Opinion ID: 1686104
Heading Depth: 1
Heading Rank: 4

Heading: October Change Order

Text: DIG concedes that the original construction contract between it and Lafarge contained an arbitration agreement. The parties dispute the effect of the October 2000 change order. The cardinal principle of contract interpretation is to ascertain the intention of the parties and to give effect to that intent. Butler v. Mitchell-Hugeback, Inc., 895 S.W.2d 15, 21 (Mo. banc 1995). The terms of a contract are read as a whole to determine the intention of the parties and are given their plain, ordinary, and usual meaning. Id.; City of Harrisonville v. Public Water Supply Dist. No. 9 of Cass County, 49 S.W.3d 225, 231 (Mo.App.2001). Additionally, each term of a contract is construed to avoid rendering other terms meaningless. City of Harrisonville, 49 S.W.3d at 231. A construction that attributes a reasonable meaning to all the provisions of the agreement is preferred to one that leaves some of the provisions without function or sense. Id. A contract is ambiguous only if its terms are susceptible to fair and honest differences. Helterbrand, 48 S.W.3d at 658. A contract is not ambiguous merely because the parties disagree as to its construction. Id. Where the language of a contract is unambiguous, the intent of the parties is to be gathered from the contract alone, and a court will not resort to construction where the intent of the parties is expressed in clear, unambiguous language. City of Harrisonville, 49 S.W.3d at 230. Extrinsic evidence may not be introduced to vary or contradict the terms of an unambiguous agreement or to create an ambiguity. Helterbrand, 48 S.W.3d at 658. The October change order incorporated all terms and conditions of the June 1999 construction contract to the extent those terms did not conflict with terms of the change order. Paragraph III.D. of the change order also provided: Lafarge and DIG agree to first attempt to resolve the items marked on the PCO List by negotiation; however, either party, at any time, may resort to their respective contract remedies or remedies as provided by law. DIG claims that the provision permitting a party to pursue its remedies as provided by law permits a party to proceed with a civil action in a court of law, thereby modifying or partially rescinding the arbitration provision in the original construction contract. Mutual rescission of a contract must be clear, positive, unequivocal, and decisive, and it must manifest the parties' actual intent to abandon contract rights. AAA Uniform and Linen Supply, Inc. v. Barefoot, Inc., 17 S.W.3d 627, 629 (Mo. App.2000). Language excluding certain disputes from arbitration must be clear and unambiguous or unmistakably clear. Genesco, Inc. v. T. Kakiuchi & Co., Ltd., 815 F.2d 840, 847 (2d Cir.1987). Where an arbitration clause is broad and contains no express provision excluding a particular grievance from arbitration, only the most forceful evidence of a purpose to exclude the claim from arbitration can prevail. United Steelworkers of Am., 363 U.S. at 584-585, 80 S.Ct. 1347. A motion to compel arbitration of a particular dispute should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Id. at 582-83, 80 S.Ct. 1347. Doubts as to arbitrability should be resolved in favor of coverage. Id. at 583, 80 S.Ct. 1347. Paragraph III.D. of the October change order is not ambiguous and can be interpreted consistently with the broad mandatory arbitration provision of the original construction contract. The contract remedies clause requires Lafarge or DIG to submit any controversy or claim arising out of or relating to the construction contract to arbitration. The remedies as provided by law clause indicates that the parties reserve other unspecified rights or remedies that do not nullify or are not inconsistent with their obligation to arbitrate. See, e.g., Dickson County v. Bomar Constr. Co., 935 S.W.2d 413, 415 (Tenn.Ct. App.1996). Examples of such unspecified rights or remedies include the right to confirm an arbitration award under 9 U.S.C. sec. 9 or to enforce a mechanic's lien under Missouri's mechanic's lien statutes. Such an interpretation produces harmony and meaningfulness for both clauses. If DIG's interpretation were adopted, the remedies at law clause would be given effect, but the contract remedies or arbitration clause would fail. The compulsory nature of the broad arbitration provision of the construction contract would be rendered ineffective at the option of either party. Such interpretation would be contrary to the principles that a contract should be construed as a whole, that all provisions should be harmonized if possible, and that a construction that would render a provision meaningless should be avoided. It would also conflict with the principle that doubts as to arbitrability should be resolved in favor of coverage. Under the broad arbitration clause of the construction contract, Lafarge and DIG manifested their intent that all disputes arising under the contract would be submitted to arbitration. Paragraph III.D. of the October change order does not clearly, positively, unequivocally, or decisively state that the right and obligation to arbitrate was modified, limited, or rescinded. The provision, and particularly the clause remedies as provided by law, does not expressly exclude the marked change orders from arbitration. The paragraph does not give the parties an option to proceed under the contract or by remedies available under the law. Instead, it preserves the parties' agreement to arbitrate and other unspecified rights or remedies that are not inconsistent with that obligation.