FRAMAN MECHANICAL, INC. v. LAKELAND REGIONAL HIGH SCHOOL BOARD OF EDUCATION et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4062-04T14062-04T1

FRAMAN MECHANICAL, INC.,

Plaintiff-Appellant,

v.

LAKELAND REGIONAL HIGH SCHOOL

BOARD OF EDUCATION and LAN

ASSOCIATES, ENGINEERING, PLANNING,

ARCHITECTURE, SURVEYING, INC.,

Defendants-Respondents.

_________________________________________

 

Submitted October 19, 2005 - Decided

Before Judges Wecker, Fuentes and Graves.

On appeal from the Superior Court of New

Jersey, Law Division, Passaic County,

L-3972-04.

Hedinger & Lawless, attorneys for appellant

(Anthony J. Belkowski, on the brief).

Sills, Cummis, Epstein & Gross, attorneys

for respondent Lakeland Regional High School

Board of Education (Loryn P. Riggiola, of

counsel; Steven M. Fleischer, on the brief).

Suarez & Suarez, attorneys for respondent

LAN Associates, Engineering, Planning,

Architecture, Surveying, Inc. (Joseph M.

Suarez, of counsel; Anazette S. Williams,

on the brief).

PER CURIAM

Plaintiff, Framan Mechanical, Inc., was the heating, ventilating, and air-conditioning (HVAC) sub-contractor on a construction project for the Lakeland Regional High School Board of Education. The architect on the project was defendant LAN Associates, Engineering, Planning, Architecture, Surveying, Inc. Framan appeals an order denying its motion to compel Lakeland to arbitrate Framan's disputed claims in accordance with an arbitration clause contained in certain American Institute of Architects' form contracts. Lakeland contends that (1) the order is interlocutory, and Framan has no right to appeal; (2) Framan never signed the contract documents and therefore cannot rely on a contractual agreement to arbitrate; (3) even if the contract provisions were deemed applicable, Framan failed to comply with conditions precedent to its right to demand arbitration; and (4) by filing this lawsuit, Framan elected its remedy and waived any otherwise applicable right to arbitrate.

As a threshold matter, we agree that this appeal is interlocutory; Framan should have sought leave to appeal. Nonetheless, under all the circumstances, and in the interest of judicial economy, we grant leave to appeal, nunc pro tunc.

Lakeland's second argument raises an interesting question. The essential procedural history is undisputed. Framan was awarded the contract after its protest resulted in the disqualification of the lowest bidder and a court order that barred Lakeland from re-bidding the project and required Lakeland to award the job to Framan. As a result of the delay involved in litigating the bid award, when Lakeland forwarded the written contract, Framan protested Lakeland's failure to adjust the completion schedule and refused to sign the contract documents "as is." Framan proceeded to begin work, however, under a "Notice to Proceed" delivered by LAN, the architect on the project. Lakeland does not dispute that there was an agreement to do the work.

The Law Division judge was persuaded by Lakeland's argument that there was no signed contract and therefore no agreement to arbitrate. That argument, while facially appealing, is not persuasive, since there was a court order to issue the contract, which plainly included an arbitration clause, and since both Framan and Lakeland substantially performed under that contract. Absent any other circumstances, it would be reasonable to conclude that the arbitration provision was implicitly part of an agreement binding the parties. Framan, however, did not initially bring suit to compel arbitration; its complaint sought substantive resolution of its claims. On that basis, we agree with Lakeland's contention that Framan waived any right to arbitration that it may have had. Plaintiff's invocation of N.J.S.A. 2A:23B-28(a) is misplaced. That statute confers the right to direct appeal of a court order denying arbitration when the order is issued in a summary action brought under N.J.S.A. 2A:23B-7.

There is another circumstance that militates in favor of the decision denying an order to compel arbitration. Framan's claims against Lakeland, and Lakeland's defenses, involve LAN as well, and LAN is not party to any arbitration agreement with Framan or Lakeland. To the extent that LAN's involvement is likely to be an issue in the disputes between Framan and Lakeland, it is hardly ideal although possible for resolution of the interrelated disputes to be divided between a court and an arbitration forum. See Elizabethtown Water Co. v. Watchung Square Assocs., LLC, 376 N.J. Super. 571, 577 (App. Div. 2005) ("Obviously, fragmentation of the litigation when some matters are subject to arbitration, while others are not, is inconsistent with the purposes of the entire controversy doctrine."); Wm. Blanchard Co. v. Beach Concrete Co., Inc., 150 N.J. Super. 277, 300-301 (App. Div.), certif. denied, 75 N.J. 528 (1977) (recognizing the inherent tension in a multi-party dispute between one party's right to contractual arbitration and the right of one not a party to the arbitration agreement to litigate its claims).

In light of our disposition of plaintiff's appeal, LAN's contention that plaintiff's complaint should be dismissed against it, rather than stayed pending arbitration, is moot.

Affirmed.

 

Framan refers to "two versions of AIA Document A201, General Conditions of the Contract for Construction," apparently included in the bid documents for the project.

(continued)

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A-4062-04T1

November 3, 2005