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Architectural Innovations, Inc. v. D’Urso

303 N.J. Super. 133, 696 A.2d 91 (App. Div. 1997)

CONTRACTORS; WARRANTIES; ARBITRATION—Homeowners and their homebuilder resolved a dispute over completion of the house through contractually mandated arbitration. Later, the homeowners demanded another arbitration under the Home Buyer’s Warranty. The first arbitration did not preclude the subsequent arbitration.

A homeowner contracted for construction of a house. As construction was nearly complete, the homeowner contended it was not done in a satisfactory manner, and refused to make the final payment. The construction company filed a demand for arbitration. The arbitrator ruled in favor of the construction company. Homeowner then filed a demand for arbitration under the Home Buyers Warranty, addressing issues not considered in the earlier arbitration and other issues claimed to have been discovered after the first arbitration hearing. The arbitrator ruled that the construction company did not have to pay monetary damages but had to repair the defects. Shortly thereafter, the construction company filed suit to confirm the first judgment and temporarily stay the second. Homeowner had the burden of demonstrating that the itemized issues in the second arbitration were not included as part of the first hearing. The motion judge ruled for homeowner.

Construction company alleged the “new claims” were barred by the express terms of the first arbitration. The Appellate Division stated that the motion judge correctly ruled that the second arbitration was not barred by the first. The Home Buyers Warranty only covers certain portions of the construction, therefore, the two arbitrations were capable of separation. Additionally, it seemed to the Court that some items were specifically left out of the first arbitration for decision under a separate proceeding. The Court held that the homeowner should not have been forced to present all claims in the original arbitration because it was conducted within the warranty period, and any claims under the Home Buyers Warranty would have been pre-mature.


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