Court Opinion

ID: 9496285
Source: CourtListenerOpinion
Date Created: 2023-08-05 16:22:25.273366+00
Date Added: 2024-06-11T17:57:28.485075
License: Public Domain

CLAY, Circuit Judge,
dissenting.
The district court did not err in concluding that all aspects of the breach of contract claim brought by Defendant, Noble International, Ltd., against Plaintiff, Bratt Enterprises, Inc., fell within the scope of the arbitration agreement. The majority’s approach to resolving the dispute is in contravention of the principles and jurisprudence pertaining to matters of arbitration. I therefore would affirm the district court’s judgment compelling arbitration, and respectfully dissent.
The Federal Arbitration Act (“FAA”) manifests a strong and liberal federal policy in favor of arbitration of disputes. See Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 625, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985); see also Decker v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 205 F.3d 906, 911 (6th Cir. 2000). The Supreme Court has long recognized that “where the contract contains an arbitration clause, there is a presumption of arbitrability in the sense that ‘[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. Doubts should be resolved in favor of coverage.’ ” AT & T Techs., Inc. v. Communications Workers of Am., 475 U.S. 643, 650, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986) (quoting Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960)). “[A]ny doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.” Moses H. Cone Mem’l Hosp. v. Mercury Construc. Corp., 460 U.S. 1, 24-25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983).
The majority ignores this well steeped body of federal policy and law in concluding that the parties’ dispute regarding the validity of the $1.2 million limitation did not fall within the ambit of the arbitration provision, but that the dispute as to the valuation amount exceeding the$1.2 million limitation did fall within the parameters of the arbitration provision. It is true, as the majority states, that a court must determine whether a dispute falls within the substantive scope of the arbitration agreement before compelling an unwilling party to arbitrate. It is also true that a party cannot be compelled to arbitrate a dispute that it had not previously agreed to arbitrate. However, in concluding that the dispute involving the limitation provision is not subject to arbitration, the majority fails to heed the Supreme Court’s directive that “any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.” Moses H. Cone Mem’l Hosp., 460 U.S. at 24-25, 103 S.Ct. 927 (emphasis added). Instead, the majority resolves the matter against arbitration by improperly interpreting the language of the provision in a narrow fashion while showing deference to Plaintiffs mutual mistake defense. See Paper, Allied-Indus., Chem. & Energy Workers Int’l Union v. Air Prods. & Chems., Inc., 300 F.3d 667, 676 (6th Cir.2002) (rejecting the union’s “narrow” interpretation of the agreement as not providing for arbitration, and finding that because the union’s dispute involved the “interpretation or application of any of the terms or provi*615sions” of the agreement, the dispute was one for arbitration).
To illustrate, the language of the arbitration agreement provides in relevant part:
Within 30 days after the delivery of the Closing Balance Sheet, the Company [Bratt] will notify the Purchaser, [Noble] as to whether it disagrees with any of the amounts included in the Closing Balance Sheet. If such notice is not given, the Closing Balance Sheet will be final and conclusive for all purposes. If the parties are unable to resolve their differences within 60 days of their receipt of the Closing Balance Sheet, the Purchaser [Noble] and the Company [Bratt] agree to retain a national accounting firm ... to arbitrate the dispute and render a decision within 30 days of such retention, which decision would be final and binding for all purposes.
(J.A. at 160-61.) The majority contends that the clause “disagree with any of the amounts included in the Closing Balance Sheet[,]” as set forth in the arbitration provision limits matters subject to arbitration strictly to disputes involving valuation, and therefore does not encompass compass any claim as to which party is responsible for the amount owed. This shortsighted and narrow approach fails to consider that implicit in any dispute as to the valuation of any amount on the Closing Balance Sheet is a claim as to which party is responsible for the amount, particularly where the Closing Balance Sheet provided the basis for the Final Purchase Price under the agreement.
In other words, as part and parcel of determining disagreements concerning the amounts included in the Closing Balance Sheet, the parties would expect to also determine by way of arbitration the applicability of the $1.2 million limitation. Thus, it cannot “be said with positive assurance that the arbitration clause is not susceptible to an interpretation that covers the asserted dispute,” and the matter is therefore entitled to a “presumption of arbitrability.” AT & T Techs., 475 U.S. at 650, 106 S.Ct. 1415 (internal quotation marks and citation omitted).
In summary, when liberally construing the arbitration provision as directed by the Supreme Court and in accordance with federal policy, it is clear that the district court properly concluded that Defendant’s' claim as to the validity of the $1.2 million limitation was one for the arbitrator. See Moses H. Cone Mem’l Hosp., 460 U.S. at 24-25, 103 S.Ct. 927 (noting that “questions of arbitrability must be addressed with a healthy regard for the federal policy favoring arbitration”). I therefore would affirm the district court’s judgment compelling arbitration of all aspects of Defendant’s breach of contract claim, and respectfully dissent.