Review of Court Decisions - Dispute Resolution Journal - Vol. 61, No. 1

Where the trial court failed to provide a reason for denying a motion to compel arbitration, and that motion could have been denied for reasons other than the absence of a valid arbitration agreement, the case had to be remanded to the lower court for further findings of fact and law.

Walker Parking Consultants/Engineers (WPCE) contracted with the Raleigh-Durham Airport Authority (RDAA) to provide engineering services for the construction and renovation of an airport parking garage. WPCE contracted with HNTB Corp., the defendant, to provide design services for the project. Subsequently, the RDAA awarded Ellis-Don Construction (EDC) the general contract for the project. That contract and the contract between RDAA and WPCE contained the identical arbitration clause. The contract between WPCE and the defendant incorporated the same dispute resolution clause.

EDC alleged that it incurred significant unanticipated cost overruns due to circumstances beyond its control. It requested an equitable adjustment to RDAA. When the dispute could not be settled, EDC demanded arbitration. During the arbitration, RDAA brought a third-party claim against WPCE for indemnification. After several days of proceedings, EDC and the RDAA settled. As part of the settlement, EDC was assigned all of RDAA’s claims against other parties.

EDC, for itself and as the assignee of RDAA’s claims, filed a complaint against the defendant asserting negligence, breach of contract, and indemnification. The defendant moved to compel arbitration. Following oral argument and review of submissions, the trial court denied the motions to compel without making any factual findings with respect to whether an arbitration agreement existed between the parties. The defendant appealed contending that there were binding arbitration agreements in the contracts between EDC and RDAA and between the defendant and WPCE that are binding between EDC and the defendant.