Brink v. Allegro Builders, Inc.

McCOMB, J. Prom an order in favor of defendant, denying plaintiffs’ application for the confirmation of an arbitration award, plaintiffs appeal.

Facts: Plaintiffs and defendant entered into a written contract in which defendant agreed to build a house on a lot owned by plaintiffs. Clause 26 of the contract reads, in part: “The following specified items are the sole responsibility of the Owner, and all charges or costs incurred shall be paid by the Owner over and above the contract price.

“(a) Grading of lot for level building site, removing all trees, debris, and other obstructions prior to start of construction. ’ ’

The grading was done by a Mr. Valenzuela. Plaintiffs contend that defendant chose Mr. Valenzuela to do the work and that it was done defectively. They notified defendant that they felt it was responsible, and demanded that it repay them the amount given Mr. Valenzuela and also pay for the damages incurred.

On February 8, 1960, defendant took the initiative and made a written demand for arbitration of plaintiffs’ “claims and accusations, either stated or inferred.”

Thereafter defendant consulted an attorney, who advised that it had no responsibility under clause 26 of the contract. It then telephoned plaintiffs and sent a letter dated February 11, 1960, rescinding its demand for an arbitrator.

Plaintiffs, in a letter dated February 12, 1960, stated that they had been informed by telephone of defendant’s intention to rescind but that since no letter had arrived, “we are appointing our arbitrator to be sure we are covered.”

On February 16, 1960, plaintiffs informed defendant that they were proceeding to arbitration unilaterally, as provided by clause 15 of the contract, which reads: “As between the parties hereto, all questions as to the rights and obligations arising under the terms of the contract, the plans and specifications are subject to arbitration. In ease of dispute either party hereto may make a demand for arbitration by filing [579]such demand in writing with the other. One arbitrator may be agreed upon, otherwise there shall be three, one named in writing by each party within five days after demand is given, and a third chosen by the two appointed. Should either party refuse or neglect to appoint said arbitrator or to furnish the arbitrators with any papers or information demanded he or they are empowered by both parties to proceed ex parte. If there be one arbitrator his decision shall be binding; if there be three the decision of any two shall be binding. Such decision shall be a condition precedent to any right of legal action, and wherever permitted by law it may be filed in Court to carry it into effect. ...”