Court Opinion

ID: 2705175
Source: CourtListenerOpinion
Date Created: 2014-08-04 22:32:52.882357+00
Date Added: 2024-06-11T12:19:24.266999
License: Public Domain

[Cite as Varga v. Drees Co., 2014-Ohio-643.]

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

PAUL VARGA, et al.                                   C.A. No.       13CA010385

         Appellees

         v.                                          APPEAL FROM JUDGMENT
                                                     ENTERED IN THE
THE DREES COMPANY                                    COURT OF COMMON PLEAS
                                                     COUNTY OF LORAIN, OHIO
         Appellant                                   CASE No.   12CV178725

                                 DECISION AND JOURNAL ENTRY

Dated: February 24, 2014

         CARR, Judge.

         {¶1}   Appellant, The Drees Co., appeals the judgment of the Lorain County Court of

Common Pleas denying its motion to stay pending arbitration. This Court reverses and remands.

                                                I.

         {¶2}   In 2010, Paul and Rebecca Varga entered into a contract with The Drees Co.,

d/b/a Drees Homes, for the construction of a new residence in Avon, Ohio. On December 7,

2012, the Vargas filed a complaint against Drees alleging negligence, breach of implied warranty

of suitability, breach of contract, and failure to comply with local building codes. On January

22, 2013, Drees filed both an answer to the complaint, and a motion to stay pending arbitration.

The Vargas filed a brief in opposition to the motion, and Drees replied thereto. Subsequently,

the trial court issued a journal entry summarily denying the motion for a stay.

         {¶3}   Drees filed a timely notice of appeal. On appeal, Drees raises one assignment of

error.
                                                2

                                                II.

                                 ASSIGNMENT OF ERROR

       THE TRIAL COURT ERRED IN REFUSING TO GRANT APPELLANT’S
       MOTION TO STAY PENDING ARBITRATION.

       {¶4}    In its assignment of error, Drees argues that the trial court erred in denying its

motion for a stay pending arbitration. This Court agrees.

       {¶5}    In support of its assignment of error, Drees argues that because all of the Vargas’

claims arise directly from the construction agreement, they fall within the arbitration agreement

set forth in the parties’ agreement. In response, the Vargas assert that the trial court properly

denied the motion to stay because its claims for negligence, breach of implied warranty of

suitability, and failure to comply with local building codes did not arise out of the parties’

agreement, and that those claims could be maintained separately from the agreement.

       {¶6}    The question of whether an arbitration provision is applicable presents a matter of

contract interpretation. Thus, “[t]he arbitrability of a claim is a question of law, and we review

the arbitrability of a claim de novo.” Murray v. David Moore Builders, Inc., 177 Ohio App.3d

62, 2008-Ohio-2960, ¶ 7 (9th Dist.), quoting McManus v. Eicher, 2d Dist. Greene No. 2003-CA-

30, 2003-Ohio-6669, ¶ 11.

       {¶7}    R.C. 2711.01(A) states:

       A provision in any written contract * * * to settle by arbitration a controversy that
       subsequently arises out of the contract, or out of the refusal to perform the whole
       or any part of the contract, or any agreement in writing between two or more
       persons to submit to arbitration any controversy existing between them at the time
       of the agreement to submit, or arising after the agreement to submit, from a
       relationship then existing between them or that they simultaneously create, shall
       be valid, irrevocable, and enforceable, except upon grounds that exist at law or in
       equity for the revocation of any contract.
                                                 3

       {¶8}    “As a matter of public policy, Ohio law strongly favors arbitration as a means to

settle disputes.” Bozich v. Kozusko, 9th Dist. Lorain No. 09CA009604, 2009-Ohio-6908, ¶ 8,

citing Schaefer v. Allstate Ins. Co., 63 Ohio St.3d 708, 711-712 (1992). Where the parties to a

contract have agreed to an arbitration clause, courts generally view that clause as the parties’

agreement to settle any contractual disputes that fall within the scope of the clause by arbitration,

as opposed to litigation.     Williams v. Aetna Fin. Co., 83 Ohio St.3d 464, 471 (1998).

Consequently, “unless it may be said with positive assurance that the subject arbitration clause is

not susceptible to an interpretation that covers the asserted dispute[,]” the trial court should stay

the proceedings. Neubrander v. Dean Witter Reynolds, Inc., 81 Ohio App.3d 308, 311 (9th

Dist.1992). In determining whether a dispute falls within an arbitration provision, “[d]oubts

should be resolved in favor of coverage.” Academy of Medicine of Cincinnati v. Aetna Health,

Inc., 108 Ohio St.3d 185, 2006-Ohio-657, ¶ 14. Accordingly, if a dispute even arguably falls

within the arbitration provision, the trial court must stay proceedings until the arbitration has

been completed. Featherstone v. Merrill Lynch, Pierce, Fenner Smith, Inc., 9th Dist. Wayne No.

