Opinion ID: 1387535
Heading Depth: 2
Heading Rank: 2

Heading: Did the Parties Otherwise Agree to Submit Their Dispute to Arbitration?

Text: As a secondary argument, it is urged by the School District that, if we agree that the contract documents did not include the arbitration provisions of the Wyoming Public Works Standard Specifications, then there is no arbitration provision in any of the contract documents and the arbitrators exceeded their powers by proceeding with arbitration. In its decision letter filed on July 23, 1984, the district court observed: Clearly the parties were not required by any written contract to submit their disputes to arbitration, nor did any Wyoming law require arbitration. No party, under Wyoming law is required to arbitrate disputes unless it has agreed to arbitrate that dispute, American National Bank of Denver v. Cheyenne Housing Authority, 562 P.2d 1017 (Wyo. 1977), Oil, Chemical, Atomic Workers v. American Oil, 528 F.2d 252 ([10th Cir.1976]). There is no statutory authority in Wyoming requiring arbitration. Wyoming law does specify that in order for an arbitration provision to be enforcible [sic], it must be in writing, W.S. sec. 1-36-103. Inasmuch as there was no contractual or statutory provisory requiring arbitration between these two parties the question becomes one of whether Appellant and Appellee agreed to submit their dispute to arbitration. For the answer, an examination of the factual matters must be considered. Appellant, in a letter to Appellee demanded arbitration, early on however there was no request to the American Arbitration Association. Appellee did, however, file a written request for arbitration with the American Arbitration Association on October 21, 1982. Appellant filed its Motion to Dismiss, citing as grounds that Appellee was 97 days late in said request. The Arbitrators heard the argument of counsel and denied the motion. After the denial, the parties then commenced the arbitration proceedings which lasted four days. At no time during the arbitration hearing did Appellant raise the issue or suggest that no arbitration agreement existed between the parties. A Motion to Dismiss for failure to timely request arbitration cannot be convoluted to mean that there was no agreement to arbitration. Appellant, in preparation for the arbitration hearing, corresponded with the American Arbitration Association, requested that certain persons be issued subpoenas and paid a filing fee, (letter dated August 4, 1983 from John Sundahl to American Arbitration Association). This Court finds there was an agreement to arbitrate the dispute and the agreement to arbitrate was outside the provisions of the Wyoming Public Works Standard Specifications. For that reason the arbitrators correctly heard the dispute and did not exceed their powers. An agreement to arbitrate need not be written and can arise as the result of the conduct of parties to an existing dispute regardless of whether or not they have previously contracted for arbitration. 5 Am.Jur.2d, Arbitration and Award § 12, pp. 528-529 (1962); and 6 C.J.S., Arbitration § 8, p. 172 and § 17, p. 187 (1975). Other courts have recognized that a party, by participating in arbitration proceedings, can be deemed to have waived its objections to the arbitrability of the dispute. O'Malley v. Petroleum Maintenance Company, 48 Cal.2d 107, 308 P.2d 9 (1957); American Motorists Insurance Company v. Llanes, 396 Mich. 113, 240 N.W.2d 203 (1976); New Jersey Manufacturers Insurance Company v. Franklin, 160 N.J. Super. 292, 389 A.2d 980 (1978); National Cash Register Company v. Wilson, 8 N.Y.2d 377, 208 N.Y.S.2d 951, 171 N.E.2d 302 (1960); Coventry Teachers' Alliance v. Coventry School Committee, R.I., 417 A.2d 886 (1980); and Annot., 33 A.L.R.3d 1242 (1970). The comments of the Colorado Supreme Court in People v. Crystal River Corporation, 131 Colo. 163, 280 P.2d 429, 432 (1955), are typical: We think it is fundamental law that an individual or an agency of the state may not freely participate in the selection of arbitrators, in accordance with statute, attend the hearing, submit his evidence, hope for a favorable award, and in the event of an adverse finding, seek a review merely because the award is unfavorable to him.    The School District argues that it did not waive its right to object to arbitrability, because it moved to dismiss the arbitration at the commencement of the hearing. In this respect we agree with the district court; a motion to dismiss for untimely filing cannot be reshaped into an objection to jurisdiction on the grounds there is no agreement to arbitrate. In reaching this decision, we are mindful of the provisions of § 1-36-104(a), W.S. 1977: On application of a party showing an arbitration agreement and the opposing party's refusal to arbitrate, the court shall order the parties to proceed with arbitration. If the opposing party denies the existence of the agreement to arbitrate, the court shall proceed summarily to determine the issue raised and shall order or deny arbitration accordingly. In the present case, the School District, throughout the arbitration proceedings, was aware of Strube's position that the agreement between the parties did not require arbitration, but that Strube was submitting to arbitration voluntarily to attempt to reach an expeditious resolution to its dispute with the School District. In submitting its counterclaim for consideration by the arbitrators, the School District's request for relief sought a resolution of all the disputes between the parties, including issues not raised by Strube. The School District was afforded a full and fair opportunity to test the proof advanced by Strube and to offer evidence in its own behalf on all the issues raised by the various claims and counterclaims. If the School District truly believed that there was no agreement to arbitrate, § 1-36-104(a) provided a speedy and conclusive method to have that question resolved. Under the circumstances present in this case, we have no difficulty in finding the School District by its participation waived its right to raise the issue of whether or not the dispute with Strube was subject to decision in the arbitration proceeding. The School District raises the specter of the effect its refusal to participate in the arbitration proceedings might have had in the event a reviewing court found there was, in fact, an enforceable agreement to arbitrate. In such instance, it is asserted that the opportunity to defend or be heard upon the merits of the case would be lost forever. While we believe that § 1-36-104(a) is designed to avoid this possibility, we find that a party who proceeds with arbitration over his explicit objections as to arbitrability is not foreclosed from raising the issue on a motion to confirm or vacate the award in the district court. Arrow Overall Supply Company v. Peloquin Enterprises, 414 Mich. 95, 323 N.W.2d 1 (1982); New Jersey Manufacturers Insurance Company v. Franklin, supra; Ben Gutman Truck Service, Incorporated v. Teamsters Local No. 600, 484 F. Supp. 893 (E.D.Mo. 1980). As we have found, however, the School District did not object to arbitrability of the dispute but chose instead to participate in hopes of a favorable result.