Mirra Co. v. School Administrative District 35 , 251 F.3d 301 ( 2001 )

United States Court of Appeals
For the First Circuit
No. 00-1958
MIRRA COMPANY, INC.,
Plaintiff, Appellant,
v.
SCHOOL ADMINISTRATIVE DISTRICT #35
A POLITICAL SUBDIVISION OF THE STATE OF MAINE
WITH PRINCIPAL OFFICES IN SOUTH BERWICK, MAINE,
Defendant Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. D. Brock Hornby, U.S. District Judge]
Before
Boudin, Circuit Judge,
Stahl, Senior Circuit Judge,
and Lynch, Circuit Judge.
David P. Ray, with whom Burns Ray DeLano & Macdonald, P.A.,
Frank P. Spinella, Jr., and Hall, Morse, Anderson, Miller &
Spinella, P.A., were on brief, for appellant.
Jerrol A. Crouter, with whom Drummond Woodsum & MacMahon,
were on brief, for appellee.
June 5, 2001
STAHL, Senior Circuit Judge. This case arose from a
dispute between the parties to a construction contract. The
Maine School Administrative District No. 35 (MSAD 35) and the
Mirra Company, Inc.(Mirra), had entered into a contract which
obligated Mirra to do site work at a high school project in the
district. Problems soon arose, and now each party has claims
against the other. The sole question before us is whether the
parties must submit these claims to binding arbitration. Mirra
argues that the contract requires disputes to be resolved
through arbitration, while MSAD 35 claims that there is no such
agreement in the final version of the parties' contract. The
district court agreed with MSAD 35 and held that the contract
unambiguously did not require arbitration. We affirm.
I. BACKGROUND
In early 1997, the State of Maine Bureau of General
Services (BGS) advertised for bids for site work at the new
Marshwood High School in South Berwick, Maine. MSAD 35 is the
public school district for that town. The bid documents
provided that the Standard General Conditions for construction
contracts would apply, subject to certain amendments, listed in
the attached Supplementary General Conditions. As relevant
here, the Standard General Conditions stated:
Article 42. ARBITRATION
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If, in the performance of this
contract, there arises a dispute between the
Owner and the Contractor which cannot be
settled, then this dispute shall be
submitted to Arbitration and both the Owner
and the Contractor shall be bound by the
decision of the Arbitrator.
The membership of the American
Arbitration Association shall be used as
Arbitrators and the procedures used for
Arbitration shall be in conformity with the
Construction Industry Arbitration Rules as
administered by the American Arbitration
Association.
The Supplementary General Conditions used two different
methods to amend the General Conditions. Where only a few words
were to be changed, the Supplementary General Conditions merely
referenced the article number and title of the relevant General
Condition to be changed and the minor alterations were
described. But where an entire article was to be substituted
with a new one, the Supplemental General Conditions referenced
the relevant article number and title and set forth an
instruction to delete the article in its entirety and to
substitute a new one with a new heading. This second procedure
was used with respect to the agreement’s original arbitration
provision resulting in the following change:
Article 42 - ARBITRATION: Delete in
its entirety and substitute:
Article 42 - DISPUTE RESOLUTION:
If, in the performance of this
Contract, there arises a dispute between
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Contractor and Owner that cannot be resolved
by the parties to the Contract, the dispute
shall be referred to the Director of the
Bureau of General Services, who, at his/her
discretion, will submit the dispute to non-
binding Alternate Dispute Resolution or
binding arbitration (ADR). If the parties
in dispute are not satisfied with the
results of ADR Owner or Contractor may re-
submit the dispute to the Director for
binding arbitration.
On May 15, 1997, Mirra submitted its bid to BGS, which
was the lowest of all received, and BGS forwarded it to MSAD 35.
