197 A.2d 83 | Conn. Super. Ct. | 1963
This is an action in which the plaintiff seeks a declaratory judgment determining whether the period of limitation has expired so as to bar an arbitration proceeding instituted by the defendant on July 31, 1962, against the plaintiff. By way of relief, in the event it is determined that the Statute of Limitations has expired, the plaintiff seeks a temporary and permanent injunction restraining the defendant from proceeding with such arbitration. After a hearing held August 31, 1962, on an order to show cause why a temporary injunction should not be issued, Meyers, J., denied the defendant's motion that the plaintiff be directed to proceed with arbitration and issued a temporary injunction restraining the defendant from proceeding with the arbitration which it had demanded of the plaintiff until further order of the court. To avoid unnecessary delay, the parties have entered into a stipulation that the arbitration proceedings heretofore instituted should, however, proceed to the point where a panel of arbitrators should be selected under the rules of the American Arbitration Association, but provided that no hearing in said arbitration proceedings should be had until judgment in this action was rendered.
There is no great dispute with respect to the facts as far as the present action is concerned. The plaintiff is a widely known partnership firm engaged in the practice of architecture and on May 5, 1953, entered into a written contract in this state with the defendant insurance company whereby the plaintiff *78 agreed to render architectural and supervisory services in connection with the design and construction of the new home office building of the defendant in the town of Bloomfield. Under the agreement, the plaintiff was given responsibility for each phase of the planning and construction, was to prepare all drawings and specifications for the building, and was given the duty of complete supervision over the course of the "Work." One of the plaintiff's specific undertakings was to furnish the "services of structural, heating, ventilating, air-conditioning, plumbing and electrical engineers." The subject matter of the controversy here relates to the alleged breach of contract with respect to the heating and air-conditioning system.
In February, 1955, the plans for the heating, ventilating, and air-conditioning (HVAC) system were "frozen" for the purposes of securing bids thereof. The purpose of freezing the HVAC plans was so that bids might be taken from potential subcontractors for the HVAC system on a uniform basis, without the confusion which would result from the necessity of making adjustments in the various bids to take account of design changes constantly being made. On March 9, 1955, the plaintiff sent a copy of the HVAC design and specifications, in their then form, to the defendant. No approval of these plans from a technical engineering point of view was asked and none was given, and plaintiff conceded that defendant was not qualified so to approve. The specifications, however, were accepted by the defendant prior to obtaining bids. Bids were secured from subcontractors, and in May, 1955, the general contractor engaged by the defendant entered into a subcontract for the HVAC system, and thereafter the general contractor undertook and completed the installation of the HVAC system, as designed by the plaintiff, in accordance with the *79 design and specifications furnished by the plaintiff as aforesaid. While no changes were made after March 9, 1955, in the basic specifications for the pipe which subsequently corroded and thereby precipitated the underlying dispute between the parties, many changes were made in the plans of the HVAC system and in other aspects of the building subsequent to this date. In fact, changes thereafter made in the HVAC system resulted in an additional cost of $500,000.
In the early months of 1957, the defendant occupied said building as a home office and has continuously occupied it since that time. The defendant first became aware of the defective air-conditioning system shortly before June 10, 1960. On that date, the defendant notified the plaintiff that there was evidence of serious pipe corrosion in the heating and air-conditioning system which used, as a cooling agent, well water from ten wells constructed on the premises of the defendant. On that date and thereafter, meetings were held to determine the cause of this corrosion and the remedial steps which should be taken. A representative of the plaintiff attended several of these meetings, and plaintiff received copies of the minutes of all of them.
The actual design of the HVAC system had been undertaken by well-known mechanical engineers, Syska and Hennessey, selected by the plaintiff and approved by the defendant. This was in accordance with the terms of the agreement entered into between the plaintiff and the defendant. The pipes specified and actually installed for the heating and air-conditioning system were copper coils, and the corrosive action thereof was in all probability due to the chemical content of the water used in connection with the heating and air-conditioning system and obtained from the wells driven for this purpose. *80 The plaintiff and the firm of Syska and Hennessey, the plaintiff's subcontractor who actually designed the HVAC system, both obviously entirely familiar with the building, were retained by the defendant to devise a means of altering the HVAC system in light of the corrosion problem. Changes in the system were subsequently made.
On July 31, 1962, defendant demanded, pursuant to the arbitration clause contained in the contract of May 5, 1953, that the plaintiff arbitrate the question whether the corrosion in the HVAC system was due to a breach by plaintiff of its duties under this contract.
