Gratech Co., Ltd. v. WOLD ENGINEERINGGratech Co., Ltd. v. WOLD ENGINEERING
- Reporters:
- , , ,
- Before:
- Sandstrom
Lead Opinion
[¶ 1] Gratech Company, Ltd., appeals a Northwest Judicial District Court’s grant of summary judgment dismissing Gra-tech’s complaint alleging several tort claims against Wold Engineering, P.C. The district court granted the summary judgment, finding that
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[¶ 2] The relevant facts are undisputed. Gratech is a grading contractor. On Octo
The work shall be done, pursuant to this contract and the laws of the State of North Dakota, and to the satisfaction of NDDOT, subject at all times to the inspection and approval of the U.S. Department of Transportation, its agents and representatives, and in accordance with the rules and regulations made pursuant to state and federal law.
[¶ 3] Wold is a professional engineering firm. On April 9, 1998, the DOT entered into a separate contract with Wold for construction engineering services on the same project. The contract provided:
The engineer shall perform the needed construction engineering work such as, but not limited to, staking, cross-sectioning, inspection, sampling and testing of materials and measuring and computing pay quantities. He shall prepare the required engineering and administrative documents and records as required by NDDOT. It is the engineer’s responsibility to perform construction inspections to verify the contractor’s work is performed according to the government specifications, plans and special provisions including but not limited to, the provisions of NDDOT’s Standards and Specifications for Road and Bridge Construction, Materials Sampling and Testing Manual, Field Office Procedures Manual, and Construction Manual,
[¶ 4] During construction, Gratech encountered difficult soil conditions, and a dispute arose about whether certain work was common excavation covered under the contract or was additional, unforeseen work entitling Gratech to extra compensation. State v. Gratech Co., Ltd., 2003 ND 7, ¶ 2, 655 N.W.2d 417. The project was completed on November 23, .1999, and accepted by the State.on December 28, 1999. Gratech filed an administrative claim against the DOT and .made a demand for arbitration. Gratech’s claim against the DOT was set to be arbitrated in April 2003.
[¶ 5] On May 10, 2002, Gratech filed an action against Wold. Gratech alleged several claims that it classified as tort claims. On February • 20, 2003, Wold moved for summary judgment. On May 6, 2003, the district court granted Wold summary judgment on the basis that
[¶ 6] The trial court had jurisdiction under
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[¶ 7] Gratech argues the district court erred in granting Wold summary judgment, because
[¶ 8] We review this appeal under our standard for summary judgment. Summary judgment is a procedure for promptly resolving a controversy without a trial if the evidence shows there are no genuine issues as to any material fact and any party is entitled to judgment as a matter of law.
[¶ 9] This case involves the interpretation of
All controversies arising out of any contract for the construction or repair of highways entered into by the director must be submitted to arbitration as provided in this chapter and chapter 32-29.2. Any person who voluntarily enters into a contract for the construction or repair of highways must be considered as having agreed to arbitration of all controversies arising out of that contract. For a claim for less than fifty thousand dollars, only one arbitrator may be jointly selected by the parties. For a claim for fifty thousand dollars or more, three persons comprise the arbitration board.
[¶ 10] In construing a statute, we try to ascertain the intent of the legislature by looking at the plain language of the statute and giving every word of the statute its ordinary meaning.
[¶ 11] Both parties agree that
[¶ 12] Gratech also argues the district court relied only on
[¶ 13] Gratech argues
[¶ 14] Furthermore, the arbitration process is strongly favored in this state as a matter of public policy. State v. Gratech Co., Ltd., 2003 ND 7, ¶ 12, 655 N.W.2d 417. Because of this strong public policy in favor of arbitration, “we have concluded that, where there is a broad arbitration clause and no exclusion clause, any doubts concerning the scope of arbi-trable issues should be resolved in favor of arbitration.” Id. We conclude there is nothing in these statutes excluding arbitration of claims against private parties such as Wold.
[¶ 15] In Hjelle v. Sornsin Construction Company, this Court interpreted the second sentence of
[¶ 16] We conclude that controversies between a contractor and a third party arising out of any contract for the construction or repair of highways entered into by the director of the DOT must be submitted to arbitration and that the arbitrators shall determine all controversies growing out of the contract.
[¶ 17] In its complaint, Gra-tech alleged causes of action such as breach of duty, bad faith, misconstruction of a contract, negligent representation, and deceit.
