325 F. Supp. 1338 | D.P.R. | 1971
MEMORANDUM AND ORDER
The complaint in this case was filed on June 16th, 1969. Plaintiffs claimed damages caused by a fire that occurred on July 16th, 1968, in their store building located in Bayamón, Puerto Rico, allegedly as a result of codefendant’s breach of their obligations under certain construction contract and subcontracts.
Two of the codefendants, Edward J. Gerrits, Inc., and Edward J. Gerrits of Puerto Rico, Inc. (hereinafter jointly referred to as “Gerrits”, in their first opportunity to plead,
All claims, disputes and other matters in question arising out of, or relating to, this Contract or the breach therefore, except as set forth in Sub-paragraph 2.2.9 with respect to the Architect’s decisions on matters relating to artistic effect, and except for claims which have been waived by the making or acceptance of final payment as provided by Subparagraphs 9.7.5 and 9.7.6, shall be decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association then obtaining. This agreement so to arbitrate shall be specifically en*1340 forceable under the prevailing arbitration law. The award rendered by the arbitrators shall be final, and judgment may be entered upon it in any court having jurisdiction thereof.
On February 4th, 1969, plaintiffs filed a motion in opposition to Gerrits’ request for arbitration alleging (1) that Gerrits had waived their right to arbitrate the claims by not making a timely demand and by not requesting arbitration upon accepting the final payment under the construction contract; (2) that the arbitration clause was unenforceable as a matter of public policy under Section 11.190 of the Insurance Code of Puerto Rico (26 L.P.R.A. Sec. 1119.
Section 1 of the Arbitration Law of Puerto Rico (32 L.P.R.A. Sec. 3201) provides:
Two or more parties may agree in writing to submit to arbitration, in conformity with the provisions of this chapter, any dispute which may be the object of an existing action between them at the time they agree to the arbitration; or they may include in a written agreement a provision for the settlement by arbitration of any dispute which may in future arise between them from such settlement or in connection therewith. Such an agreement shall be valid, requirable and irrevocable except for the grounds prescribed by law for the reversal of an agreement.
In Puerto Rico there is a strong public policy favoring the arbitration of disputes, McGregor-Doniger v. Tribunal Superior, 98 D.P.R. 864 (1970); Hilti, Inc. v. Oldach, 392 F.2d 368 (1st Cir., 1968).
This Court has no doubt and so determines that Gerrits did not waive its right to arbitrate Sears’ claims under the contract. The fact that Gerrits negotiated with plaintiffs the possible settlement of their respective claims cannot be interpreted as Gerrits’ waiver of its right to arbitrate the same. To hold the contrary would be against the public policy in favor of the extra-judicial settlement of claims.
Plaintiffs’ reliance on the provisions of Section 9.7.6
The case of Korody Marine Corp. v. Minerals & Chemicals Philipp Corp., 1962, 2 Cir., 300 F.2d 124, and the Annotation in 5 A.L.R.2d 1008 cited by plaintiffs to support their contention
Section 11.190 of the Insurance Code of Puerto Rico (26 L.P.R.A. Sec. 1119)
Although the motion filed by Gerrits on October 17, 1969 requested the dismissal of the complaint, this Court considers it as a motion requesting a stay of the proceedings in view of Section 3 of the Arbitration Act of Puerto Rico (32 L.P.R.A. Section 3203).
In view of the foregoing it is therefore,
Ordered that the proceedings in this case against Edward J. Gerrits, Inc., and Edward J. Gerrits of Puerto Rico, Inc., be and are hereby stayed, until the claims asserted against them in the complaint filed in this case are submitted to arbitration and such arbitration has been proceeded with, according to the agreement.
. Upon plaintiff’s motion the Court entered an order on September 26, 1969 appointing a particular person to serve summons on the “Gerrits” at any place within the Commonwealth of Puerto Rico and/or any of the Virgin Islands.
. (1) No policy delivered or issued for delivery in Puerto Rico and covering a subject of insurance resident, located, or to be performed in Puerto Rico, shall contain any condition, stipulation, or agreement : (a) Depriving the insured of right of access to the courts for determination of his right under the policy in event of dispute. (b) Depriving the courts of Puerto Rico of jurisdiction of action against the insurer, (c) Limiting right to institute action against the insurer to a period of less than one year from date cause of action accrues in connection with all insurances other than property and marine and transportation policies such right shall not be limited to a period of less than one year from the date of occurrence of the event resulting in the loss, (d) Requiring that the policy be governed by the laws of any other jurisdiction except as necessary to meet the requirements of motor vehicle financial responsibility laws or compulsory disability benefit laws of such other jurisdiction.
(2) Any condition, stipulation, or agreement in violation of this section shall be void, but such voidamce shall not affect the validity of the other provisions of the policy.
. Sec. 9.7.6. “The acceptance of final payment shall constitute a waiver of all claims by the Contractor except those previously made in writing and still unsettled.”
. See supra 1.
. “If any of the parties to a written arbitration agreement institutes action or other legal remedy, the court before which said action or remedy is pending shall, after being satisfied that any dispute involved in said action or remedy may be submitted to arbitration under said agreement, and on motion of any of the parties to the arbitration agreement, order said action or remedy stayed, until such time as the arbitration has been proceeded with, according to the agreement.”