Court Opinion

ID: 2705989
Source: CourtListenerOpinion
Date Created: 2014-08-04 22:43:11.019479+00
Date Added: 2024-06-11T12:55:52.475001
License: Public Domain

[Cite as Avenbury Lakes Homeowners Assn., Inc. v. Avenbury Lakes, Inc., 2012-Ohio-2553.]

STATE OF OHIO                   )                        IN THE COURT OF APPEALS
                                )ss:                     NINTH JUDICIAL DISTRICT
COUNTY OF LORAIN                )

AVENBURY LAKES HOMEOWNERS                                C.A. Nos.        11CA009958
ASSOCIATION, INC.                                                         11CA009964

        Appellant

        v.                                               APPEAL FROM JUDGMENT
                                                         ENTERED IN THE
AVENBURY LAKES, INC., et al.                             COURT OF COMMON PLEAS
                                                         COUNTY OF LORAIN, OHIO
        Defendants                                       CASE No.   07-CV-154222

        v.

BARTON & ASSOCIATES

        Appellant

        And

ROBLER ASSOCIATES, INC.

        Appellee

                                DECISION AND JOURNAL ENTRY

Dated: June 11, 2012

        CARR, Presiding Judge.

        {¶1}    In Case No. 11CA009964, appellant, Barton & Associates, appeals the judgment

of the Lorain County Court of Common Pleas which granted the motion to dismiss and/or stay

proceedings filed by appellee, Robler Associates. In Case No. 11CA009958, Avenbury Lakes

Homeowners Association, appeals from the same judgment entry. This Court reverses in Case

No. 11CA009964, and dismisses the appeal in Case No. 11CA009958.
                                                 2

                                                 I.

       {¶2}    On December 20, 2007, Avenbury Lakes Homeowners Association, Inc.

(“Avenbury Lakes”) commenced this action in the Lorain County Court of Common Pleas for

breach of implied warranty and negligence, seeking damages from the Avenbury Lakes’

developer, Avenbury Lakes, Inc. (“Developer”), for poor workmanship and severe deficiencies

in the construction of the community’s clubhouse, known as the “Lodge.” Avenbury Lakes is

comprised of owners in fee simple title to lots contained within a residential community in Avon,

Ohio. On January 9, 2008, Developer filed an answer and a third-party complaint, which

asserted claims against various subcontractors involved in the construction of the Lodge,

including the architect, Barton & Associates, Inc. (“Barton”), and the HVAC consulting

engineers, Robler Associates, Inc. (“Robler”).

       {¶3}    After the initial exchange of written discovery, Avenbury Lakes came to believe

that Robler and Barton shared responsibility for the deficiencies affecting the Lodge.       On

December 11, 2008, Avenbury Lakes was granted leave to file an amended complaint, which

asserted claims against Developer, Robler, and Barton for breach of implied warranty, breach of

contract, and negligence.

       {¶4}    On February 13, 2009, Barton moved to dismiss the negligence claim in the

amended complaint on the basis that it was barred by lack of contractual privity and the

economic loss rule. On June 18, 2009, the trial court issued a journal entry denying the motion

to dismiss.

       {¶5}    On March 23, 2009, Barton filed its own third-party complaint, asserting claims

against Robler for breach of contract, negligence, as well as contribution and indemnity.
                                                  3

       {¶6}    On June 5, 2009, Robler filed a motion to “dismiss and/or stay proceedings,” in

which it sought to dismiss Avenbury Lakes’ and Barton’s claims on the basis of (i) lack of

jurisdiction due to failure of service of process; (ii) failure to state a claim upon which relief may

be granted; and (iii) the absence of subject matter jurisdiction due to a controlling mediation

and/or arbitration agreement between Robler and Barton. Robler also asserted that it was “no

longer [] in existence as a corporation” and that its only relation to the dispute was its “brief”

tenure as an HVAC consulting engineer subcontractor to the architect, Barton. In the alternative,

Robler sought a stay of the proceedings pending mediation or arbitration of its disputes with

Barton. On July 8, 2009, both Avenbury Lakes and Barton filed briefs in opposition to the

motion. Robler filed a reply brief in support of its motion on July 22, 2009.

       {¶7}    On January 14, 2011, the trial court issued a journal entry granting the motion and

ordering, pursuant to R.C. 2711.01, that “the case [be] stayed pending the result of the

mediation/arbitration between Robler and Defendant, Barton and Associates as per contract.”

