Penford Products Co. v. C.J. Schneider Engineering Co.

I. Background Facts and Proceedings.

Penford Products Company (Penford) entered into a contract with C.J. Schneider Engineering Company, Inc. (CJS) for professional services related to the design and construction of an ethanol plant in Cedar Rapids. Penford and CJS’s contract provided that all disputes between the parties would be settled by arbitration, which was later invoked when Penford filed a demand for arbitration asserting claims relating to an alleged defective design of the plant. CJS tendered its defense to Lexington Insurance Company (Lexington), which had issued a professional…