Opinion ID: 2616432
Heading Depth: 2
Heading Rank: 1

Heading: does the agreement fall within the scope of hawaii revised statutes chapter 658?

Text: The City contends that the provisions of HRS Chapter 658 do not apply to the agreement in controversy. It argues that the agreement does not provide for arbitration but instead contemplates an appraisal because only the value of Leeward's assets are at issue. We disagree. We have stated that [a]n agreement should be construed as a whole and its meaning determined from the entire context and not from any particular word, phrase or clause. Ching v. Hawaiian Restaurants, Ltd., 50 Haw. 563, 565, 445 P.2d 370, 372 (1968). Ching involved the interpretation of a lease which provided for the selection of three appraisers following procedure similar to that followed in this case. The procedure was incorporated into a lease to resolve a possible dispute between the parties over the renegotiation of rent. The lessor argued that the agreement called for an appraisal and not arbitration because it used the terms appraisers, appraisal and decision. In rejecting this argument and reversing the lower court's decision to the contrary, the court pointed out that the appraisers were only to be appointed if a dispute over the rent arose, that the decision of the appraisers had the binding effect of a judgment of a court of law and that the agreement expressly referred to the arbitration and award statute. [1] It is true that an appraisal is indicated when value is the only issue to be resolved, but it is not the controlling factor. Omaha v. Omaha Water Co., 218 U.S. 180, 30 S.Ct. 615, 54 L.Ed. 991 (1910); 16 Williston on Contracts, Third Ed. § 1919. In Ching, the appraisers were only to determine the fair market value of the rental property, but upon considering the agreement as a whole the court found the contingency of the procedure on the disagreement of the parties and the finality of the appraiser's decision established the agreement as one providing arbitration. Ching v. Hawaiian Restaurants, Ltd., supra ; see Omaha v. Omaha Water Co., supra, 218 U.S. at 194-96, 30 S.Ct. 615. Applying these considerations to the facts of this case we find the terms of the agreement clearly provide for arbitration. As in Ching, the adopted procedure is provided to resolve a dispute between the parties over the value of certain property and the valuation of the decisionmaker is final. Further, the agreement provides that the arbitrator's decision must be returned no later than thirty days after the representatives of each party present their arguments on the value of Leeward's assets. This quasijudicial procedure is characteristic of arbitration. See Bewick v. Mecham, 26 Cal.2d 92, 156 P.2d 757 (1945); 16 Williston on Contracts, Third Ed. § 1919. For these reasons we hold that the agreement between the City and Leeward provides for arbitration and is within the scope of Hawaii Revised Statutes Chapter 658.