20 A.3d 163
Md. Ct. Spec. App.2011Background
- U.K. Construction entered an August 10, 2007 home improvement contract with Gore for renovation of 2200 Brookfield Road, Baltimore, MD.
- Five draws were planned; four installments were paid, but Gore withheld the final $40,720 due to alleged punch-list deficiencies.
- Gore locked out U.K. Construction, hired others, and obtained occupancy and a mortgage loan without paying the final amount.
- Arbitration in 2008 ruled in favor of U.K. Construction, finding Gore repudiated the contract by her conduct and that repairs should have been warranty work by U.K. Construction.
- Gore later petitioned to compel arbitration in 2009 alleging defective work; the circuit court initially denied and sanctioned Gore, then reversed and granted arbitration.
- The Court of Special Appeals reverses, holding that res judicata bars Gore’s petition to compel arbitration and remands for proceedings consistent with this opinion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether res judicata bars Gore's petition to compel arbitration. | Gore contends prior arbitration resolved the issues and cannot be relitigated. | U.K. Construction argues the prior award precludes relitigation due to final adjudication. | Res judicata bars the petition. |
| Whether the Exxon test supports applying res judicata to the arbitration. | Gore's claim involves new warranty issues post-arbitration. | The arbitration had adjudicatory procedure; issues should be final. | Exxon test supports applying res judicata. |
| Whether Gore denied UK Construction an opportunity to cure, affecting the warranty claim. | Gore argues the issues were not properly resolved. | Gore's unilateral removal and self-help impaired defect correction obligations. | Gore's denial of curing opportunities was resolved in the prior arbitration and supports res judicata. |
| Whether Gore’s attempt to relitigate warranty issues contradicts the prior arbitration award. | Any subsequent award could not nullify the prior judgment because UK Construction was paid in full. | Petition seeks warranty relief without nullifying the prior award. | Relitigating is barred; petition was improper. |
Key Cases Cited
- Ewing v. Koppers Co., 312 Md. 45, 537 A.2d 1173 (1988) (Md. 1988) (final arbitration may have res judicata effect when adjudicatory procedures are present)
- Batson v. Shiflett, 325 Md. 684, 602 A.2d 1191 (1992) (Md. 1992) (Exxon test for preclusion in arbitration contexts)
- Exxon Corp. v. Fischer, 807 F.2d 842, 845-46 (2d Cir. 1987) (2d Cir. 1987) (three-factor test for preclusive effect of agency decisions; applied to arbitration)
- R & D 2001, LLC v. Rice, 402 Md. 648, 938 A.2d 839 (2008) (Md. 2008) (restatement of res judicata principles in Maryland context)
- Monarc Constr., Inc. v. Aris Corp., 188 Md.App. 377, 981 A.2d 822 (2009) (Md.App. 2009) (preclusion principles in construction dispute context)