ORDER AND MEMORANDUM OF DECISION
Plaintiff Bangor Hydro-Electric Co. (“Plaintiff’), a Maine corporation, brings this diversity action against Defendant New England Telephone & Telegraph Co., d/b/a Bell Atlantic (“Defendant”), a New York corporation. Plaintiff alleges that Defendant was obligated to pay a certain portion of tree clearance costs incurred by Plaintiff during the January 1998 ice storm, and that Defendant failed to do so. Plaintiff seeks to recover approximately $295,675.00 under the theories of breach of contract (Count I), quantum meruit (Count
I. BACKGROUND
The sole issue presented at this stage of the proceedings is whether Plaintiffs claims are subject to arbitration. Consequently, the Court dispenses with a lengthy discussion of the facts bearing on the merits and focuses instead on the facts related to arbitrability. 1 The following information — drawn from Plaintiffs Complaint, from the Affidavit of Larry Billings 2 , and from a copy of a letter from Larry Billings to George A. Belcher, Jr. 3 (“Billings Letter”) — is sufficient to provide some context.
Plaintiff is an electric utility that provides electrical transmission and distribution services throughout the greater Bangor area and the surrounding counties, including Penobscot, Piscataquis, Hancock, Washington, and Waldo counties (“Service Territory”). Defendant is a telephone utility that provides telephone services throughout Maine, including the Service Territory. Both Plaintiff and Defendant provide their respective services to customers within the Service Territory via utility distribution poles. Approximately seventy percent of the utility poles used by Plaintiff in the Service Territory are owned jointly, in equal ownership interest, by Plaintiff and Defendant.
In 1984, the parties executed a written contract entitled the “Joint Pole Agreement” that governs their joint ownership and occupancy of the utility poles. Plaintiff asserts that the Joint Pole Agreement provides, among other things, that Plaintiff and Defendant will share equitably the expenses and benefits connected with the jointly owned and occupied poles.
Beginning on or about January 5, 1998, and continuing through January 9, 1998, the State of Maine suffered a series of catastrophic ice storms. The Service Territory was among the most severely damaged areas in the State. Accumulations of ice on utility poles, wires, and trees caused numerous utility poles to weaken and collapse. Trees, limbs, and lines fell on and around utility poles. As a result, electrical power and telephone services were affected or cut off throughout the State and, in particular, the Service Territory.
Starting on January 7, 1998, Plaintiff engaged and dispatched work crews (“Tree Clearance Crews”) throughout the Service Territory to cut, trim, and clear away the trees, limbs, and debris that had fallen on and around utility poles and lines (“Tree Clearance Work”). As a result of deploying the Tree Clearance Crews, Plaintiff incurred costs totaling approximately $700,000.00 (“Tree Clearance Costs”). At some point during the next few months, Plaintiff indicated to Defen
In the spring of 1998, Defendant requested that Plaintiff provide a separate billing for its portion of the Tree Clearance Costs, rather than including those costs as an item in Plaintiffs routine monthly cross-billing with Defendant. In accordance with this request, Plaintiff submitted to Defendant in May a bill indicating its assessment of Defendant’s share of the Tree Clearance Costs and describing the work performed, the hours worked, and the location of the work. The bill specified that Defendant pay approximately $295,-675.00 to Plaintiff. Defendant responded that it would not pay for any of the Tree Clearance Work.
On June 17, 1998, Larry Billings, Plaintiffs Manager of Transmission and Distribution, sent a letter to George A. Belcher, a specialist in Joint Lines Facility Management for Defendant, explaining Plaintiffs position as to the bill and asking “for your re-consideration in this matter and if you still feel that it isn’t equitable then we must inform you that we will pursue this to the next step provided for in our agreement, that of ‘arbitration’ as provided for in ‘Article XV.’ ” (Billings Letter at 1.) Defendant never responded to this comment in the Billings Letter. The two parties continued to correspond regarding the dispute between June 1998 and the winter months of 1998 with no further mention of arbitration. (Billings Aff. at 3; Def.’s Reply Pl.’s Resp. Mot. Dismiss and Compel at 6.)
On March 8, 1999, Plaintiff filed a Complaint in this court asserting that by refusing to pay the amount specified, Defendant has breached a contract (Count I) and is additionally liable under the theories of quantum meruit (Count II), unjust enrichment (Count III), and equitable contribution (Count IV).
