Partner Gary Strong and Associate Kevin Riexinger Secure Court Ruling in Supreme Court for Westchester County, NY Enforcing Arbitration Provision in a Construction Contract
Partner Gary Strong and Associate Kevin Riexinger recently secured a favorable court ruling enforcing the arbitration provision in their client’s construction contracts. The client, a framing contractor, completed its work at the subject construction project but were not paid in full by the general contractor who retained him. Their contracts contained a provision whereby the parties must demand arbitration or bring litigation as to any disputes within one year of their last day of work. This clause, negotiated amongst the parties, significantly shortened the framing contractor’s time to file litigation or arbitration. The framing contractor remained in contact with the hiring entity, which continued to represent that additional work must be done before final payment would be issued.
The framing contractor returned to the site, as asked, to analyze the alleged need for remediation but were never met by any representative from the party that hired them. Emails and phone calls continued between the parties but final payment was never made. The framing contractor eventually made an arbitration demand within the terms of its contract. The general contractor filed a petition in the Supreme Court for Westchester County seeking a permanent stay claiming the arbitration demand was not made within one year of the framing contractor’s final day of work at the subject project.
The Supreme Court held that there was a question of fact as to what could be considered the framing contractor’s last day of work and if the demand was timely. The Court also held that a question of fact existed as to whether the general contractor should be equitably estopped from raising the statute of limitations defense based on its misrepresentations of its intention to pay, upon which the framing contractors relied, lulling them into delaying their arbitration demand. Click here for a copy of the Decision and Order.