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Wm. C. Blanchard Co. v. Beach Concrete Co.

Decided: November 29, 1972.


Herbert, J.s.c.


This case arises out of the construction of the new office building at Washington and James Streets in Newark which has now become the headquarters of the Blue Cross-Blue Shield organization. The owner of the property is defendant Washington Park Building, Inc. That corporation had a general contract with plaintiff Blanchard to construct the building in accordance with plans and specifications prepared by architects and engineers. Defendant Beach entered into a subcontract with plaintiff Blanchard by which Beach agreed to erect the structural concrete of the building. Blanchard also made a subcontract with Rockwin Corporation, Eastern Schokbeton Division, to manufacture prefabricated architectural concrete and to install it upon the building. Schokbeton furnished the prefabricated concrete members, but in turn subcontracted with C.S.T. Erection Co. East for their placement or erection.

A web of claims and cross-claims are involved in this situation. Much time and effort has been spent in an attempt to work out an arrangement whereby every claim of every contractor and subcontractor, as well as claims by and against the owner, would be presented in a single arbitration. The attempt has not succeeded and defendant Beach now moves for an order requiring that all issues between it and the plaintiff Blanchard be submitted to arbitration and that this action be stayed until the arbitration is completed. Plaintiff Blanchard has made a cross-motion for an order to consolidate all claims and defenses of Blanchard, Beach and Washington

Park in a single arbitration proceeding. Plaintiff has also moved for leave to join as an additional defendant here Rockwin Corporation, Eastern Schokbeton Division, this being for the purpose of making the new defendant a party to an order for consolidated arbitration if there should be such an order entered.

An added complication is a suit brought in the Law Division of the Superior Court, Union County, Docket No. L 388-72 entitled: C.S.T. Erection Co. East and Eastern Schokbeton, a Division of Rockwin Corporation, plaintiffs, v. Washington Park Building, Inc., Wm. Blanchard Co., Welton Becket & Associates and Hospital Service Plan of New Jersey, defendants. I have been informed that in this Law Division action Washington Park and Hospital Service Plan intend to serve a third-party complaint upon Beach Concrete Co., and that the Blanchard company also intends to serve a third-party complaint upon Beach.

At earlier stages of the case it has been argued for Beach that all claims should be disposed of in a single proceeding. Beach has an arbitration clause in the subcontract between it and Blanchard, the general contractor. That clause does not encompass claims which others have against Beach or which Beach may wish to assert against those others. There is no arbitration clause anywhere in the contract documents which by its terms makes the entire web of claims and cross-claims (or even the greater part of that web) subject to a single arbitration or subject to consolidation if a series of separate arbitrations should be demanded. Nor is there any provision in the contract documents providing that a court or courts may take over the entire controversy in all its parts in the event that a complex of claims cannot be arbitrated in a single proceeding.

Beach now departs from its former position that there should be a single proceeding to determine all parts of the complex controversy and presses its motion for an order requiring only arbitration of the claims between Beach and Blanchard. It takes the position that it is entitled to such

an order by reason of the arbitration clause in its subcontract with Blanchard and our statute (N.J.S.A. 2A:24-1 et seq.) relating to enforcement of contracts for arbitration. In taking that position Beach has to be willing to present elsewhere its claims against parties other than Blanchard and to defend elsewhere the claims others may have against it. Following such a course will subdivide the entire case and rather obviously will make it necessary to go over the same proofs and deal with substantially the same subject matter and issues more than once. There might also be conflicting decisions by different arbitration panels or between a court decision and an arbitrator's award. Though handling all of the claims and cross-claims in a single proceeding before a single tribunal would be far from simple, that procedure in my judgment would be simpler than the duplication of effort, the possible conflicts and the over-all complications of piece-by-piece solutions.

Thus, the questions presented are:

Is Beach entitled to an order for an arbitration of all Beach-Blanchard claims and only those claims?

Or -- Can a single consolidated arbitration of all claims between all parties be ordered?

Or -- Can all parties to the present action and to the action in the Law Division, Union County, be required to litigate in one of those actions every existing claim and defense?

The "General Conditions" of the prime contract between Washington Park Building, Inc. and plaintiff Blanchard contain the following paragraph relating to arbitration:

7.10.1 All claims, disputes and other matters in question arising out of, or relating to, this Contract or the breach thereof, except as set forth in Subparagraph 2.2.9 with respect to the Architect's decisions on matters relating to artistic effect, and except for claims which have been waived by the making or acceptance of final payment as provided by Subparagraphs 9.7.5 and 9.7.6, shall be decided by arbitration in accordance with the Construction Industry Arbitration Rules of the ...

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