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Atwood Health Props., LLC v. Calson Constr. Co.

Supreme Court of Rhode Island

March 17, 2015

Atwood Health Properties, LLC
v.
Calson Construction Company
v.
Gem Plumbing & Heating Co., Inc

Page 312

Providence County Superior Court. (PM 12-4203). Associate Justice William E. Carnes, Jr.

For Plaintiff: David D. Barricelli, Esq.

For Defendants: Daryl E. Dayian, Esq., Kevin M. Daley, Esq.

Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.

OPINION

Page 313

Goldberg, Justice

The defendant, Calson Construction Company (Calson), and the third-party defendant, Gem Plumbing & Heating Co., Inc. (GEM), (collectively, defendants), appeal a Superior Court order confirming an arbitration award in favor of the plaintiff, Atwood Health Properties, LLC (Atwood or plaintiff). This case came before the Supreme Court for oral argument pursuant to an order directing the parties to show cause why the issues raised in this appeal should not summarily be decided. After hearing the arguments of the parties and examining the record and memoranda that were filed in this case, we are of the opinion that cause has not been shown, and we summarily affirm the order confirming the arbitration award.

Facts and Travel

In December 1999, Atwood contracted with Calson to construct a three-story medical office building in Johnston, Rhode Island. Calson engaged GEM, as a subcontractor, to design and install a heating, ventilation, and air conditioning (HVAC) system in accordance with specifications provided by the project architect, Robinson Baretta Corporation (RBC). The project was completed in January of 2001, and Calson issued a one-year warranty, as required by its contract with Atwood. Thereafter, Atwood experienced compressor failures at the newly constructed facility.[1] For several years, the manufacturer replaced the compressors under its warranty with GEM. However, in 2005, the manufacturer refused to provide more replacement compressors, and the compressors continued to improperly function.

On January 23, 2006, Atwood sold the building to Atwood Medical Properties, LLC (AMP). However, after the compressors in the HVAC system continued to fail, AMP filed suit against Atwood, alleging that Atwood had misrepresented the condition of the HVAC system. Atwood agreed to pay for a new HVAC system and, in turn, initiated arbitration proceedings against Calson to recover the cost of the new HVAC system. Calson consequently initiated a separate arbitration proceeding against GEM, for indemnification in accordance with its contract with GEM. The two proceedings subsequently were consolidated.[2]

The arbitration proceeding included not only witness testimony but also more than 500 pages of exhibits. The arbitrator issued an " Interim Award of Arbitrator[,]" which was later affirmed and incorporated in a " Final Award of Arbitrator" (arbitration award). The arbitration award declared that Calson breached its contract with Atwood, " in that it designed and built, through subcontractor GEM, an HVAC system that experienced repeated compressor failures[.]" The arbitration award also found that " GEM breached its contract with Calson in that it designed and

Page 314

built the defective system." Accordingly, the arbitrator concluded that Calson should pay Atwood $358,223.42 on or before August 1, 2012 and that GEM should pay Calson that ...


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