       {¶8}    Both Barton and Avenbury Lakes filed notices of appeal to this Court. On May

25, 2011, this Court issued a journal entry consolidating the appeals.            Barton raises two

assignments of error in Case No. 11CA009964. Avenbury Lakes raises one assignment of error

in Case No. 11CA009958.

                                                 II.

                       BARTON’S FIRST ASSIGNMENT OF ERROR

       THE TRIAL COURT ERRED IN GRANTING ROBLER’S MOTION TO
       DISMISS/STAY PROCEEDINGS AS BARTON’S CLAIMS ARE NOT
       SUBJECT TO ARBITRATION.
                                                 4

                     BARTON’S SECOND ASSIGNMENT OF ERROR

       THE     TRIAL     COURT      ERRED      IN    COMPELLING
       MEDIATION/ARBITRATION OF BARTON’S CLAIMS AGAINST ROBLER
       AS BARTON’S CLAIMS ARE NOT SUBJECT TO ARBITRATION[.]

       {¶9}    In its first and second assignments of error, Barton argues that the trial court erred

in granting Robler’s motion to stay proceedings as Barton’s claims are not subject to arbitration.

This Court agrees.

       {¶10} Because the issue of whether this controversy is subject to arbitration under

Barton’s and Robler’s agreement presents a question of law, the standard of review is de novo.

Ignazio v. Clear Channel Broadcasting, Inc., 113 Ohio St.3d. 276, 2007-Ohio-1947, ¶ 19.

       {¶11} The trial court’s judgment entry indicated that the stay of proceedings was issued

pursuant to R.C. 2711.01, which states, “A provision in any written contract *** to settle by

arbitration a controversy that subsequently arises out of the contract *** shall be valid,

irrevocable, and enforceable[.]” Moreover, R.C. 2711.02(B), states:

       If any action is brought upon any issue referable to arbitration under an agreement
       in writing for arbitration, the court in which the action is pending, upon being
       satisfied that the issue involved in the action is referable to arbitration under an
       agreement in writing for arbitration, shall on application of one of the parties stay
       the trial of the action until the arbitration of the issue has been had in accordance
       with the agreement, provided the applicant for the stay is not in default in
       proceeding with arbitration.

       {¶12} While courts generally encourage arbitration to settle disputes, the Supreme Court

of Ohio has held that arbitration is a matter of contract and a party cannot be required to submit a

dispute to arbitration when it has not agreed to do so. Academy of Med. of Cincinatti v. Aetna

Health, Inc., 108 Ohio St.3d 185, 2006-Ohio-657, ¶ 11; Gillen Concrete & Excavating, Inc. v.

Fortney & Weygant, 9th Dist. No. 96CA006525, 1997 WL 430863 (July 16, 1997) (Because

“arbitration is a matter of contract ***, a party cannot be compelled to arbitrate any dispute
                                                  5

which he had not agreed to submit.”) See also Peters v. Columbus Steel Castings Co., 10th Dist.

No. 05AP-308, 2006-Ohio-382, ¶ 11. Thus, a court interpreting an agreement between the

parties must determine whether the arbitration clause contains limitations as to arbitrability, as

well as whether the arbitration clause limits itself only to certain aspects of the underlying

contract. Aetna at ¶ 17-18.

       {¶13} This Court has recognized two basic types of arbitration clauses, namely

“unlimited clauses providing for arbitration of all disputes arising out of a contract; and limited

clauses providing for a specific type of dispute arising out of a contract.” Neubrander v. Dean

Witter Reynolds, Inc., 81 Ohio App.3d 308, 312 (9th Dist.1992).              The primary focus in

interpreting such clauses is whether the parties agreed to arbitrate the issue. Aetna at ¶ 19.

       {¶14} This controversy in this case stems out of the contract between Barton and Robler.

The contract contains the following provision in regard to arbitration:

       5.8.1 All claims, counterclaims, disputes and other matters in question between
       the parties to this contract arising out of or relating to this Agreement or the
       breach of same will be decided by arbitration[.]

