Court Opinion

ID: 9384763
Source: CourtListenerOpinion
Date Created: 2023-04-04 21:01:09.247657+00
Date Added: 2024-06-11T17:17:56.404781
License: Public Domain

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                                           UNPUBLISHED

                             UNITED STATES COURT OF APPEALS
                                 FOR THE FOURTH CIRCUIT

                                             No. 22-1795

        GREENWOOD, INC.,

                           Plaintiff - Appellee,

                    and

        TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA,

                           Third Party Defendant - Appellee,

                    v.

        IES COMMERCIAL, INC., a subsidiary of IES Holdings, Inc,

                           Defendant - Appellant,

                    and

        NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH PA,

                           Defendant.

        Appeal from the United States District Court for the District of South Carolina, at
        Greenville. Donald C. Coggins, Jr., District Judge. (6:21-cv-02085-DCC)

        Submitted: February 10, 2023                                    Decided: April 3, 2023

        Before WYNN and QUATTLEBAUM, Circuit Judges, and FLOYD, Senior Circuit Judge.
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        Affirmed by unpublished per curiam opinion.

        ON BRIEF: Andrew B. Bender, ANDREWS MYERS, P.C., Houston, Texas, for
        Appellant. W. Kyle Dillard, Greenville, South Carolina, Vanessa N. Garrido,
        OGLETREE, DEAKINS, NASH, SMOAK & STEWART, P.C., Raleigh, North Carolina,
        for Appellees.

        Unpublished opinions are not binding precedent in this circuit.

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        PER CURIAM:

               Cornerstone Construction, Inc. (“Cornerstone”) entered into a subcontract with

        Appellant IES Commercial, Inc. (“IES”), who subsequently subcontracted some of its work

        to Appellee Greenwood, Inc. (“Greenwood”). After IES allegedly failed to remit payment

        for some of Greenwood’s work, Greenwood commenced the instant breach of contract

        action against IES, who then moved to compel arbitration. The district court denied the

        motion, and we affirm.

               “We review de novo a district court’s denial of a motion to compel arbitration.”

        Muriithi v. Shuttle Exp., Inc., 712 F.3d 173, 178 (4th Cir. 2013). “[W]hether a dispute is

        arbitrable presents primarily a question of contract interpretation, requiring that we give

        effect to the parties’ intentions as expressed in their agreement.” Chorley Enters., Inc. v.

        Dickey’s Barbecue Rests., Inc., 807 F.3d 553, 563 (4th Cir. 2015) (internal quotation marks

        omitted). “In determining the parties’ intent, we apply ordinary state law principles

        governing the formation of contracts.” Id.

               The contract between IES and Greenwood (“the Greenwood Subcontract”)—which

        IES drafted—provided that, if either party refused to arbitrate a dispute, then the matter

        could be resolved through litigation. However, the Greenwood Subcontract also contained

        a so-called “flow-down clause,” which, according to IES, incorporated by reference the

        arbitration clause from IES’s agreement with Cornerstone (“the Master Subcontract”).

        And unlike the Greenwood Subcontract’s dispute resolution provision, the Master

        Subcontract’s arbitration clause did not afford the parties an arbitration veto; rather, for

        most disputes, arbitration was mandatory.

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               Contrary to IES’s argument, Greenwood contends that the Master Subcontract’s

        arbitration clause is inapplicable here. But we need not decide this issue. Assuming

        arguendo that Greenwood’s lawsuit implicates both the dispute resolution provision and

        the arbitration clause, we conclude that the resulting ambiguity must be resolved in favor

        of litigation.

               In South Carolina, whose law governs here, “[i]f a contract’s language is

        unambiguous, the plain language will determine the contract’s force and effect.” N. Am.

        Rescue Prod., Inc. v. Richardson, 769 S.E.2d 237, 240 (S.C. 2015). If, on the other hand,

        a contract provision is ambiguous—that is, “it is capable of more than one meaning or . . .

        its meaning is unclear,” id.—then the ambiguous language “should be construed liberally

        and interpreted strongly in favor of the non-drafting party,” S. Atl. Fin. Servs., Inc. v.

        Middleton, 590 S.E.2d 27, 29 (S.C. 2003). “[W]hether a contract is ambiguous is a

        question of law.” Richardson, 769 S.E.2d at 240.

               The provisions at issue are in conflict: the Greenwood Subcontract’s dispute

        resolution provision allows for arbitration if the parties so consent, whereas, for the most

        part, the Master Subcontract’s arbitration clause makes arbitration mandatory. In spite of

        this, IES tries to harmonize the provisions, reasoning that the dispute resolution provision

        permits arbitration if the parties agree to arbitrate, and the decision to incorporate the

        Master Subcontract’s arbitration clause—by way of the flow-down clause—reflects that

        the parties so agreed. But this interpretation would render much of the dispute resolution

        provision meaningless. See Stevens Aviation, Inc. v. DynCorp Int’l LLC, 756 S.E.2d 148,

        153 (S.C. 2014) (“[A]n interpretation that gives meaning to all parts of the contract is

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        preferable to one which renders provisions in the contract meaningless or superfluous.”

        (internal quotation marks omitted)). Thus, we are unpersuaded by IES’s attempt to explain

        away the obvious conflict between these two provisions.

               So, to resolve this conflict, we construe the agreement against the drafter, IES, and

        hold that the dispute resolution provision—allowing for arbitration only if the parties

        consent—controls here. * And because Greenwood does not consent, the district court was

        correct to deny IES’s motion to compel arbitration.

               As a final matter, IES argues, for the first time on appeal, that the parties agreed to

        delegate questions of arbitrability to an arbitrator. In other words, having failed to convince

        the district court that Greenwood’s breach of contract claim should be arbitrated, IES now

        wants someone else to decide this issue. But by not raising this issue before the district

        court, IES has forfeited the issue. Stern v. Marshall, 564 U.S. 462, 481-82 (2011); Wood

        v. Crane Co., 764 F.3d 316, 326 (4th Cir. 2014). We therefore decline to consider IES’s

        unpreserved delegation argument.

               *
                Though IES invokes the federal policy favoring arbitration, that policy does not
        apply where, as here, the question is whether the parties actually agreed to arbitrate a given
        dispute. E.E.O.C. v. Waffle House, Inc., 534 U.S. 279, 294 (2002) (“[W]e look first to
        whether the parties agreed to arbitrate a dispute, not to general policy goals, to determine
        the scope of the agreement.”); Wilson v. Willis, 827 S.E.2d 167, 173 (S.C. 2019) (“The
        presumption in favor of arbitration applies to the scope of an arbitration agreement; it does
        not apply to the existence of such an agreement or to the identity of the parties who may
        be bound to such an agreement.” (cleaned up)).

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               Accordingly, we affirm the district court’s order. We dispense with oral argument

        because the facts and legal contentions are adequately presented in the materials before this

        court and argument would not aid the decisional process.

                                                                                        AFFIRMED

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