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GORDON-MAIZEL CONSTR. CO. v. LEROY PRODUCTIONS

March 27, 1987

Gordon-Maizel Construction Company, Inc., Plaintiff
v.
LeRoy Productions, Inc., et al., Defendants v. Krick Plumbing & Heating Company, Inc., Counterclaim Defendant



The opinion of the court was delivered by: HARRIS

 Honorable STANLEY S. HARRIS

 This matter is before the Court on the motions of several of the parties. Defendants LeRoy Productions, Inc., and Cafe Partners/Washington 1983 (Cafe Partners) have moved to stay all proceedings in the case pending private arbitration of the underlying dispute pursuant to the terms of a construction contract between Cafe Partners and plaintiff Gordon-Maizel Construction Company, Inc. (Gordon-Maizel). Cafe Partners also has moved for partial summary judgment on its counterclaims against Gordon-Maizel. Additionally, defendants Washington Harbour Associates Limited Partnership, CSX Resources, Inc. - Georgetown, Potomac Commons Limited, Herbert S. Miller, Richard L. Kramer, and Gerald L. Dillon (Washington Harbour Associates) have filed motions to dismiss and for a protective order. Defendant Georgetown Potomac Company has filed a joint motion to dismiss the complaint, and Georgetown Potomac Company also has filed a motion to dismiss. Finally, Gordon-Maizel seeks to compel discovery from Washington Harbour Associates.

 Facts

 This dispute arose during the construction of a restaurant, known as Potomac on the River at Washington Harbour, in the Georgetown area of Washington, D.C. In 1983, Cafe Partners, a New York limited partnership whose general partner is LeRoy Productions, Inc., signed a lease agreement under which Cafe Partners was to construct and operate an exclusive restaurant within a commercial real estate development known as Washington Harbour. Cafe Partners' landlord, and the developer of the Washington Harbour project, is Washington Harbour Associates, a District of Columbia limited partnership whose general partners are CSX Resources, Inc. - Georgetown, Potomac Commons Limited, Herbert S. Miller, Richard L. Kramer, and Gerald L. Dillon. The real property on which the Washington Harbour project is built is owned by the Georgetown Potomac Company. Under the terms of the lease, Cafe Partners granted Washington Harbour Associates a substantial role in the selection of a construction contractor and the supervision of the work. In exchange, Washington Harbour Associates agreed to provide $ 1,074,474 toward the costs of construction and to perform certain work necessary to incorporate the restaurant into the Washington Harbour project.

 In June of 1985, Cafe Partners hired Gordon-Maizel to act as the general contractor in the restaurant construction and agreed to pay $ 1,344,240 for the work. Gordon-Maizel, in turn, subcontracted with Krick Heating & Plumbing Company (Krick) for installation of the heating, ventilation, air conditioning, and plumbing systems. The general contract included a provision allowing Cafe Partners to terminate the contract for "landlord related causes," and another provision requiring all subcontracts to incorporate the terms of the general contract.

 Construction commenced in the summer of 1985 and was suspended in November of that year. Disputes between the parties had arisen over the adequacy of designs for the heating and ventilation system, and Cafe Partners and Washington Harbour Associates had disagreed on their respective responsibilities under the lease. In December 1985, Cafe Partners notified Gordon-Maizel that it was terminating the general contract under the "landlord related causes" provision. Construction eventually resumed under the supervision of a different general contractor.

 Although Gordon-Maizel has submitted a number of invoices, Cafe Partners had made no payments to Gordon-Maizel since construction was halted in November 1985. On December 23, 1985, Krick filed notice of a mechanic's lien on Cafe Partners' property in the amount of $ 185,000. On January 2, 1986, Gordon-Maizel filed notice of a mechanic's lien on the restaurant property against Cafe Partners in the amount of $ 461,180. Throughout February 1986, Gordon-Maizel and Cafe Partners engaged in unsuccessful efforts to negotiate a settlement. On March 11, 1986, Gordon-Maizel filed notices of mechanic's liens in the amount of $ 740,587 against both Cafe Partners and Washington Harbour Associates, and on March 17, 1986, Gordon-Maizel filed suit in this Court to enforce those liens through judicially-ordered sales of the liened property.

 In its answer, Cafe Partners asserted counterclaims against Gordon-Maizel and Krick seeking to vacate the mechanic's liens, compel arbitration of the contract dispute, and recover damages for fraudulent filing of mechanic's liens. *fn1"

 Discussion

 I. Cafe Partners' Motion To Compel Arbitration

 The general contract executed by Cafe Partners and Gordon-Maizel includes a broad arbitration clause, § 7.9.1, which provides in relevant part:

 
All claims, disputes and other matters in question between the contractor and the Owner arising out of, or relating to, the Contract Documents or the breach thereof, . . . shall be decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association then obtaining unless the parties mutually agree otherwise.

 Cafe Partners argues that the underlying dispute over the suspension of construction and subsequent termination of the general contract is just the sort of dispute that should be submitted to private arbitration under the terms of § 7.9.1. Cafe Partners further argues that all proceedings ...


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