RW Development, L.L.C. v. Cunningham Group Architecture, P.A. ( 2014 )

Case: 13-60010 Document: 00512593689 Page: 1 Date Filed: 04/11/2014
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 13-60010 FILED
Summary Calendar April 11, 2014
Lyle W. Cayce
RW DEVELOPMENT, L.L.C., Clerk
Plaintiff - Appellant
v.
CUNNINGHAM GROUP ARCHITECTURE, P.A.,
Defendant - Appellee
Appeal from the United States District Court
for the Southern District of Mississippi
USDC No. 1:12-CV-224
Before JONES, DENNIS and HAYNES, Circuit Judges.
PER CURIAM:*
In 2008, the Plaintiff-Appellant, RW Development (“RW Devco”), entered
into a written Letter Agreement with the Appellee, Cuningham Group
Architecture (“CGA”). CGA was to provide architectural services for the design
of a casino resort in exchange for compensation from RW Devco.
In 2010, CGA initiated an arbitration hearing against RW Devco for its
failure to pay CGA as conditioned in the Letter Agreement. CGA argues that
the Letter Agreement established that the parties would arbitrate all disputes
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
Case: 13-60010 Document: 00512593689 Page: 2 Date Filed: 04/11/2014
No. 13-60010
arising from the agreement. To support its claim, CGA relies on the following
provision from the Letter Agreement:
OTHER TERMS AND CONDITIONS
Except as otherwise modified or limited herein, the terms and
conditions of AIA Document B151, Abbreviated Standard Form of
Agreement Between Owner and Architect [], where [RW Devco] acts
as Owner and CGA acts as Architect, shall apply to the services
provided under this Proposal and Agreement.
AIA Document B151 states that all claims shall be arbitrated in accordance with
the Construction Industry Arbitration Rules (“CIAR”) of the American
Arbitration Association. In turn, the CIAR provides that "[t]he arbitrator shall
have the power to rule on his or her own jurisdiction, including any objections
with respect to the existence, scope or validity of the arbitration agreement."
After CGA initiated the arbitration hearing, RW Devco filed a complaint
in the Chancery Court of Harrison County, Mississippi, seeking a declaratory
judgment stating that the Letter Agreement did not oblige the parties to
arbitrate. CGA removed the case to the District Court for the Southern District
of Mississippi.
In the District Court, CGA filed a Motion to Enforce Arbitration
Agreement and to Dismiss, or Alternatively, Stay Action. The District Court
held that the parties agreed to arbitrate the issue of arbitrability, and left it to
the arbitrator to determine the arbitrability of the claims. The case was
dismissed without prejudice, and RW Devco appealed.
Neither party requested that the arbitration be stayed pending appeal,
and an arbitrator has since ruled on both the arbitrability of the claims, and RW
Devco's liability.1
1
The concluded arbitration does not affect this Court's ability to rule on whether or not
the Letter Agreement obligates the parties to submit the issue of arbitrability to an arbitrator.
In Weingarten Realty Investors v. Miller, this Circuit held that a Court of Appeals may decide
arbitrability while the merits of the underlying claims were decided by a district court or state
court. 661 F.3d 901 (5th Cir. 2011).
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On appeal, RW Devco asserts three main arguments why this court
should reverse the district court decision. First, RW Devco contends that the
CIAR, which compels the parties to arbitrate arbitrability, is too attenuated to
the Letter Agreement to be binding. Second, it argues that the AIA applies only
to disputes regarding services but does not apply to payment disputes. Finally,
it argues that the parties did not clearly and unmistakably agree to arbitrate
arbitrability. We review the grant of a motion to compel arbitration de novo.
Webb v. Investacorp, Inc., 89 F.3d 252, 257 (5th Cir. 1996).
RW Devco’s first two arguments-- that the CIAR is not enforceable because
it is too attenuated from the Letter Agreement to be binding, and that the AIA
only applies to services and not payments-- were not raised in the district court.
This court will not consider issues not properly presented in the court below.2
Regarding the final argument, RW Devco correctly asserts that the
arbitrability of the dispute will be determined by a district court "[u]nless the
parties clearly and unmistakably provide otherwise." Howsam v. Dean Witter
Reynolds, Inc., 537 U.S. 79, 83, 123 S. Ct. 588, 591 (2002) (citing AT & T
Technologies, Inc. v. Communications Workers, 475 U.S. 643, 649 (1986)). This
court has held that the "express adoption of [the American Arbitration
Association Rules] presents clear and unmistakable evidence that the parties
agreed to arbitrate arbitrability." Petrofac, Inc. v. DynMcDermott Petroleum
Operations Co., 687 F.3d 671, 675 (5th Cir. 2012). We must, therefore,
determine whether the Letter Agreement expressly adopted the American
Arbitration Association Rules.
Under Minnesota law, the law governing the agreement, a court must give
the language of the contract its plain and ordinary meaning when interpreting
it. Current Tech. Concepts, Inc. v. Irie Enters., Inc., 530 N.W.2d 539, 543 (Minn.
2
See In re Goff, 812 F.2d 931, 933 (5th Cir. 1987) ("We will not allow a party to raise
an issue for the first time on appeal merely because the party thinks that he or she might
prevail if given the opportunity to try the case again on a different theory.").
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1995). "A contract is ambiguous if its language is reasonably susceptible of more
than one interpretation." Id. "If a contract is ambiguous, it must be construed
against its drafter." Id.
RW Devco contends that the language of the Letter Agreement is
ambiguous on the arbitration issue because the Letter itself never mentions the
word "arbitration." This argument is without merit. The Supreme Court of
Minnesota has ruled that "[w]here one instrument refers to another for any
purpose, the latter, for the purpose and to the extent of the reference, will be
deemed a part of the former." In re Holtorf's Estate, 224 Minn. 220, 223 (Minn.
1947). In interpreting the Letter Agreement, the language of the AIA must also
be considered.
While the Letter Agreement does not mention arbitration, Article 7 of the
AIA expressly addresses it. Article 7 states, "Claims, disputes and other matters
in question between the parties that are not resolved by mediation shall be
decided by arbitration which, unless the parties mutually agree otherwise, shall
be in accordance with the Construction Industry Arbitration Rules of the
American Arbitration Association currently in effect." From this language it is
clear that the parties have expressly adopted the rules of the American
Arbitration Association. The parties have clearly and unmistakably agreed to
arbitrate arbitrability.
RW Devco further argues that the agreement is ambiguous because the
provision incorporating the AIA only mentions services. Therefore, it argues,
the agreement is unclear as to whether that parties also agreed to arbitrate
disputes about payments. Because the parties have adopted the CIAR and the
CIAR provides that the arbitrator will determine the scope of the arbitration
agreement, it was within the arbitrator’s compass to would decide if the parties
agreed to arbitrate payment disputes.
For the reasons stated above, the District Court's dismissal is AFFIRMED.
4