No. 52-434
I N TEE SUPREME COURT OF THE STATE OF M N A A
O T N
1983
A E PLCJ;I.IBING& HEATING, I N C .
C ,
P l a i n t i f f , a n d Respondent,
HELENA FLATS SCHOOL DISTRICT 1 5 ,
a p o l i t i c a l subdivision of Flathead
County, a n d STEWART & JANES, g e n e r a l
contractors,
Defendants and Respondent,:,
W. C. SIMONS & ASSOCIATES,
Third-Party Defendant
and A p p e l l a n t .
Appeal from: D i s t r i c t C o u r t of t h e E l e v e n t h J u d i c i a l D i s t r i c t ,
I n a n d f o r t h e County o f F l a t h e a d ,
The H o n o r a b l e R o b e r t C . S y k e s , J u d g e p r e s i d i n g .
Counsel o f Record:
For Appellant:
Warden, C h r i s t i a n s e n , J o h n s o n & B e r g ; S t e v e B e r g ,
K a l i s p e l l , Montana
For Respondent:
T,ed 0, Lympus, Couhby A t k o r n & y , R a l i $ p e l l , Montqna
Montana (Lane B e n n e t t , D e p u t y )
Thomas Q. J o h n s o n , H e l e n a , Montana
W i l l i a m Evan J o n e s , M i s s o u l a , Montana
R i c h a r d DeJana, K a l i s p e l l , Montana
S u b m i t t e d on B r i e f s : March 3 , 1 9 3 3
Decided: Way 12, 1 9 8 3
Filed: ;. .:, 1? 1983
d
Mr. Justice John C. Sheehy delivered the Opinion of the
Court.
This is an appeal from a judgment issued by the District
Court of the Eleventh Judicial. District, Flathead County,
ordering in part that the third-party defendant, Simons and
Associates (Simons) to pay the defendant, Helena Flats School
District 15 (Helena Flats) $1,806.49 for a debt incurred in
the construction of a school building. We affirm the
judgment of the District Court in all respects.
Helena Flats received a federal grant for expansion and
remodeling of the Helena Flats elementary school. The school
district contracted with Simons for architectural, planning
and supervisory services. Simons provided all the contract
documents and design specifications. Included within the
plans and specifications and contracts for the project were
requirements for a well and water system.
Defendant Stewart and Janes, was selected as the general
contractor. Plaintiff Ace Plumbing & Heating, Inc. (Ace) was
selected by Stewart & Janes as mechanical subcontractor. Ace
subcontracted the drilling of a water well to OIKeefe
drilling.
On August 25, 1978, Helena Flats and Simons entered into
a supplemental agreement. This agreement provided that
Simons was responsible for "insuring" completion of the
project. This obligation included "insuring" that the
contractors performed in accordance with the contract
documents. This agreement also increased Simons' fee.
In the summer of 1978 problems developed in the water
system. Sand was being pumped into the tanks and lines
rendering the water unusable for drinking purposes and
damaging and clogging the fixtures. The cause of the problem
was disputed by the parties.
Simons claims the well was improperly drilled. He sent
repeated requests to the general contractor suggesting the
general contractor require the subcontractors to comply with
the specifications, and provide an additional screen for the
sand.
The school district claimed the problem was Simons'
faulty design. On February 13, 1979, the school district
decided to ask Ace to correct the plumbing. Thereafter, Ace
installed five extra tanks and a cut-off valve at a cost of
$1,806.49. The problem was corrected. Ace sent a bill to
the school district, the school district refused to pay.
Ace filed this action against the school district and
Stewart and Janes seeking payment. The school district filed
a third-party complaint against Simons for the amount claimed
by Ace. A non-jury trial was had on the third-party
complaint. The District Court held against Simons and for
the school district. The District Court found that the
storage system, as designed, was inadequate to assure proper
recycling and by reason of the recycling system, continued
turbidity in the well itself caused excessive sand to
permeate the entire system. The District Court further found
that the school board discussed the problem with the
architect and general contractor many times.
The District Court concluded that by reason of the
contract, Simons failed to take action that would resolve the
problem and that any inadequacy in the specifications was the
responsibility of the architect to the school board. The
District Court ordered Simons to pay the school board the
amount paid to Ace for installation of the tanks and other
parts. Simons appeals.
The issues presented for review are:
1. Whether it is mandatory to invoke a sta.ndardized
arbitration clause in an architect's service contract.
2. Who is responsible for payment to Ace for the
subsequent modification of the water system.
3. Whether the ten percent contingency fund provided in
the contract should be used to pay the debt.
The first question is whether Simons can now claim that
since the school district did not arbitrate they cannot now
seek reimbursement for the payment to Ace. It is well
settled in Montana that when there are issues of law or mixed
issues of law and fact, arbitration is not mandatory without
the consent of the parties involved. In this case, the
underlying questions to be resolved by the District Court
were: Was the architect negligent in his workmanship and
inspection of the building? Does liability attach if the
plans and specifications of the architect were properly
followed? Who is responsible for payment to Simons? These
are questions of law and mixed questions of law an.d fact.
Section 28-2-708, MCA, provides:
"Restraints upon legal proceedings void. Every
stipulation or condition in a contract by which any
party thereto is restricted from enforcing his
rights under the contract by the usual proceedings
in the ordinary tribunals or which limits the time
within which he may thus enforce his rights is
void. "
This Court has held that contract provisions which
require parties to submit future d.isputes as to questions of
law or mixed questions of law and fact are void under this
section. Palmer Steel Structures v. Westech, Inc. (1978),
178 Mont. 347, 350, 584 P.2d 152, 154. In this case, neither
party consented to arbitrate the dispute. Without the
consent of the parties the clause was unenforceable.
