Title: Eastwick v. Cate Street Capital, Inc.

State: maine

Issuer: Maine Supreme Court

Document:

MAINE SUPREME JUDICIAL COURT 
Reporter of Decisions 
Decision: 
2017 ME 206 
Docket: 
Cum-17-116 
Argued: 
September 13, 2017 
Decided: 
October 12, 2017 
Revised: 
November 30, 2017 
 
Panel: 
SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, HJELM, and HUMPHREY, JJ. 
 
 
MATTHEW EASTWICK 
 
v. 
 
CATE STREET CAPITAL, INC. 
 
 
ALEXANDER, J. 
[¶1]  Cate Street Capital, Inc., appeals from a judgment in which the 
Superior Court (Cumberland County, Horton, J.) granted Matthew Eastwick’s 
application to confirm an arbitration award and denied Cate Street’s 
competing motion to vacate that award after concluding that the parties had 
agreed to arbitrate disputes arising from a settlement agreement.  We affirm 
the judgment.   
I.  CASE HISTORY 
[¶2]  The following facts are taken from the trial court’s findings and are 
supported by substantial evidence in the record.  See Champagne v. 
Victory Homes, Inc., 2006 ME 58, ¶ 8, 897 A.2d 803. 
 
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[¶3]  Eastwick was employed by Cate Street from August 2010 until 
February 2016 pursuant to an employment contract.  That contract included a 
dispute resolution process that required mediation and, if mediation was 
unsuccessful, arbitration, with no opportunity for resolution through a court 
system.  The dispute resolution clause in the employment contract stated: 
In the event any dispute arises between the parties to this 
Agreement, the matter shall be submitted promptly to mediation.  
In the event that mediation is unsuccessful, the dispute shall be 
submitted for arbitration in accordance with the rule[s] of the 
American Arbitration Association. 
 
[¶4]  After Eastwick left Cate Street’s employ, a dispute arose under the 
employment contract.  In accordance with the dispute resolution clause, the 
parties selected a mediator to address the dispute.   
 
[¶5]  At a mediation session held on July 27, 2016, the parties reached a 
settlement of the dispute.  To memorialize the settlement, the parties signed a 
memorandum of understanding (MOU), which provided, in part, for (1) the 
termination of the employment contract; (2) an exchange of releases in 
“standard terms” covering all claims between the parties and requiring 
confidentiality; (3) payment by Cate Street to Eastwick of $100,000 within 
thirty days after the effective date of the release and $15,000 per quarter for 
ten quarters beginning on January 15, 2017; (4) a provision authorizing 
 
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Eastwick—if Cate Street failed to make a timely quarterly payment and failed 
to make such payment within thirty days after demand—to “file a stipulated 
judgment for the outstanding amount due to him”; and (5) a provision in 
paragraph seven that read: “Any disputes that may arise during the drafting 
and execution of the settlement shall be submitted to [the same individual 
who conducted the mediation] for review and resolution.”  Drafting the MOU 
was a collaborative effort by all participants in the mediation.    
 
[¶6]  After the mediation, and after signing the MOU, the parties 
negotiated the terms of the releases and other aspects of the settlement 
contemplated in the MOU.  Because Eastwick and Cate Street did not agree on 
the final terms, the parties agreed to return to the mediator on October 11, 
2016.  The day before the meeting, Eastwick sent “proposed exhibits” and a 
“proposed order” to the mediator and to Cate Street.  Eastwick’s proposed 
order contained a provision stating that it was enforceable as an arbitration 
award.   
 
[¶7]  At the October 11 meeting, the parties discussed the disputes that 
had arisen since the July 27 mediation.  Ultimately, the mediator signed 
Eastwick’s proposed order, which contained findings of fact and conclusions 
of law and required Cate Street to comply with the “Confidential Settlement 
 
4 
Agreement and Mutual Release of Claims,” which was referred to as the “final 
agreement.”  Cate Street objected to the October 11 meeting “as being 
anything other than a further mediation session” and filed a written objection 
to the mediator’s decision at or just after the meeting.   
 
[¶8]  Eastwick applied to the Superior Court to confirm the October 11 
mediation decision as an arbitration award, see 14 M.R.S. § 5937 (2016), and 
filed a motion for approval of attachment and attachment on trustee process, 
see M.R. Civ. P. 4A, 4B.  Cate Street opposed Eastwick’s motions and filed an 
application to vacate the arbitration award, see 14 M.R.S. § 5938(1)(E) (2016), 
arguing, despite the terms of its employment contract, that the parties never 
agreed to arbitration.   
[¶9]  In January 2017, the court held a hearing on all pending motions, 
with the primary issue being whether the parties had agreed to arbitrate 
disputes arising out of the MOU.  Eastwick argued that the parties intended to 
submit any subsequent disputes to the mediator for final resolution—not for 
additional negotiation or further mediation—as indicated by the language in 
paragraph seven.  Cate Street argued that paragraph seven did not express “a 
clear contractual intent to go to binding arbitration,” but rather that the 
parties would return to the mediator “in his role as a mediator.”   
 
