary hearing was held on December 2, 1977, before the district court to determine whether a valid agreement to arbitrate existed between the parties. After reviewing briefs and considering the oral testimony presented by Cudahy, the district court ordered the parties to proceed to arbitration. Cudahy sought certified interlocutory review of this order which was denied by this Court on February 3, 1978.

Pursuant to a district court order, the American Arbitration Association (AAA) was appointed to arbitrate the dispute. In August 1978, Cudahy filed a motion to dismiss arbitration with the AAA which was forwarded to the arbitrator. The AAA gave notice dated October 10,1978, that the arbitration hearing would be held on December 4, 1978. The arbitrator by letter dated November 14, 1978, informed the AAA that the parties had agreed to reschedule the hearing to December 5, 1978. The AAA gave notice dated November 17, 1978, of the new hearing date. Cudahy’s counsel sought by letter dated November 16,1978, a continuance until February 1979 due to alleged personal problems which made Cudahy unavailable for the scheduled [108]*108hearing. Later, Cudahy’s counsel made a formal request for postponement dated December 4, 1978, which was mailed and also hand delivered to the arbitrator and Smith’s counsel. On December 5, 1978, after reviewing the request, the arbitrator denied it and proceeded with the hearing. After the denial, Cudahy’s counsel left the hearing without presenting any evidence. The arbitrator rendered an award on December 20, 1978, which denied the claims of both parties.2

After receiving cross-motions to confirm or vacate, the district court confirmed the arbitration award and later denied Cudahy’s motion for reconsideration of the confirming order. Cudahy appeals. We affirm.

Appellant Cudahy first contends that no ruling was ever made on the question of whether or not the agreement to arbitrate was valid and enforceable. This contention is without merit as the record clearly reveals that after a hearing was conducted pursuant to I.C. § 7-902(a), the district court found a valid and enforceable agreement to arbitrate.

Under I.C. § 7-901 “a provision in a written contract to submit to arbitration any controversy thereafter arising between the parties is valid, enforceable and irrevocable, save upon such grounds as exist at law or in equity for the revocation of any contract.” This provision together with the following sections comprises the Idaho Uniform Arbitration Act as enacted by our legislature in 1975. By passage of the act, our legislature has aligned Idaho with the majority of jurisdictions which have adopted the Uniform Arbitration Act. Under the act arbitration and agreements to arbitrate are encouraged and given explicit recognition as effective means to resolve disputed issues.3 Arbitration generally offers an inexpensive and rapid alternative to prolonged litigation.4 It also serves to alleviate crowded court dockets. Since our own sparse array of arbitration caselaw evolved before our legislature enacted the Uniform Arbitration Act as promulgated by the National Conference of Commissioners on Uniform State Laws, it is necessary for us to look for possible edification and guidance among the courts of our sister states and the federal system.

I.C. § 7-901 and Section 1 of the Uniform Arbitration Act closely parallel Section 2 of the Federal Arbitration Act.5 In County of Middlesex v. Gevyn Construction Corp., 450 F.2d 53, 56 (1st Cir.1971), cert. denied, 405 U.S. 955, 92 S.Ct. 1176, 31 L.Ed.2d 232 (1972), the court held “that the only grounds for revocation which meet the requirement of 9 U.S.C. § 2 are mutual agreement or a condition which vitiates [109]*109agreement ab initio, i.e., fraud, mistake, or duress.” In Halcon International, Inc. v. Monsanto Australia Limited, 446 F.2d 156 (7th Cir.), cert. denied, 404 U.S. 949, 92 S.Ct. 286, 30 L.Ed.2d 266 (1971), reh’g denied, 404 U.S. 1026, 92 S.Ct. 672, 30 L.Ed.2d 677 (1972), the court stated with regard to revocation under § 2 that

“[t]he word ‘revocation,’ when used in a contractual context, ordinarily refers to revocation of an offer or an option; but it is used in Section 2 of the Arbitration Act to apply to a contract and in that connotation obviously is intended to be synonymous with ‘rescission.’ Rescission is an appropriate remedy when, for example, a contract is induced by fraud, mistake or duress, and is ‘used chiefly where the termination of the contractual relation is by mutual consent.’ 5 Williston, Contracts § 1454A, page 4063 (Rev.Ed., 1937). ‘Revocation’ and ‘cancellation’ are closely synonymous; to revoke means ‘to annul, repeal, rescind, cancel.’ Glenram Wine & Liquor Corp. v. O’Connell, 295 N.Y. 336, 67 N.E.2d 570 (1946).
“Since the savings clause of Section 2 is limited to ‘revocation,’ this is clearly the only type of ‘unmaking’ contemplated by the act — that is, an unmaking resulting from the mutual cancellation of the contract by the parties or the voiding of the transaction due to fraud, mistake or duress.” Id. at 159.

In World Brilliance Corp. v. Bethlehem Steel Co., 342 F.2d 362, 364 (2d Cir.1965), the court held that “ ‘[Revocation’ ... [under § 2 of the act] applies only to cases in which the courts will step in and rescind the agreement, for reasons such as fraud, duress, or undue influence.”

In Bernalillo County Medical Center Employees’ Association Local Union No. 2370 of Southwestern Council of Industrial Workers, United Brotherhood of Carpenters, AFL-CIO v. Cancelosi, 92 N.M. 307, 587 P.2d 960 (1978), the court examined their statute which parallels our Section 7-902(a) and stated:

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Bluebook (online)
656 P.2d 1359, 104 Idaho 106, 1982 Ida. LEXIS 322, Counsel Stack Legal Research, https://law.counselstack.com/opinion/loomis-inc-v-cudahy-idaho-1982.