Opinion ID: 1686104
Heading Depth: 1
Heading Rank: 3

Heading: Arbitration Provision of Construction Contract

Text: The Federal Arbitration Act (FAA) evinces a liberal policy favoring arbitration agreements so that disputes might be resolved without resort to the courts. Greenwood v. Sherfield, 895 S.W.2d 169, 173 (Mo.App.1995). Before a party may be compelled to arbitrate under the FAA, a court must determine whether a valid agreement to arbitrate exists between the parties and whether the specific dispute falls within the substantive scope of that agreement. Houlihan v. Offerman & Co., Inc., 31 F.3d 692, 694-95 (8th Cir. 1994). A court must compel arbitration if it determines that the parties agreed to arbitrate the dispute. Id. at 695. The usual rules and canons of contract interpretation govern the subsistence and validity of an arbitration clause. Village of Cairo v. Bodine Contracting Co., 685 S.W.2d 253, 258 (Mo.App.1985). Whether a dispute is covered by an arbitration provision is relegated to the courts as a question of law. Drake Bakeries, Inc. v. Local 50, 370 U.S. 254, 256, 82 S.Ct. 1346, 8 L.Ed.2d 474 (1962). An appellate court's review of the arbitrability of a dispute is de novo. Fru-Con Constr. Co. v. Southwestern Redevelopment Corp. II, 908 S.W.2d 741, 743-44 (Mo.App.1995). In construing arbitration clauses, courts have categorized such clauses as broad or narrow. McCarney v. Nearing, Staats, Prelogar & Jones, 866 S.W.2d 881, 889 (Mo.App.1993). A broad arbitration provision covers all disputes arising out of a contract to arbitrate; a narrow provision limits arbitration to specific types of disputes. Id. The June 1999 construction contract between Lafarge and DIG contained a broad arbitration clause: Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. All of the claims in DIG's petition arise out of or relate to the construction contract. The counts involve allegations of extra work or additions or changes to DIG's scope of work under the construction contract. The underlying claims sought to be enforced by mechanic's lien also arise out of the parties' construction contract. Resolution of DIG's claims requires an examination of Lafarge and DIG's respective obligations and performance under the construction contract. DIG's claims against Lafarge fall within the substantive scope of the parties' arbitration agreement.