5 
 
[¶10]  By an order entered on January 9, 2017, the court denied Cate 
Street’s motion to vacate, granted Eastwick’s application to confirm the 
arbitration award, and approved a writ of attachment and attachment upon 
trustee process in the amount of $250,000.   
[¶11]  In its order, the court concluded that the MOU was an integrated, 
binding settlement agreement even though it contemplated the execution of 
further documents and that the parties had agreed to arbitrate any disputes 
arising out of the drafting and execution of the settlement.  Citing to several 
federal and state court precedents, the court stated that the absence of an 
express reference to “arbitration” was not determinative and that “the 
existence of an arbitration agreement does not depend entirely on whether 
words such as ‘arbitrate’ or ‘arbitration’ appear in the agreement.”  The court 
then concluded that the plain meaning of the disputed provision in the MOU 
was that the mediator “would decide—not mediate—any such dispute 
between the parties.”  The court added, “Mediators facilitate the parties’ 
resolution of disputes, but they themselves do not resolve disputes.  
Arbitrators do.”   
[¶12]  The court’s order also addressed two provisions in the MOU, the 
meaning of which Cate Street contested.  First, the court concluded that the 
 
6 
plain meaning of the word “outstanding” allowed Eastwick to accelerate all 
remaining unpaid installments if any one payment was not made by Cate 
Street within thirty days after demand.  Second, the court stated that “[o]ne 
aspect of the parties’ settlement that cannot be preserved intact . . . is the 
confidentiality provision” due to the public nature of court proceedings.   
[¶13]  The court entered a judgment in conformity with the order 
confirming the arbitration award.  See 14 M.R.S. § 5940 (2016).  The judgment 
awarded Eastwick $100,000 to be paid immediately and an additional 
$150,000 to be paid, as originally agreed, in ten quarterly installments of 
$15,000 each, beginning on January 15, 2017; included the acceleration 
clause; and incorporated the final agreement as a declaratory judgment.1   
[¶14]  Cate Street filed a motion for reconsideration, which the court 
denied.  No motion for further findings of fact and conclusions of law was 
filed.  See M.R. Civ. P. 52.  Cate Street timely filed a notice of appeal.  See 
14 M.R.S. § 5945 (2016); M.R. App. P. 2 (Tower 2016).2   
                                         
1  The judgment also awarded costs to Eastwick as the prevailing party and included a provision 
for prejudgment and post-judgment interest. 
2  Rule 2 of the Maine Rules of Appellate Procedure (Tower 2016), governing filing and timing of 
appeals, was replaced by Rules 2A and 2B of the Maine Rules of Appellate Procedure in the restyling 
of the Maine Rules of Appellate Procedure adopted to govern appeals filed on or after September 1, 
2017.  
 
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II.  LEGAL ANALYSIS 
A. 
Standards of Appellate Review 
[¶15]  The Uniform Arbitration Act, 14 M.R.S. §§ 5927-5949 (2016), 
“requires a reviewing court to vacate an arbitration award if the parties did 
not agree to submit the dispute to arbitration.” Cape Elizabeth Sch. Bd. v. 
Cape Elizabeth Teachers Assoc., 459 A.2d 166, 168 (Me. 1983); see 14 M.R.S. 
§ 5938(1)(E).  “The final decision on the question of substantive arbitrability 
rests with the court.”  Roosa v. Tillotson, 1997 ME 121, ¶ 2, 695 A.2d 1196; 
accord Westbrook Sch. Comm. v. Westbrook Teachers Assoc., 404 A.2d 204, 207 
(Me. 1979).  We review the trial court’s determination of arbitrability de novo 
for errors of law.  Reg’l Sch. Unit No. 5 v. Coastal Educ. Assoc., 2015 ME 98, ¶ 16, 
121 A.3d 98; V.I.P., Inc. v. First Tree Dev. Ltd. Liab. Co., 2001 ME 73, ¶ 3, 
770 A.2d 95. 
[¶16]  “Parties cannot be compelled to submit their controversy to 
arbitration unless they have manifested in writing a contractual intent to be 
bound to do so.”  Roosa, 1997 ME 121, ¶ 4, 695 A.2d 1196 (alteration omitted).  
“General rules of contract interpretation apply.”  V.I.P., 2001 ME 73, ¶ 3, 
770 A.2d 95.  “A contract is to be interpreted to effect the parties’ intentions as 
reflected in the written instrument, construed with regard for the subject 
 
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matter, motive, and purpose of the agreement, as well as the object to be 
accomplished.”  Id. 
[¶17]  “Whether language in a contract is ambiguous is a question of law 
that we review de novo.  Document language is ambiguous if it is reasonably 
susceptible to different interpretations.”  Champagne, 2006 ME 58, ¶ 8, 
897 A.2d 803 (citation omitted).  If a document is unambiguous, then its 
interpretation is also a question of law and “must be determined from the 
plain meaning of the language used and from the four corners of the 
instrument without resort to extrinsic evidence.”  Portland Valve, Inc. v. 
Rockwood Sys. Corp., 460 A.2d 1383, 1387 (Me. 1983).  “The fact that parties 
have different views of what an agreement means does not render it 
ambiguous.”  Champagne, 2006 ME 58, ¶ 10, 897 A.2d 803. 
B. 
The Settlement Agreement 
[¶18]  Cate Street contends that the MOU does not contain clear 
contractual language of the parties’ intent to submit disputes to the mediator 
for binding arbitration.  We do not agree. 
[¶19]  Paragraph seven of the MOU states that “[a]ny disputes that may 
arise during the drafting and execution of the settlement shall be submitted to 
[the mediator] for review and resolution.”  (Emphasis added.)  A plain reading 
 
