Court Opinion

ID: 5751800
Source: CourtListenerOpinion
Date Created: 2022-01-12 16:58:29.426008+00
Date Added: 2024-06-11T08:41:18.340226
License: Public Domain

Eager, J. (dissenting).
I agree that the architectural notes, including the arbitration clause therein, were effectively incorporated into and became a part of the contract between the parties for the alterations to the building. The clause, however, is not in' the nature of an unlimited clause purporting to embrace all disputes arising in connection with the alteration work. The provisions here are merely for the arbitration of “ any disputes on value of required work”.
The arbitration clause, construed in light of the provisions of the contract as a whole, means that any dispute between the parties as to the “value” of the work “required” by the terms of the contract is subject to arbitration. To this extent, the clause has meaning notwithstanding that the contract provides for a fixed price for the specified labor and materials. A dispute with respect to the value of the contract work may very well be a material issue for determination in connection with a claim for a balance due under the contract or by either party for a breach of the contract. To this extent, the arbitration clause here is unambiguous and should be given full effect.
The contractor’s claim here is for $9,253 as the alleged balance of the contract price and also for the sum of $61,981.42 as the agreed price and reasonable value of alleged extra work and materials. Instead of seeking an arbitration limited to the “value of the required work” as provided by the agreement of the parties, the owners demand arbitration of the “value of all work performed under such contract including the value of any alleged extra work, as well as the value of work required to be performed but not performed.”
To enlarge the agreement between the parties to encompass disputes as to the “work performed” and as to “the value of any alleged extra work” is to extend the scope of the agreement “ by construction or implication ” and this is forbidden. (Matter of Rosenbaum [Amer. Sur. Co., N. Y.], 11 N Y 2d 310, 314.) It is a “ special rule that the courts have laid down with respect to arbitration clauses, namely, that the agreement to arbitrate must be direct and the intention made clear, without implication, inveiglement or subtlety ”. (Matter of Doughbdy Ind. [Pantasote Co.], 17 A D 2d 216, 218, 219, citing cases.) “ A party is not to be compelled to surrender his right to resort to the *678courts, with all of their safeguards, unless he has agreed in writing to do so * * * by clear language (Matter of Riverdale Fabrics Corp. [Tillinghast-Stiles Co.], 306 N. Y. 288, 289; see, also, Matter of Lehman, v. Ostrovsky, 264 N. Y. 130, 132.)
The parties did not agree that any and all disputes arising under the contract were to be arbitrated. They did not agree that the matter of performance or nonperformance by the contractor was to be submitted to arbitration, nor did they agree that disputes with respect to extra work were to be arbitrated. Their agreement was limited to a provision for the arbitration of any dispute between them as to the “value” of the contract work.
Claims for extra work, if any, would not arise out of a contract containing the arbitration clause. The contract detailed the labor and materials to be performed thereunder and contained no provision for extra work. Any claim for extra work would necessarily depend upon the existence of a subsequent understanding or contract, express or implied. It is clear that the arbitration clause in the original contract, construable as a clause limited to an arbitration of disputes arising with respect to the “value” of required work thereunder, may not be extended to embrace disputes arising under the subsequent contracts for extra work.
The order appealed from should be reversed and vacated, without prejudice to the institution of the arbitration of a dispute between the parties, if any, as to the value of the required work under the contract; and, in the event such an arbitration is instituted, without prejudice to such application to the court as may be proper in connection therewith.
Valente, Stevens and Bastow, JJ., concur in decision; Eager, J., dissents in opinion in which Breitel, J. P., concurs.
Order, entered on April 15, 1964, staying prosecution of the action and directing arbitration, affirmed, with $30 costs and disbursements to respondents.