*3 EDMONDSON, Before FAY and GARWOOD*, Judges. Circuit FAY, Circuit Judge: Appellants Employers Insurance (“Wausau”) Construc- * Garwood, Honorable Will L. U.S. Circuit tion. Circuit, Judge sitting by designa- Fifth 1993, A-l September In seq. et dis- appeal the (“Rogers”) Company
tion Project portion of the a subcontracted compelling arbitration trict court’s a written Bright pursuant Metal Appellee Bright work to claim asserted a (the or arising from (“Bright”) “Subcontract” Inc. Specialties, Subcontract”) pro- construction included “Bright/A-1 dispute on Government Park. The dis- National Everglades ject clause. an arbitration Wausau, a Miller Act held that trict court subsequently terminat- The Government party Bright’s subcon- surety, became a Project, and A-l for its default on the ed therein tract and the work called Agree- Takeover of Wausau’s by virtue bond. On pursuant to Government, Wausau’s *4 ment the 20, 1994, and May the Government about completion with its Completion Contract Agree- into a Takeover Wausau entered contractor, Rogers Construction general complete to by agreed ment which Wausau Agree- Ratification (“Rogers”), and Co. for A-l. On or about contract that it argues Bright. Wausau ment with 26, 1994, into a Con- May Wausau entered agree to arbitrate contractually did not (the Completion and Construction tract for by the not bound Bright, with Contract”) Rogers “Completion with. Bright’s subcon- arbitration completing Rogers became the whereby tract, precludes Miller Act and all, work under remaining for contractor Act a Miller of a claim arbitration Pursuant to the prime contract. Com- Rogers concedes surety such Wausau. Contract, assign agreed to pletion Wausau subcontract, by Bright’s it is bound title and right, of Wausau’s Rogers to exclud- claim is but contends that executory subcon- to A-l’s in and interest pursuant to an arbitra- ed from Project for the tracts More- exception in subcontract. tion work. over, jurisdiction to contests our Bright conclude that appeal. We
hear this Bright On or about June appealable was an court’s order district Agree- a Ratification into Wausau entered decision” and affirm “final payment resolved ment which respect to both Wausau order with Bright/A- ratified the claim and bond Rogers. First, and'Bright lSubcontract. monies due relating resolved Background I. to A-l’s performed prior work Bright for Second, to’ Bright agreed termination. facts, following parties agree agreed to complete the Subcontract established contract. most of which are (7) seven Project within start work' on 16, 1993, the National July or about On Wausau, agent, its days request after (“Government”) contracted Park Service completion con- including any assigns, “or (“A-l”) A-l with Construction/BellineCo. Third, the engaged [Wausau].” tractor buildings to certain repair of roofs provided Park Everglades National located “assign rights its Wausau could (the Wausau, sure- “Project”). as contract to a this agreement” subcontract and [A-l] performance and ty, provided parties Finally, the completion contractor. A-l, its Project on behalf of bonds Bright the pay would Government, agreed that as- principal, favor its Act, retainage, as fulfillment remaining 40 U.S.C. Miller required by the obligations Bright, if begin work did not in January Bright filed a Demand Thereafter, specified period. within a for Arbitration with the American Arbitra- (“AAA”) required Bright tion Association alleged completion Subcontract with as the breach of contract by Rogers and Wausau. contractor. resumed work on the claimed losses in the amount of Project $944,000 interest, in June 1994. plus attorney’s fees and costs.