9 
of this provision indicates that the parties agreed to yield authority to the 
mediator to resolve—not make recommendations on or merely assist the 
parties themselves to resolve—any disputes.  See New Oxford American 
Dictionary 1486 (3d ed. 2010) (defining “resolution” as “the action of solving a 
problem, dispute, or contentious matter”); id. at 1734 (defining “submitting” 
as “agree[ing] to refer a matter to a third party for decision or adjudication”). 
[¶20]  Looking at the four corners of the MOU bolsters this plain 
language interpretation.  See V.I.P., 2001 ME 73, ¶ 3, 770 A.2d 95; Portland 
Valve, Inc., 460 A.2d at 1387.  The purpose of the document was to 
memorialize the parties’ agreement “to settle their dispute . . . after 
mediati[on].”  The MOU provided for the termination of the employment 
agreement, which, notably, was drafted by Cate Street and required the 
parties to proceed to arbitration if mediation was unsuccessful; an exchange 
of releases in “standard terms” covering all claims between the parties and 
providing for confidentiality; and consideration of $250,000.  Thus, there were 
no remaining issues that required further mediation.  The mediator’s services 
were required only to resolve any disputes that arose in the drafting or 
execution of the settlement in order to make the settlement final. 
 
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[¶21]  The language of paragraph seven and the language used by the 
parties to express the purpose of the MOU indicate finality.  Given this 
language, we conclude that the parties intended to submit any disputes arising 
from the MOU to the mediator for arbitration.  Cf. Champagne, 2006 ME 58, 
¶ 12, 897 A.2d 803 (quoting the American Arbitration Association Rules 
which define “arbitration” as the “voluntary submission of a dispute to a 
disinterested person or persons for final and binding determination”).  
Because we conclude that there was an agreement to arbitrate, we turn to 
Cate Street’s argument that the court exceeded the scope of its authority by 
not limiting its decision to confirming the arbitration award.   
C. 
The Judgment Entered Pursuant to Section 5940 
 
[¶22]  Cate Street contends that the court erred by construing and 
applying the acceleration clause and the confidentiality provision when 
Eastwick did not file a breach of contract claim.3  
[¶23]  Upon granting an application to confirm an arbitration award, the 
court is required to enter a judgment in conformity with the award.  14 M.R.S. 
§ 5940.  There are limited circumstances in which a court may modify an 
arbitration award.  See id. §§ 5937, 5939; Me. State Emps. Assoc. Local 1989, 
                                         
3  Cate Street also argues that the court’s actions deprived it of due process.  We are not 
persuaded by Cate Street’s argument and do not address it further. 
 
11 
SEIU v. State Dep’t of Corr., 593 A.2d 650, 652 (Me. 1991).  The court does not 
modify an award, however, by construing a term in the award when the term’s 
meaning is unambiguous.  See M.S.E.A. Local 1989, 593 A.2d at 653. 
[¶24]  Here, the court explicitly stated that its interpretation of the 
acceleration clause was based on the clause’s unambiguous meaning: 
“Mr. Eastwick is not entitled to judgment for the entire $250,000, at least as of 
yet.  The acceleration provision . . . applies, on its face, only to late installment 
payments due under section 1(b), not to the initial payment due under 
section 1(a).  Accordingly, the judgment will be for the $100,000 that is clearly 
past due, and will provide that the judgment may be amended for the entire 
unpaid amount if any installment payment is missed and not made within 30 
days of a written demand for payment . . . .”  (Emphasis added.)  Thus, there 
would be an acceleration requiring payment of all remaining unpaid 
installments, not just the original $100,000 payment and the four quarterly 
installment payments now past due, only if Cate Street were to fail to make 
the future quarterly payments as due or within 30 days after a written 
demand for a missed payment.  Otherwise, those quarterly payments not yet 
due must be paid as specified in the MOU. 
 
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[¶25]  Although the court noted in its order that the parties’ 
confidentiality had been compromised by the litigation, the court’s judgment 
incorporated the final agreement, including the ten quarterly payments, 
without ordering acceleration of those payments not yet due and without 
modifying any of its terms, including the confidentiality provision. 
The entry is: 
Judgment affirmed. 
 
 
 
 
 
 
 
 
Melinda J. Caterine, Esq., and David Strock, Esq. (orally), Littler Mendelson, 
P.C., Portland, for appellant Cate Street Capital, Inc. 
 
Julia G. Pitney, Esq. (orally), Drummond Woodsum, Portland, for appellee 
Matthew Eastwick 
 
 
Cumberland County Superior Court docket number CV-2016-398 
FOR CLERK REFERENCE ONLY