Opinion ID: 201695
Heading Depth: 2
Heading Rank: 2

Heading: Arbitrability of the Termination Dispute

Text: 9 We think it most helpful to begin this discussion by reviewing several basic arbitration principles noted by the Supreme Court in AT & T Techs., Inc. v. Communications Workers, 475 U.S. 643, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986), and derived from prior case law. See id. at 648, 106 S.Ct. 1415 (referring to the Steelworkers Trilogy ). 7 First, `arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.' Id. at 648, 106 S.Ct. 1415 (citation omitted). Second, the question of arbitrability... is undeniably an issue for judicial determination. Id. at 649, 106 S.Ct. 1415. Third, a court deciding whether the parties have agreed to submit a particular grievance to arbitration is not to rule on the potential merits of the underlying claims. Id. And, finally, when a contract contains an arbitration clause, `[d]oubts should be resolved in favor of coverage.' Id. at 650 (citation omitted); see also, e.g., First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944-45, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995). In other words, `[a]n order to arbitrate the particular grievance 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.' AT & T Techs., 475 U.S. at 650, 106 S.Ct. 1415 (citation omitted); see also Mobil Oil Corp. v. Local 8-766, Oil, Chemical & Atomic Workers Int'l Union, 600 F.2d 322, 328 (1st Cir. 1979) (`In the absence of any express provision excluding a particular grievance from arbitration, we think only the most forceful evidence of a purpose to exclude the claim from arbitration can prevail, particularly where ... the arbitration clause [is] quite broad.' (quoting United Steelworkers of Amer. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 584-85, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960))). 10 The middle two principles pose no difficulty here. Both parties agree that the arbitrability question is for the court and that the merits do not play a role in that determination. The parties pit the first and fourth principles against each other, however — with the Municipality claiming that the termination issue is outside the contractual arbitration provision and COFECC maintaining that, in the absence of its explicit exclusion, termination falls within the clause. Like the district court, we conclude that COFECC has the better argument. Our review of the court's decision is de novo. See InterGen N.V. v. Grina, 344 F.3d 134, 141 (1st Cir. 2003) 11 We first dispense with the Municipality's argument that this case implicates Supreme Court precedent on the arbitrability of post-termination disputes. See, e.g., Litton Fin. Printing Div. v. N.L.R.B., 501 U.S. 190, 111 S.Ct. 2215, 115 L.Ed.2d 177 (1991). The dispute here is not over matters that arose following the acknowledged end of the parties' agreement, but the issue is whether termination has, in fact, properly occurred. Post-termination case law is simply inapposite in this setting. 12 Our focus, rather, must be on whether the arbitration provision in Deed of Trust No. 5 is reasonably construed to embrace disputes over the termination of the trustee relationship. The entire arbitration provision, section 702 of the Trust document, states as follows: 13 In the event any controversy arises between the parties with regard to their responsibilities and obligations under this contract, said differences shall be resolved by arbitration. The parties should mutually agree to consent to the designation of the arbiter and shall be bound by his decision. The parties will equally share the costs of the arbitration. 14 The responsibilities and obligations outlined in the contract appear to include those related to the agreement's termination. Under section 604, the Municipality is obliged to give at least sixty days notice of its intent to end the relationship and to appoint a successor administrator by the termination date. That section goes on to state that, in the event of termination, 15 the Administrator of the Capital Fund shall be responsible for transferring all the documents and assets, and deliver to and on behalf of the Municipality all the documents, moneys and values received with regard to the loan funds that might be in his possession, custody or control, and the prerogatives and responsibilities of the Administrator of the Capital Fund and his right to compensation shall terminate. 16 The parties here volley various assertions about whether the Municipality accomplished a valid termination of the Deed of Trust (as well as the subsidiary delegation agreements) and whether COFECC is therefore presently obliged to turn over all federal assets and related materials remaining in its possession. We think it fairly clear that section 604's explicit reference to both the requirements for termination and the administrator's responsibilities upon termination places these matters squarely within the arbitrator's domain as described in section 702. Even if that proposition were debatable, however, we would be obliged to reach the same outcome. We certainly could not say with positive assurance that the arbitration clause is not susceptible of being so construed. Consequently, we think it manifest that the issue of contract duration must be decided by the arbitrator. Cf. New York News Inc. v. Newspaper Guild, 927 F.2d 82, 84 (2d Cir.1991) (per curiam) (narrow arbitration clause limited to grievances does not apply to disputes over contract termination); but see Virginia Carolina Tools, Inc. v. Int'l Tool Supply, Inc., 984 F.2d 113, 118 (4th Cir.1993) (general presumption in favor of arbitrability given less force on contract duration issues). 8 17 In urging its contrary view, the Municipality relies most heavily on Nat'l R.R. Passenger Corp. v. Boston and Maine Corp., 850 F.2d 756 (D.C.Cir.1988), arguing that the issue of termination is not arbitrable here because Deed of Trust No. 5 specifies a date certain for expiration of the contract. In National R.R. Passenger Corp., the D.C. Circuit reasoned that the presumption in favor of arbitrating disputes over contract duration can be overcome by a clear showing that the parties intended for the underlying contract to expire, or separately agreed to terminate it, before the relevant dispute arose. Id. at 763. Such a showing would be accomplished, the court explained, if the contract clearly provides that it will expire on a date certain. Id. 18 Even under a date certain test, however, the Municipality's position falters. The instant contract expires only after two prerequisites are fulfilled: written notice given sixty days in advance and substitution of a successor administrator. We need not address now whether a conditional expiration provision could ever be considered sufficiently certain to overcome the presumption in favor of arbitrability; the touchstone, after all, is not the language formula chosen but what the language reveals about the particular parties' intent. See, e.g., PaineWebber Inc. v. Elahi, 87 F.3d 589, 599 (1st Cir.1996) ([T]he intent of the parties always controls what is to be arbitrated.); Nat'l R.R. Passenger Corp., 850 F.2d at 760 ([O]ur task is to discern the choice of the parties, not to make a choice of our own.); see also First Options, 514 U.S. at 943, 115 S.Ct. 1920 ([A]rbitration is simply a matter of contract between the parties[.]). Here, the parties' debate concerns both the efficacy of the notice given and whether notice was necessary at all — matters that cloud the time of termination. Without a fixed end-point for the Deed of Trust, and otherwise lacking `forceful evidence of a purpose to exclude the [termination] claim from arbitration,' Mobil Oil Corp., 600 F.2d at 328 (citation omitted), the Municipality is unable to make the clear showing of non-arbitrability required by the court in Nat'l R.R. Passenger Corp. In sum, we see no basis for departing from the general principle that all doubts be resolved in favor of arbitration. 19 The judgment of the district court is therefore affirmed.