Lane-Tahoe, Inc. v. Kindred Construction Company
Lane-Tahoe, Inc. v. Kindred Construction Company
Opinion of the Court
By the Court,
These consolidated appeals are from orders of the district court, entered in lien foreclosure proceedings, denying motions to compel the arbitration of disputes arising under construction 'Contracts.
1. Kindred filed a statement of facts constituting its claim of lien [NRS 108.239] in a lien foreclosure action commenced by two of its subcontractors, Incline Glass and Cal-Vada Cabinet Company, against Lane-Tahoe. Since Lane-Tahoe’s contract with Kindred provided for the arbitration of disputes between them, Lane-Tahoe moved to stay court action and to compel arbitration. As noted, that motion was denied. We are asked to dismiss Lane-Tahoe’s appeal from the order denying arbitration because NRCP 54(b) provides that when multiple parties are involved, the court may direct the entry of final judgment “only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment.” The record contains no such express determination and direction. Whether Rule 54(b) has application to this case is the point to be decided.
The motion to compel arbitration was offered pursuant to NRS 38.045 of the Uniform Arbitration Act. Section 1 thereof provides that “on application of a party showing an agreement described in NRS 38.035, and the opposing party’s refusal to arbitrate, the court shall order the parties to proceed with arbitration. . . And, section 4 thereof reads that “any action or proceeding involving an issue subject to arbitration shall be stayed if an order for arbitration or an application therefor has been made under this section. . . . When the application is made in such action or proceeding, the order for arbitration shall include such stay.” Finally, NRS 38.205 (1) (a) of the Act expressly provides that “an appeal may be taken from an order denying an application to compel arbitration made under NRS 38.045.”
A Rule 54(b) determination is not necessary if a statute or rule expressly authorizes an appeal. In DeLuca Importing
Kindred’s motion to dismiss is denied. We turn to consider the merits of the consolidated appeals.
2. The contractual provisions for arbitration are, in each instance, identical and, in relevant part, are quoted below.
The underlying purpose of the Act is to preclude court intervention into the merits of disputes when arbitration has been provided for contractually. This is evident from a mere reading of the Act. A contract to submit controversies to arbitration, with certain exceptions, is valid, enforceable, and irrevocable. NRS 38.035. Any action o/ proceeding involving an issue subject to arbitration shall be stayed if an application therefor has been made. NRS 38.045(4). Subject to the specified exceptions of NRS 38.145 and 38.155, the court shall confirm
Although Lane-Tahoe did not file a written demand for arbitration, neither did McKenzie nor Kindred. All had agreed, however, to settle their disputes in that manner. In view of that agreement, one of the contracting parties was obliged to initiate the arbitration process. Absent express language in the contract placing the initial burden on either party, that responsibility properly rests with the party seeking relief. Mamlin v. Susan Thomas, Incorporated, 490 S.W.2d 634, 639 (Civ.App. Tex. 1973); Nordenstrom v. Swedberg, 143 N.W.2d 848, 857 (N.D. 1966); Klein Coat Corp. v. Peretz, 153 N.Y.S.2d 92, 97 (Sp.Ct. 1956). He should not be free to litigate in the courts simply because his opponent did not demand arbitration. This is not to say that the opponent could not have initiated arbitration. We hold only that the burden to initiate arbitration is upon the party seeking relief and does not shift to the opponent absent a clear waiver of arbitration by the opponent. The parties seeking relief in these cases, that is, payment for the claimed balances due for their work, are the contractors McKenzie and Kindred.
This view is compatible with NRS 38.045(1) which explicitly provides that on application of a party showing an agreement to arbitrate and the opposing party’s refusal to arbitrate, the court shall order the parties to proceed with arbitration. The thrust of the statute is to compel the contracting parties to honor their promises. The agreements to arbitrate are admitted. McKenzie and Kindred, who seek relief, did not initiate arbitration. Instead, they commenced court action. This, we think, is a refusal to arbitrate within the intendment of NRS 38.045 (1). Cf. Galion Iron Works & Mfg. Co. v. J. D. Adams Mfg. Co., 128 F.2d 411, 413 (7th Cir. 1943).
