IN RE: Application of CONSOLIDATED EDISON COMPANY OF NEW YORK

Reset A A Font size: Print

Supreme Court, Appellate Division, First Department, New York.

IN RE: Application of CONSOLIDATED EDISON COMPANY OF NEW YORK, INC., Petitioner-Appellant, For an Order, etc., v. CRUZ CONSTRUCTION CORP., Respondent-Respondent.

Decided: February 23, 1999

ELLERIN, J.P., NARDELLI, WALLACH and RUBIN, JJ. Andrew J. Czerepak, for petitioner-appellant. Howard Blum, for respondent-respondent.

Order, Supreme Court, New York County (Edward Lehner, J.), entered September 25, 1998, which granted petitioner's motion for reargument but adhered to the prior determination, unanimously reversed, on the law, without costs, the cross petition denied, and the petition to stay arbitration granted.   Appeal from judgment, same court and Justice, entered June 30, 1998, which denied the petition to stay arbitration and granted respondent's cross petition to compel arbitration, unanimously dismissed, without costs, as subsumed in the subsequent order.

The contract provided, in Addendum No. 6, for arbitration on remuneration for “extra utility work” only where the contractor's claim for such remuneration is first submitted to the utility company for review and consideration, and the parties are unable to reach a settlement within 30 days thereafter.   Assuming respondent's generalized claim was arbitrable in the first place, under the limited arbitration provision, respondent never did comply with that contractual condition precedent to filing a claim for arbitration.   Respondent's letter to the Resident Engineer (with a copy to petitioner), outlining the extra work, did not satisfy that requirement.

Rather than addressing the specific condition precedent, the IAS court relied upon the “strong presumption in favor of arbitrability of disputes in the commercial sector,” the “reasonable relationship between the subject matter of the dispute and the general subject matter of the underlying contract,” and the breadth of the arbitration clause sufficient to encompass the subject claim.   The court erred in construing the arbitration clause broadly.   This was an arbitration clause narrowly limited in scope, with respect to both claim and remedy.   The claim was limited to the contractor's costs and expenses incurred due to extra utility work.   The remedy was limited to the condition precedent, namely, submission to arbitration “if, within 30 days after submission of contractor's claim to the affected Utility Company, the Utility Company and the contractor are unable to settle the claim”.   Failure to comply with the condition precedent foreclosed respondent's access to arbitration (Matter of Asphalt Green [Herbert Constr. Co.], 210 A.D.2d 21, 618 N.Y.S.2d 810).

MEMORANDUM DECISION.