Defendant then filed a Motion to Dismiss for Lack of Subject Matter Jurisdiction and to Compel Arbitration based on Article XV of the Joint Pole Agreement, a copy of which is attached to the Affidavit of George A. Belcher as Defendant’s Exhibit B. Article XV of the Joint Pole Agreement is entitled “Arbitration” and states in its entirety:
In any case where it becomes necessary to resort to arbitration to resolve any provisions of this Agreement, each party shall designate an arbitrator and the two so selected shall have the right to appoint a third arbitrator. If they shall be unable to agree upon a third arbitrator, then the third arbitrator shall be appointed by a Justice of the Maine Supreme Judicial Court. Findings of fact by the arbitrators shall be binding and conclusive on the parties.
(Def.’s Ex. B.)
II. DISCUSSION
Section 3 of the FAA provides for the stay of an action brought in federal court where that action involves an issue intended by the parties to be resolved through arbitration.
4
9 U.S.C. § 3 (1994). Section 4 of the FAA provides for an order directing the parties to proceed to arbitration where they have agreed upon that dispute resolution method. 9 U.S.C. § 4 (1994). In order to grant a motion brought pursuant to these provisions, the Court must find that (i) there exists a written agreement to arbitrate, (ii) the dispute in question falls within the scope of that arbitration agreement, and (iii) the party seeking an arbitral forum has not waived its right to arbitration.
See Brennan v. King,
1. Existence of an Arbitration Agreement
The first and primary question before the Court in this case is whether the parties entered into an arbitration agreement at all. As the party seeking to substitute an arbitral forum for a judicial one, Defendant bears the burden of demonstrating, “at a bare minimum, that the protagonists have agreed to arbitrate some claims.”
McCarthy v. Azure,
Article XV of the Joint Pole Agreement, entitled “Arbitration,” provides:
In any case where it becomes necessary to resort to arbitration to resolve any provisions of this Agreement, each party shall designate an arbitrator and the two so selected shall have the right to appoint a third arbitrator. If they shall be unable to agree upon a third arbitrator, then the third arbitrator shall be appointed by a Justice of the Maine Supreme Judicial Court. Findings of fact by the arbitrators shall be binding and conclusive on the parties.
(Def.’s Ex. B.) Both parties assert that Article XV is unambiguous, but disagree as to its import. 5 Defendant argues that the language of Article XV indicates that any disputes arising out of the Joint Pole Agreement are to be decided through arbitration. 6 Plaintiff contends, in contrast, that Article XV merely sets forth the procedures to be followed in selecting an arbitrator in the event the parties decide to utilize arbitration to resolve a dispute.
The language giving rise to these competing interpretations is: “[i]n any case where it becomes necessary to resort to arbitration.” (Def.’s Ex. B.) According to Defendant, it is “necessary to resort to arbitration” when the parties cannot resolve a dispute arising out of the Joint Pole Agreement in the absence of third party intervention. Plaintiffs decision to file a Complaint in federal district court, argues Defendant, illustrates that this is an occasion where the parties are at an impasse and thus must “resort to arbitration.” Plaintiff, on the other hand, insists that the language of this clause simply does not reflect an agreement to arbitrate disputes relating to the Joint Pole Agreement that cannot be resolved by the parties themselves.
Unquestionably, Article XV is an example of poor draftsmanship. Moreover, the Court is mindful that it “should not rewrite contracts, particularly agreements between two corporations acting at arms length.”
Id.
at 1388. Nevertheless, courts in this Circuit have not required meticulously detailed language to support the existence of an arbitration agreement.
See Powderly v. MetraByte Corp.,
The interpretation of an unambiguous contract is a question of law and “must be determined from the plain meaning of the language used and from the four corners of the instrument without resort to extrinsic evidence.”
Portland Valve, Inc.,
2. Dispute Falling Within Scope of Arbitration Agreement
Having determined that the parties agreed to arbitrate any disputes arising out of the Joint Pole Agreement, the Court now must evaluate whether the dispute in question falls within the scope of that arbitration agreement. Assessing the scope of an arbitration agreement in relation to a particular dispute is a matter of both state law and general federal substantive law.
See Rosenberg v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,
Defendant identifies the relevant dispute as “whether joint tree trimming occurred justifying a division of costs, and occurred in accordance with the procedures outlined in the Agreement.” (Def.’s Mot. Dismiss and Compel at 7-8.) It points to the Joint Operating Procedures, which are incorporated into the Joint Pole Agreement, 8 as the source of the parties’ disagreement. Specifically, Defendant directs the Court to Section III, Article IV of the Joint Operating Procedures, entitled “Joint Trimming and Spraying,” which provides that “[t]he following principles apply to joint tree trimming and spraying where such work is mutually agreed upon in advance,” and which further provides that:
Joint tree trimming associated with heavy storm work such as hurricanes and ice storms, when each Company deploys trimming crews, shall be coordinated by field representatives of each Company as soon as practical. Determination will be made as to the areas which each Company will deploy its crews and the order in which lines will be cleared.
