Opinion ID: 782349
Heading Depth: 3
Heading Rank: 4

Heading: The Incorporation of the Arbitration Provision

Text: 28 We next consider whether the contract contained a valid arbitration provision. Although we cannot determine without doubt whether the parties agreed on Revision A or Revision B of the offer, we find the factual dispute to be irrelevant. We conclude that the parties' actions, the language of the contract documents, and the federal policy favoring arbitration all support the conclusion that the contract did incorporate an arbitration clause — regardless of whether Revision A or Revision B was the operative contract between the parties. 29 It is in part because the district court's decision consisted of a marginal entry order containing no findings of fact that we find it difficult to determine which version of the contract was the one actually agreed upon. 7 Cummins points to the fact that the purchase form listed the price at $545,190. This price is the price listed in Revision A. Revision B, in contrast, listed a price of $558,270. This suggests that Inland Bulk thought it was purchasing pursuant to Revision A. On the other hand, Inland Bulk points out that the timing suggests that the parties contemplated Revision B. Cummins gave Inland Bulk the initial Quotation on July 24, 1997, and Revision A on August 11, 1997. Revision B was sent on April 6, 1998, two days before Inland Bulk returned the purchase form on April 8, 1998. The proximity between the alleged faxing of Revision B and Inland Bulk's acceptance suggests that Inland Bulk was really accepting Revision B. Inland Bulk also points to the fact that each of the offers came with an expiration date. The Quotation, for example, expired on August 8, 1997. Revision A stated that it would expire at the end of September 1997. This strongly suggests that Inland Bulk was accepting Revision B when it signed that purchase order on April 8, 1998, because Revision A had expired roughly seven months earlier. This evidence suggests that Inland Bulk actually accepted Revision B. Yet, without any factual findings in the district court, it remains difficult to tell with certainty whether the parties agreed on Revision A or B. 30 Ultimately, however, it does not matter whether the parties agreed on Revision A or Revision B. Regardless of whether Revision A or Revision B was the operative version of the contract, we are convinced that the arbitration clause became part of the contract. Inland Bulk admits that both Revision A and Revision B incorporated a set of terms and conditions, and further admits that it received a single set of terms and conditions that plainly required arbitration. Inland Bulk attempts to argue that it had no way of knowing that the set of terms and conditions it received and the set of terms and conditions referred to in Revisions A and B were the same. Inland Bulk suggests that it was confused because the two sets of terms and conditions had different titles. This argument cannot withstand scrutiny. Regardless of whether Revision A or Revision B was the final contract, Inland Bulk had every reason to infer that the terms and conditions to which the contract referred were the same terms and conditions that it had previously received. This, as we explain below, is enough to make Inland Bulk chargeable with the terms of the arbitration provision. 31 Arbitration cannot be forced upon parties who do not consent to it. See Sweeney v. Grange Mut. Cas. Co., 146 Ohio App.3d 380, 766 N.E.2d 212, 218 (2001) (noting that `[a]rbitration is a matter of contract and, in spite of the strong policy in its favor, a party cannot be compelled to arbitrate any dispute which he has not agreed to submit') (citation omitted); Volt Info. Sciences, Inc. v. Bd. of Trustees, 489 U.S. 468, 478, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989) (stating that the FAA does not require parties to arbitrate when they have not agreed to do so). Thus, an undisclosed arbitration agreement or one hidden in an undisclosed terms-and-conditions package cannot bind Inland Bulk. 32 However, the law is equally clear that Inland Bulk cannot be excused from complying with the arbitration provision if it simply failed properly to read the contract. See ABM Farms, Inc. v. Woods, 81 Ohio St.3d 498, 692 N.E.2d 574, 579 (1998) (`A person of ordinary mind cannot be heard to say that he was misled into signing a paper which was different from what he intended, when he could have known the truth by merely looking when he signed.') (citation omitted); Haskins, 230 F.3d at 239 (holding that, even in the Title VII context, the parties are chargeable with the knowledge of the terms contained in the contract). Morever, Inland Bulk is not excused from the arbitration provision just because it appears in a separate document from the rest of the contract. See Blanchard Valley Farmers Coop., Inc. v. Rossman, 761 N.E.2d 1156, 1162 (2001) (noting that [w]hen documents are incorporated by reference into a document, they are to be read as though they are restated in the contract); Haskins, 230 F.3d at 239, 241 (incorporating, by reference, the rules of the National Association of Securities Dealers). 33 Taken together, these two points establish the general rule that `one who signs a contract which he has had an opportunity to read and understand, is bound by its provisions.' Stout v. J.D. Byrider, 228 F.3d 709, 715 (6th Cir.2000) (citing Allied Steel & Conveyors, Inc. v. Ford Motor Co., 277 F.2d 907, 913 (6th Cir.1960)), cert. denied, 531 U.S. 1148, 121 S.Ct. 1088, 148 L.Ed.2d 963 (2001); see also Pippin v. M.A. Hauser Enters., Inc., 111 Ohio App.3d 557, 676 N.E.2d 932, 937 (1996) (noting that [a] person who signs a contract without making a reasonable effort to know its contents cannot, in the absence of fraud or mutual mistake, avoid the effect of the contract). The parties seem to agree with the above legal analysis. They just debate what result that rule dictates given the facts of this case. Cummins argues that Inland Bulk had proper notice of the arbitration provision and is therefore bound to it; Inland Bulk argues that it had no notice of this arbitration provision, as it was never properly referenced by the contract the parties signed. 