On appeal from the Superior Court, Law Division, Bergen County.
Gaulkin, Gruccio and D'Annunzio. The opinion of the court was delivered by Gaulkin, J.A.D.
Plaintiff Highgate Development Corp. (Highgate) brought this action to confirm an arbitration award entered against defendants Michael and Marcia Kirsh. On motion for summary judgment, the Law Division judge dismissed the complaint by an order determining that
the American Arbitration Association was not conferred with jurisdiction over the parties Highgate Development Corp. and Michael and Marcia Kirsh, as a result of the residential construction contract between those parties, which provided for an alternate means of arbitration.
By a separate order, the judge awarded the Kirshs costs and attorney's fees totalling $900 pursuant to R. 4:58. Highgate appeals from both orders.
The dispute arises out of a May 1982 contract under which Highgate agreed to construct a one family residence for the Kirshs. Paragraph 18 of the printed form contract provided:
Any disagreement, dispute, controversy or claim rising out of or relating to this Contract or the breach thereof, shall be settled by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association. Judgment upon the award rendered by the Arbitrator[s] may be entered in any Court having jurisdiction thereof.
Attached to the printed contract was a three-page typewritten rider with 17 additional paragraphs. Paragraph 10 of the rider provided as follows:
Should any disputes arise respecting the interpretation or the meaning of the architect's plans, specifications or any of the terms contained in this Agreement, or with respect to the reasonable value of any extra work, etc., the parties agree to arrange for an immediate settlement conference with their respective attorneys, and make a sincere attempt to resolve their differences, so that construction can continue in an expeditious manner. In the event the parties and their respective attorneys are not able to amicably resolve the problem, the parties further agree that the dispute shall be referred for final determination to two (2) competent persons, as arbitrators, one of whom shall be employed by the Owners, and the other by the Contractor, and if the two arbitrators disagree, the dispute shall then be submitted to a referee or umpire to be named by the two arbitrators, whose decision shall be final and conclusive. Thereafter, the decision of the arbitrators will be binding as per Paragraph 18 of the Contract.
On May 12, 1983 Highgate filed a demand for arbitration with the American Arbitration Association (AAA) pursuant to paragraph 18. Highgate alleged that it had "duly performed substantially all of the construction work required of it," that a certificate of occupancy had been issued in December 1982 and that the Kirshs had taken occupancy. Highgate claimed $18,547.90 as the unpaid balance due on the base contract price and $37,307 for authorized extras.
Although the record before us is not complete, it appears that counsel for both parties submitted letter briefs to the AAA addressing the question whether arbitration should proceed under paragraph 18 of the contract or paragraph 10 of the rider. Counsel for the Kirshs argued that "there is no agreement to submit ...