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VESPE CONTR. CO. v. ANVAN CORP.

July 24, 1975

VESPE CONTRACTING CO.
v.
ANVAN CORPORATION



The opinion of the court was delivered by: BECHTLE

 BECHTLE, District Judge.

 This is a diversity contract action in which defendant, Anvan Corporation ("Anvan"), has moved for an order staying all proceedings pending plaintiff's submission of its claim to arbitration. Plaintiff, Vespe Contracting Co. ("Vespe"), was the subcontractor engaged by Anvan to perform the concrete work for a Holiday Inn under construction in the University City area of Philadelphia, Pennsylvania. Anvan is the general contractor for that project.

 A brief history of the dispute between the parties will be helpful in understanding the action taken by this Court on the present motion. On March 3, 1974, Anvan and Vespe entered into a subcontract agreement concerning the aforementioned project. Anvan terminated this contract on February 20, 1975. Anvan then commenced an action against Vespe on February 24, 1975, alleging certain breaches of the contract between them and seeking a temporary restraining order to prevent Vespe from entering the job site. On that same day, without a hearing, this Court granted such a temporary restraining order. Vespe then filed a motion with this Court seeking a stay of Anvan's suit pending arbitration. This motion was never acted upon, however. On February 28, 1975, following a conference before the Court in chambers, Anvan withdrew its suit after informing Vespe that it would no longer be permitted on the job site and that Anvan would complete the job.

 Vespe then filed the instant action on February 28, 1975. Vespe seeks injunctive relief preventing Anvan from working, in any way, on those portions of the construction project upon which Vespe performed unless or until a fully itemized statement is provided showing the work that remained to be done as of the time of filing of the suit, as well as any repair work allegedly necessitated by Vespe's alleged contractual defaults. Additionally, Vespe seeks to have two representatives permitted on the job site to observe the completion of the work on its portion of the project. Vespe's underlying concern is that it will be charged for work it is not responsible for, or has already performed adequately, and that it will be unable to monitor the expenses which will be charged against it out of the "retainage" held by Anvan.

 Anvan was granted two extensions of time within which to plead to the complaint. During that period, on April 1, 1975, Anvan's original counsel withdrew from the case and its current counsel entered his appearance. On April 10, 1975, Anvan's new counsel filed the motion for a stay pending arbitration which is now before the Court. Claiming its original position concerning the propriety of arbitration was incorrect, Vespe now opposes this course of action on the grounds that the contract between the parties does not provide for arbitration and that, in any event, Anvan has waived its right to arbitration.

 Anvan contends that authority to stay this action is found in Section 3 of the United States Arbitration Act, 9 U.S.C.A. § 3. *fn1" In Bernhardt v. Polygraphic Company, 350 U.S. 198, 202, 100 L. Ed. 199, 76 S. Ct. 273 (1956), the Supreme Court held that the stay made available by Section 3 reaches only those contracts covered by Sections 1 and 2 of the Act -- namely, those involving maritime or interstate commerce transactions. The matter now before the Court is clearly not one in admiralty. Whether the contract between the parties evidenced a transaction involving interstate commerce is not easily resolved. Due to the sparse nature of the record before us, the Court is unwilling to make the initial factual determination necessary to establish that interstate commerce is involved here. Merritt-Chapman & Scott Corp. v. Pennsylvania Turnpike Commission, 387 F.2d 768, 772 (3d Cir. 1967); United States Fidelity & Guaranty Co. v. Bangor Area Joint School Authority, 355 F. Supp. 913, 916 (E.D.Pa. 1973).

 We need rely neither on the United States Arbitration Act nor the Pennsylvania Arbitration Act, 5 P.S. § 161 et seq.,2 however, in order to support a decision to grant a stay of proceedings pending arbitration. "Such a remedy is one which is within the inherent power of a court and does not require statutory authority." Merritt-Chapman, supra, 387 F.2d at 773. With our power to grant a stay thus acknowledged, we will now proceed to consider the appropriateness of such action in the instant case.

 A motion to compel arbitration presents a court with three basic questions to resolve: (1) whether there is an agreement to arbitrate; (2) whether there are arbitrable claims in issue; and (3) whether there has been a waiver of the right to arbitration. Bigge Crane & Rigging Co. v. Docutel Corporation, 371 F. Supp. 240, 243 (E.D.N.Y. 1973).

 Plaintiff conceded at oral argument on this motion that if a binding agreement to arbitrate exists between these parties, then the claims involved here are arbitrable. Plaintiff's position, however, is that there is no clause in the contract package between Vespe and Anvan which requires arbitration. Anvan contends that the General Conditions *fn3" and Supplementary General Conditions to the contract between it and the owner are incorporated into its subcontract with Vespe, and that the duty to arbitrate the present dispute arises out of those documents. Despite some troubling ambiguities in the contractual language, we hold that, under all the circumstances here, there is a binding agreement to arbitrate between these parties.

 There are two clauses of the subcontract agreement between Vespe and Anvan which, in this Court's view, are of particular importance in determining this issue. They appear in full in the margin. *fn4" There is clearly no specific clause in the subcontract agreement itself which requires the arbitration sought here. Vespe contends that the absence of such a clause, plus the omission from the schedule of explicitly incorporated "Subcontract Documents" of the General Conditions of the main owner-contractor contract, signifies that arbitration was not the intended method of dispute settlement between Vespe and Anvan. This Court believes, however, that Clause 8 of the subcontract is not determinative of the applicability of the General Conditions to these parties.

 We do not lightly dismiss the fact that the subcontract, which is a form agreement prepared by Anvan, fails to specifically incorporate any outside material other than the Subcontract Documents. However, the Court does not believe that this fact alone is enough to dispel the inference raised by Clause 4 of the subcontract that, since Vespe was required to perform, pay for and turn over the concrete work to Anvan "all in accordance with the General Conditions," the General Conditions were intended by the parties to be a part of their agreement. Accordingly, we ...


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