Court Opinion

ID: 4211190
Source: CourtListenerOpinion
Date Created: 2017-10-12 15:12:54.269762+00
Date Added: 2024-06-11T09:23:44.645845
License: Public Domain

MAINE	SUPREME	JUDICIAL	COURT	                                           Reporter	of	Decisions	
Decision:	 2017	ME	206	
Docket:	   Cum-17-116	
Argued:	   September	13,	2017	
Decided:	  October	12,	2017	
                                                                                              	
Panel:	        SAUFLEY,	C.J.,	and	ALEXANDER,	MEAD,	GORMAN,	JABAR,	HJELM,	and	HUMPHREY,	JJ.	
	
	
                                 MATTHEW	EASTWICK	
                                           	
                                          v.	
                                           	
                               CATE	STREET	CAPITAL,	INC.	
	
	
ALEXANDER,	J.	

          [¶1]	 	 Cate	 Street	 Capital,	 Inc.,	 appeals	 from	 a	 judgment	 in	 which	 the	

Superior	 Court	 (Cumberland	 County,	 Horton,	 J.)	 granted	 Matthew	 Eastwick’s	

application	 to	 confirm	 an	 arbitration	 award	 and	 denied	 Cate	 Street’s	

competing	motion	to	vacate	that	award	after	concluding	that	the	parties	had	

agreed	to	arbitrate	disputes	arising	from	a	settlement	agreement.		We	affirm	

the	judgment.			

                                     I.		CASE	HISTORY	

          [¶2]		The	following	facts	are	taken	from	the	trial	court’s	findings	and	are	

supported	 by	 substantial	 evidence	 in	 the	 record.	 	 See	 Champagne	 v.	

Victory	Homes,	Inc.,	2006	ME	58,	¶	8,	897	A.2d	803.	
2	

      [¶3]	 	 Eastwick	 was	 employed	 by	 Cate	 Street	 from	 August	 2010	 until	

February	2016	pursuant	to	an	employment	contract.		That	contract	included	a	

dispute	 resolution	 process	 that	 required	 mediation	 and,	 if	 mediation	 was	

unsuccessful,	 arbitration,	 with	 no	opportunity	 for	 resolution	 through	 a	 court	

system.		The	dispute	resolution	clause	in	the	employment	contract	stated:	

      In	 the	 event	 any	 dispute	 arises	 between	 the	 parties	 to	 this	
      Agreement,	the	matter	shall	be	submitted	promptly	to	mediation.		
      In	 the	 event	 that	 mediation	 is	 unsuccessful,	 the	 dispute	 shall	 be	
      submitted	 for	 arbitration	 in	 accordance	 with	 the	 rule[s]	 of	 the	
      American	Arbitration	Association.	
	
      [¶4]		After	Eastwick	left	Cate	Street’s	employ,	a	dispute	arose	under	the	

employment	 contract.	 	 In	 accordance	 with	 the	 dispute	 resolution	 clause,	 the	

parties	selected	a	mediator	to	address	the	dispute.			

	     [¶5]		At	a	mediation	session	held	on	July	27,	2016,	the	parties	reached	a	

settlement	of	the	dispute.		To	memorialize	the	settlement,	the	parties	signed	a	

memorandum	 of	 understanding	 (MOU),	 which	 provided,	 in	 part,	 for	 (1)	 the	

termination	 of	 the	 employment	 contract;	 (2)	 an	 exchange	 of	 releases	 in	

“standard	 terms”	 covering	 all	 claims	 between	 the	 parties	 and	 requiring	

confidentiality;	 (3)	 payment	 by	 Cate	 Street	 to	 Eastwick	 of	 $100,000	 within	

thirty	days	after	the	effective	date	of	the	release	and	$15,000	per	quarter	for	

ten	 quarters	 beginning	 on	 January	 15,	 2017;	 (4)	 a	 provision	 authorizing	
                                                                                        3	

