Court Opinion

ID: 9492835
Source: CourtListenerOpinion
Date Created: 2023-08-05 14:51:40.219449+00
Date Added: 2024-06-11T17:55:31.113838
License: Public Domain

PARKER, Circuit Judge,
dissenting:
I agree with the majority that the relevant question in this case is whether the claims of the plaintiffs are within the scope of the arbitration clause. The arbitration clause, contained in the Termite Protection Plan, states that “any controversy or claim *51between [the parties] arising out of or relating to this agreement shall be settled exclusively by arbitration.” The scope of the agreement to arbitrate turns on the scope of “this agreement.” I differ from the majority in my interpretation of what “this agreement” encompasses. Because I believe that “this agreement” is the Termite Protection Plan, which clearly states that it becomes effective only after the initial termiticide treatments which gave rise to the plaintiffs’ claims were completed, I would affirm the judgment of the district court. See Mehler v. Terminix Int’l Co., No. 397CV2390, 1998 WL 893149 (D.Conn. Sept. 28,1998).
The majority found that the agreement referred to in the arbitration clause encompassed not only services offered under the Protection Plan, but also the initial termiticide treatments performed on July 19 and July 24, 1996. I disagree. First, the agreement being discussed bears the heading, in large bold type, “TERMITE PROTECTION PLAN.” The text of that agreement (the Termite Protection Plan) deals exclusively with protection from termite damage occurring after the initial two termiticide treatments. The Protection Plan and the Termite Guarantee which incorporates the Protection Plan state clearly that the contract between the parties was not yet in effect during these initial two treatments. Therefore the arbitration clause covers only claims pertaining to protection from new damage to the treated building, not the claims at issue here.
Under Connecticut contract law, “[w]here the language of the contract is clear and unambiguous, the contract is to be given effect according to its terms.” Lawson v. Whitey’s Frame Shop, 241 Conn. 678, 686, 697 A.2d 1137, 1141 (1997) (quoting 24 Leggett Street Ltd. Partnership v. Beacon Indus., 239 Conn. 284, 295, 685 A.2d 305 (1996)). The Protection Plan clearly provides that it is only effective “upon completion,” for two years. The Protection Plan itself does not define “completion,” but a separate “Completion Certificate” states that Terminix completed work on the Plaintiffs’ home on July 24, 1996, the date of the second termiticide treatment. Thus the Protection Plan went into effect after the initial treatments that gave rise to the claims in this case.
In addition, a “Note to Customer” printed on the first page of the Protection Plan states: “You will receive written confirmation that your contract is in effect when the work is completed and Terminix has been paid in full.” The work completed apparently refers to the initial termiticide treatments; Terminix was paid in full on July 31, 1996. Subsequently, written confirmation was sent to the plaintiffs by Ter-minix in the form of a form letter and the Termite Guarantee.
Finally, the Protection Plan states that it protects against only “new subterranean termite damage,” which is damage “subsequent to the inception date.” The Termite Guarantee, which incorporates the Protection Plan, offers an inception date, stating: “CONTRACT BEGINS: 08/01/96” — one week after the second termiticide treatment was applied, and one day after Ter-minix was paid in full. In short, the unambiguous terms of the Protection Plan and Guarantee clearly provide that the contract only became effective after the initial termiticide treatments; the Protection Plan and its arbitration clause pertain exclusively to new termite damage occurring subsequent to the initial treatments. See Mehler, 1998 WL 893149 at *5.
The majority does not disagree with the applicable dates of the Termite Protection Plan, but concludes that a “reasonable reading” of the agreement indicates that the start date “pertains only to the Protection Plan and the Guarantee, which constitute only part of the Agreement as a whole.” But a “reasonable reading” cannot displace clear and unambiguous contract language under Connecticut law. See Lawson, 241 Conn. at 686, 697 A.2d at 1141. The majority imposes its reasonable reading of the agreement, even though the *52Protection Plan, the Guarantee, and the other documents provided by Terminix nowhere state that the contract was in effect before completion of the initial termiticide treatments.
This Court should not look further than the clear language of the contractual documents. It is irrelevant, for example, that the plaintiffs signed the Protection Plan on the date of the initial treatment, or that the Protection Plan incorporates the Inspection Graphs. At most, these facts make the agreement ambiguous, and Connecticut contract law provides that an ambiguous contract must be construed against its drafter-here, Terminix. See Southern New England Contracting Co. v. Connecticut, 165 Conn. 644, 656, 345 A.2d 550, 557 (1974) (“[A] contract which is susceptible of two meanings must be construed against the party who drew it.”). The majority also points to language in small print which is part of a Note to Customer which says: “This is a service order and copy of the Termite Protection Plan.” Given the fact that nothing in the contract provides for any services except future treatment, this language is at best a highly ambiguous reference to prior treatment. Terminix drafted all of the documents at issue, and should not be advantaged by the majority’s “reasonable reading” of these documents, if the documents are ambiguous. Because the Protection Plan and Guarantee clearly state that they pertain only to damage occurring after the two initial treatments, doubts which might be raised elsewhere should not override that clear language in Terminix’s favor.
