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
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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 nonbinding Alternate Dispute Resolution or

binding arbitration (ADR). If the parties

in dispute are not satisfied with the

results of ADR Owner or Contractor may resubmit 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.