Court Opinion

ID: 5751799
Source: CourtListenerOpinion
Date Created: 2022-01-12 16:58:29.42292+00
Date Added: 2024-06-11T08:41:18.339314
License: Public Domain

Memorandum: Order, entered on April 15, 1964, staying prosecution of the action and directing arbitration, affirmed, with '$30 costs and disbursements to respondents. Plaintiff-appellant, a general contractor, in March, 1962, entered into an agreement with defendants, the owners of premises on Seventh Avenue, Manhattan, for the alteration of the premises according to certain plans and specifications. The contract provided for an over-all payment of $91,403 for the proposed work and labor. After plaintiff had proceeded with the alterations, it filed a notice of mechanic’s lien against the subject premises in the sum of $71,234.42. The sum so claimed included $9,253 as a balance due under the contract and $61,981.42 as the reasonable price of extra work, which plaintiff alleged it had performed. Suit was commenced by plaintiff to recover the $71,234.42 and to foreclose the mechanic’s lien. It is that suit which has been enjoined. The contract between the parties provided: “ Any disputes on value of required work to be arbitrated”. Appellant contends (1) that no valid arbitration agreement was made, and (2) that, in any event, no portion of appellant’s claim in the action falls within the scope of the arbitration agreement. This court is unanimous in finding a valid arbitration agreement. The dissenting Justices, in' an opinion by Eager, J., would, however, give the arbitration clause a restrictive interpretation so as to exclude any dispute as to the claim for $61,981.42 for extra work. The majority of the court can see no warrant for such a sterile and limited construction of the agreement to arbitrate. It is true that the parties did not agree that any and all disputes arising under the contract were to be arbitrated. But taken in the context of the entire *677agreement, the language of the arbitration clause indicates clearly that any dispute as to the amount to be paid for work done in the alteration of the premises was to be settled by arbitration. A claim for extra work is so intimately connected with performance under the contract that it may not be said that it does not arise out of the contract containing the arbitration clause. The arbitration clause contains two elements, (1) required work and (2) the value thereof. That plaintiff denominates work it has done as “ extra work ” does not militate against a finding that it was “ required ” under the contract for alteration of the building. Whatever work was done was pursuant to the contract for the alterations. Unanticipated circumstances arising in the performance of these alteration contracts may necessarily call for work not specifically provided for but nevertheless “ required ” to be performed to complete the contemplated alteration. The word “required” includes not only the precise specifications but also the reasonable expectations of the parties for the proper completion of the intended alteration. Hence, the arbitration clause gives to arbitrators the right to determine initially whether the work was required, either by specification or reasonable extension of the intent of the parties. Only if the “ extra work ” for which plaintiff sues was “required” would plaintiff be entitled to recover. Following a determination of what was “required”, the arbitrators may then assess the value. The dispute between the parties therefore falls literally, as well as by proper construction, within the borders of the arbitration clause.