AVCORR Management, LLC v. Central Falls Detention Facility Corp.
41 A.3d 1007
| R.I. | 2012Background
- Detention Facility is a Rhode Island public corporation operating Wyatt in Central Falls.
- AVCORR and Detention Facility entered into a consulting agreement on Jan 1, 2008 with an initial five-year term.
- The May 22, 2008 amendment amended compensation via Amended Exhibit B, including an Annual Fixed Fee and an Annual Man Day Fee; Section (a) of Exhibit B permitted binding arbitration for disputed invoices, while Section (b) did not.
- Amended Exhibit B defined the monthly invoice as including 1/12 of the Annual Fixed Fee plus reimbursable expenses; the Annual Man Day Fee was to be paid separately within 30 days after each annual period.
- Detention Facility terminated the agreement in April 2009; AVCORR invoiced May 1, 2009 for outstanding fixed fee, expenses, and 2008 Man Day Fee; Detention Facility disputed and did not pay.
- AVCORR petitioned Superior Court in May 2010 for appointment of a binding arbitrator; the Superior Court granted the petition; Detention Facility appealed; the Rhode Island Supreme Court granted stay and proceeded to decision.]
- IV. The Supreme Court vacated the part of the Superior Court’s order granting arbitration for the Annual Man Day Fee and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Annual Man Day Fee disputes fall within arbitration. | AVCORR: Amended Exhibit B requires binding arbitration for disputes over the monthly invoice (Annual Fixed Fee). | Detention Facility: arbitration clause limited to monthly fixed fees and expenses; Man Day Fee not included. | No; Man Day Fee disputes are not subject to arbitration. |
| Whether Amended Exhibit B controls over the original agreement on arbitration scope. | AVCORR: Exhibit B trumps inconsistent provisions and favors arbitration for all fees. | Facility: original agreement reserves court jurisdiction for non-arbitrable disputes. | Amended Exhibit B does not render all fees arbitrable; only the invoice-related disputes (Fixed Fee/expenses) are arbitration-bound. |
| What is the scope of arbitration for disputes arising under the agreement overall? | AVCORR: arbitration should resolve all disputes related to invoices under the agreement. | Facility: disputes outside the monthly invoice (e.g., Man Day Fee) are not within arbitration; courts retain jurisdiction for others. | Arbitration covers only the Annual Fixed Fee and expenses, not the Annual Man Day Fee. |
Key Cases Cited
- State Dept. of Corrections v. Rhode Island Brotherhood of Correctional Officers, 866 A.2d 1241 (R.I. 2005) (arbitration depends on clear and unequivocal language in contract)
- Radiation Oncology Assocs., Inc. v. Roger Williams Hosp., 899 A.2d 511 (R.I. 2006) (arbitration is a matter of contract; intent governs scope)
- School Committee of North Kingstown v. Crouch, 808 A.2d 1074 (R.I. 2002) (contractual arbitration scope governed by intent; policy favors arbitration in uncertainty)
- Stanley-Bostitch, Inc. v. Regenerative Environmental Equipment Co., 697 A.2d 323 (R.I. 1997) (duty to arbitrate arises only with clear language in the contract)
- Brown v. Amaral, 460 A.2d 7 (R.I. 1983) (public policy favors resolution of disputes by arbitration)