(Def.’s Ex. B.) Defendant contends that since the dispute giving rise to Counts IIV of Plaintiffs Complaint arises out of differing interpretations of a provision of the Joint Pole Agreement, it is one of the disputes the parties agreed to submit to arbitration and all four claims should be decided by an arbitrator.
Plaintiff does not contest that disputes relating to the “provisions” of the Joint Pole Agreement are subject to arbitration under Article XV. It argues, however, that since Counts II (quantum meruit), III (unjust enrichment), and IV (equitable contribution) of his Complaint do not specifically reference a “provision” of the Joint Pole Agreement, these claims are not subject to arbitration. Furthermore, although Plaintiff concedes that Count I (breach of contract) does reference a provision of the Joint Pole Agreement, it contends that even this count is not subject to arbitration for two reasons: (i) Count I is grounded in a different provision of the Joint Pole
With respect to Count I, Plaintiffs formalistic appeals are unavailing. Count I states that “[p]ursuant to the Joint Pole Agreement, [Defendant] agreed to share the expenses related to [the parties’] ownership and occupancy of the jointly owned poles in the Service Territory” and that “[Defendant] has breached the Joint Pole Agreement.” (Pl.’s Compl. at 6.) This is a clear invocation of the Joint Pole Agreement as the source of Defendant’s asserted obligation to pay. The fact that Defendant’s Motion cites a provision other than the one apparently contemplated by Plaintiff, and the fact that Defendant has not filed an answer asserting an affirmative defense premised on a provision of the Joint Pole Agreement, are simply irrelevant in the face of the plain language of Count I.
With respect to Plaintiffs position that Counts II, III, and IV are non-arbitrable because they do not reference a specific provision of the Joint Pole Agreement, the Court observes that “the First Circuit has rejected the labeling of controversies arising out of or related to the contract subject to arbitration so as to exclude them from the scope of arbitration.” Sea
-Land Serv., Inc. v. Sea-Land of P.R., Inc.,
3. Waiver
Plaintiff next argues that Defendant has waived any right it may have had to arbitration based on its conduct dating back to the earliest stages of this dispute. Section 3 of the FAA requires that “the applicant for the stay [not be] in default in proceeding with such arbitration.” 9 U.S.C. § 3 (1994). In order to successfully assert waiver by the opposing party, a plaintiff must demonstrate that it has been prejudiced.
See Sevinor v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,
Resolution of the waiver issue requires this Court to sift through the conflicting narratives advanced by the parties as to their respective courses of conduct. Plaintiff claims that from the beginning, Defendant has delayed resolution of this dispute. It first characterizes Defendant’s initial request in the spring of 1998 for a separate billing of its portion of the Tree Clearance Costs as irregular and suspect. It then argues that the Billings Letter was an “invitation to submit the dispute to arbitration” that was “ignored” by Defendant. (Pl.’s Resp. Def.’s Mot. Dismiss and Compel at 6.) Plaintiff more generally asserts that in the months after the exchange of the Billings Letter, it tried to negotiate the
Defendant, in contrast, frames Plaintiffs Complaint as having “interrupted a lengthy series of negotiations that the parties clearly anticipated would lead to arbitration if they were not resolved.” (Def.’s Reply Pl.’s Resp. Mot. Dismiss and Compel at 6.) It points out that the Billings Letter contained a threat to arbitrate, but not an arbitration demand, and that Plaintiff has never communicated to Defendant a request to proceed to arbitration. Instead, according to Defendant, Plaintiff continued to negotiate the dispute in writing through the winter months of 1998 but then abandoned those negotiations by ignoring its obligation to arbitrate and filing a lawsuit in March of 1999.
In support of its argument that Defendant has waived its right to arbitration, Plaintiff relies on
Menorah Ins. Co., Ltd. v. INX Reinsurance Corp.,
The dispute between these parties arose when Defendant refused, in the late spring or early summer of 1998, to pay a bill issued by Plaintiff. In the Billings Letter of June 17, 1998, one of Plaintiffs agents indicated to Defendant that Plaintiff might request arbitration if the dispute was not resolved to its satisfaction. Defendant never responded to this statement in the Billings Letter. No actual arbitration request was ever made by Plaintiff. The parties corresponded further regarding the dispute between June 17, 1998 and the winter months of 1998 with no mention of arbitration. (Billings Aff. at 3; Def.’s Reply Pl.’s Resp. Mot. Dismiss and Compel at 6.) Plaintiff filed a Complaint in this court on March 8, 1999. Defendant filed the pending Motion concerning arbitration on May 10, 1999 and has filed no pleadings in this action.
The defendant in this case simply is not similarly situated to the defendant in
Menorah.