3. The contracts provide that the demand for arbitration shall be made within a reasonable time and in no event “after the date when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statute of limitations.” With regard to the McKenzie controversy, it is urged that the quoted language bars arbitration since Lane-Tahoe did not file its motion to compel arbitration until more than six months after McKenzie had recorded its claim of lien.
The mechanics’ lien law does not impair the right to sue for the debt claimed to be due. NRS 108.238; State v. Breen,
4. The district court intimated that arbitration is not suited to a case where a lienor-contractor enjoys the statutory remedy provided by the mechanics’ lien law.
We find no authority holding that arbitration is inappropriate when the parties to a construction contract have agreed to that method of settlement. Neither the mechanics’ lien law nor the arbitration act discloses a legislative intention to preclude the voluntary arbitration of disputes arising out of a construction contract. The contractors before us have not attempted to demonstrate how or why they would be prejudiced by having the rights settled by the arbitration process to which they have agreed.
We conclude that a valid arbitration agreement should be enforced as between the parties hereto.
Reversed, with direction to stay the lien foreclosure proceedings of McKenzie and Kindred, and to enter an order in each instance granting arbitration.
We have examined other grounds for the motion to dismiss and find them to be without merit.
“All claims, disputes and other matters in question arising out of, or relating to, this contract or the breach thereof . . . shall be decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association then obtaining unless the parties mutually agree otherwise. This agreement to arbitrate shall be specifically enforceable under the prevailing arbitration law. The award rendered by the arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law of any court having jurisdiction thereof.”
“Notice of the demand for arbitration shall be filed in writing with the other party to the Contract and with the American Arbitration Association, and a copy shall be filed with the Architect. The demand for arbitration shall be made . . . within a reasonable time after the claim, dispute or other matter in question has arisen, and in no event shall be made after the date when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statute of limitations.”
NRS 108.233(1): “No lien . . . binds any building, mining claim, improvement or structure for a longer period than 6 months after such lien has been recorded, unless: (a) Proceedings are commenced in a proper court within that time to enforce the same; . . . .”
NRS 11.190(1): “Within 6 years:
(a) . . . .
(b) An action upon a contract, obligation or liability founded upon an instrument in writing. . . .”
Labor and material suppliers are not permitted a lien on public buildings or public works of the United States. Consequently, the Miller Act was enacted to give such suppliers needed protection. It provides for furnishing a payment bond in all government construction contracts. Court action upon the bond is not the exclusive remedy to decide disputed issues. If the contract provides for arbitration, that method for settlement may be enforced. United States v. Electronic Missile Facilities, Inc., 364 F.2d 705 (2d Cir. 1966); Electronic & Missile Facilities, Inc. v. United States, 306 F.2d 554 (5th Cir. 1962); Agostini Bros. Bldg. Corp. v. United States, 142 F.2d 854, 855 (4th Cir. 1944). See also: “Compulsory Arbitration and Rights Under the Miller Act, Mechanics’ Lien Laws, and State Public Improvement Bonds,” Vol. IV, Number 3, The Forum, 195 (April, 1969).
Dissenting Opinion
dissenting:
With all respect, we believe the majority’s resolution of the above cases is incorrect.
We believe that, as the district court perceived, staying lien
Even if no stay of proceedings be granted, the arbitration if compelled will often be futile; for the results will not be binding on the other claimants, who by statute have the right to have the court declare the existence, amount, and priority of all liens. See: NRS 108.235 etseq.
Reference
- Full Case Name
- LANE-TAHOE, INC., a Nevada Corporation, Appellant, v. KINDRED CONSTRUCTION COMPANY, INC., a Nevada Corporation, and DAVIS WADE KINDRED, Respondents; LANE-TAHOE, INC., a Nevada Corporation, v. McKENZIE CONSTRUCTION, INC., a Nevada Corporation, Respondent
- Cited By
- 18 cases
- Status
- Published