Opinion ID: 1686104
Heading Depth: 1
Heading Rank: 11

Heading: Whether Arbitration Provision was Incorporated into Dunn's Guaranty

Text: Dunn next contends that it has no agreement to arbitrate any dispute with Lafarge because it, as guarantor, is not a signatory to a contract containing an arbitration agreement and the guaranty does not incorporate the arbitration provision of the construction contract between Lafarge and DIG. Arbitration is a matter of contract, and a party cannot be required to arbitrate a dispute that it has not agreed to arbitrate. AgGrow Oils, L.L.C. v. Nat'l Union Fire Ins. Co. of Pittsburgh, PA, 242 F.3d 777, 780 (8th Cir.2001). As such, a guarantor who is not a signatory to a contract containing an arbitration clause is generally not bound by the arbitration clause. Grundstad v. Ritt, 106 F.3d 201, 204 (7th Cir.1997). However, in a majority of state courts, including Missouri, due to the strong federal policy in favor of arbitration, arbitration agreements are enforced against guarantors or sureties where the arbitration agreement is incorporated by reference [5] into the guaranty or performance bond. Sheffield Assembly of God Church, Inc. v. Am. Ins. Co., 870 S.W.2d 926, 931 (Mo.App.1994); Gabriel M. Wilner, 1 Domke On Commercial Arbitration Section 10:04 (1999). The instant case is distinguishable from Jim Carlson Construction, Metro Demolition , and Sheffield . In those cases, documents containing arbitration provisions were specifically incorporated by reference into other contracts. In this case, Dunn's guaranty refers to the construction contract between Lafarge and DIG, and the contract is attached to the guaranty. The guaranty also provides that Dunn guarantees prompt and satisfactory performance of the attached Contract in accordance with all its terms and conditions. The guaranty does not, however, incorporate by reference the construction contract. Mere reference to the construction contract in the guaranty is insufficient to establish that Dunn bound itself to the arbitration provision of the construction contract. See Grundstad, 106 F.3d at 205. Likewise, the guaranty provision of the October change order, which provides that the guaranty shall apply to and cover DIG's obligations under the change order, does not incorporate by reference the construction contract or the change order itself. Additionally, unlike in Sheffield , Dunn has not judicially admitted that it is bound by the arbitration provision. Dunn has consistently resisted arbitration. Dunn is not required to arbitrate the claims raised by Lafarge against it under the guaranty. [6]