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