On June 9, 1997, MSAD 35 sent Mirra a addendum designed to
further modify the Bidding and Contract Documents. The addendum
did not delete and replace any articles wholesale, as the BGS's
Supplementary General Conditions had done, but merely referenced
each article it was to modify and set forth what was to be
deleted and what was to be added within the relevant article as
it most recently stood. On June 23, 1997, Mirra explicitly
acknowledged the changes wrought by the addendum and executed
the contract. The addendum modified the parties’ dispute
resolution agreement as follows:
1.04 Supplementary General Conditions,
Section 3-B-4, Article 42
DELETE: The entire paragraph
ADD: "Any disputes arising out
of or in the course of this Agreement,
which cannot be settled through
discussion between parties, shall be
submitted to mediation before any
lawsuit or Demand for Arbitration is
filed. When either party requests
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mediation, the parties, [sic] shall
attempt to agree on a single mediator to
mediate the dispute. The mediator shall
assist the parties in attempting to
solve their dispute by agreement. The
parties agree to participate in good
faith during the mediation process
including the selection of the mediator.
The parties agree that they will engage
in mediation for at least three days,
unless a shorter period is set by the
mediator, before abandoning the process.
The cost of mediation shall be borne
equally by each party.
Notwithstanding this provision, either
party may file suit before or during
mediation if the party in good faith
deems it necessary to avoid losing the
right to sue. If suit is filed before
good faith mediation efforts are
completed, the party filing suit will
agree to stay until all mediation
efforts have been completed.
In early 2000, as the project neared completion,
various disputes arose between the parties, and each asserted
claims against the other. As required by the contract, the
parties participated in mediation on May 17, 2000, but without
success. MSAD 35 then filed suit against Mirra on May 19, 2000,
in the Maine Superior Court. On May 22, 2000, Mirra filed this
diversity action requesting an order to compel arbitration. On
July 1, 2000, the district court held that "the contract is
unambiguous and does not require arbitration." Mirra appeals
that decision.
II. DISCUSSION
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The interpretation of unambiguous contract language is
a matter of law reserved to the courts. Golden Rule Ins. Co. v.
Atallah, 45 F.3d 512, 516 (1st Cir. 1995) ("Under Maine's
general
law of contracts, the interpretation of a contract is a question
for the fact finder only if the court first determines that the
contract is ambiguous, a question of law."). For this reason,
we afford de novo review to the district court’s ruling. Paul
Revere Variable Annuity Ins. Co. v. Kirschhofer, 226 F.3d 15,
18-19 (1st Cir. 2000).
Arbitration is a contractual matter, and no party may
be forced to arbitrate a dispute unless she has expressly agreed
to do so by contract. Air Line Pilots Ass'n v. Miller, 523 U.S.
866, 876 (1998). In determining whether the parties to a
contract have agreed to arbitrate their disputes, courts "should
apply ordinary state-law principles that govern the formation of
contracts." First Options of Chicago, Inc. v. Kaplan, 514 U.S.
938, 944 (1995). Maine requires "clear contractual language
evidencing an intent to be bound to [arbitrate]." Maine Cent.
R.R. v. Bangor & Aroostook R.R., 395 A.2d 1107, 1116 (Me. 1978);
see also Roosa v. Tillotson, 695 A.2d 1196, 1197-98 (Me. 1997).
Here, there is no language in the final version of the
contract that clearly suggests an intent to arbitrate. Article
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42, as revised by the addendum, only requires non-binding
mediation, after which either party may file suit or seek
arbitration (with the consent of the other party). Mirra does
not suggest a different interpretation of this language.
Rather, its central argument is that, when the final addendum
deleted the ADR paragraph from the revised Article 42, it also
deleted the preceding instruction to delete the original Article
42, thus resulting in its reinstitution.
We do not agree. The Supplementary General Conditions
removed the arbitration clause found in the Standard General
Conditions, and replaced it with an entirely new dispute
resolution clause. The addendum merely changed the language of
that new clause so as to require mediation rather than ADR. The
contract unambiguously does not require arbitration. Thus,
either party is free to bring a lawsuit against the other for
damages arising from a breach of the contract.
The judgment of the district court is affirmed.
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