Court Opinion

ID: 199427
Source: CourtListenerOpinion
Date Created: 2011-02-07 04:30:33+00
Date Added: 2024-06-11T17:27:00.552641
License: Public Domain

United States Court of Appeals
                     For the First Circuit

No. 00-1958

                     MIRRA COMPANY, INC.,

                     Plaintiff, Appellant,

                              v.

              SCHOOL ADMINISTRATIVE DISTRICT #35
        A POLITICAL SUBDIVISION OF THE STATE OF MAINE
       WITH PRINCIPAL OFFICES IN SOUTH BERWICK, MAINE,

                      Defendant Appellee.

         APPEAL FROM THE UNITED STATES DISTRICT COURT

                   FOR THE DISTRICT OF MAINE

         [Hon. D. Brock Hornby, U.S. District Judge]

                            Before

                     Boudin, Circuit Judge,
                 Stahl, Senior Circuit Judge,
                   and Lynch, Circuit Judge.

     David P. Ray, with whom Burns Ray DeLano & Macdonald, P.A.,
Frank P. Spinella, Jr., and Hall, Morse, Anderson, Miller &
Spinella, P.A., were on brief, for appellant.
     Jerrol A. Crouter, with whom Drummond Woodsum & MacMahon,
were on brief, for appellee.
June 5, 2001
            STAHL, Senior Circuit Judge.      This case arose from a

dispute between the parties to a construction contract.                 The

Maine School Administrative District No. 35 (MSAD 35) and the

Mirra Company, Inc.(Mirra), had entered into a contract which

obligated Mirra to do site work at a high school project in the

district.    Problems soon arose, and now each party has claims

against the other. The sole question before us is whether the

parties must submit these claims to binding arbitration.              Mirra

argues   that   the   contract   requires   disputes    to   be   resolved

through arbitration, while MSAD 35 claims that there is no such

agreement in the final version of the parties' contract.                The

district court agreed with MSAD 35 and held that the contract

unambiguously did not require arbitration.        We affirm.

                             I. BACKGROUND

            In early 1997, the State of Maine Bureau of General

Services (BGS) advertised for bids for site work at the new

Marshwood High School in South Berwick, Maine.           MSAD 35 is the

public   school   district   for   that   town.   The    bid      documents

provided that the     Standard General Conditions for construction

contracts would apply, subject to certain amendments, listed in

the attached Supplementary General Conditions.               As relevant

here, the Standard General Conditions stated:

            Article 42. ARBITRATION

                                   -3-
                   If, in the performance of this
            contract, there arises a dispute between the
            Owner and the Contractor which cannot be
            settled,   then   this  dispute   shall   be
            submitted to Arbitration and both the Owner
            and the Contractor shall be bound by the
            decision of the Arbitrator.
                   The   membership  of   the   American
            Arbitration Association shall be used as
            Arbitrators and the procedures used for
            Arbitration shall be in conformity with the
            Construction Industry Arbitration Rules as
            administered by the American Arbitration
            Association.

            The Supplementary General Conditions used two different

methods to amend the General Conditions.           Where only a few words

were to be changed, the Supplementary General Conditions merely

referenced the article number and title of the relevant General

Condition    to    be   changed   and    the    minor     alterations   were

described.     But where an entire article was to be substituted

with a new one, the Supplemental General Conditions referenced

the   relevant     article   number     and    title    and   set   forth   an

instruction to delete the article               in its entirety and to

substitute a      new one with a new heading.          This second procedure

was used with respect to the agreement’s original arbitration

provision resulting in the following change:

                   Article 42 - ARBITRATION: Delete in
            its entirety and substitute:

                    Article 42 - DISPUTE RESOLUTION:

                          If, in the performance of this
            Contract,    there arises a dispute between

                                   -4-
          Contractor and Owner that cannot be resolved
          by the parties to the Contract, the dispute
          shall be referred to the Director of the
          Bureau of General Services, who, at his/her
          discretion, will submit the dispute to non-
          binding Alternate Dispute Resolution or
          binding arbitration (ADR).   If the parties
          in dispute are not satisfied with the
          results of ADR Owner or Contractor may re-
          submit the dispute to the Director for
          binding arbitration.

          On May 15, 1997, Mirra submitted its bid to BGS, which

was the lowest of all received, and BGS forwarded it to MSAD 35.