First, unlike the defendant in
Menorah,
Defendant did not expressly reject a written request to arbitrate. Rather, it merely did not respond to a written statement threatening to demand arbitration if it did not change its position. There was no arbitration demand to ignore or reject. Second, with respect to delay, while it is true that Defendant did not invoke its right to arbitration until approximately one year after the dispute first arose, this fact is not in and of itself meaningful.
See Menorah,
Finally, the Court is not persuaded that Plaintiff has been prejudiced by
4. Motion to Stay Versus Motion to Dismiss
As a final matter, the Court must decide whether Defendant’s Motion is properly framed as a motion to dismiss. Plaintiff contends that the Court’s determination that the parties are bound by an arbitration clause does not affect the Court’s subject matter jurisdiction over its claims, and therefore the Court should treat Defendant’s Motion to Dismiss as a Motion to Stay. Defendant responds that where parties have agreed to arbitrate, the Court lacks subject matter jurisdiction, but goes on to request that “to the extent necessary, ... this court consider [the] motion as one to stay and compel arbitration.” (Def.’s Reply PL’s Resp. Mot. Dismiss and Compel at 5.)
A review of First Circuit precedent indicates that where, as in this case, a court determines that all claims raised by the plaintiff are subject to arbitration, the court may dismiss the entire action, rather than staying it.
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See Bercovitch v. Baldwin Sch., Inc.,
In this case, however, in light of the particular features of Article XV, 10 the Court concludes that dismissal would be inappropriate. As' a result, the Court stays the pending action under section 3 of the FAA and orders, pursuant to section 4, that the parties proceed to arbitration in accordance with the procedures established in Article XV of the Joint Pole Agreement.
III. CONCLUSION
For the reasons discussed above, Defendant’s Motion to Dismiss for lack of subject matter jurisdiction and to Compel Arbitration is treated as a Motion to Stay and Compel Arbitration and is GRANTED. This action is stayed and the parties
SO ORDERED.
Notes
.Defendant has attached a number of documents to its Motion to Dismiss and Compel, including a Statement of Undisputed Material Facts and the Affidavit of Steve Polyot. Both of these submissions speak to the merits of Plaintiff's claims. Although Defendant invites the Court to convert its Motion to Dismiss and Compel into a Motion for Summary Judgment "to the extent necessary,” (Def.’s Mot. Dismiss and Compel at 2 n. 2.), such a conversion would be inappropriate because the issue before the Court is not dispositive of Plaintiff's substantive claims. The Court therefore will not consider Defendant’s Statement of Undisputed Material Facts or the Affidavit of Steve Polyot.
. This affidavit was attached to Plaintiff's Response to Defendant's Motion to Dismiss and Compel.
. This document was appended to the Affidavit of George A. Belcher as Defendant’s Exhibit A and attached to Defendant’s Motion to Dismiss and Compel.
. Where the action is premised on diversity jurisdiction, as in this case, section 3 may be invoked only if the suit is grounded in a maritime transaction or a contract involving a transaction in interstate commerce.
See Bernhardt v. Polygraphic Co. of America,
. In its Reply brief, Defendant additionally suggests that it will prevail even if the Court concludes that Article XV is ambiguous.
. As additional support for its assertion that an arbitration agreement exists, Defendant reminds the Court of the federal policy generally favoring arbitration. Plaintiff correctly notes, however, that this policy applies only to the interpretation of the scope of an arbitration agreement, rather than to the question of whether such an agreement exists in the first place.
See McCarthy v. Azure,
. As the Court has determined that Article XV is unambiguous and constitutes an agreement to arbitrate, it will not address Defendant’s alternative argument that Plaintiff impliedly consented to arbitration, nor will it address the numerous arguments advanced by both parties as to the relevance of the Billings Letter.
. Plaintiff suggests the Joint Operating Procedures are not so incorporated, and in fact constitute a separate agreement, but this claim is specious. The preamble of the Joint Pole Agreement clearly states ''[w]hereas, this agreement is intended to set forth the basic terms of joint occupancy and work, the detailed administration and operations thereof being set forth in 'Joint Operating Procedures,' attached hereto and made a part hereof and administered by a Joint Occupancy Committee as hereinafter provided.” (Def.'s Ex. B.)
. In such an instance, dismissal has several advantages:
Any post-arbitration remedies sought by the parties will not entail renewed consideration and adjudication of the merits of the controversy but would be circumscribed to a judicial review of the arbitrator’s award in the limited manner prescribed by law. This course of action will also make the arbitrability issue immediately appealable and will avoid the litigation expenses and delay if the arbitration conducted were vacated by a later appeal.
Sea-Land Serv., Inc.
v.
Sea-Land of P.R., Inc.,
. Article XV specifies that the parties will be bound by the arbitrator’s factual findings.