Opinion
C.A. No. 99L-08-017-CHT.
December 30, 1999.
NON-ARBITRATION CASE
ORDER
This the 30th day of December, 1999, upon consideration of the Defendant's United Trust Fund Limited Partnership (UTF) and Milistein Industries, L.L.C. Motion for Summary Judgment and the record in this case, it appears that:
1. On August 26, 1998, JSM entered into a Building and Site Construction Contract with UTF for the construction of an Eckerd Drug Store and other work included in the required provisions and in support of the construction of the Eckerd Drug Store in Bear, Delaware.
2. The contract required that any claim or dispute arising thereunder must be initially referred to the architect hired by the parties to oversee the project for a resolution. Until the architect renders a final decision, no dispute arising under the terms of the contract can be submitted to arbitration or litigation in a court of law. This decision is required as a condition precedent to arbitration or litigation of a claim between the Contractor and Owner. In this regard, Section 4.5.4.1 establishes the requirements, which would lead to that decision becoming final and binding upon the Owner and Contractor. To be precise:
When a written decision of the Architect states that (1) the decision is final but subject to arbitration and (2) a demand for arbitration of a Claim covered by such decision must be made within 30 days after the date on which the party making the demand receives the final written decision, then failure to demand arbitration within said 30 days period shall result in the Architect's decision becoming final and binding upon the Owner and Contractor.
3. John W. Lister was retained by defendant UTF as the architect for purposes of Section 4.5.4.1 to review and render a decision regarding claims and for disputes arising under the contract. Mr. Lister initially sent a letter dated July 23, 1999 to the parties requesting more documentation in order to make a final decision. Approximately one month later, on August 25, a second letter was both faxed and mailed to all parties which indicated that the additional information had been supplied and set forth what he deemed was due the general contractor under the provisions of the contract.
4. A fax was sent from Mr. Lister to the Plaintiff on September 20 which indicated that JSM had sent some additional information, which was received on September 3 that reiterated JSM's position. Mr. Lister notified the Plaintiff that he would not review the additional information sent on its behalf because it was beyond the scope of work for which he was retained. On September 29 Mr. Lister followed his September 20 communique with a letter which indicated that the decision he rendered on August 27 was final, but subject to arbitration. The September 29 letter also stated that the demand for arbitration must have been made within thirty days, and since there was no demand for arbitration, his decision was final and binding as of August 27. On October 21, the Plaintiffs filed a demand for arbitration. On October 22, the Defendants filed the present action.
5. The basis of the Defendants' motion is that a final and binding decision had been rendered under the dispute resolution mechanism established under the instant contract. Since there are no material facts in dispute, the issue is one of contract interpretation, which is appropriately determined through a motion for summary judgment. Abb Flakt. Inc. v. National Union Fire Ins. Co., Del. Supr., 731 A.2d 811, 816 (1999).
6. The Plaintiff has responded that the action should be dismissed because JSM did not demand arbitration within the time required by Section 4.5.4.1 of the Building and Construction Contract. There are conditions within Section 4.5.4.1 which were not satisfied, therefore they bar the further litigation contained therewith and this section does not apply. In addition, there are material facts in dispute and the time limits established in Section 4.5.4.1 upon which the Defendants rely apply only when the architect complies with the conditions set forth in that section.
7. Summary judgment will be granted where the evidence shows that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. The moving party bears the burden of showing that no genuine issue of material fact exists and the record must be viewed in the light most favorable to the nonmoving party. Borish v. Graham et. al., Del. Super., 655 A.2d 831, 833 (1994). If there is any evidence to support an outcome favorable to the non-moving party, summary judgment must be denied. Plant v. Catalytic Construction Co., Del. Super., 287 A.2d 682, 684 (1972).
8. Unless ambiguous, there is no need for contract interpretation or construction. Ferentinos v. Firststate Mortgage Corp., Del. Super., CA. No. 98C-AP-40, Babiarz, J. (Feb. 1, 1991). The Court will recognize the "plain meaning" of language used in a contract when there is "a generally prevailing meaning and there is no evidence that the parties intended the language to have any other meaning." Id.
9. Mr. Lister's initial letter of July 23 indicated that additional information was needed to make a final determination in this matter. While the follow-up letter dated August 25 does not specifically state that, "this is the final decision", it does indicate that "this is a determination of what is and is not due the general contractor under the provisions of the contract executed by the owner and contractor." There was also a telefax cover sheet attached to the advance copy provided all parties dated August 27 which specifically stated, "attached is an advance copy of my final report."
10. While the August 25 letter did not specifically state that "this is the final decision on this matter," it can be inferred from the aforementioned circumstances that this was his final decision. However, this is not enough to satisfy Section 4.5.4.1. The written decision must not only state that it is the final decision, but also that it is subject to arbitration. In addition, it must state that a demand for arbitration must be made within thirty days after the date on which the party making the demand receives the final written decision.
11. There is no language in the August 25 letter to indicate that Mr. Lister's decision was subject to arbitration or that a demand for arbitration must be made within thirty days. According to the record, the first indication that the August 25 decision was subject to arbitration and that a demand for arbitration need be made within thirty days is in the September 29 letter to the Plaintiff from Mr. Lister. This letter contained the balance of the elements required by Section 4.5.4.1. The Plaintiff filed a demand for arbitration on October 21, twenty-two days after minimal compliance with Section 4.5.4.1 was had.
12. Consequently, and viewing the facts most favorably towards the moving party, the Plaintiff complied with Section 4.5.4.1. Indeed, the Plaintiff could argue that even the September 29 letter fails to conform strictly with Section 4.5.4.1 in that it did not contain the "decision" itself, but only refreferences the August 25 letter. In any event, the Defendant is not entitled to judgment as a matter of law on the facts of this case. The best that can be said is that there appear to be genuine issues as to material facts. Summary judgment must therefore be denied.
IT IS SO ORDERED.
Toliver, Judge.