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ARCHITECT'S DECISION NOT 'FINAL' UNLESS CONTRACT EXPLICITLY SAYS SO

Thursday, November 15, 2012 02:44 am

 

Arbitration

Neighbors Constr. Co., Inc. v. Woodland Park at Soldier Creek, LLC, 2012 Kan. App. Lexis 82 (Aug. 3, 2012)

A trial court confirmed an arbitration award of nearly $1.3 million in favor of a contractor for an owner's nonpayment. An appellate court would not vacate that ruling despite the owner's insistence that the arbitrator failed to give proper deference to the architect's conclusive authority over payment issues.

Woodland Park at Soldier Creek, LLC (Woodland) hired general contractor Neighbors Construction Co., Inc. (Neighbors) to build a multi-family housing project in Topeka, Kansas. During the work, Woodland allegedly short-paid a progress payment by $200,000, and Neighbors threatened to stop work until it received the full amount. Woodland submitted the disputed payment request to the project architect for review, and the architect rescinded its certification of the $200,000. Neighbors then filed a demand for arbitration on the matter. After the architect failed to certify the unpaid balance on a subsequent progress payment request, Neighbors gave Woodland notice of termination, as required under the contract, and the contract was terminated.

The arbitrator ruled that: (1) Woodland had breached the contract by its nonpayment of $200,000, and (2) because it had completed the project, Neighbors was entitled to recover the balance of the adjusted contract sum less the amount it would have cost Neigh [...]

 
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