J&J CONTRACTORS INC v. MSAD 22

Filing 13

ORDER ON MOTION TO STAY AND MOTION TO COMPEL ARBITRATION- granting 4 Motion to Stay and Motion to Compel Arbitration By JUDGE NANCY TORRESEN. (mjlt)

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
J&J CONTRACTORS, INC.,
Plaintiff,
v.
M.S.A.D. 22 a/k/a REGION
SCHOOL UNIT 22,
Defendant

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Civil No. 1:14-cv-540-NT

ORDER ON MOTION TO STAY AND MOTION TO COMPEL ARBITRATION
The Plaintiff, J&J Contractors, Inc. (“J&J”), moves for an order compelling
arbitration and staying the case pending the completion of arbitration. Pl.’s Mot. to
Stay Litigation and Compel Arbitration (ECF No. 4). The Defendant, Maine School
Administrative District 22 (“M.S.A.D. 22”), objects to arbitration. For the reasons
that follow, I will GRANT the Motion to Compel and stay the case pending
arbitration.
I. APPLICABLE LEGAL STANDARDS
The Motion to Stay Litigation and Compel Arbitration implicates provisions of
the Federal Arbitration Act (“FAA”). 9 U.S.C. §§ 3 and 4. With respect to motions to
compel arbitration, the FAA provides, in relevant part:
A party aggrieved by the alleged failure, neglect, or refusal of another to
arbitrate under a written agreement for arbitration may petition any
United States district court which, save for such agreement, would have
jurisdiction under Title 28, in a civil action or in admiralty of the subject
matter of a suit arising out of the controversy between the parties, for

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an order directing that such arbitration proceed in the manner provided
for in such agreement.
9 U.S.C. § 4. Addressing the issuance of stays the FAA provides:
If any suit or proceeding be brought in any of the courts of the United
States upon any issue referable to arbitration under an agreement in
writing for such arbitration, the court in which such suit is pending,
upon being satisfied that the issue involved in such suit or proceeding is
referable to arbitration under such an agreement, shall on application
of one of the parties stay the trial of the action until such arbitration has
been had in accordance with the terms of the agreement, providing the
applicant for the stay is not in default in proceeding with such
arbitration.
9 U.S.C. § 3.
“Unless the parties clearly and unmistakably provide otherwise,” AT & T
Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 649 (1986), the court must
resolve a disagreement among the parties as to whether an arbitration clause applies
to a particular dispute, Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287, 299300 (2010). “[A] court may order arbitration of a particular dispute only where the
court is satisfied that the parties agreed to arbitrate that dispute.” Id. at 297. “When
deciding whether the parties agreed to arbitrate a certain matter . . . courts generally
. . . should apply ordinary state-law principles that govern the formation of contracts.”
First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995).
II. FACTS
In April 2010, M.S.A.D. 22 contracted with J&J to build the new Hampden
Academy (the “Project”). The dispute resolution clause in the construction contract
requires arbitration of “a dispute between [J&J] and [M.S.A.D. 22] that cannot be

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resolved by the parties to the contract.”1 Construction Contract, Article 42 (ECF No.
1-1). After a dispute between the parties in which J&J sought additional
compensation beyond the contract balance and M.S.A.D. 22 claimed that certain work
items remained incomplete, the parties entered into a Settlement Agreement and
Mutual Release (“Settlement Agreement”) on December 28, 2012. Settlement
Agreement (ECF No. 4-1). Later, J&J sought an additional payment from M.S.A.D.
22 for work performed by Porter Drywall. After M.S.A.D. 22 refused to reimburse
J&J for monies it paid to Porter Drywall, J&J filed this lawsuit and Motion to Compel
Arbitration under the terms of the Construction Contract.
III. DISCUSSION
MSAD 22 opposes arbitration because (1) the Porter Drywall claim was
discussed and expressly included as part of the “subject matter” of the Settlement
Agreement; (2) the integration clause of the Settlement Agreement states that it
“supersedes all prior agreements”; and (3) the Settlement Agreement contains no
arbitration provision. Def.’s Opp. To Pl.’s Mot. to Compel 2. M.S.A.D. 22 correctly

