Summit Constr. Co., Inc. v. L.L.F.J.A.O., L.L.C.
2012 Ohio 568
Ohio Ct. App.2012Background
- June 2004, Summit Construction contracted with L.L.F.J.A.O., LLC as general contractor for a hotel project under an AIA form with arbitration provisions.
- Project completed and final payment made March 27, 2006; later defects were attributed to Summit’s work.
- March 2006 settlement produced a release between the parties resolving claims related to the project.
- September 6, 2007, L.L.F.J.A.O. demanded arbitration with the AAA.
- July 31, 2009, Summit filed a declaratory-judgment action seeking legal effect of the release and sought TRO/PI to halt arbitration; TRO granted then denied PI on Sept. 1, 2009; briefing completed by Oct. 30, 2009.
- September 10, 2010, trial court denied declaratory judgment, holding the arbitrator would determine the rights and breadth of the release; Summit timely appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who decides arbitrability of the release? | Summit: trial court should decide release validity. | L.L.F.J.A.O.: arbitrator should decide under broad arbitration clause. | Arbitrator determines arbitrability under broad clause and incorporated rules. |
| Is the release scope within arbitration or court review? | Release extinguishes all future claims; court should interpret if mutual. | Release falls within arbitration scope under contract. | Release scope is within arbitration per broad clause and AAA rules. |
Key Cases Cited
- Belmont Cty. Sheriff v. Fraternal Order of Police, Ohio Labor Council, Inc., 104 Ohio St.3d 568 (2004) (arbitrability may be delegated when rules grant arbitrator authority)
- Ohio Patrolman’s Benevolent Assn. v. Munroe Falls, 2008-Ohio-659 (9th Dist.) (issue of arbitrability is judicial unless agreement expressly assigns to arbitrator)
- Saunders v. Mortensen, 101 Ohio St.3d 86 (2004-Ohio-24) (contract interpretation is a question of law for court, but arbitration can cover arbitrability)
- Didado v. Lamson & Sessions Co., 81 Ohio App.3d 302 (8th Dist.1992) (unlimited arbitration clause covers all disputes unless excluded; arbitrator can decide arbitrability)
- Roberts v. Bank of Am. NT & SA, 107 Ohio App.3d 301 (10th Dist.) (arbitration clause broad enough to require arbitration of defenses lacking consideration)