Eastwick—if	Cate	Street	failed	to	make	a	timely	quarterly	payment	and	failed	

to	make	such	payment	within	thirty	days	after	demand—to	“file	a	stipulated	

judgment	 for	 the	 outstanding	 amount	 due	 to	 him”;	 and	 (5)	 a	 provision	 in	

paragraph	 seven	 that	 read:	 “Any	 disputes	 that	 may	 arise	 during	 the	 drafting	

and	 execution	 of	 the	 settlement	 shall	 be	 submitted	 to	 [the	 same	 individual	

who	conducted	the	mediation]	for	review	and	resolution.”		Drafting	the	MOU	

was	a	collaborative	effort	by	all	participants	in	the	mediation.				

	     [¶6]	 	 After	 the	 mediation,	 and	 after	 signing	 the	 MOU,	 the	 parties	

negotiated	 the	 terms	 of	 the	 releases	 and	 other	 aspects	 of	 the	 settlement	

contemplated	in	the	MOU.		Because	Eastwick	and	Cate	Street	did	not	agree	on	

the	 final	 terms,	 the	 parties	 agreed	 to	 return	 to	 the	 mediator	 on	 October	 11,	

2016.	 	 The	 day	 before	 the	 meeting,	 Eastwick	 sent	 “proposed	 exhibits”	 and	 a	

“proposed	 order”	 to	 the	 mediator	 and	 to	 Cate	 Street.	 	 Eastwick’s	 proposed	

order	 contained	 a	 provision	 stating	 that	 it	 was	 enforceable	 as	 an	 arbitration	

award.			

	     [¶7]		At	the	October	11	meeting,	the	parties	discussed	the	disputes	that	

had	 arisen	 since	 the	 July	 27	 mediation.	 	 Ultimately,	 the	 mediator	 signed	

Eastwick’s	 proposed	 order,	 which	 contained	 findings	 of	 fact	 and	 conclusions	

of	 law	 and	 required	 Cate	 Street	 to	 comply	 with	 the	 “Confidential	 Settlement	
4	

Agreement	and	Mutual	Release	of	Claims,”	which	was	referred	to	as	the	“final	

agreement.”	 	 Cate	Street	 objected	 to	 the	 October	 11	 meeting	 “as	 being	

anything	other	than	a	further	mediation	session”	and	filed	a	written	objection	

to	the	mediator’s	decision	at	or	just	after	the	meeting.			

	      [¶8]		Eastwick	applied	to	the	Superior	Court	to	confirm	the	October	11	

mediation	decision	as	an	arbitration	award,	see	14	M.R.S.	§	5937	(2016),	and	

filed	a	motion	for	approval	of	attachment	and	attachment	on	trustee	process,	

see	 M.R.	 Civ.	 P.	 4A,	 4B.	 	 Cate	 Street	 opposed	 Eastwick’s	 motions	 and	 filed	 an	

application	to	vacate	the	arbitration	award,	see	14	M.R.S.	§	5938(1)(E)	(2016),	

arguing,	despite	the	terms	of	its	employment	contract,	that	the	parties	never	

agreed	to	arbitration.			

       [¶9]		In	January	2017,	the	court	held	a	hearing	on	all	pending	motions,	

with	 the	 primary	 issue	 being	 whether	 the	 parties	 had	 agreed	 to	 arbitrate	

disputes	arising	out	of	the	MOU.		Eastwick	argued	that	the	parties	intended	to	

submit	any	subsequent	disputes	to	the	mediator	for	final	resolution—not	for	

additional	 negotiation	 or	 further	 mediation—as	 indicated	 by	 the	 language	 in	

paragraph	seven.		Cate	Street	argued	that	paragraph	seven	did	not	express	“a	

clear	 contractual	 intent	 to	 go	 to	 binding	 arbitration,”	 but	 rather	 that	 the	

parties	would	return	to	the	mediator	“in	his	role	as	a	mediator.”			
                                                                                           5	

	      [¶10]	 	 By	 an	 order	 entered	 on	 January	 9,	 2017,	 the	 court	 denied	 Cate	

Street’s	 motion	 to	 vacate,	 granted	 Eastwick’s	 application	 to	 confirm	 the	

arbitration	 award,	 and	 approved	 a	 writ	 of	 attachment	 and	 attachment	 upon	

trustee	process	in	the	amount	of	$250,000.			

