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Zervos v. Freedman Properties

Decided: December 14, 1987.

GEORGE ZERVOS, PLAINTIFF,
v.
FREEDMAN PROPERTIES, LTD., A LIMITED PARTNERSHIP, DEFENDANT



Wells, J.s.c.

Wells

This is an action to confirm an award of arbitrators. N.J.S.A. 2A:24-1 et seq. The facts are as follows.

On April 30, 1984 plaintiff, George Zervos, entered into a contract with defendant, Freedman Properties, Ltd., to construct a commercial building. Paragraph 7.9.1 of the agreement provided that any disputes relating to the contract "shall be decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association (AAA) then obtaining unless the parties mutually agree otherwise."

A dispute did arise between the parties which proceeded to arbitration. Hearings were held in late October 1986 and on May 12, 1987. At the last hearing the arbitrators set June 1, 1987 as the date for receipt of briefs and either asked for leave to hold executive sessions thereafter or simply told counsel they were going to do so. By letter dated July 28, 1987 Tom Cutrone, AAA Tribunal Administrator, advised the parties that the hearings had been declared closed on July 16, 1987 and that "pursuant to the Rules, the arbitrators will have 30 days from that date, or until August 15, 1987 within which to render an award." The award, rendered in favor of Zervos in the amount of $67,087, was signed by each of the three arbitrators on August 12, 13 and 17, 1987 respectively. By letter dated August 28, 1987 Gerald J. Muller, attorney for Freedman Properties, Ltd. asked Cutrone when the award would be submitted. By letter dated September 14, 1987, Muller advised Cutrone that he had received the award on August 31, 1987 and asserted for the first time that it was invalid since it was

entered subsequent to the time limit prescribed by the construction industry association rules of the AAA.

On October 1, 1987 Zervos filed a verified complaint and order to show cause why the award should not be confirmed. In response, Freedman Properties, Ltd. moved to vacate the award on the ground that the arbitrators exceeded their authority by failing to make their award by July 1, 1987.

We must look to the applicable construction industry arbitration rules of the AAA for the resolution of this matter.

Rule 35 provides in pertinent part:

Rule 38 provides:

Any party who proceeds with the arbitration after knowledge that any provision or requirement of these Rules has not been complied with and who fails to state an objection thereto in writing, shall be deemed to have waived the right to object.

Rule 39 provides in pertinent part:

The parties may modify any period of time by mutual agreement. The AAA for good cause may extend any period of time established by these Rules, except the time for making the award. The AAA shall notify the parties of any such ...


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