The contract for architectural services referred to above contained the following clause with respect to arbitration: "L. Arbitration. All questions in dispute under this Agreement shall, at the choice of either party, be submitted in accordance with the procedures then obtaining of the American Arbitration Association." The claim or relief sought and the defendant's demand for arbitration are as follows: "Claimant alleges breach of contract on the part of Skidmore, Owings Merrill in failing to use reasonable care and skill in discharging its duties as architect of the Home Office Building of Connecticut General, located in Bloomfield, Connecticut, pursuant to a contract between the parties executed at Hartford, Connecticut, on May 5, 1953, to wit: As a result of faulty design and construction the heating and air-conditioning system has become badly corroded and its useful life substantially shortened, requiring claimant to expend large sums in repairs and permanently reducing the value and usefulness of its building."
The plaintiff refused to arbitrate and instituted the present action seeking the declaratory judgment referred to above. During the course of the *81 trial, the plaintiff agreed and the parties stipulated that no claim of laches was or could be raised with respect to the timeliness of the defendant's demand on July 31, 1962, for arbitration.
The plaintiff claims that the arbitration proceeding is barred by the Statute of Limitations because the cause of action, if the defendant has any, which is the basis for the arbitration proceedings arose in 1955 when the plaintiff submitted its specifications for the HVAC system and the defendant approved them. Since the pipe installed was that specified, the wrong, the plaintiff claims, occurred at the time the specifications were submitted, even though the damage flowing from the allegedly defective pipe was not discovered by the defendant until June, 1960. The plaintiff claims that such a cause of action, being essentially one based on negligence, is barred by §
The plaintiff further claims that if §
It is the defendant's claim that the Statute of Limitations is not applicable to bar the arbitration proceeding which it demanded on July 31, 1962, pursuant to the arbitration clause in its agreement with the plaintiff, for the following reasons: (1) The arbitration proceeding which it invoked by its demand does not constitute the bringing of an action within the meaning of the phrase as used in the Statute of Limitations above cited, and therefore the Statute of Limitations cannot be invoked to enjoin the arbitration; (2) even if the demand for arbitration constitutes the bringing of an action within the meaning of the phrase as used in such Statute of Limitations, the question of its applicability as a bar is to be determined in the arbitration proceeding by the arbitrators and not by the court so as to preclude the arbitrators from considering the matter; (3) and finally, even if the defendant's position with respect to the first two assertions is not upheld, the Statute of Limitations applicable to the case is §
The first question then to be determined is whether the demand for arbitration made by the defendant on July 31, 1962, is the bringing of an action within the bar of any applicable Statute of Limitations.
An arbitration proceeding is not the bringing of an action within the meaning of the phrase as used in the Statute of Limitations cited above. "[T]he word `action' has no precise meaning and the scope of proceedings which will be included within the term as used in the statutes depends upon the nature and purpose of the particular statute in question."Carbone v. Zoning Board of Appeals,
"In Hickey v. Slattery, . . . [supra], we pointed out that our ancient statutes of limitation were originally designed to apply to the various actions known to the common law, and the adoption of the Practice Act of 1879 abolishing set forms for instituting *84
actions did not alter their scope. SeeBaker v. Lee,
Arbitration is not a common-law action, and the institution of arbitration proceedings is not the bringing of an action under any of our statutes of limitation. "Arbitration is an arrangement for taking and abiding by the judgment of selected persons in some disputed matter, instead of carrying into the established tribunals of justice; and is intended to avoid the formalities, the delay, the expense and vexation of ordinary litigation. When *85
the submission is made a rule of court, the arbitrators are not officers of the court, but are the appointees of the parties, as in cases where there is no rule of court." In re Curtis-Castle Arbitration,
While it is perfectly true that a court proceeding may arise which is related to an arbitration, as when a party to the arbitration applies to the court for confirmation of an award of the arbitrators, nevertheless, there is no reason on this account to confuse the arbitration with legal proceedings which may follow. Any suit to enforce an arbitration award is based not upon the original cause of action giving rise to the dispute between the parties but upon the award of the arbitrators as such. Sturges, Commercial Arbitrations and Awards, p. 676; seeDewart v. Northeastern Gas Transmission Co.,
"The parties to an arbitration set up their own tribunal and rules of procedure. In re Curtis-CastleArbitration,
Thus, although various stages of the arbitration proceedings have been construed as "actions" for certain purposes; see Boltuch v. Rainaud, supra;Yale Towne Mfg. Co. v. International Assn. ofMachinists,
Even if it be assumed by way of argument that the commencement of an arbitration proceeding is the bringing of an action within the meaning of the phrase as used in the Statute of Limitations, the application of the statute is to be determined in the arbitration proceedings by the arbitrators and not by the court. The arbitration clause in paragraph L of the contract between the parties hereinbefore set forth, is unrestricted in its scope. It leaves all questions in dispute, under the contract, at the choice of either party to arbitration under the procedures then obtaining of the American Arbitration *87
