Charles Construction Co. v. Derderian
Massachusetts Supreme Judicial Court
586 N.E.2d 992 (1992)
- Written by Mary Katherine Cunningham, JD
Facts
In October 1984, Derderian (owner) (plaintiff) and Charles Construction Co. (Charles Construction) (defendant) entered a general contractors’ agreement to construct a condominium and parking garage. The agreement contained an arbitration agreement providing for the arbitration of disputes in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association (AAA). Disputes arose between the parties about alleged contractual breaches, leading to an arbitration commencing in September 1987. In February 1990, Charles Construction sought an interim order of security against Derderian. Citing § 34 of the Construction Industry Arbitration Rules, the arbitral tribunal entered an award ordering to furnish a $1,000,000 irrevocable letter of credit to the AAA as security for the payment of any arbitration award that might be entered against him in the arbitration proceeding. Charles Construction filed suit to enforce the interim order, while Derderian countered in a separate suit seeking to vacate the interim order. The superior court vacated the arbitrators’ interim order for security. Charles Construction appealed, seeking enforcement of the interim arbitration award, while Derderian asked that the appellate court affirm the superior court order. On appeal, Derderian further argued that, if Charles Construction was to obtain any relief including an interim order of security while the arbitration is still proceeding, the relief must come from the court.
Rule of Law
Issue
Holding and Reasoning (Wilkins, J.)
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