On Appeal from Superior Court of New Jersey, Chancery Division, Ocean County.
Lora, Antell and Pressler. The opinion of the court was delivered by Lora, P.J.A.D.
Diversified R.B. & T. Construction Co., Inc. (Diversified) appeals from a final judgment entered in the Chancery Division permanently enjoining and restraining it from arbitrating a claim against Brick Township Municipal Utilities Authority (BTMUA) for additional costs for realignment of an effluent line on a construction project because its demand for arbitration was filed out of time.
BTMUA and Diversified entered into a contract on March 22, 1976 for the construction of a pumping station. A dispute arose as to additional compensation which Diversified claimed it was owed as a result of alleged dewatering problems and misalignment of piping on the project site.
The contract, apparently due to its length, was not made an exhibit but certain clauses of the contract were before the trial court. Article III provides that such claims be submitted, in the first instance, to the engineer for his approval. Accordingly, Diversified, by letters dated April 24, 1978 and May 22, 1978, requested BTMUA's engineers, Fellows, Read and Weber (FRW), to pass on the aforesaid claims.
FRW, by letters dated May 1, 1978 and May 25, 1978, rejected Diversified's claims. On July 10, 1978 Diversified mailed a petition and a demand for arbitration to the American Arbitration Association (AAA), which had been designated by the contract for arbitration.
Article III further provides that either the owner or the contractor may demand arbitration with respect to any claim, dispute or other matter that has been referred to the engineer within 30 days of the engineer's written decision thereon. The trial judge found that the demand for arbitration had been
untimely made and that there was no issue of estoppel in light of the particular facts and circumstances of the case.
Diversified contended below, as it does on appeal, that the conduct of BTMUA amounted to a waiver of the 30 day contractual limitation period for arbitration; that BTMUA was estopped from raising the contractual provision as a defense and that the trial judge applied an incorrect standard in determining that there was no basis to invoke the equitable doctrine of estoppel.
In support of its position, Diversified asserts that it was in constant communication with BTMUA during the period from July 11, 1978, the date of the filing of the demand for arbitration, and September 12, 1978, the date upon which the arbitrators first convened. It also argues that the letter received from the engineer allegedly rejecting Diversified's claims was vague and ambiguous and did not constitute a rejection of the claim here involved. Furthermore, Diversified states that BTMUA's failure to review the contract during that period and its asserting the clause as a defense nearly a month later when it became aware of the 30-day clause in the contract, resulted in Diversified's expending engineering fees in preparation for the arbitration hearing.
The threshold question is whether the engineer's letter was an unconditional and unequivocal rejection of Diversified's claim, thereby triggering the 30-day contractual limitation period. The trial judge had no difficulty in finding the May 25, 1978 letter unambiguous and on its face a written final determination of the claim. We agree and perceive no merit in Diversified's contention that paragraph three of the letter, which stated "a settlement of this claim along the lines of the attached estimate is recommended," converted what is otherwise a final decision into a mere proposal. Obviously, the recommendation referred only to the manner ...