On June 9, 1997, MSAD 35 sent Mirra a addendum designed to

further modify the Bidding and Contract Documents.        The addendum

did not delete and replace any articles wholesale, as the BGS's

Supplementary General Conditions had done, but merely referenced

each article it was to modify and set forth what was to be

deleted and what was to be added within the relevant article as

it most recently stood.      On June 23, 1997, Mirra explicitly

acknowledged the changes wrought by the addendum and executed

the   contract.   The   addendum    modified   the   parties’   dispute

resolution agreement as follows:

          1.04   Supplementary   General    Conditions,
          Section 3-B-4, Article 42
                 DELETE:   The entire paragraph
                 ADD:           "Any disputes arising out
                 of or in the course of this Agreement,
                 which   cannot    be   settled    through
                 discussion between parties, shall be
                 submitted   to   mediation   before   any
                 lawsuit or Demand for Arbitration is
                 filed.    When either party requests

                                   -5-
                   mediation, the parties, [sic] shall
                   attempt to agree on a single mediator to
                   mediate the dispute. The mediator shall
                   assist the parties in attempting to
                   solve their dispute by agreement.    The
                   parties agree to participate in good
                   faith during the mediation process
                   including the selection of the mediator.
                   The parties agree that they will engage
                   in mediation for at least three days,
                   unless a shorter period is set by the
                   mediator, before abandoning the process.
                   The cost of mediation shall be borne
                   equally by each party.
                   Notwithstanding this provision, either
                   party may file suit before or during
                   mediation if the party in good faith
                   deems it necessary to avoid losing the
                   right to sue. If suit is filed before
                   good   faith   mediation   efforts   are
                   completed, the party filing suit will
                   agree to stay until all mediation
                   efforts have been completed.

           In   early   2000,   as    the   project   neared   completion,

various disputes arose between the parties, and each asserted

claims against the other.            As required by the contract, the

parties participated in mediation on May 17, 2000, but without

success.   MSAD 35 then filed suit against Mirra on May 19, 2000,

in the Maine Superior Court.          On May 22, 2000, Mirra filed this

diversity action    requesting an order to compel arbitration.          On

July 1, 2000, the district court held that "the contract is

unambiguous and does not require arbitration."             Mirra appeals

that decision.

                            II. DISCUSSION

                                     -6-
           The interpretation of unambiguous contract language is

a matter of law reserved to the courts.           Golden Rule Ins. Co. v.

Atallah,   45   F.3d   512,   516   (1st   Cir.   1995)   ("Under   Maine's

general

law of contracts, the interpretation of a contract is a question

for the fact finder only if the court first determines that the

contract is ambiguous, a question of law.").              For this reason,

we afford de novo review to the district court’s ruling.               Paul

Revere Variable Annuity Ins. Co. v. Kirschhofer, 226 F.3d 15,

18-19 (1st Cir. 2000).

           Arbitration is a contractual matter, and no party may

be forced to arbitrate a dispute unless she has expressly agreed

to do so by contract.     Air Line Pilots Ass'n v. Miller, 523 U.S.

866, 876 (1998).        In determining whether the parties to a

contract have agreed to arbitrate their disputes, courts "should

apply ordinary state-law principles that govern the formation of

contracts."     First Options of Chicago, Inc. v. Kaplan, 514 U.S.

938, 944 (1995).       Maine requires "clear contractual language

evidencing an intent to be bound to [arbitrate]."              Maine Cent.

R.R. v. Bangor & Aroostook R.R., 395 A.2d 1107, 1116 (Me. 1978);

see also Roosa v. Tillotson, 695 A.2d 1196, 1197-98 (Me. 1997).

           Here, there is no language in the final version of the

contract that clearly suggests an intent to arbitrate.              Article

                                    -7-
42,   as   revised    by   the   addendum,       only    requires     non-binding

mediation,    after    which     either    party       may   file   suit    or    seek

arbitration (with the consent of the other party).                       Mirra does

not   suggest    a    different    interpretation            of   this     language.

Rather, its central argument is that, when the final addendum

deleted the     ADR paragraph from the revised Article 42, it also

deleted the preceding instruction to delete the original Article

42, thus resulting in its reinstitution.

            We do not agree.       The Supplementary General Conditions

removed the arbitration clause found in the Standard General

Conditions,     and   replaced     it     with    an    entirely     new     dispute

resolution clause. The addendum merely changed the language of

that new clause so as to require mediation rather than ADR.                        The

contract unambiguously does not require arbitration.                             Thus,

either party is free to bring a lawsuit against the other for

damages arising from a breach of the contract.

            The judgment of the district court is affirmed.

                                        -8-