       [¶11]		In	its	order,	the	court	concluded	that	the	MOU	was	an	integrated,	

binding	 settlement	 agreement	 even	 though	 it	 contemplated	 the	 execution	 of	

further	 documents	 and	 that	 the	 parties	 had	 agreed	 to	 arbitrate	 any	 disputes	

arising	 out	 of	 the	 drafting	 and	 execution	 of	 the	 settlement.	 	 Citing	 to	 several	

federal	 and	 state	 court	 precedents,	 the	 court	 stated	 that	 the	 absence	 of	 an	

express	 reference	 to	 “arbitration”	 was	 not	 determinative	 and	 that	 “the	

existence	 of	 an	 arbitration	 agreement	 does	 not	 depend	 entirely	 on	 whether	

words	such	as	‘arbitrate’	or	‘arbitration’	appear	in	the	agreement.”		The	court	

then	concluded	that	the	plain	meaning	of	the	disputed	provision	in	the	MOU	

was	 that	 the	 mediator	 “would	 decide—not	 mediate—any	 such	 dispute	

between	 the	 parties.”	 	 The	 court	 added,	 “Mediators	 facilitate	 the	 parties’	

resolution	 of	 disputes,	 but	 they	 themselves	 do	 not	 resolve	 disputes.		

Arbitrators	do.”			

       [¶12]		The	court’s	order	also	addressed	two	provisions	in	the	MOU,	the	

meaning	 of	 which	 Cate	 Street	 contested.	 	 First,	 the	 court	 concluded	 that	 the	
6	

plain	 meaning	 of	 the	 word	 “outstanding”	 allowed	 Eastwick	 to	 accelerate	 all	

remaining	 unpaid	 installments	 if	 any	 one	 payment	 was	 not	 made	 by	 Cate	

Street	 within	 thirty	 days	 after	 demand.	 	 Second,	 the	 court	 stated	 that	 “[o]ne	

aspect	 of	 the	 parties’	 settlement	 that	 cannot	 be	 preserved	 intact	 .	 .	 .	 is	 the	

confidentiality	provision”	due	to	the	public	nature	of	court	proceedings.			

        [¶13]	 	 The	 court	 entered	 a	 judgment	 in	 conformity	 with	 the	 order	

confirming	the	arbitration	award.		See	14	M.R.S.	§	5940	(2016).		The	judgment	

awarded	 Eastwick	 $100,000	 to	 be	 paid	 immediately	 and	 an	 additional	

$150,000	 to	 be	 paid,	 as	 originally	 agreed,	 in	 ten	 quarterly	 installments	 of	

$15,000	 each,	 beginning	 on	 January	 15,	 2017;	 included	 the	 acceleration	

clause;	and	incorporated	the	final	agreement	as	a	declaratory	judgment.1			

        [¶14]	 	 Cate	 Street	 filed	 a	 motion	 for	 reconsideration,	 which	 the	 court	

denied.	 	 No	 motion	 for	 further	 findings	 of	 fact	 and	 conclusions	 of	 law	 was	

filed.	 	 See	M.R.	 Civ.	 P.	 52.	 	 Cate	 Street	 timely	 filed	 a	 notice	 of	 appeal.	 	 See	

14	M.R.S.	§	5945	(2016);	M.R.	App.	P.	2	(Tower	2016).2			

    1		The	judgment	also	awarded	costs	to	Eastwick	as	the	prevailing	party	and	included	a	provision	

for	prejudgment	and	post-judgment	interest.	
     2		Rule	2	of	the	Maine	Rules	of	Appellate	Procedure	(Tower	2016),	governing	filing	and	timing	of	

appeals,	was	replaced	by	Rules	2A	and	2B	of	the	Maine	Rules	of	Appellate	Procedure	in	the	restyling	
of	the	Maine	Rules	of	Appellate	Procedure	adopted	to	govern	appeals	filed	on	or	after	September	1,	
2017.		
                                                                                           7	