As the district court correctly concluded, work that was to be completed before the contract could become effective was not within the scope of that contract. The agreement contains no provision to the contrary. “While it is clear now what sort of language the defendant wishes it had written in its Termite Protection Plan, it is equally clear that such language is not to be found there.” Mehler, 1998 WL 893149 at *6. The majority’s interpretation of the agreement as a unified contract cannot alter the fact that the effective dates of the contract were clearly specified by Termi-nix in the documents themselves. The initial termiticide treatments are not covered by the Protection Plan signed by the Plaintiffs, or by the Guarantee; the claims relating to those treatments are therefore not covered by that contract.
Once the contract including the arbitration clause is viewed as not covering the initial treatments, the arbitration provision in that contract should not be applied retroactively to acts that took place before commencement of the contract. The district court correctly interpreted Connecticut law to provide that the arbitration clause should not be applied retroactively. See Mehler, 1998 WL 893149, at *8. Connecticut law provides that contract provisions typically do not apply retroactively “in the absence of an express term.” See Housing Authority of Norwalk v. Ross, No. 9206-A2880, 1993 WL 394294, at *4 (Conn.Super.Ct. July 19, 1993). The majority finds the district court’s conclusion flawed, arguing that the agreement covered the period before the stated dates of the contract’s effectiveness, so retroactive application was not required. But any flaw that may be present is in the agreement itself, according to which Terminix specifically provided that only claims arising under the Protection Plan would be submitted to arbitration.
In addition, the breadth of the arbitration clause is irrelevant in this case, because it does not alter the fact that the parties’ agreement to arbitrate became effective only after the claims arose. The presumption of arbitrability that accompanies broad arbitration clauses thus does not apply here.
Finally, the majority’s alternative holding that the claims are covered by the arbitration clause because they “relate to” the agreement is not supported by the law of this Circuit. This Court has not previously held that parties must arbitrate *53claims that arise before an agreement to arbitrate has gone into effect. Indeed, this conclusion is at odds with federal law, which does not require parties to arbitrate when they have not agreed to do so. See Volt Info. Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University, 489 U.S. 468, 478, 109 S.Ct. 1248, 108 L.Ed.2d 488 (1989); Collins & Aikman Products Co. v. Building Systems, Inc., 58 F.3d 16, 19-20 (2d Cir.1995). The plaintiffs only agreed to arbitrate claims arising out of or relating to services provided under the Protection Plan. I cannot see how a claim that arose as a result of services previously rendered arises out of or relates to claims which might arise as a result of future services.
None of the cases cited by the majority involved a situation where, as here, the agreement to arbitrate was not yet in effect at the time the claims arose. Collins, upon which the majority principally relies, involved wrongful termination of two 1977 contracts that contained arbitration clauses, as well as other claims framed as violations of a 1988 agreement which did not contain an arbitration clause. See Collins, 58 F.3d at 18-19. The 1977 contracts clearly were in effect before the claims arose. Here, the language of the Termite Protection Plan clearly and unambiguously states that the Protection Plan was not yet in effect at the time of the initial termiti-cide treatments which gave rise to the plaintiffs’ claims. Therefore, these claims do not arise under and are not related to the Protection Plan.
Moreover, in Collins this Court did not find that any claim related to the 1977 contracts would be submitted to arbitration; rather, this Court specifically concluded that claims that did not implicate construction of the 1977 contracts or the plaintiffs rights and obligations under those contracts were beyond the scope of the contracts’ arbitration agreements. See ■id. at 23.
The Collins analysis began by recognizing that the arbitration clauses in the 1977 contracts were broad, and therefore raised a presumption that the claims were arbi-trable. See id. at 20.- Because it was a presumption only, this Court went on to analyze whether the claims at issue implicated the 1977 contracts; “Our goal is always to enforce the agreement to arbitrate on its own terms.” Id. at 21 (emphasis added). This Court recognized that not all of the claims at issue were arbitrable: “To the extent that these claims seek relief under the 1988 Agreement for conduct that does not arise out of or relate to the 1977 Contracts, they are not arbitrable.” Id. at 22. Finally, this Court summarized the test that we must apply:
[I]f the arbitration clause is broad, there arises a presumption of arbitrability; if, however, the dispute is in respect of a matter that, on its face, is clearly collateral to the contract, then a court should test the presumption by reviewing the allegations underlying the dispute and by asking whether the claim alleged implicates issues of contract construction or the parties’ rights and obligations under it. If the answer is yes, then the collateral dispute falls within the scope of the arbitration agreement; claims that present no question involving construction of the contract, and no questions in respect of the parties’ rights and obligations under it, are beyond the scope of the arbitration agreement.
Id. at 23.
Here, Terminix presents no question involving construction of the Protection Plan or in respect to the parties rights and obligations under the Protection Plan, because the Protection Plan on its face is concerned only with protection against future termite damage. Therefore the plaintiffs’ claims do not arise out of or relate to the Protection Plan. For these reasons, I respectfully dissent from the opinion of the majority.