Rockland County v. Primiano Construction Co., Inc., 51 N.Y.2d 1 (1980)
Courts decide whether parties agreed to arbitration, if a dispute falls within the agreement’s scope, and if conditions precedent to arbitration were met; procedural stipulations within arbitration are for the arbitrator.
Summary
Rockland County contracted with Primiano Construction for a building project. After completion, Primiano claimed delay damages due to the county’s breach and sought arbitration. The county sought to stay arbitration, arguing that the contract required initial referral to the architect and that the demand for arbitration was untimely. The Court of Appeals held that the claim for delay damages, asserted after project completion, didn’t require initial referral to the architect and that the arbitrator should resolve the timeliness issue. The court differentiated between conditions precedent to arbitration (for courts) and procedural rules within arbitration (for arbitrators).
Facts
Rockland County and Primiano Construction entered a contract for Primiano to construct a building. After the project’s substantial completion, Primiano claimed delay damages due to the County’s breach of contract. Primiano sought arbitration for its claim on September 20, 1978. The contract contained provisions for arbitration, with some disputes requiring initial referral to the architect.
Procedural History
The County sought a stay of arbitration; Primiano cross-moved to compel it. Special Term denied the stay and compelled arbitration, holding that referral to the architect wasn’t required and that timeliness was for the arbitrator. The Appellate Division reversed, granting the stay. The Court of Appeals then reversed the Appellate Division and reinstated the Special Term ruling, compelling arbitration and assigning the timeliness issue to the arbitrator.
Issue(s)
1. Whether Primiano’s claim for delay damages required initial referral to the architect as a condition precedent to arbitration under the contract.
2. Whether the timeliness of Primiano’s demand for arbitration was an issue for the court or the arbitrator to decide.
Holding
1. No, because claims asserted after substantial completion of the work do not fall within the scope of disputes requiring initial referral to the architect.
2. No, because the timeliness of the demand for arbitration is a procedural stipulation for the arbitrator, not a condition precedent for the court.
Court’s Reasoning
The Court distinguished between three threshold questions in arbitration disputes: (1) whether a valid agreement to arbitrate exists; (2) if so, whether the agreement was complied with; and (3) whether the claim would be time-barred in court. The first two are for judicial determination. The court stated, “It is for the courts to determine whether the parties agreed to submit their disputes to arbitration, if so, whether the particular dispute comes within the scope of their agreement, and finally whether there has been compliance with any condition precedent to access to the arbitration forum.”
Regarding the first issue, the court reviewed the contract’s provisions regarding the architect’s role, noting that the architect’s authority was focused on the operational phases of construction. Therefore, claims arising after substantial completion, like Primiano’s delay damages claim, did not require initial referral to the architect. The court emphasized that the architect’s duties primarily involved “general Administration of the Construction Contract” and ensuring the “Work is proceeding in accordance with the Contract Documents.”
Regarding the second issue, the court distinguished between conditions precedent to arbitration (decided by the court) and procedural stipulations within the arbitration process (decided by the arbitrator). The court noted, “Sharply to be distinguished from conditions precedent to arbitration are procedural stipulations that the parties may have laid down to be observed in the conduct of the arbitration proceeding itself — conditions in arbitration”. The timeliness of the demand was deemed a procedural matter for the arbitrator. The court emphasized that “the entire arbitration process is a creature of contract” and parties can explicitly designate requirements as conditions precedent or conditions within arbitration.