                                  II.		LEGAL	ANALYSIS	

A.	    Standards	of	Appellate	Review	

       [¶15]	 	 The	 Uniform	 Arbitration	 Act,	 14	 M.R.S.	 §§	 5927-5949	 (2016),	

“requires	 a	 reviewing	 court	 to	 vacate	 an	 arbitration	 award	 if	 the	 parties	 did	

not	 agree	 to	 submit	 the	 dispute	 to	 arbitration.”	 Cape	Elizabeth	 Sch.	 Bd.	 v.	

Cape	Elizabeth	 Teachers	 Assoc.,	 459	 A.2d	 166,	 168	 (Me.	 1983);	 see	 14	 M.R.S.	

§	5938(1)(E).		“The	final	decision	on	the	question	of	substantive	arbitrability	

rests	 with	 the	 court.”	 	 Roosa	 v.	 Tillotson,	 1997	 ME	 121,	 ¶	 2,	 695	 A.2d	 1196;	

accord	Westbrook	Sch.	Comm.	v.	Westbrook	Teachers	Assoc.,	404	A.2d	204,	207	

(Me.	1979).		We	review	the	trial	court’s	determination	of	arbitrability	de	novo	

for	errors	of	law.		Reg’l	Sch.	Unit	No.	5	v.	Coastal	Educ.	Assoc.,	2015	ME	98,	¶	16,	

121	 A.3d	 98;	 V.I.P.,	 Inc.	 v.	 First	Tree	 Dev.	 Ltd.	 Liab.	 Co.,	 2001	 ME	 73,	 ¶	 3,	

770	A.2d	95.	

       [¶16]	 	 “Parties	 cannot	 be	 compelled	 to	 submit	 their	 controversy	 to	

arbitration	 unless	 they	 have	 manifested	 in	 writing	 a	 contractual	 intent	to	 be	

bound	to	do	so.”		Roosa,	1997	ME	121,	¶	4,	695	A.2d	1196	(alteration	omitted).		

“General	 rules	 of	 contract	 interpretation	 apply.”	 	 V.I.P.,	 2001	 ME	 73,	 ¶	 3,	

770	A.2d	95.		“A	contract	is	to	be	interpreted	to	effect	the	parties’	intentions	as	

reflected	 in	 the	 written	 instrument,	 construed	 with	 regard	 for	 the	 subject	
8	

matter,	 motive,	 and	 purpose	 of	 the	 agreement,	 as	 well	 as	 the	 object	 to	 be	

accomplished.”		Id.	

      [¶17]		“Whether	language	in	a	contract	is	ambiguous	is	a	question	of	law	

that	we	review	de	novo.		Document	language	is	ambiguous	if	it	is	reasonably	

susceptible	 to	 different	 interpretations.”	 	 Champagne,	 2006	 ME	 58,	 ¶	8,	

897	A.2d	 803	 (citation	 omitted).	 	 If	 a	 document	 is	 unambiguous,	 then	 its	

interpretation	 is	 also	 a	 question	 of	 law	 and	 “must	 be	 determined	 from	 the	

plain	 meaning	 of	 the	 language	 used	 and	 from	 the	 four	 corners	 of	 the	

instrument	 without	 resort	 to	 extrinsic	 evidence.”	 	 Portland	 Valve,	 Inc.	 v.	

Rockwood	Sys.	Corp.,	460	A.2d	1383,	1387	(Me.	1983).		“The	fact	that	parties	

have	 different	 views	 of	 what	 an	 agreement	 means	 does	 not	 render	 it	

ambiguous.”		Champagne,	2006	ME	58,	¶	10,	897	A.2d	803.	

