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Southern Tile Co. v. Commercial Construction Co.
Citations: 548 So. 2d 47; 1989 La. App. LEXIS 1439; 1989 WL 78874Docket: No. 88-468
Court: Louisiana Court of Appeal; July 17, 1989; Louisiana; State Appellate Court
Southern Tile Company, Inc. (Southern Tile) filed a lawsuit against Collins and Aikman Corporation (C. A.C.) for damages due to defective carpeting purchased from C. A.C. The trial court granted C. A.C.'s exception of prematurity, leading to Southern Tile's appeal regarding the enforceability of an arbitration clause in a written acknowledgment signed by both parties. The court affirmed the trial court's judgment, finding the arbitration clause enforceable and adopting the trial court's rationale. In 1985, Southern Tile ordered carpeting to be installed in the U.S.L. Health P.E. Building. Due to defects, Southern Tile failed to meet the installation deadline, resulting in the general contractor, Commercial Construction Company, withholding payment, citing liquidated damages for the delay. Southern Tile sought payment for installation from Commercial Construction and alternatively claimed damages from C. A.C. Commercial Construction counterclaimed against Southern Tile and cross-claimed against C. A.C. C. A.C. argued that Southern Tile had agreed to arbitration in New York, filing exceptions of prematurity and no cause of action. The acknowledgment signed by Southern Tile's president, Claire Koch, explicitly stated that the order was subject to terms including arbitration, which superseded any previous agreements. Southern Tile contended there was no mutual agreement regarding arbitration and claimed the acknowledgment was merely an invoice. However, the court noted that previous case law regarding coercion did not apply here, as there were no extreme circumstances. The court emphasized the clarity of the signed document, which included references to arbitration and stipulated it constituted the entire contract, leading to the conclusion that Southern Tile was presumed to understand and accept the terms. Title 9, Section 4201 of the Louisiana Revised Statutes establishes that written contracts for arbitration are valid, irrevocable, and enforceable unless grounds for revocation exist under law or equity. This statute reflects a legislative intent to promote arbitration for the efficient resolution of contract disputes, as demonstrated in the case of Willis-Knighton Medical Center v. Southern Builders, Inc. In In re Cajun Electric Power Cooperative, Inc., the Fifth Circuit upheld the enforcement of an arbitration clause despite a party's claim of ignorance, asserting that the clause was a fundamental component of the contract. The court emphasized that arbitration is favored in Louisiana, and parties cannot evade the implications of their signatures. Consequently, the court affirmed the trial court's judgment in favor of Collins and Aikman Corporation, ruling the case premature and assigning all appellate costs to Southern Tile Company, Inc.