Opinion ID: 1686104
Heading Depth: 1
Heading Rank: 7

Heading: Claims Against DIG

Text: Lafarge contends that its claims against DIG in its demand for arbitration fall within the scope of the parties' arbitration agreement and, therefore, must be arbitrated. As discussed previously, the June 1999 construction contract contained a broad arbitration provision that mandated arbitration of [a]ny controversy or claim arising out of or relating to [the] contract. Clearly, Lafarge's claim for damages against DIG for DIG's failure to timely complete the construction contract and for its failure to properly perform and coordinate the construction work arise out of or relate to the construction contract. Lafarge's claims against DIG fall within the substantive scope of the parties' arbitration agreement. Once again, DIG asserts that the October change order freed [it] from its obligation to arbitrate. The October change order does not modify or rescind the arbitration provision in the construction contract but preserves the parties' agreement to arbitrate as well as other unspecified rights or remedies that are not inconsistent with that obligation. Finally, DIG asserts that since Lafarge's claims against it are compulsory counterclaims to its claims against Lafarge that were properly raised in the equitable mechanic's lien action in the circuit court proceedings, the trial court's judgment staying the arbitration proceedings was correct. Missouri has a compulsory counterclaim rule that compels a party to state any claim it has against its adversary that arises out of the transaction or occurrence that is the subject matter of the suit. Rule 55.32(a); Evergreen Nat'l Corp. v. Killian Constr. Co., 876 S.W.2d 633, 635 (Mo.App.1994). The purpose of the rule is to discourage separate litigation covering the same subject matter and to require adjudication of such claims in the same action. Evergreen, 876 S.W.2d at 635. The compulsory counterclaim is a means of bringing together all logically related claims into a single litigation, through the penalty of precluding the later assertion of omitted claims. Id. The preclusion effect of the compulsory counterclaim rule, however, is subject to contractual adjustment by the parties. Publicis Communication v. True N. Communications Inc., 132 F.3d 363, 366 (7th Cir.1997). An arbitration clause is simply a particular type of forum selection clause. Id. Thus, a dispute covered by a contract's arbitration clause need not be asserted as a compulsory counterclaim in litigation to avoid waiver. Local Union No. 11 v. G.P. Thompson Elec., Inc., 363 F.2d 181, 185 (9th Cir.1966). In this case, Lafarge and DIG agreed that any dispute arising out of the construction contract shall be settled by arbitration. DIG cannot now seek to bar arbitration of Lafarge's claims against it because those claims were not presented as compulsory counterclaims in its suit against Lafarge in circuit court, which, as previously discussed, was itself subject to arbitration. See also Sokkia Credit Corp. v. Bush, 147 F.Supp.2d 1101, 1105-06 (D.Kan.2001). The trial court erred in staying arbitration of Lafarge's claims against DIG. That part of the judgment is, therefore, reversed, and the case is remanded to the trial court to enter an order compelling arbitration of Lafarge's claims against DIG.