359 So. 2d 224

STANDARD COMPANY OF NEW ORLEANS, INC. v. ELLIOTT CONSTRUCTION CO., INC., et al. ELLIOTT CONSTRUCTION CO., INC. v. DIV. OF ADMINISTRATION, State of Louisiana.

Nos. 11867, 11868.

Court of Appeal of Louisiana, First Circuit.

Feb. 13, 1978.

Writ Granted March 31, 1978.

James Ryan, III, Jack M. Alltmont, Sessions, Fishman, Rosenson, Snellings & Bois-fontaine, New Orleans, of counsel, for plaintiff-appellee Standard Co. of New Orleans, Inc.

Gordon A. Pugh, Baton Rouge, of counsel, for defendant-appellee Elliott Const. Co.

Jay H. Kern, Robert E. Redmann, New Orleans, of counsel, for defendant-appellant Division of Administration, State of La.

Before LOTTINGER, EDWARDS and PONDER, JJ.

PONDER, Judge.

The Division of Administration, State of Louisiana, appeals from judgments denying a motion to stay arbitration and ordering it to arbitrate.

The issues are (1) whether the court or an arbitrator should decide the question of waiver, and (2) whether the requirement to arbitrate has been waived. The lower court held that the arbitrator should decide the issue of waiver. We reverse and remand one case and reverse and render in the other.

Elliott Construction Company, Inc. was the general contractor on the Southern University Minidome. Standard Roofing Com*225pany of New Orleans, Inc. was a sub-contractor. The general contract had a provision for arbitration,1 the sub-contract made the provision applicable to it.2 After a dispute arose, Standard sued Elliott, who filed a third-party demand against the State, asking not only for the amount demanded by Standard, but also for additional damages in the amount of $1,689,866.85. Elliott also filed with the architect a claim for equitable adjustment of the contract for $3,387,690.00 and for an extension of the completion date. When the architect denied substantially all these claims, Elliott demanded arbitration. When the State refused, Elliott filed suit under LSA-R.S. 9:4201 et seq., asking for an order to require the State to arbitrate. The court granted this order and denied a motion to stay arbitration proceedings filed by the State in the Standard-Elliott-State case. The State appealed both judgments.

The lower court relied on Bartley, Inc. v. Jefferson Parish School Board, La., 302 So.2d 280 (1974) in deciding that the only issues before it were: whether an agreement to arbitrate had been made, and whether the opponent had refused or failed to comply. LSA-R.S. 9:4203.3 If both questions were answered “yes,” the court was without discretion to do other than order arbitration.

We disagree with that conclusion. LSA-R.S. 9:42014 provides that the provision to arbitrate “shall be valid, irrevocable, and enforceable, save upon such grounds as ex*226ist at law or in equity for the revocation of any contract.” We interpret that to mean that the court is not required to order arbitration under LSA-R.S. 9:4203 if there are grounds under LSA-R.S. 9:4201 for revocation. It follows, necessarily, that the court must consider and rule upon any contention that such ground exists. Certainly, the State is contending that waiver is a ground for revocation.

In the recent decision of George Engine Company, Inc. v. Southern Shipbuilding Corporation, La., 350 So.2d 881 (1977), the Supreme Court held that the court, not the arbitrator, had to decide the question of invalidity of the contract because of lack of consent; that it would be absurd to require arbitration under a contract that did not legally exist. We believe there should be a similar result if the arbitration provision has been waived.

It is true that Bartley did hold that the claims of prematurity and waiver in that case, were to be submitted to the arbitrator rather than to the court. However,.because the court called them “questions of procedural arbitrability” and because the court also speaks of the failure to refer the claims to the architect prior to the demand for arbitration, as was required by the contract, we believe that the question involved was one of failure to conform to the procedure rather than one of a basis for revocation of a contract.

A very substantial group of cases from other jurisdictions reach the same result. See, for instance, Vespe Contracting Co. v. Anvan Corporation, D.C., 399 F.Supp. 516 (1975), from which the following quotation is made, at page 519:

“A motion to compel arbitration presents a court with three basic questions to resolve: (1) whether there is an agreement to arbitrate; (2) whether there are arbi-trable claims in issue; and (3) whether there has been a waiver of the right to arbitration.”

See also In re Tsakalotos Navigation Corp., D.C., 259 F.Supp. 210 (1966) which cites a number of cases to the same effect.

Because the lower court felt that the question of waiver was not properly before it, it did not rule thereon. However, because we have the facts before us, we proceed to decide that question. Gonzales v. Xerox Corporation, La., 320 So.2d 163 (1975).

Elliott contends there has been no waiver of the obligation to arbitrate because the claims asserted in the suit are separate and distinct from those claims to be arbitrated. A comparison of these claims5 leads us to *227believe that they are not mutually exclusive.

Furthermore, while there is some authority in other states to the contrary,6 we believe that the obligation to arbitrate once waived cannot be revived over the objections of the opponent. It would be an inequitable result to allow a party to “flit between forums” of his choice. This would be especially true when the claims are interrelated.

We therefore believe that Elliott has waived the obligation to arbitrate.

In Suit No. 11,867, there is judgment herein reversing the decision of the lower court and ordering the stay of the proposed arbitration. The suit is remanded for proceedings not inconsistent with these reasons. The appellee is cast with cost of these proceedings.

In Suit No. 11,868, the judgment ordering the Division of Administration, State of Louisiana, to arbitrate is reversed and the suit is dismissed at appellee’s costs.

In Suit No. 11,867, Reversed and Remanded.

In Suit No. 11,868, Reversed and Dismissed.

Standard Co. of New Orleans v. Elliott Construction Co.
359 So. 2d 224

Case Details

Name
Standard Co. of New Orleans v. Elliott Construction Co.
Decision Date
Feb 13, 1978
Citations

359 So. 2d 224

Jurisdiction
Louisiana

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