Northwest Construction Co. v. Oak Partners, L.P.

248 S.W.3d 837, 2008 Tex. App. LEXIS 1734, 2008 WL 623238
CourtCourt of Appeals of Texas
DecidedMarch 6, 2008
Docket2-07-293-CV, 2-07-328-CV
StatusPublished
Cited by44 cases

This text of 248 S.W.3d 837 (Northwest Construction Co. v. Oak Partners, L.P.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Northwest Construction Co. v. Oak Partners, L.P., 248 S.W.3d 837, 2008 Tex. App. LEXIS 1734, 2008 WL 623238 (Tex. Ct. App. 2008).

Opinions

OPINION

TERRIE LIVINGSTON, Justice.

This consolidated mandamus proceeding and interlocutory appeal arise from the trial court’s order denying relator and appellant Northwest Construction Company, Inc.’s motion to compel arbitration in the underlying suit involving construction of an assisted living center in Granbury, Texas. In both the appeal and mandamus proceeding, Northwest raises the following four issues: (1) whether there is a valid arbitration clause binding the parties that encompasses the dispute; (2) whether the trial court had jurisdiction to determine if Northwest waived its right to arbitrate the dispute; (3) whether the trial court erred by ruling that Northwest waived its right to arbitrate by substantially invoking the judicial process to the detriment of the other parties; and (4) whether appellees have waived their right to rely on mediation as a condition precedent to the enforceability of the arbitration clause. We affirm the trial court’s order in part and [842]*842reverse it in part. We also dismiss Northwest’s petition for writ of mandamus.

Background Facts

On April 27, 2004, Northwest entered into a construction contract with The Oak Partners, L.P., an appellee and real party in interest, to design and construct an assisted living facility in Granbury, Texas. The contract referenced the facility to be constructed as “more particularly described in the design development plans and specifications and design criteria identified in Exhibit B ” attached to the contract. Exhibit B, in turn, provided that the project specifications were the “Project Manual for The Courtyards at Lake Gran-bury, Granbury, Texas, prepared by GSR Andrade Architects dated April 16, 2004.” The April 16, 2004 Project Manual included a provision incorporating into it “[t]he ‘General Conditions of the Contract for Construction’, AIA Document A201, Fourteenth Edition, 1997, Articles 1 through 14 inclusive.” A new Project Manual dated May 28, 2004 contained the same language.

AIA Document A201-1997 contains an arbitration clause, which reads as follows, in pertinent part:

Claims not resolved by mediation shall be decided by arbitration which, unless the parties mutually agree otherwise, shall be in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association currently in effect. The demand for arbitration shall be filed in writing with the other party to the Contract and with the American Arbitration Association, and a copy shall be filed with the Architect.

The term “Claim” is defined as

a demand or assertion by one of the parties seeking, as a matter of right, adjustment or interpretation of Contract terms, payment of money, extension of time or other relief with respect to the terms of the Contract. The term “Claim” also includes other disputes and matters in question between the Owner and Contractor arising out of or relating to the Contract.

After entering into the contract with Oak Partners, Northwest entered into subcontractor agreements with S & S Tile, Ltd., Morgan Development and Supply, Inc., Metroplex Masonry, Inc., Ari-Tex, Inc., Kent-Anderson Concrete L.P. d/b/a Anderson Concrete Construction, and Max Plumbing Contractors, Inc. Each of the subcontract agreements contained the following provisions:

The terms of the dispute resolution and claims procedure contained in the General Contract shall be binding upon Subcontractor, whether or not Subcontractor records or files a mechanic’s lien, stop notice or prosecutes suit thereon or against any bond posted by Contractor; and Subcontractor hereby acknowledges that this Subcontract waives, affects, and impairs rights it would otherwise have in connection with such liens, stop notices and suits on said bonds.
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Any disputes or controversies not resolved or settled by the parties under the previous provisions shall be submitted to binding arbitration in accordance with the Construction Industry Rules of the American Arbitration Association and any judgment upon the award by the arbitrators may be entered by any court having jurisdiction. The venue for any hearing under this arbitration provision shall be in Dallas County, Texas.

After Northwest constructed the facility, Oak Partners sued Northwest on August 30, 2005, in the 355th District Court of Hood County, alleging that Northwest had breached the contract; Oak Partners [843]*843claimed that the facility had failed to pass inspections by the Texas Department of Aging and Disability Services because certain parts of the design and construction were not in accordance with the Department’s applicable rules and regulations. Northwest filed its original answer in the suit on December 12, 2005.

S & S Tile and Max Plumbing sued Oak Partners and Northwest in separate suits in the 355th District Court, claiming they were owed money on the project. On January 11, 2006, Northwest filed a motion to consolidate the Max Plumbing and Oak Partners cases. The trial court granted the motion the next day and consolidated the cases. On January 19, 2006, Northwest filed a motion to consolidate the S & S Tile case with the two consolidated cases. Before the trial court ruled on the motion to consolidate, S & S Tile filed a motion for summary judgment. While that motion was pending, the trial court granted Northwest’s motion to consolidate the S & S Tile case with the other two cases on February 2, 2006.

Northwest filed a counterclaim against Oak Partners on February 3, 2006, alleging that Oak Partners breached the contract by failing to pay for change orders, causing delays, and refusing to release re-tainage. Northwest also brought causes of action for quantum meruit, promissory es-toppel, and foreclosure of statutory and constitutional liens; a Prompt Payment Act claim; and a claim for attorneys’ fees.

Northwest and Oak Partners filed responses to S & S Tile’s motion for summary judgment on March 10, 2006. The motion was set for a hearing on March 17, 2006, but S & S Tile and Northwest entered into a rule 11 agreement to remove the motion from the court’s docket.1 The motion was never reset.

On February 17, 2006, Kent-Anderson filed a separate suit against Northwest and Oak Partners, which the trial court consolidated with the other three cases upon Northwest’s motion. Oak Partners then filed a first amended petition adding GSR as an additional defendant and alleging causes of action for breach of contract and negligence. After the addition of GSR as a defendant, subcontractors Morgan Development and Supply, Inc., Metroplex Masonry, Inc., and Ari-Tex, Inc. intervened in the suit.

Northwest filed a motion for partial summary judgment on May 2, 2007. In it, Northwest sought a ruling that Oak Partners could not recover damages arising from design flaws or errors or omissions in the project design. Northwest asserted the affirmative defenses of estoppel, contractual bar, violation of the express negligence rule, and waiver. Oak Partners filed a response on May 30, 2007. GSR also filed a response and an affidavit in opposition to the motion.

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Cite This Page — Counsel Stack

Bluebook (online)
248 S.W.3d 837, 2008 Tex. App. LEXIS 1734, 2008 WL 623238, Counsel Stack Legal Research, https://law.counselstack.com/opinion/northwest-construction-co-v-oak-partners-lp-texapp-2008.