Under the Arbitration provision of the construction contract, if the parties cannot resolve a
dispute,
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the dispute shall be referred to the Director of the Bureau of General Services
(“BGS”) who at his/her discretion, will submit the dispute to non-binding Alternative
Dispute Resolution (ADR) or binding arbitration.” If the parties in dispute are not
satisfied with the results of ADR the Owner or the Contractor may resubmit the
dispute to the Director of the Bureau of General Services for binding arbitration.
Construction Contract, Article 42. The parties have agreed that J&J does not need to name the BGS
as a party and seek an order compelling BGS to make an election. Instead, the parties have agreed
that if the dispute resolution clause in the contract is applicable, the Court may compel binding
arbitration. Attorneys’ E-mail Exchange (ECF No. 4-5).

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asserts that there is no arbitration provision in the Settlement Agreement.

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disagree, however, that the Porter Drywall claim is not subject to arbitration.
Although the Settlement Agreement provides that it “supersedes all prior
agreements,” the integration clause also states that “[t]he provisions of this
Agreement comprise all of the terms, conditions, agreements, and representations of
the Parties respecting settlement of the claims released herein.”2 Settlement
Agreement ¶ 7. The Porter Drywall claim while referenced in the Settlement
Agreement was specifically excluded from the release given by J&J to M.S.A.D. 22.3
Settlement Agreement ¶ 5. Under the terms of the Settlement Agreement, J&J

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The integration clause of the Settlement Agreement provides:
The provisions of this Agreement comprise all of the terms, conditions, agreements,
and representations of the Parties respecting settlement of the claims released
herein. This Agreement supersedes all prior agreements, arrangements and
understandings, if any, relating to the subject matter hereof and may be amended
only by an instrument in writing executed jointly by all of the Parties. All
representations and promises made by any party to another, whether in writing or
orally, are understood by the Parties to be merged into this Agreement.

Settlement Agreement ¶ 7. The Settlement Agreement does not define “subject matter,” however, I
understand the “subject matter” of the Settlement Agreement to be the disputed claims that were
settled by the agreement, not the reserved Porter Drywall claim.
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The Release by J&J provides:
J &J, together with its agents, fellow agents, representatives, assigns, and any and
all persons or entities in privity with them, does hereby release, cancel, acquit,
relinquish, and forever discharge MSAD 22, its agents, fellow agents,
representatives, and any and all persons or entities in privity with them (collectively,
"Defendant Releasees"), from claims, demands, causes of action, damages, liabilities,
expenses, fees and costs, including attorneys’ fees, whether known or not known,
suspected or claimed, that J&J ever had, now has, or that may later develop, appear
or accrue against Defendant Releasees arising out of or related to the Project, except
that J&J does not release and expressly preserves any pass-through claims it may
have against MSAD 22. The only such claim of which J&J is currently aware is the
claim of Porter Drywall as generally described in Exhibit A.

Settlement Agreement ¶ 5. A detailed description of the Porter Drywall claim is attached to the
Settlement Agreement. See Exhibit A to Settlement Agreement – Summary of Porter Drywall Claim
for Productivity, Disruption and Delay Damages Hampden Academy.

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retained its right to bring a “pass-through” claim related to Porter Drywall against
M.S.A.D. 22. Thus, the adjudication of the Porter Drywall claim is not governed by
the terms of the Settlement Agreement. The Porter Drywall claim arises out of the
Project’s Construction Contract and is controlled by the terms therein, including the
arbitration clause.
IV. CONCLUSION
Accordingly, the Plaintiff’s Motion to Compel Arbitration is GRANTED and
the Motion to Stay is GRANTED pending the resolution of the arbitration. Every 90
days, the parties shall file with this Court a status report to apprise the Court of the
arbitration process.
SO ORDERED.

/s/ Nancy Torresen
United States Chief District Judge

Dated this 6th day of April, 2015.

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