B.	   The	Settlement	Agreement	

      [¶18]	 	 Cate	 Street	 contends	 that	 the	 MOU	 does	 not	 contain	 clear	

contractual	language	of	the	parties’	intent	to	submit	disputes	to	the	mediator	

for	binding	arbitration.		We	do	not	agree.	

      [¶19]		Paragraph	seven	of	the	MOU	states	that	“[a]ny	disputes	that	may	

arise	during	the	drafting	and	execution	of	the	settlement	shall	be	submitted	to	

[the	mediator]	for	review	and	resolution.”		(Emphasis	added.)		A	plain	reading	
                                                                                        9	

of	 this	 provision	 indicates	 that	 the	 parties	 agreed	 to	 yield	 authority	 to	 the	

mediator	 to	 resolve—not	 make	 recommendations	 on	 or	 merely	 assist	 the	

parties	 themselves	 to	 resolve—any	 disputes.	 	 See	 New	 Oxford	 American	

Dictionary	1486	(3d	ed.	2010)	(defining	“resolution”	as	“the	action	of	solving	a	

problem,	 dispute,	 or	 contentious	 matter”);	 id.	 at	 1734	 (defining	 “submitting”	

as	“agree[ing]	to	refer	a	matter	to	a	third	party	for	decision	or	adjudication”).	

      [¶20]	 	 Looking	 at	 the	 four	 corners	 of	 the	 MOU	 bolsters	 this	 plain	

language	 interpretation.	 	 See	 V.I.P.,	 2001	 ME	 73,	 ¶	 3,	 770	A.2d	 95;	 Portland	

Valve,	 Inc.,	 460	 A.2d	 at	 1387.	 	 The	 purpose	 of	 the	 document	 was	 to	

memorialize	 the	 parties’	 agreement	 “to	 settle	 their	 dispute	 .	 .	 .	 after	

mediati[on].”	 	 The	 MOU	 provided	 for	 the	 termination	 of	 the	 employment	

agreement,	 which,	 notably,	 was	 drafted	 by	 Cate	 Street	 and	 required	 the	

parties	 to	proceed	 to	 arbitration	 if	 mediation	 was	 unsuccessful;	 an	 exchange	

of	 releases	 in	 “standard	 terms”	 covering	 all	 claims	 between	 the	 parties	 and	

providing	for	confidentiality;	and	consideration	of	$250,000.		Thus,	there	were	

no	remaining	issues	that	required	further	mediation.		The	mediator’s	services	

were	 required	 only	 to	 resolve	 any	 disputes	 that	 arose	 in	 the	 drafting	 or	

execution	of	the	settlement	in	order	to	make	the	settlement	final.	
10	

           [¶21]	 	 The	 language	 of	 paragraph	 seven	 and	 the	 language	 used	 by	 the	

parties	 to	 express	 the	 purpose	 of	 the	 MOU	 indicate	 finality.	 	 Given	 this	

language,	we	conclude	that	the	parties	intended	to	submit	any	disputes	arising	

from	 the	 MOU	 to	 the	 mediator	 for	 arbitration.	 	 Cf.	Champagne,	 2006	 ME	 58,	

¶	12,	 897	A.2d	 803	 (quoting	 the	 American	 Arbitration	 Association	 Rules	

which	 define	 “arbitration”	 as	 the	 “voluntary	 submission	 of	 a	 dispute	 to	 a	

disinterested	 person	 or	 persons	 for	 final	 and	 binding	 determination”).		

Because	we	conclude	that	the	there	was	an	agreement	to	arbitrate,	we	turn	to	

Cate	 Street’s	 argument	 that	 the	 court	 exceeded	 the	 scope	 of	 its	 authority	 by	

not	limiting	its	decision	to	confirming	the	arbitration	award.			