34 Looking at the facts of this case, we believe that it is clear that Inland Bulk was on notice that its contract with Cummins Engine would have a terms-and-conditions package that included the arbitration provision, regardless of whether they agreed to Revision A or Revision B. The original quotation referred to the Wartsila NSD terms and conditions, but no terms and conditions were given to Inland Bulk at that time. Revision A again referred in its text to the Wartsila NSD terms and conditions, and this time Cummins faxed terms and conditions along with the document. Inland Bulk claims that Revision A did not incorporate an arbitration clause because Island Bulk never saw the Wartsila NSD terms and conditions Revision A referred to — Island Bulk only saw the Wartsila Diesel Group terms and conditions that were sent with Revision A. 35 This is little more than wordplay. When Cummins sent Revision A, it sent only a single set of terms and conditions (which indisputably included an arbitration provision). Moreover, Revision A referred only to a single set of terms and conditions. That alone should have given Inland Bulk notice that the terms and conditions that were attached to Revision A were actually the terms and conditions that Revision A meant to incorporate. Moreover, when Revision A was sent by facsimile to Inland Bulk, the facsimile cover sheet stated that the terms and conditions of Revision A would come attached to Revision A. This should have made it unmistakably clear to Inland Bulk that the terms and conditions that came faxed with Revision A were the ones incorporated by Revision A. Inland Bulk claims that because the attached document had a different heading than Revision A listed, Inland Bulk could safely assume that the attached terms and conditions were irrelevant. This seems, on its face, implausible. The title, Wartsila NSD General Sales Terms and Conditions could have been simply a quick way to refer to the document captioned Wartsila Diesel Group General Terms and Conditions of Contract, Marine Applications / 1993-1. Even if the different titles were a product of clerical error or simple oversight, however, it is clear that Revision A was referring to the document attached to it, which contained an arbitration clause. Inland Bulk's claim that Revision A did not mean to incorporate the attached terms and conditions (which had a different heading) creates a whole host of puzzling questions. If Revision A was not really referring to the attached terms and conditions, to what was it referring? And what were the attached terms and conditions supposed to mean? The fact that Inland Bulk never asked these questions makes it implausible that it believed that the attached terms and conditions were not incorporated by Revision A. 36 Ultimately, however, it is legally irrelevant that Inland Bulk might have idiosyncratically believed that its contract with Cummins did not include an arbitration provision. For, `[c]onsistent with the notion that assent is to be judged objectively, the modern law properly construes both acts and words as having the meaning which a reasonable person present would ascribe to them in view of the surrounding circumstances.' Nilavar v. Osborn, 127 Ohio App.3d 1, 711 N.E.2d 726, 733 (1998) (quoting 1 Williston, Contracts 244 (4th ed.1990)). A reasonable party in Inland Bulk's position would have thought that Revision A included an arbitration provision, and a reasonable party in Cummins's position would have construed Inland Bulk's acceptance as an acceptance of the embedded arbitration provision. Therefore, we hold that Revision A included an arbitration clause. 37 Similarly, we hold that Revision B also incorporated the arbitration clause. Revision B refers to the same terms and conditions that Revision A did. Where Revision A referred to the Wartsila NSD General Sales Terms and Conditions, Revision B referred to the Cummins Wartsila General Sales Terms and Conditions. J.A. at 184. Inland Bulk claims that Revision B was referencing a completely different set of terms than those referenced by Revision A. This argument, however, is meritless. Between the time Revision A and Revision B were sent out, the name of the company dealing with Inland Bulk changed because Cummins Engine joined with Wartsila NSD to form Cummins Wartsila. It is therefore not strange that every time that Revision A refers to Wartsila NSD, Revision B refers to Cummins Wartsila. The critical difference Inland Bulk identifies is simply the result of Cummins's replacement of every occurrence of Wartsila NSD (the initial company) with Cummins Wartsila (the new company). It is unclear why Inland Bulk believed that the Cummins Wartsila terms were completely different from the Revision A terms. Again, Inland Bulk saw only the single set of terms and conditions that came attached to Revision A. It had every reason to believe that those same terms and conditions were the ones that Revision B was referring to and intended to incorporate. Thus, a reasonable observer would have seen Inland Bulk's acceptance as an acceptance of the arbitration clause. 38 As a result, regardless of whether the parties agreed upon Revision A or Revision B as the contract, we hold that the arbitration clause located in the terms-and-conditions package attached with Revision A was part of the contract between the parties. The district court therefore should have properly stayed the proceeding pending arbitration. 8