Opinion ID: 1967690
Heading Depth: 2
Heading Rank: 3

Heading: Amended and Restated Certificate of Limited Warrantythe Mackell Appellees

Text: We reach a different result with respect to the Mackell appellees, who, as noted, received an Amended and Restated Certificate of Limited Warranty. Although the procedure for noting defects and the arbitration provision in Section V of the Mackells' Certificate is similar to that we have just discussed in the Limited Certificate of the other appellees, the Mackell warranty is different in several significant respects. First, and most important, the defects warranted include not only structural defects in the components constituting the Unit the Mackells purchased, but also any defect in or relating to the plumbing and sewer ventilation lines located both within and outside the designated boundaries of any Unit, whether or not such lines are deemed by the Declarationto be part of the Unit. Declarant will also correct any water related damage to or associated with the Unit, including, without limitation, the eradication of mold spores within the Unit, consistent with practices in the industry at the time. And, unlike the other Certificates of Limited Warranty, which expressly disclaimed damages, the Mackells are covered for direct and consequential damages incurred . . . resulting or arising from the failure of, or defect in, any warranted item. Second, rather than designate the project's architect as arbitrator, the Amended and Restated Certificate appoints as apparently unaffiliated entity, Consolidated Engineering Services, Inc. (CESI), to perform that function. Third, the warranty period extends beyond the two years of settlement (December 19, 2000) required by the Condominium Act to the later of (i) July 16, 2004, (ii) one year from the date warranty work is completed, or (iii) one year from the date that CESI issues a certification that the corrective work in those areas identified by CESI has been properly completed by or on behalf of the [appellants], and that the installation of the affected Common Elements and the selected Unit elements comply with requirements of relevant building product manufactures and with all applicable and generally accepted industry standards applicable to luxury multi-family residential buildings in the District of Columbia. We think that the broader scope of the Mackell warranty, as well as the selection of an independent arbitrator not involved in the design of the building, evidence an intent to submit to arbitration at least some of the claims made by the Mackells in their complaint. Applying the presumption in favor of arbitration, see Lopata, 735 A.2d at 936, we are unable to say, with positive assurance that warranty claims made by the Mackell appellees were not intended to be subject to arbitration. AT & T Teas., 475 U.S. at 650, 106 S.Ct. 1415. In reaching this conclusion, we cannot ignore that the Mackells' Certificate also includes the provision in Section I.A.(2), see supra p. 148, that refers to commencement of judicial proceedings for breach of any obligation under the warranty. [21] But we do not go so far as to say, however, that under this section of the Certificate, judicial recourse to enforce any warranty claim remains available, in lieu of arbitration, so long as notice is given within the two-year warranty period and is filed in court within five years of the effective date of the warranty. In our view, such a broad reading would render nugatory the arbitration provision in Section V.B. and we are required to interpret the contract as a whole, giving effect to each of the provisions, where possible. Akassy v. William Penn Apts., Ltd. P'ship, 891 A.2d 291, 303 (D.C.2006). Although the Certificate's language and structure are hardly models of clarity, it is possible to give effect to both provisions (Section I.A.(2) and V.B.), by a selective application of the arbitration clause to some but not all warranty disputes. As the Certificate provides, the procedures leading to arbitration by the Project Architect laid out in Section V are established to permit maximum efficiency in administering work under warranty (emphasis added), through the use of the Pre-Settlement Inspection Form and the Warranty Inspection Form attached to the Certificate as Exhibits A and B. By its terms, the arbitration provision is limited to situations where the Unit Owner and the Declarant's representative fail to agree upon the defects to be noted on the Warranty Inspection Form. Section V.B. That would leave for judicial resolution under Section LA(2), [a]ny other defects that may arise subsequent to the completion of the Warranty Inspection Form, during the period covered by the Limited Warranty Certificate, which are to be handled individually upon written notice by the unit owner to appellants. Section V.A.(3) (emphasis added). [22] Although we recognize the presumption in favor of arbitration that is raised once it is established that the parties have agreed to some arbitration, the arbitration clause here is not a comprehensive commitment to submit to arbitration all disputes, controversies or differences between the parties. See, e.g., Mitsubishi Motors Corp. v. Soler Chrysler Plymouth, Inc., 473 U.S. 614, 625 n. 13, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985). Rather, it is a more modest agreement to arbitrate disputes concerning the identification of defects to be addressed via the Inspection Form procedure. Because the limiting language in the Certificate's arbitration clause does not support a reading that would compel arbitration of all warranty claims, and because we also must give effect to the parties' inclusion of a provision calling for judicial recourse, we are constrained to so construe the language in the agreement, even though the resulting balance may not appear to us to be the most efficient, logical, or compelling. As noted, the Mackells sued to rescind their purchase of a condominium unit at the Ritz, as an alternative to damages. Although the legal basis or nature of a cause of action does determine its arbitrability vel non, see id. at 628, 105 S.Ct. 3346, insofar as the allegations underlying the [] claims touch matters covered by the agreement to arbitrate, id. at 625 n, 13, 105 S.Ct. 3346, the claim must nonetheless come within the contemplation of the parties' agreement to arbitrate. The Mackell Certificate of Limited Warranty expressly provides that appellants will repair or replace defects covered by the warranty and be liable for certain direct and consequential damages, up to $25,000 per occurrence per Unit damaged. Without in any way commenting on whether the Mackells can maintain a claim to rescind their Purchase Contract with appellants based on fraudulent inducement, we can say with positive assurance that even under the more comprehensive coverage of their Amended and Restated Certificate of Limited Warranty, the parties never contemplated that the arbitrator, an engineering company, would be responsible for determining the Mackells' claim to set aside their purchase contract altogether, rather than settle disputes concerning the repair and/or compensation for defects they claimed should be listed on the warranty inspection form. We therefore conclude that the Mackells are not bound to submit to arbitration their claim for injunctive relief based on fraudulent inducement.