An arbitration claimant who sought to preserve the right to pursue related claims against the same opponent has found its efforts barred by the Rhode Island Supreme Court, in a case with several procedural twists and turns. The case has all the hallmarks of an inequitable outcome for the benefit of a public authority against an architect who provided more services than originally contracted for.
The original design contract had a “not to exceed” fee of $61,500, calculated as a percentage of anticipated construction costs. The public authority administrator reportedly assured the architect that additional services would be required and would be paid for, but the contract was not amended. Ultimately the project was substantially expanded and the architect unsuccessfully sought a revised fee of $156,000. The parties proceeded to statutory arbitration. The arbitrator sympathized with the architect but believed the RI procurement regulations barred any additional compensation above the original contract amount, and issued an award based on the original contract amount. Then the case got interesting.
The architect sought to amend its claim to include a claim for equitable relief. The arbitrator denied the motion to amend with a rather opaque and certainly confusing decision. “By agreement of the parties” the arbitration award was confirmed after the arbitrator turned down the motion to amend. Then the architect commenced a new arbitration seeking equitable relief, and the public authority moved to dismiss that request on the grounds of res judicata. The lower court dismissed the new action, and the RI Supreme Court affirmed the dismissal. The case is Torrado Architects v. Rhode Island Dept. of Human Svcs., 2014 R.I. LEXIS 154 (Nov. 25, 2014).
The court held: once the original arbitration award was confirmed, the doctrine of res judicata barred the second attempt. Even though the architect sought an amendment to add a claim for equitable relief (which was denied), by allowing the original award to be confirmed, without any explicit agreement with the public authority that the second claim could still be pursued, the architect’s alternative claim for relief was barred.
The lesson? Take all reasonably available steps to ensure that claims which were not adjudicated can still be pursued, presumably by seeking a court order if necessary, prior to confirmation of the original award. Once that award is confirmed, the doctrine against claim splitting will bar any claim that could or should have been brought in the original action, in the absence of agreement with the opposing party that the remaining claim is yet to be adjudicated.