Opinion ID: 1967690
Heading Depth: 3
Heading Rank: 1

Heading: Paragraph 5(a) of the Purchase Agreement.

Text: Under paragraph 5(a) of the Purchase Agreements signed by the parties, appellants guaranteed that the condominium units would be substantially in accordance with the Plats and Plans, but not necessarily in exact compliance therewith, as nonmaterial changes could be made to the Plans, as the same may be modified from time to time and as may be required by any governmental authorities asserting jurisdiction over the Condominium or any construction or permanent lender or as may be reasonably necessary. [14] This paragraph requires that all disputes involving delivery of the Unit in accordance with the Plans be arbitrated, i.e. submitted to a third partythe project architectfor binding resolution. [15] Appellants' argument that this paragraph mandates arbitration of the present claims depends on a reading of the Plans mentioned in the arbitration clause as including the  construction plans for the building. From this premise, they argue that the installation of the utilities of the buildingwater, HVAC, and the likeare governed by blueprints and other construction plans, and as the gravamen of the various lawsuits rests on whether those systems in the building were properly constructed, Paragraph 5(a) of the Purchase Agreement requires that these claims be arbitrated. Appellees respond that Paragraph 5(a) applies only to disputes over whether the building and the specific unit purchased is in substantial compliance with the Plats and Plans, which refers to official documents showing the location and boundaries of the building and of specific condominium units within the building, and that the arbitration clause in Paragraph 5(a) pertains solely to disputes as to differences between the location, layout and size of the units they purchased as promised and as delivered. The first level of analysis is a plain meaning interpretation of Paragraph 5(a) of the Purchase Agreement. The Purchase Agreement does not itself refer specifically to construction plans nor does it define the term Plans used in the arbitration clause. But Paragraph 1(a) of the Purchase Agreement provides that [c]apitalized terms not defined herein shall have the meanings specified for such terms in Section 45-1802 of the Condominium Act, which has since been re-codified without change as D.C.Code § 42-1901.02 (2001). The Condominium Act defines Condominium instruments as the declaration, bylaws, and plats and plans, recorded pursuant to the provisions of this chapter. D.C.Code § 42-1901.02(5) (emphasis added). The Act further defines the plat and plan as official documents to be recorded, which survey . . . the location and dimensions of the real property on which the condominium building structure is located and shall show the location and dimensions of the vertical boundaries of each unit within that structure. D.C.Code § 42-1902.14(a) & (b). The term Unit, also defined in the Act, means a portion of the condominium designed and intended for individual ownership. D.C.Code § 42-1901.02(30). The Plats and Plans of the Ritz Residences which are in the record show the building's location on the relevant piece of property, and also show, floor by floor, each unit's location and boundaries within the building (in building terms, the footprint of the building and of each unit). These documents meet precisely, the meaning of plat and plan as defined in the Condominium Act. [16] Because the contract between the parties adopts the definition of terms in the Condominium Act, which narrowly defines the term at issue, appellants' assertion that the term Plans used in the arbitration clause of the Purchase Agreement broadly means construction plans such as blueprints and the like, is not supported by the contractual documents. Furthermore, the choice of a person with specialized expertisein this case, the project architectas arbitrator is further evidence that the arbitration required by Paragraph 5(a) is limited to a narrow and specialized category of disputes, namely those which fall within the professional expertise of an architect. See, e.g., McDonnell Douglas Fin. Corp. v. Pa. Power & Light Co., 858 F.2d 825, 828 (2d Cir.1988) (holding that parties' agreement requiring that disputes over the computation of indemnity to be paid be submitted to a tax counsel, supported a conclusion that the effect of the clause should be limited to tax law questions and computations disagreements). Paragraph 5(a) deals with a guarantee that the condominium units will be delivered in substantial compliance with the Plats and Plans recorded pursuant to the Condominium Act and will be of essentially the same square footage, configuration and location as promised, subject to slight modifications as construction and regulatory contingencies warrant. It is in the specialized expertise of an architect to decide such issues. But the broader issues `raised in appellee's complaints, such as negligence, fraud, misrepresentation and breach of statutory duties related to the construction of the building, and the availability of equitable relief (rescission) or the extent of compensable damages for personal injury and property loss, are not within an architect's usual expertise. Moreover, although the chosen arbitrator's relationship to a party does not automatically nullify a valid agreement to arbitrate, see Aviall, Inc. v. Ryder Sys. Inc., 110 F.3d 892, 896 (2d Cir.1997), the identity of the arbitrator may shed some light on the parties' intent as to the scope of their agreement. Here, for example, if the construction plans themselves are challenged ( e.g., on a theory of negligent design), the project architect would be an inherently unsuitable arbiter of that dispute, as he is the person responsible for those plans. We hold that the plain reading of Paragraph 5(a) of the Purchase Agreement, including the definitions of the relevant terms (Plats and Plans) found in the Condominium Act incorporated by reference in the arbitration clause, as well as the inference to be drawn by the appointment of the project architect as arbiter, compels the conclusion that the parties agreed to arbitrate only those disputes which concern the Plats and Plans, e.g., the location of the unit inside the building, or disputes as to the configuration or size of the units. Because this is the only reasonable reading of the parties' agreement, it is inappropriate to employ the presumption in favor of arbitration in this case, as arbitration is a way to resolve those disputesbut only those disputes that the parties have agreed to submit to arbitration. First Options v. Kaplan Investments, Inc., 514 U.S. 938, 943, 115 S.Ct. 1920, 1924, 131 L.Ed.2d 985 (1995); see Masurovsky, 687 A.2d at 205; Steelworkers, 363 U.S. at 582-83, 80 S.Ct. 1347. And because the arbitration clause is so limited by its terms, we can say with positive assurance, AT & T Techs., 475 U.S. at 650, 106 S.Ct. 1415, that it does not apply to other disputes such as those contained in appellees' complaints. [17]