       ***

       5.8.3 All demands for arbitration and all answering statements to same which
       include any monetary claim must contain a statement that the total sum or value in
       controversy as alleged by the party making such demand or answering statement
       is not more than $100,000 (exclusive of interest and costs); and the arbitrators will
       not have jurisdiction, power or authority to render a monetary award in response
       thereto against any party which totals more than $100,000 (exclusive of interest
       and costs). The arbitrators will not have jurisdiction, power or authority to
       consider, or make findings (except in denial of their own jurisdiction) concerning
       any claim, counterclaim, dispute or other matter in question where the amount in
       controversy of any such claim, counterclaim, dispute or matter is more than
       $100,000 (exclusive of interest and costs).

       5.8.4 No arbitration arising out of, or relating to, this Agreement may include, by
       consolidation, joiner or in any other manner, any person or entity who is not a
       party to this Agreement.
                                                 6

       {¶15} In this case, the dispute in question falls outside the scope of the arbitration

agreement between Barton and Robler. Pursuant to Section 5.8.3 of the agreement, any claim,

counterclaim, dispute or matter that exceeds $100,000 is not subject to arbitration. In its motion

to “dismiss and/or stay proceedings,” Robler did not assert that the total sum or value in

controversy was less than $100,000. Avenbury Lakes, in its amended complaint, asserted a

claim against Barton. As a direct result of Avenbury Lakes’ claim against Barton, Barton filed a

third-party complaint against Robler. Subsequently, upon the request of Barton, Avenbury

Lakes filed a statement of damages pursuant to Civ.R. 8 for the amount of $698,118.82.        Thus,

as the amount in question likely exceeds the $100,000 limit set forth in the arbitration agreement,

the trial court erred in staying proceedings pending the outcome of arbitration. Barton’s first and

second assignments of error are sustained.

                     AVENBURY LAKES’ ASSIGNMENT OF ERROR

       THE LOWER COURT ERRED IN GRANTING DEFENDANT, ROBLER
       ASSOCIATES, INC.’S, MOTION TO DISMISS AND/OR STAY
       PROCEEDINGS.

       {¶16} In its sole assignment of error, Avenbury Lakes argues that the trial court erred in

granting Robler’s motion to dismiss and/or stay proceedings. In support of its assignment of

error, Avenbury Lakes argues that because it is not a party to the contract between Barton and

Robler, its claims do not fall within the scope of the arbitration agreement and, therefore, are not

subject to the stay provisions of R.C. 2711.02(B). In the judgment entry from which both parties

appeal, the trial court stated that “the case [be] stayed pending the result of the

mediation/arbitration between Robler and Defendant, Barton and Associates as per contract.” As

this Court has determined that the claims between Barton and Robler are not subject to

arbitration pursuant to the terms of their agreement, we decline to address Avenbury Lakes’
                                                 7

assignment of error as it is moot, and its appeal in C.A. No. 11CA009958 is dismissed. See

App.R. 12(A)(1)(c).

                                                III.

       {¶17} In Case No. 11CA009964, Barton’s first and second assignments of error are

sustained. The judgment of the Lorain County Court of Common Pleas is reversed, and the

cause remanded, for further proceedings consistent with this opinion.

                                                                             Judgment reversed,
                                                                            and cause remanded.

       {¶18} In light of our decision in Barton’s appeal in Case No. 11CA009964, Avenbury

Lakes’s appeal in Case No. 11CA009958 is moot, and the appeal is dismissed.

                                                                               Appeal dismissed.

       There were reasonable grounds for this appeal.

       We order that a special mandate issue out of this Court, directing the Court of Common

Pleas, County of Lorain, State of Ohio, to carry this judgment into execution. A certified copy of

this journal entry shall constitute the mandate, pursuant to App.R. 27.

       Immediately upon the filing hereof, this document shall constitute the journal entry of

judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the

period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is

instructed to mail a notice of entry of this judgment to the parties and to make a notation of the

mailing in the docket, pursuant to App.R. 30.
                                          8

      Costs taxed to Appellee.

                                              DONNA J. CARR
                                              FOR THE COURT

MOORE, J.
DICKINSON, J.
CONCUR.

APPEARANCES:

ROBERT E. KMIECIK and KEVIN M. FIELDS, Attorneys at Law, for Appellant.

STEVEN G. JANIK, AUDREY K. BENTZ, and DAVID B. SHAVER, Attorneys at Law, for
Appellant.

JEFFREY A. LIPPS and JOEL E. SECHLER, Attorneys at Law, for Appellee.