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Commerce Bank, N.A. v. DiMaria Const.

April 17, 1997

COMMERCE BANK, N.A., PLAINTIFF-APPELLANT-CROSS-RESPONDENT,
v.
DIMARIA CONSTRUCTION, INC., DEFENDANT-RESPONDENT-CROSS-APPELLANT. COMMERCE BANK, N.A., PLAINTIFF-APPELLANT-CROSS-RESPONDENT, V. DIMARIA CONSTRUCTION, INC., DEFENDANT-RESPONDENT-CROSS-APPELLANT.



A-2981-95T5 - On appeal from Superior Court of New Jersey, Law Division, Camden County. A-3576-95T5 - On appeal from Superior Court of New Jersey, Law Division, Burlington County.

Approved for Publication April 17, 1997.

Before Judges Long, Skillman and Cuff. The opinion of the court was delivered by Skillman, J.A.D.

The opinion of the court was delivered by: Skillman

The opinion of the court was delivered by SKILLMAN, J.A.D.

This appeal requires us to consider the principles which govern the determination of whether a court or arbitrators should decide questions regarding the timeliness of a demand for arbitration or the satisfaction of other conditions of arbitration.

In December of 1993, defendant DiMaria Construction, Inc. (DiMaria) entered into two contracts with plaintiff Commerce Bank, N.A. (Commerce) to supervise and manage the construction of interior offices and the installation of heating and air conditioning units in Commerce's commercial office building in Mount Laurel Township. Each contract included a schedule for the completion of construction. On April 14, 1994, Commerce sent a notice to DiMaria terminating both contracts on the ground that DiMaria had breached the interior office contract by failing to complete construction in a timely manner.

During the following months, the parties exchanged correspondence regarding the termination of the contracts. When the parties were unable to settle their dispute, DiMaria submitted a demand for arbitration on October 21, 1994. Commerce then filed the first of the two actions involved in this appeal, seeking to enjoin the arbitration on the ground that DiMaria had failed to satisfy two conditions precedent to the right to arbitrate, namely, filing a claim within twenty-one days of the "occurrence" giving rise to its claim and obtaining a decision from the project architect. DiMaria responded by filing a motion to dismiss and a cross-motion for counsel fees. The trial court denied Commerce's application to enjoin the arbitration and dismissed the counts of the complaint implicated in this appeal. *fn1 The trial court concluded that under the arbitration clause contained in both contracts the arbitrators had the responsibility to pass upon Commerce's contention that DiMaria failed to satisfy the conditions precedent to arbitration. The court also denied DiMaria's application for counsel fees.

The arbitrators conducted hearings on twenty-two days over a six month period. Following the testimony of eleven witnesses and the introduction of more than 230 exhibits, the arbitrators rendered a decision, which concluded:

A. It is the opinion of the Tribunal that this contract was ended in a wrongful manner by Commerce Bank, N.A., ... As a result of this wrongful dismissal the Contractor of record "Di Maria Construction, Inc.", ... was harmed in a number of ways. Primarily they were placed in a position where other contracts were unavailable due to a lack of bonding ability and a lack of funds necessary to purchase material. Other harms were the loss of faith by subcontractors and material suppliers and the damage to the Corporate name relative to non-payment and suits against [Di Maria] by others related to this project.

B. This Tribunal has found that conditions precedent were not a factor in this case and therefore did not prevent the case from proceeding to a decision.

Accordingly, the arbitrators awarded DiMaria $205,270 for the interior office and HVAC contracts, $49,650 "related to all other contractual topics" and $69,554.66 for counsel fees.

Following the award, Commerce filed its second action, which sought to vacate the arbitration award on the ground that it was the product of "fraud, corruption or similar wrongdoing," and DiMaria filed a counterclaim seeking confirmation. The trial court rejected Commerce's challenge and confirmed the arbitration award. The court also denied DiMaria's application for counsel fees.

Commerce filed separate appeals from the dismissal of its actions seeking to enjoin the arbitration hearing and to vacate the arbitration award. DiMaria filed cross appeals from the denial of its ...


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