C.	        The	Judgment	Entered	Pursuant	to	Section	5940	

	          [¶22]	 	 Cate	 Street	 contends	 that	 the	 court	 erred	 by	 construing	 and	

applying	 the	 acceleration	 clause	 and	 the	 confidentiality	 provision	 when	

Eastwick	did	not	file	a	breach	of	contract	claim.3		

           [¶23]		Upon	granting	an	application	to	confirm	an	arbitration	award,	the	

court	is	required	to	enter	a	judgment	in	conformity	with	the	award.		14	M.R.S.	

§	 5940.	 	 There	 are	 limited	 circumstances	 in	 which	 a	 court	 may	 modify	 an	

arbitration	 award.	 	 See	 id.	 §§	 5937,	 5939;	 Me.	 State	 Emps.	 Assoc.	 Local	 1989,	

      3	
     	 Cate	 Street	 also	 argues	 that	 the	 court’s	 actions	 deprived	 it	 of	 due	 process.	 	 We	 are	 not	
persuaded	by	Cate	Street’s	argument	and	do	not	address	it	further.	
                                                                                          11	

SEIU	v.	State	Dep’t	of	Corr.,	593	A.2d	650,	652	(Me.	1991).		The	court	does	not	

modify	an	award,	however,	by	construing	a	term	in	the	award	when	the	term’s	

meaning	is	unambiguous.		See	M.S.E.A.	Local	1989,	593	A.2d	at	653.	

       [¶24]	 	 Here,	 the	 court	 explicitly	 stated	 that	 its	 interpretation	 of	 the	

acceleration	 clause	 was	 based	 on	 the	 clause’s	 unambiguous	 meaning:	

“Mr.	Eastwick	is	not	entitled	to	judgment	for	the	entire	$250,000,	at	least	as	of	

yet.		The	acceleration	provision	.	.	.	applies,	on	its	face,	only	to	late	installment	

payments	 due	 under	 section	 1(b),	 not	 to	 the	 initial	 payment	 due	 under	

section	1(a).		Accordingly,	the	judgment	will	be	for	the	$100,000	that	is	clearly	

past	due,	and	will	provide	that	the	judgment	may	be	amended	for	the	entire	

unpaid	 amount	 if	 any	 installment	 payment	 is	 missed	 and	 not	 made	 within	 30	

days	 of	 a	 written	 demand	 for	 payment	 .	 .	 .	 .”	 	 (Emphasis	 added.)	 	 Thus,	 there	

would	 be	 an	 acceleration	 requiring	 payment	 of	 all	 remaining	 unpaid	

installments,	 not	 just	 the	 original	 $100,000	 payment	 and	 the	 four	 quarterly	

installment	 payments	 now	 past	 due,	 only	 if	 Cate	 Street	 were	 to	 fail	 to	 make	

the	 future	 quarterly	 payments	 as	 due	 or	 within	 30	 days	 after	 a	 written	

demand	for	a	missed	payment.		Otherwise,	those	quarterly	payments	not	yet	

due	must	be	paid	as	specified	in	the	MOU.	
12	

         [¶25]	 	 Although	 the	 court	 noted	 in	 its	 order	 that	 the	 parties’	

confidentiality	had	been	compromised	by	the	litigation,	the	court’s	judgment	

incorporated	 the	 final	 agreement,	 including	 the	 ten	 quarterly	 payments,	

without	 ordering	 acceleration	 of	 those	 payments	 not	 yet	 due	 and	 without	

modifying	any	of	its	terms,	including	the	confidentiality	provision.	

         The	entry	is:	

                            Judgment	affirmed.	
	
	      	       	     	      	      	
	
Melinda	 J.	 Caterine,	 Esq.,	 and	 David	 Strock,	 Esq.	 (orally),	 Littler	 Mendelson,	
P.C.,	Portland,	for	appellant	Cate	Street	Capital,	Inc.	
	
Julia	 G.	 Pitney,	 Esq.	 (orally),	 Drummond	 Woodsum,	 Portland,	 for	 appellee	
Matthew	Eastwick	
	
	
Cumberland	County	Superior	Court	docket	number	CV-2016-398	
FOR	CLERK	REFERENCE	ONLY