Sturdy Built Homes, L.L.C. v. Carl E. Woodward L.L.C.
82 So. 3d 473
La. Ct. App.2011Background
- Suit arises from CEW-Sturdy Built subcontract for 460 New Orleans apartments; dispute over arbitration provision in subcontract; mediation mandatory before arbitration; project owner contract separate but disputes alleged against non-signatories; CEW terminated portion of work; CEW/arbitration filed; Sturdy Built filed breach, unjust enrichment, tortious interference, and bad-faith breach claims; trial court granted prematurity and stay pending arbitration; appellate review affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the general contract overrides the subcontract to avoid arbitration. | Sturdy Built argues the Construction Contract governs and permits litigation. | CEW contends the subcontract’s clear arbitration clause controls. | No; arbitration clause in subcontract governs. |
| Whether the dispute is within the scope of the arbitration clause. | All claims arise from the subcontract relationship. | Broad arbitration clause requires arbitration of related disputes. | Yes; broad clause encompasses the plaintiffs’ claims. |
| Whether non-signatory Jorgensen can be compelled to arbitrate. | Equitable estoppel should not bind non-signatories. | Equitable estoppel can bind non-signatories when intertwined with the contract. | Yes; non-signatory Jorgensen can be compelled via equitable estoppel. |
| Whether Sturdy Built’s tort claims against Jorgensen are subject to arbitration. | Tort claims do not arise from the subcontract’s arbitration clause. | Claims are intertwined with the subcontract as to arbitration. | Arbitration applies to alleged tort claims as intertwined with contract. |
Key Cases Cited
- Grigson v. Creative Artists Agency, LLC, 210 F.3d 524 (5th Cir. 2000) (equitable estoppel to compel arbitration of intertwined contract claims)
- Regions Bank v. Weber, 53 So.3d 1284 (La.App. 4th Cir. 2010) (equitable estoppel permits non-signatories to arbitrate when intertwined with contract)
- Moore v. Automotive Protection Corp., 695 So.2d 550 (La.App. 4th Cir. 1997) (strong presumption in favor of arbitration; doubts resolved in favor of arbitrability)
- Neal v. Hardee’s Food, 918 F.2d 84 (5th Cir. 1990) (integration/interpretation of separate agreements in same transaction)
- Lakeland Anesthesia, Inc. v. United Healthcare of Louisiana, Inc., 871 So.2d 380 (La.App. 4th Cir. 2004) (construction of arbitration-related provisions; varied interpretations favored toward arbitration)
- Saavedra v. Dealmaker Developments, LLC, 8 So.3d 758 (La.App. 4th Cir. 2009) (threshold question is arbitrability and staying proceedings pending arbitration)