Bogen Communications, Inc. v. Tri-Signal Integration, Inc. ( 2007 )

Opinions of the United
2007 Decisions States Court of Appeals
for the Third Circuit
4-13-2007
Bogen Comm v. Tri-Signal
Precedential or Non-Precedential: Non-Precedential
Docket No. 06-1987
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"Bogen Comm v. Tri-Signal" (2007). 2007 Decisions. Paper 1306.
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 06-1987
BOGEN COMMUNICATIONS, INC.
In The Matter Of Arbitration Between
v.
TRI-SIGNAL INTEGRATION, INC.
In The Matter Of Arbitration Between
Bogen Communications, Inc.,
Appellant
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
D.C. Civil No. 04-cv-06275
District Judge: The Honorable William G. Bassler
Submitted Under Third Circuit LAR 34.1(a)
March 27, 2007
Before: RENDELL, BARRY, and CHAGARES, Circuit Judges
(Filed April 13, 2007 )
OPINION
BARRY, Circuit Judge
Bogen Communications, Inc. (“Bogen”) appeals from an order of the District
Court for the District of New Jersey denying its Petition to Compel Arbitration. Because
the dispute that Bogen seeks to arbitrate arose more than two years after the expiration of
the contract containing the arbitration clause, we will affirm.
Bogen, a manufacturer and seller of sound systems and telephone peripherals,
authorized Tri-Signal Integration, Inc. (“Tri-Signal”), a company that specializes in the
design and installation of fire safety and communications systems, to distribute sound
systems in California. The two companies entered into a written contract that included an
arbitration clause. The contract expressly stated that it would terminate on December 31,
2000, and that it could be renewed only through a writing signed by both parties.
After the contract expired, the companies continued to do business together, but
they conducted their relationship on materially different terms. Bogen no longer required
Tri-Signal to (1) attend and participate in training courses; (2) submit business plans and
market reports; (3) meet quarterly to establish performance criteria; or (4) provide annual
financial statements. In addition, Bogen allowed Tri-Signal to pay on credit and
expanded Tri-Signal’s territory to include Sacramento and San Diego Counties.
Beginning on May 7, 2003, more than two years after the contract expired, Bogen
sent Tri-Signal a series of termination letters. These letters did not accord with the notice
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or opportunity to cure provisions contained in the original contract.1
On November 12, 2004, Tri-Signal sued Bogen, alleging a series of claims
stemming from the termination letters that included breach of an implied-in-fact contract
but not breach of the original contract. On December 14, 2004, Bogen filed a Demand
for Arbitration and on December 21, 2004, filed a Petition to Compel Arbitration. The
District Court found that none of Tri-Signal’s claims was based on Bogen’s actions
during the term of the original contract and denied the Petition. As noted above, it is this
order from which Bogen appeals.
We have jurisdiction over the District Court’s denial of Bogen’s Petition to
Compel Arbitration pursuant to 28 U.S.C. § 1291 and 9 U.S.C. § 16(a)(1)(B). We
exercise plenary review because the construction of a contract constitutes a legal
question. Medtronic AVE, Inc. v. Advanced Cardiovascular Systems, Inc., 247 F.3d 44,
53 n.2 (3d Cir. 2001).
Despite well-established policy considerations favoring the enforcement of
arbitration agreements under the Federal Arbitration Act, 9 U.S.C. § 1 et seq., a party can
only be required to arbitrate if “that party has entered into a written agreement to arbitrate
that covers the dispute.” Bel-Ray Co., Inc. v. Chemrite Ltd., 181 F.3d 435, 440 (3d Cir.
1999); see also 9 U.S.C. § 2. “Unless the parties clearly and unmistakably provide
1
The contract had specified sixty days’ notice for a termination for cause and had
provided for the opportunity to cure any alleged breach.
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otherwise, the question of whether the parties agreed to arbitrate is to be decided by the
court, not the arbitrator.” AT&T Technologies, Inc. v. Communications Workers of
America, 475 U.S. 643, 649 (1986).
The District Court did not err in refusing to order arbitration because Bogen chose
not to renew the contract that contained the arbitration clause. The dispute over
termination did not arise until more than two years after the original contract expired and
does not relate back to that contract.
Bogen relies on Luden’s Inc. v. Local Union No. 6 of the Bakery, Confectionery
and Tobacco Workers’ International Union of America, 28 F.3d 347 (3d Cir. 1994), to
argue that in continuing to do business together after the contract expired, the companies’
conduct gave rise to an implied-in-fact agreement containing an arbitration clause.
Luden’s, however, was decided by us in the context of a labor dispute, where the parties
had engaged in extensive negotiations concerning the extension of a collective bargaining
agreement.2 Id. at 350-51. The employer and union in Luden’s intended to renew their
agreement and intended for it to contain an arbitration clause. Id. at 356. Indeed, the
litigation concerned retroactive wages for the period between the expiration of the old
2
The four Third Circuit cases that cite Luden’s also involve labor unions and
collective bargaining agreements. See Durham Life Ins. Co. v. Evans, 166 F.3d 139, 159
(3d Cir. 1999); Graphic Communs. Int'l Union, Local 735-S v. North Am. Directory
Corp. II, 98 F.3d 97, 100 (3d Cir. 1996); McQuestion v. New Jersey Transit Rail
Operations, 30 F.3d 388, 393 (3d Cir. 1994); Laborers' Int'l Union v. Foster Wheeler
Corp., 26 F.3d 375, 399 (3d Cir. 1994).
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agreement and the ratification of the new one, both of which contained an arbitration
clause. Id. at 349, 356. Here, by contrast, the companies neither signed a new contract
nor evidenced any continuing intention to arbitrate disputes.
The order of the District Court will be affirmed.
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