Association. There is no great public policy involved which should lead the court to restrain the defendant from demanding arbitration, as was the case in Wilko v. Swan,
In Reconstruction Finance Corporation v. Harrisons Crosfield, Ltd., supra, the court, in a majority opinion, held the underlying dispute between the parties concerned the failure of the plaintiff to procure insurance on certain rubber shipments, as it was obligated to do by contract. The defendant suffered a large financial loss when certain of these shipments were destroyed in transit by enemy action in 1942. On September 14, 1951, the defendant served upon the plaintiff a demand for arbitration, pursuant to a relevant arbitration clause. The plaintiff sought to enjoin the arbitration on the ground that more than six years (the period of the applicable Statute of Limitations under New York law) had elapsed since the breach of contract occurred. The plaintiff pointed out, properly, that by statutory definition in New York an "action" encompasses an arbitration. See N.Y. Civ. Prac. Act §§ 10, 1459. The court acknowledged that it was faced with a case of first impression. It distinguished between the problem of applying the Statute of Limitations to the alleged breach of contract of the plaintiff which occurred in 1942 and the alleged breach of the arbitration clause itself in refusing to arbitrate when demand was made therefor under the contract. As to this alleged wrong, the court stated (p. 369): "The `cause of action' for breach of the obligation to arbitrate did not `accrue' until defendant recently asked Reconstruction *88
Finance Corporation to arbitrate the `controversy,' and Reconstruction Finance Corporation then refused to comply." The Statute of Limitations had obviously not run on this "cause of action." The court felt that this was the only statute of limitations question which it had power to consider. As to the effect of the Statute of Limitations on the merits of the controversy, the court said (p. 369): "The effect of the limitations statute on the asserted obligations to obtain insurance will be determined by the arbitrators." This approach is consistent with Connecticut Law. United Electrical Radio Machine Workers v. Union Mfg. Co.,
The opinion of the court in ReconstructionFinance Corporation v. Harrisons Crosfield, Ltd.,
supra, has been followed in Mitchell v. Alfred Hofmann,Inc.,
The plaintiff cites Hammerstein v. Shubert,
127 N.Y.S.2d 249 (1953), in support of its claim that the application of the Statute of Limitations is to be *89
determined by the court and not by the arbitrators. In that case, the court held that where an agreement containing provisions for arbitration was made in 1938 and no action to enforce arbitration brought until the pending action, the six-year Statute of Limitations controlled, the obligation of the parties being contractual, and that the only matters arbitrable under the agreement were those that transpired in the six years immediately prior to the bringing of the litigation. The plaintiff also cites the dissent of Judge Clark in ReconstructionFinance Corporation v. Harrisons Crosfield, Ltd.,
supra, as well as the cases of Matter of PlasticMolded Arts Corporation (A H Doll Mfg. Corporation),
In a recent case, Matter of Cohen (Cohen),
The reasoning of the court in the Cohen case, supra, in the absence of a statute such as § 1458-a of the New York Civil Practice Act, is applicable as well to an agreement to arbitrate future disputes as is the situation in the instant case. It is worthy to note that the New York Court of Appeals in the case of Matter of Lipman (Haeuser Shellac *91 Co.),
Thus, in the absence of express statutory direction, the determination that the Statute of Limitations is a bar to the arbitration proceedings is one which cannot be made by the court but must be left to the arbitrators.
Finally, even if it be conceded that the bar of the Statute of Limitations is an issue for the court to determine, yet in the present case it must be concluded that the arbitration proceeding demanded is not barred by any applicable Statute of Limitations, because the breach in this case continued until 1957.
In the demand for arbitration set forth in plaintiff's exhibit E, the defendant alleged a breach of *92
contract on the part of the plaintiff in failing to use reasonable care and skill in discharging its duties as architect of the defendant's home office building. Such an allegation includes a claim of failure to supervise and inspect properly the progress of the work. An architect's duty to direct and inspect work carries with it the duty to condemn work which he considers unfit. See 6 C.J.S. 315, Architects, § 17. The duty to supervise construction includes the right to condemn improper materials.Avent v. Proffitt,
The plaintiff claims that the case of Kennedy v.Johns-Manville Sales Corporation,
In considering the application of the Statute of Limitations to this case, one must distinguish between a contract obligation, such as was undertaken by the plaintiff, providing for a continuing, indivisible responsibility for the attainment of an end result, and a contract for the performing of a specific, definable act. This distinction, as it relates to the medical field, was clearly articulated inGiambozi v. Peters,
It must, therefore, be concluded that the plaintiff is not entitled to a declaratory judgment that the Statute of Limitations is a bar to the defendant's proceeding with arbitration pursuant to its demand. Judgment may be entered for the defendant and the temporary injunction dissolved.