[¶ 19] The torts alleged in this case consist of a claim of bad faith against Wold in determining the nature and ejrtent of unsuitable soil conditions, negligent representation of contract plans and specifications, and deception as to the contractor’s entitlement to compensation under the contract. Although these actions sound in tort, they are directly and closely related to the performance of the contract.1 Although Gratech alleged, these claims as tort claims in its initial complaint, we conclude the claims alleged fall within the scope of the contract despite Gratech’s classification.
Ill
[¶ 20] Wold argues it is entitled to “umbrella protection” from Gratech’s claims. We conclude this issue is not properly before this Court and will not consider it on appeal.
IV
[¶ 21] Gratech argues the district court improperly dismissed its claim with prejudice and failed to correct this obvious error after Gratech raised the issue in a Rule 60 Motion for Relief from Judgment. See
[¶ 22] Dismissing a case with prejudice has the effect of barring any future claim, amounting to a final disposition of the controversy. Trottier v. Bird, 2001 ND 177, ¶ 8, 635 N.W.2d 157.
[¶ 23] “A party who moves for relief under
[¶ 24] Dismissing this case with prejudice is inconsistent with the district court’s memorandum decision indicating that arbitration is Gratech’s exclusive remedy. We conclude the district court erred to the extent that it dismissed Gratech’s claim with prejudice.
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[¶ 25] We affirm in part, concluding the district court did not err in finding that
Notes
. The dissent states: “Because Gratech alleges in his complaint Wold ‘intentionally and willfully deceived the Contractor, with the intent to induce him to alter his position to his injury or risk,’ ” this claim is an intentional tort and not arbitrable. The claim discussed in the dissent alleges: “The Engineer intentionally and willfully deceived the Contractor, with the intent to induce him to alter his position to his injury or risk by attempting to persuade him that he was not entitled to compensation rightfully due him under the contract for the excavation and disposal and rehandling of the wet and unstable, unsuitable material, and other directed extra work, which false and untrue representations constitute deceit as a matter of law” (emphasis added). To determine this claim, it would be necessary to interpret whether Gratech was entitled to extra compensation under the contract. Furthermore, this claim is so interwoven with the contract that it cannot be determined without a reference to the contract.
Concurrence Opinion
concurring in part and dissenting in part.
[¶ 28] I concur in most of the majority opinion, but dissent from that part which concludes all of Gratech’s claims must be arbitrated. I am of the opinion that Gra-tech, by entering into a contract with the North Dakota Department of Transportation (“NDDOT”) for the construction of a federal aid project on U.S. Highway 281, did not agree to arbitrate intentional tort claims.
[¶ 29] Gratech brought an action against Wold, the project engineer, alleging it bid the project in reliance upon the information furnished by the NDDOT; that nothing in the proposal or contract documents disclosed unstable soil conditions on the project; that when the unstable soil conditions were encountered, Wold, as the engineer, directed certain work done, classifying it as incidental, and denied payment for any additional working days or price adjustments; and that Wold misconstrued and misapplied the specifications and wrongfully denied payment to Gratech. Gratech alleges six causes of action:
1) Breach of the duty to provide professional engineering services,
2) Wold acted arbitrarily and capriciously and/or in bad faith and/or abused its discretion and professional judgment in determining the nature of unsuitable soil,
3) Wold -wrongfully and improperly construed the contract to deny payment to Gratech,
4) Wold negligently misrepresented the contract plans and specifications,
5) Wold intentionally and willfully deceived Gratech with intent to get him to alter his position on its right to compensation for extra work, and
6) For punitive damages.
Whether the claims and causes of action arise out of the contract under
[¶ 30] In this case, Gratech must plead and prove its contract with the NDDOT, which it relied on to bid the project. The interpretation of the contract is the subject of the alleged misrepresentations by Wold to Gratech. At first glance, I agree it appears the alleged torts of negligence and misrepresentation are closely interwoven with the contract. However, Gratech did not enter into a contract with Wold agreeing to arbitrate intentional torts, nor did its contract with the NDDOT or
On the other hand, if there were allegations of some intentional tort visited directly by Valero on Wagner, e.g., defamation or assault, or some cause of action antithetical to the contract, e.g., fraudulent inducement to enter into the contract or quantum meruit, the phraseology of the arbitration clause would have to be broad, indeed, to require arbitration.
Id. at 567.
[¶ 31] Because Gratech alleges in his complaint Wold “intentionally and willfully deceived the Contractor, with the intent to induce him to alter his position to his injury or risk ...,” I respectfully dissent from the majority’s conclusion that all of Gratech’s claims are arbitrable.