04CA0037, 2004-Ohio-5953, ¶ 5.

       {¶9}    When a court is called to determine whether a dispute falls within an arbitration

provision, it must “ask if an action could be maintained without reference to the contract or

relationship at issue.” Academy of Medicine of Cincinnati, at ¶ 24. However, “[a]rbitration is not

limited to claims alleging a breach of contract, and creative pleading of claims as something

other than contractual cannot overcome a broad arbitration provision.” Id. at ¶ 19.

       {¶10} Drees attached a portion of the construction and purchase agreement to the motion

to stay pending arbitration. Paragraph 18 of the agreement reads as follows:

       18. Arbitration and Disputes. * * * Any controversy, claim or other matter arising
       out of or relating to this agreement, or breach thereof, shall be resolved in
                                                  4

       accordance with the residential construction arbitration rules of the American
       Arbitration Association, and judgment upon the award rendered by the arbitrator
       may be entered in any court having jurisdiction thereof. The parties agree that the
       seller shall have the right to add its subcontractors and/or suppliers as parties to
       the arbitration. The parties further agree that the arbitration hearing shall be
       conducted either at the subject residence or the offices of the arbitrator, as
       determined by the arbitrator. The seller shall have the right, but not the
       obligation, to enter the residence at reasonable times prior to the arbitration
       hearing for purposes of conducting inspections and tests of the residence.
       Notwithstanding the above, arbitration shall not be required in connection with
       any controversy or claim in which the dollar amount in dispute does not exceed
       the jurisdictional limit of any small claims court having jurisdiction over the
       parties. In such event, either party shall have the right to resolve such controversy
       or claim by filing an action in such small claims court. Claims in excess of such
       jurisdictional limit shall be subject to arbitration as provided in this Paragraph 18.
       All such controversies, claims or other matters regarding construction shall be
       resolved (whether through arbitration or small claims court) in accordance with
       the Drees Company’s Limited Warranty Booklet which establishes the standard
       by which the seller’s performance in connection with construction matters shall
       be governed. * * *.

       {¶11} The Supreme Court of Ohio has recognized that “[a]n arbitration clause that

contains the phrase ‘any claim or controversy arising out of or relating to the agreement’ is

considered ‘the paradigm of a broad clause.’” Academy of Medicine of Cincinnati, at ¶ 18,

quoting Collins & Aikman Prods. Co. v. Bldg. Sys. Inc., 58 F.3d 16, 20 (2d Cir.1995). Here, the

arbitration provision must be considered a broad clause as it aims to cover any dispute arising

from the parties’ business relationship and does not contain language which limits its scope,

other than the small claims stipulation which is not at issue in this case.

       {¶12} A review of the complaint reveals that all of the Vargas’ claims stemmed from

their central allegation that they retained Drees to build a home, and that Drees failed to properly

install the sidewalk and driveway pursuant to their agreement. As noted above, “unless it may be

said with positive assurance that the subject arbitration clause is not susceptible to an

interpretation that covers the asserted dispute[,]” the trial court should stay the proceedings.

Neubrander, 81 Ohio App.3d at 311. While the Vargas did, in fact, couch certain claims in
                                                 5

terms of negligence, breach of implied warrant of suitability, and failure to comply with local

building codes, all of these claims stemmed from Drees’ performance of a contractual obligation,

namely the construction of the Vargas’ home. Thus, as all of the Vargas’ claims are “arising out

of or relating to” the construction agreement, they fall within the scope of the broad arbitration

provision contained in their agreement. It follows that the trial court erred in denying Drees’

motion for a stay pending arbitration.

       {¶13} The assignment of error is sustained.

                                                III.

       {¶14} The Drees Co.’s assignment of error is sustained. The judgment of the Lorain

County Court of Common Pleas is reversed and the cause remanded for further proceedings

consistent with this decision.

                                                                             Judgment reversed,
                                                                            and cause remanded.

       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.
                                           6

      Costs taxed to Appellees.

                                                DONNA J. CARR
                                                FOR THE COURT

MOORE, P. J.
HENSAL, J.
CONCUR.

APPEARANCES:

VICTORIA D. BARTO, Attorney at Law, for Appellant.

JOHN H. WEST, Attorney at Law, for Appellees.