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Smith Design & Constr., Inc. v. N.L. Constr. Corp.
2014 Ohio 4904
Ohio Ct. App.
2014
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Background

  • NL was general contractor for the Noble County ODOT maintenance facility project; Smith Design was a subcontractor for concrete and masonry work.
  • Dispute over whether the Subcontract Terms document containing a mandatory arbitration clause was attached to and agreed in the Subcontract Agreement.
  • The two-page Subcontract Agreement did not reference arbitration and listed exhibits that did not include the nine-page Subcontract Terms.
  • NL filed a third-party/indemnity-related action in the Ohio Court of Claims in 2011; Smith counterclaimed and later dismissed in part.
  • In 2013, Smith filed suit in Stark County, NL moved to stay pending arbitration under R.C. 2711.02, and the trial court denied the motion without explaining its basis.
  • On appeal, the court affirmed, holding NL did not prove Smith agreed to arbitration and finding no abuse of discretion; NL was not entitled to a stay, and waiver of arbitration could be found if applicable.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether the trial court properly denied stay pending arbitration. NL argues arbitration is mandatory under the Subcontract Terms. Smith argues no agreement to arbitrate existed and no waiver occurred. No abuse of discretion; arbitration not proven and no stay.

Key Cases Cited

  • Council of Smaller Enterprises v. Gates, McDonald & Co., 80 Ohio St.3d 665 (Ohio 1998) (four Principles of arbitrability; court decides arbitrability unless contract clearly provides otherwise)
  • Griffith v. Linton, 130 Ohio App.3d 746 (Ohio App.3d 1998) (waiver analyzed by active participation in litigation)
  • Glenmoore Builders, Inc. v. Kennedy, 2001-Ohio-8777 (Ohio 2001) (right to arbitrate can be waived by filing suit)
  • Rock, Inc. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 79 Ohio App.3d 126 (Ohio 1992) (waiver analysis for arbitration rights)
  • Rona Ents., Inc. v. Vanscoy, 2010-Ohio-1836 (Ohio 2010) (arbitration rights and when to compel/arbitrate)
Read the full case

Case Details

Case Name: Smith Design & Constr., Inc. v. N.L. Constr. Corp.
Court Name: Ohio Court of Appeals
Date Published: Nov 3, 2014
Citation: 2014 Ohio 4904
Docket Number: 2014 CA 00002
Court Abbreviation: Ohio Ct. App.