Amarillo COA Holds Arbitration is Required in Construction Fee Dispute
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Texas’ Seventh District Court of Appeals in Amarillo has reversed a district court’s decision to deny arbitration in a construction fee dispute. In Journeyman Const. Inc. v. Scottco Mechanical Contractors, Inc., No. 07-13-00393-CV, (Tex. App. – Amarillo, Sept. 26, 2014), a general contractor, Journeyman, entered into a number of subcontracting agreements related to the restoration of the Potter County Courthouse. Each identical subcontract included an alternative dispute resolution provision. In January 2013, several of the subcontractors (“Scottco”) filed a lawsuit against Journeyman to recover payment for services rendered pursuant to their respective subcontracting agreements. Journeyman responded by filing a motion to abate the court proceedings and compel arbitration. After the district court denied Journeyman’s motion, the general contractor filed an interlocutory appeal with the Amarillo appeals court.
On appeal, Journeyman claimed the district court committed error when it denied the general contractor’s motion to compel arbitration. According to the company, the parties’ subcontracting agreement required that any and all disputes be arbitrated. In contrast, Scottco argued the arbitral provision included in the parties’ contract was unenforceable, Journeyman’s request was untimely, arbitration was not the sole means for resolving disputes between the parties, and the general contractor waived its right to request alternative dispute resolution when it participated in the district court case.
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