Furthermore, the defense of the arbitration provision of
the contract was not raised by Simons in his answer and
third-party complaint. The right to raise enforcement of the
arbitration clause may be waived by failure to assert it in a
timely manner. If a party fails to raise the right to
arbitrate in his pleadings, he waives his right. 5 Am.Jur.
Arbitration and Award S 51, at 556, 557. In this case,
Simons did not raise the issue of arbitration until much
later in the proceedings.
For these reasons Simons is precluded from claiming that
the dispute should have been submitted to arbitration.
The second issue is who is responsible for payment for
the construction. and modification of the water system.
The District Court found that: "The specifications
submitted pertaining to the drilling of the well, the
development of the water supply, storage and water system,
were inadequate; and were not in sufficient detail compared
to specifications on other matters relating to said project."
There was testimony presented at trial to show that the
plans and specifications were insufficient, thereby rendering
the system inoperative. Tom Smith, an expert in the field of
well drilling, testified that the system was installed as
provided in the plans and specifications and that this system
was inadequate. He further testified that he felt the
problem was apparent from the outset of the project. Simons
testified that the tanks and pump were installed according to
the architect's design.
On review, this Court must determine whether there is
sufficient evidence in the record to sustain the findings of
the District Court. Only when the findings of the District
Court are clearly erroneous will they be set aside. Rule
52 (a), M.R.Civ.P. ; McConnell v. Dempster (1982), Mont .
In the present case there was sufficient evidence to
support the findings of the District Court that the
specifications of the architect with regard to the water
supply, storage and water system were inadequate.
The contra.ctor is not responsible for errors or defects
in the plans and is not liable, absent negligence on his
part, where the owner's plans and specifications prove
defective. Sandkay Construction Co. v. State Highway C~mm'n.
(1965), 145 Mont. 180, 188-189, 399 P.2d 1002, 1007. In that
case the State was found responsible for the defects in the
plans and specifications as the owner/architect. In the
present case the District Court found that:
"Ordinarily the drilling of a well, development of
same and establishment of water supply is not
considered by contractors and the construction
industry as part of any expansion, remodeling and
addition project. However, it was required as such
by reason of the EDA monies which included same.
"By reason of said requirement, the Third-Party
Defendant, W. C. Simons & Associates assumed the
same responsibilities and duties as the architect
for the project as it related to all other
specifications, performances, etc. for
construction, addition and remodeling."
Simons testified that well systems are not normally
included in the architect's contract but that this was one of
the requirements necessary to obtain an EDA grant. William
Janes, of Stewart and Janes also testified that the water
well and water system not usually included in the architect's
plans and specifications was included in this contract.
Given the terms of the original contract, the
supplemental agreement and the testimony presented there was
sufficient evidence presented to uphold. the findings of the
District Court that Simons was responsible for the
performance of the architectural duties which were found to
be deficient.
When Simons directed the general contractor to remedy
the problem, the plans were not sufficiently detailed to
inform the general contractor of what changes were necessary.
As a result, the school district was forced to hire Ace to
remedy the problem in accordance with the advice of Tom
Smith. Simons argues that he informed Stewart and Janes that
they had to comply with state, federal and local laws
requiring potable water. He argues that these laws were
incorporated into the contract and were therefore binding on
Stewart and Janes without further direction from him.
In Sandkay, the State argued that the provisions of the
"Standard Specifications" were incorporated by reference into
the construction contra-ct. The "Sta-ndard Specifications"
consisted of a printed book containing 502 pages. This Court
agreed with the District Court:
"That the provisions of the Standard
Specifications ... as part of said contract were
intended by both parties and can only be construed
to allow the Project Engineer to make those normal
and anticipated changes in the plans and drawings
required by the exigencies of ordinary and
anticipated highway construction and were not
intended by the parties and cannot be construed to
apply to conditions which are abnormal,
unanticipated and substantially different from
those shown in the contract plans and drawaings, or
to authorize or allow defendant to require
different and more difficult excavation without
additional compensation." 145 Mont. at 187.
Simons argues that Sandkay does not apply in this case
because the condition was not abnormal, unanticipated or
substantially different from those in the contract plans and
drawings. The remedy in this case was the installation of
several new tanks and other parts at a cost of $1,806.49.
Sand in the water system does not appear to be a normal or an
anticipated condition. Installation of additional tanks and
other parts does not appear to be normal or anticipated.
Therefore the assertion that the rule in Sandkay does not
apply is without merit.
The third issue concerns the application of the EDA
contingency fund. Simons argues that the 10 percent
contingency fund, required as a condition to federal funding,
should be used to pay for the subsequent installment of the
new tanks and other parts. The owner/architect contract
provides :
"When a fixed limit of Construction Cost is
established as a condition of this Agreement, it
shall be in writing signed by the parties and shall
include a bidding contingency of ten percent unless
another amount is agreed upon in writing. When
such a fixed limit is established, the Architect
shall be permitted to determine what materials,
equipment, component systems and types of
construction are to be included in the Contract
Documents, and to make reasonable adjustments in
the scope of the Project to bring it within the
fixed limit. The architect may also include in the
Contract Documents alternate bids to adjust the
Construction Cost to the fixed limit."
Since Simon did not make the specific order to install
the additional tanks and other parts and was uncooperative in
his attempt to remedy the situation he cannot avail himself
of the benefits of the contingency fund. The contract
specifically provides that the architect may require the
money in the fund be used to include contingencies. However,
it was the school district that hired Ace to remedy the
problem. It did so in accordance with the recommendation of
Tom Smith to insure normal operation the facility.
The judgment of the District Court is affirmed in all
respects.
'
o
We Concur:
d Justice