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Nordlund & Associates, Inc. v. Village of Hesperia

April 20, 2010

NORDLUND & ASSOCIATES, INC., PLAINTIFF/COUNTERDEFENDANT-APPELLANT,
v.
VILLAGE OF HESPERIA AND COUNTY OF NEWAYGO DRAIN COMMISSIONER, DEFENDANTS/COUNTERPLAINTIFFSAPPELLEES.



Oceana Circuit Court LC No. 05-004843-CK

Per curiam.

FOR PUBLICATION

Before: OWENS, P.J., and SAWYER and O'CONNELL, JJ.

Plaintiff, Nordlund & Associates, Inc., appeals as of right from the trial court's order confirming an arbitration award and denying plaintiff's motion to vacate or modify the arbitration award. We affirm.

I. Facts

On January 7, 2005, plaintiff filed a breach of contract action against defendant-appellant, the Village of Hesperia.*fn1 Defendant filed a counter-complaint alleging breach of contract and demanding indemnification.

On January 22, 2007, the circuit court entered a stipulation and order for arbitration pursuant to MCL 600.5001 et seq. The order provided that the parties would submit "all issues in this action which are subject to the jurisdiction of this court" to binding arbitration. Pursuant to the circuit court's order, the parties executed an arbitration agreement, which stated that "[a]ll theories/defenses and affirmative defenses raised in the pleadings of the parties during the course of these proceedings and associated damages, offsets, and failure to mitigate claims" would be submitted for arbitration.

Before this dispute, plaintiff acted as defendant's engineer for roughly twenty-two years. Two projects are relevant to this appeal: 1) the Sunset Boulevard / Family Dollar water main project, and 2) the Sewer System and Wastewater Treatment Plant Improvements, known as "the SRF project."

A. Sunset Boulevard / Family Dollar

Innovative Construction hired plaintiff to do work in relation to the opening of a Family Dollar store near Sunset Boulevard. In relation to this project, plaintiff filed an application on behalf of defendant, seeking authorization to extend a water main along Sunset Boulevard. Plaintiff billed defendant $600 for this work, but never received payment for this work.

Plaintiff also prepared additional permit applications and gave them to defendant to submit to the proper authorities. These permits, which were subsequently denied, needed to be approved by the Michigan Department of Environmental Quality (MDEQ) before the water main could be installed. However, Innovative Construction installed the water main before any permits were approved. As a result, the MDEQ fined defendant $12,140. Defendant sought reimbursement from plaintiff for that amount, charging that plaintiff was responsible for the premature installation.

B. SRF Project

On November 10, 2003, by written contract, defendant hired plaintiff to perform professional services. On August 5, 2004, defendant terminated the contract. The contract provided that it may be terminated without cause, and that, upon termination, "[a]n equitable adjustment shall be made in the contract price." Defendant argued that because only 65 percent of plaintiff's work was salvageable by the engineering firm that replaced plaintiff, the "equitable adjustment" should equal that percentage of the fees plaintiff earned, reduced by any payment already made. Defendant claimed that it had paid plaintiff $10,000. Plaintiff disagreed, claiming that it should be paid the full amount of $39,677.18. Plaintiff also disputed the $10,000 reduction, on the ground that defendant's $10,000 payment was for work performed on another, unrelated job, the Division Street Bridge project.

The parties submitted an "arbitration summary" to the arbitrator, through which both fully briefed the issues to be decided. Following a hearing, the arbitrator issued an opinion setting forth the following findings: (1) plaintiff was entitled to $14,787.29 for the use of its plans and specifications on the SRF project; (2) defendant was entitled to $19,787.42 in compensation for plaintiff's breach of the SRF project contract (that amount being the difference between plaintiff's contract price and what defendant ultimately paid another party to complete the contract); (3) defendant failed to prove that it had paid plaintiff $10,000 on the SRF project; (4) defendant was not entitled to recover any damages attributable to the Sunset Boulevard / Family Dollar project; and (5) plaintiff was ...


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