Summary
In Landis we held a stipulation for arbitration was unenforceable in a construction contract between a public agency and a private corporation when neither was expressly authorized to agree to arbitration in the resolutions enabling them to contract.
Summary of this case from Huber, Hunt Nichols, Inc. v. StateOpinion
No. 8757.
May 10, 1978. Rehearing Denied June 30, 1978.
APPEAL FROM CIVIL DISTRICT COURT, NO. 76-9296, DIVISION C, PARISH OF ORLEANS, STATE OF LOUISIANA, HONORABLE RICHARD J. GARVEY, J.
Joseph E. Friend, Dodge, Friend, Wilson Spedale, New Orleans, for plaintiff-appellee.
George G. Kiefer, Kiefer, Glorioso Fleming, New Orleans, for defendant-appellant.
John A. Stewart, Jr., New Orleans, for Associated General Contractors of La., Inc., amicus curiae.
Before REDMANN, LEMMON and GULOTTA, JJ.
A construction contract between a business corporation and a governmental agency contained a stipulation for arbitration of disputes. Neither the corporation's nor the public agency's resolution authorizing the contract included express authority to stipulate for arbitration. On this appeal from a judgment ordering the public agency to arbitrate, we hold that the contractual stipulation for arbitration was not authorized by either party to the contract and is therefore unenforceable.
"[T]he power [of attorney] must be express . . . [to] refer a matter to arbitration." La.C.C. 2997. Even the power to compromise "does not include that of submitting or referring to arbitrators." C.C. 2998.
The trial judge reasoned that apparent authority or ratification (by having arbitrated an earlier dispute) should bind both parties. We disagree. The Civil Code does not permit implied authority to bind to arbitration. Neither pre-contract actions nor a post-contract submission of one dispute constitutes "express" authority to mandataries to bind either the corporation or the public agency to future arbitration of disputes.
Reversed at plaintiff's cost.
ON APPLICATION FOR REHEARING
Amicus curiae shares plaintiff's misapprehension of the facts. No resolution by either plaintiff or defendant authorized signing of this contract, or of any "contract as a whole", or even of a "contract in the A.I.A. form" (which contains an arbitration clause "as boilerplate").
A resolution authorizing a corporate officer to sign some specific entire contract, either described in or attached to the resolution, would constitute authorization by the corporation for the delegated signer to bind the corporation to every clause of that contract. But a general authority by resolution to "sign contracts" or the like does not constitute the necessary special authority to the signer to bind the corporation to arbitrate. Much less does a resolution (like defendant's here) which specifies many provisions to be contained in the contract but is silent on arbitration.
Rehearing is refused.