Washington Township Municipal Authority v. American Arbitration Ass'n
Washington Township Municipal Authority v. American Arbitration Ass'n
Opinion of the Court
This is an appeal from the order of the Court of Common Pleas of Franklin County, Civil Action, Equity, and involves the appellant Washington Township Municipal Authority’s appeal from an order which directed the appellant to proceed with arbitration before the American Arbitration Association (AAA). The appellant had commenced a suit in equity on October 20, 1979 seeking to enjoin the American Arbitration Association from requiring appellant to proceed to arbitration on a claim initiated by Conewago Contractors, Inc. Conewago filed an Answer and New Matter to the Complaint on May 21, 1979 and also presented a petition seeking to compel appellant to proceed with arbitration and requesting a stay in the equity action. After a hearing and the filing of briefs the court below granted Conewago’s petition, stayed the appellant’s equity action and ordered appellant to proceed with arbitration before the American Arbitration Association. From that order the appellant took the instant appeal.
When the appellant advertised for bids the original document contained the following language pertaining to the settlement of disputes under “General Conditions”:
“ARTICLE 16
ARBITRATION
“16.1. All claims, disputes and other matters in question arising out of, or relating to, this agreement or the breach thereof except for claims which have been waived by the making or acceptance of final payment as provided by paragraph 14.16, shall be decided by arbitration in accordance with the construction industry arbitration rules of the American Arbitration Association then obtaining. This agreement so 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 any court having jurisdiction thereof.
“16.2. Notice of the demand for arbitration shall be filed in writing with the other party to the agreement and with the American Arbitration Association, and a copy shall be*81 filed with the engineer. The demand for arbitration shall be made within the 30-day period specified in paragraph 9.10 where applicable, and in all other cases within a reasonable time after the claim, dispute or other matter in question has arisen, and in no event shall it be made after 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.”
On June 25, 1976, the appellant issued “Bulletin No. 4” to all the prospective bidders. The bulletin was a 40 page document and contained revisions to specifications and to “General Conditions.” The bulletin contained the following language pertaining to arbitration:
“16. Page IIIA-35—General Conditions
In paragraph 16.1, DELETE the last six lines of the paragraph and ADD ‘in accordance with the laws of the Commonwealth of Pennsylvania.’ ”
The court below found that Section 16.1 was effectively amended to read as follows:
“16.1. All claims, disputes and other matters in question arising out of, or relating to, this agreement or the breach thereof except for claims which have been waived by the making or acceptance of final payment as provided by paragraph 14.16, shall be decided by arbitration in accordance with the laws of the Commonwealth of Pennsylvania.”
The bids were opened on July 15, 1976.
All parties agree that the contract mandates that all claims and disputes be settled by arbitration. However, the appellant claims that the amendment to Section 16.1 compels the submission of all claims and disputes to arbitration pursuant to the Act of 1927, April 25, P.L. 381, et seq., 5 P.S. § 161, et seq. and that since no provision is made in Section 16.1 for the appointment of arbitrators from any particular group that the Court should choose the arbitrators. Conewago claims that although Section 16.1, as amended, does not designate anyone as the source of the particular arbitrators to hear the dispute, Section 16.2 does name the Ameri
In interpreting a contract it is the intention of the parties thereto which is the guiding principle. Percy A. Brown & Co. v. Raub, 357 Pa. 271, 54 A.2d 35 (1947). In ascertaining the parties’ intent the courts must take into consideration each and every part of the contract and give effect to each part of the contract if possible. Robert F. Felte, Inc. v. White, 451 Pa. 137, 302 A.2d 347 (1973). In the event of an ambiguity in contract language so that alternative constructions of a contract’s provisions are possible, the contract should be construed against the drafter of the language employed in the contract. Penn. Dept. of Trans, v. DePaul, 29 Cmwlth.Ct. 447, 371 A.2d 261 (1977). The problem with appellant’s position is that it was the party which issued the bulletin amending Section 16.1 but, in so doing, failed to indicate that Section 16.2 was being deleted. The appellant argues, however, that Section 16.2 was deleted by implication because unless that interpretation is given to its amending of Section 16.1 then the amendment to Section 16.1 makes no sense and the courts should not interpret a contract so as to lead to an absurd result.
The difficulty with this argument is that a reading of Amended Section 16.1 and Section 16.2 reveals that they can
For that reason we hold that the court below was correct in its ruling and that the appellant must submit its disputes with Conewago to the American Arbitration Association.
Order affirmed.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.