85 A.3d 824
D.C.2014Background
- Jahanbein owned Unit 2; Sahri owned Units 4 and 6 in the seven-unit Ndidi Condominium. Pipes burst in Sahri’s Unit 6, damaging Jahanbein’s unit and common areas.
- Jahanbein sued the Condo Association for breach of fiduciary duty (claiming the Association withheld insurance proceeds) and sued Sahri for negligence (alleging improper heating/maintenance caused the burst pipes).
- The Association and Sahri moved to compel arbitration under § 15.9 of the Ndidi Bylaws and D.C. Code § 16-4407(a); Superior Court granted the motions and dismissed for lack of subject-matter jurisdiction. Jahanbein appealed.
- § 15.9 of the Bylaws requires negotiation, mediation, then arbitration for disagreements “over the meaning, terms, conditions and applicability” of any Bylaw provision, and references disputes involving Unit Owners, the Association, its Board, or its officers.
- The trial court held the fiduciary claim against the Association implicated Bylaw § 10 (insurance/distribution duties) and so was arbitrable; it also concluded the Bylaws applied between unit owners, making the negligence claim arbitrable.
- The appellate court affirmed arbitration as to the Association (Bylaws are a contract between owner and Association and § 10’s interpretation is central to the fiduciary claim) but reversed as to Sahri, finding the Bylaws ambiguous and not clearly a contract between unit owners.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Ndidi Bylaws create an enforceable agreement to arbitrate Jahanbein’s claim against the Condo Association | Jahanbein: his tort/statutory fiduciary claim is not governed by the Bylaws; § 10 does not authorize withholding insurance proceeds | Association: Bylaws are a contract with unit owners and § 15.9 requires ADR for disputes about Bylaw meaning/applicability, including § 10 duties | Held: Affirmed — Bylaws are an enforceable contract with the Association and Jahanbein’s fiduciary claim requires interpreting § 10, so arbitration applies |
| Whether the Bylaws create an enforceable agreement to arbitrate disputes between unit owners (Jahanbein v. Sahri) | Jahanbein: Bylaws do not make unit owners parties to one another’s contracts and thus cannot compel arbitration against another owner | Sahri: § 15.9’s language covers disagreements “between” unit owners and others, so arbitration should apply | Held: Reversed — ambiguous language; no clear enforceable arbitration agreement between individual unit owners, so arbitration cannot be compelled against Sahri |
Key Cases Cited
- Certain Underwriters at Lloyd’s, London v. Ashland, Inc., 967 A.2d 166 (D.C. 2009) (arbitrability is reviewed de novo)
- Meshel v. Ohev Sholom Talmud Torah, 869 A.2d 343 (D.C. 2005) (court must find an enforceable arbitration agreement and that dispute falls within its scope)
- Hercules & Co. v. Shama Rest. Corp., 613 A.2d 916 (D.C. 1992) (ambiguities about scope are resolved in favor of arbitration)
- Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (2002) (arbitration is a matter of contract and parties cannot be forced to arbitrate disputes they didn’t agree to submit)
- Masurovsky v. Green, 687 A.2d 198 (D.C. 1996) (if clause reasonably susceptible to arbitration, trial court must order arbitration)
- Keeton v. Wells Fargo Corp., 987 A.2d 1118 (D.C. 2010) (courts, not arbitrators, decide validity of an arbitration clause)