Case Law Alerts
Arbitration clause in the first of multiple contracts for the same project applied to the work at issue under the second contract.
The owner sued the architect for negligent design and oversight on a project. The architect brought the contractor into the case on a third party claim, alleging the "construction defects" were due to the contractor's negligence. Experts for the owner and architect opined that the defects were attributable to the contractor. The owner sought to amend its asserted direct claims against the contractor. The court denied the request, finding that there was an arbitration agreement between the owner and the contractor that precluded bringing claims within the litigation. The owner had argued that the claims related to work were the subject of a second contract, which did not have an arbitration clause. However, the original contract had an arbitration clause that stated in part, "[a]ll claims … arising out of the Contract Documents, … shall be subject to Arbitration." All of the claims being asserted by the owner dealt with the construction, and thus, arose out of the construction documents, and therefore, the claims could not be brought within the lawsuit.
Case Law Alert - 3rd Qtr 2011