In December and Wausau settled a claim previously bond In February Wausau filed a com- work, submitted by Bright for plaint labor in the District Court for the South- and/or performed materials un- furnished ern District and/or Florida der its Subcontract A-l.1 Bright seeking declaratory injunctive (Case relief against the arbitration No. 97- completion Near Project, 410-Civ-Marcus). separate In a action sought compensation additional for delays against Wausau and Rogers, Bright filed a and damages by the caused Government. Arbitration, Motion Compel pursuant to Ultimately, Bright submitted Act, the Federal Arbitration 9 U.S.C. *5 request “equitable adjustment” for and based on an arbitration clause in the (“REA”) under the Subcontract. As re- Subcontract Bright between and A-l quired by documents, the contract (Case 97-433-Civ-Marcus). No. Wausau request submitted the pre- Wausau for filed claims for declaratory sentation Wausau to the Government. injunctive seeking stay relief Bright, Rogers, Wausau and the Govern- arbitration.2 Denver, ment inmet Colorado in February claims, 1996 to Project address including The two actions were consolidated and Bright’s REA. At meeting, the Govern- referred Magistrate Judge Ted E. ment offered to settle REA 22, 1997, Bandstra. On December Magis- $10,000, approximately less than per- two trate Judge Bandstra issued an Amended (2%) cent of the amount sought by Bright. Report and Recommendation that Wausau Bright declined the settlement offer and and Rogers be compelled to arbitrate left the meeting. After Bright left court, claim. The district Judge meeting, accepted Wausau the Govern- Ungaro-Benages presiding,3 conducted a ment’s settlement offer without Bright’s de novo review and order Sep- entered approval or consent. Bright 22, did not 1998, sub- tember affirmed the Magistrate’s anymit further against claims the Govern- Report Amended and Recommendation ment, directly through or Rogers or Wau- granting Bright’s Compel Motion Arbi- sau, regarding tration, sought amounts denying Wausau’s and Roger’s REA. Relief, Injunctive Motions for and denying 1. Pursuant agreement, to this sponse settlement Bright's pleadings, Rog- conditional paid Bright Wausau agreed amount ers against filed a counterclaim Metal exchange signed by release of all surety, and its Preferred National Insurance Bright might nature which have Company. against against Government surety under its bond. 21, 1998, January 3.On the district court en- transferring tered an order the consolidated filed a counterclaim Judge cases to Ungaro-Benages. a cross-claim Rogers conditioned on the denying Court arbitration. In re-
1321 underlying actions is a dismissing In addi- as moot. remaining motions all an respect to arbitra “final decision with each tion, court dismissed the district meaning within the statute. actions def- tion” underlying consolidated 16(a)(3). § arbitration, Roger’s and denied U.S.C. erence for reconsideration. request jurisdic lack arguing that we In appeal from tion, “embed Bright distinguishes between Bright challenges court’s decision. district a dis “independent” proceedings, ded” and appeal this assert- jurisdiction to hear our albeit recognized, this has tinction Court was not a court’s order that the district
ing
using
without
those labels.4 See Thomson
respect
to arbitration
decision with
final
Sec.,
Salter,
F.2d
Inc. v.
McKinnon
16(a)(3)
Federal
9 U.S.C.
(11th Cir.1989) (cited
in Ran
(“FAA”).
Act
Arbitration
4). Bright
involving request both for arbitration Perry v. 482 U.S. 107 S.Ct. (1987). other claims for relief. Green Tree L.Ed.2d 426 Federal law counsels questions 520-521, arbitrability, Corp., Fin. at S.Ct. S.Ct. doubt, when in should be resolved in favor Here, Corp., as Green Tree Fin. of arbitration. See Moses H. Cone Mem’l parties the district court directed the Hospital v. Mercury Constr. Corp., 460 dispute by resolve the arbitration and dis 1, 24, 927, 941, U.S. 103 S.Ct. 74 L.Ed.2d cases,6 leaving missed both the court noth (1983). Thus, as with any other con- ing to judgment. do but execute the Ac tract, parties’ control, intentions but cordingly, jurisdiction we have over the those generously intentions are construed consolidated actions because the arbitra as to of arbitrability.7 issues disposes tion order of all the issues framed by the litigation nothing and leaves duty Wausau’s to arbitrate. district court to resolve. matter,
As an initial
Wausau is cor
that,
FAA,
rect
party
no
can be
B. The Applicability of the Subcon-
compelled to arbitrate unless that party
tract’s Arbitration Clause
has entered into an agreement
to do so.
Having
Tech.,
juris-
determined that we
AT
have
& T
Inc. v. Communica
Workers,
643, 649,
diction
appeal,
over this
we
tions
now turn to
475 U.S.
106 S.Ct.
(1986).
question
Courts,
L.Ed.2d 648
parties
whether the
agreed to
however, have recognized a number of the
present
arbitrate the
dispute. Wausau
ories under which non-signatories may be
may
contends that it
compelled
not be
bound to the
agreements
arbitration
arbitrate
party
because
is not a
See,
Thomson-CSF,
others.
generally,
containing
an
arbitration
Ass’n,
S.A. Am. Arbitration
that Wausau bound Agreement, to the Ratification Pursuant Bright/A-1 to agreement Wausau obtained Agreement, Wau By signing Takeover no additional complete the Subcontract at responsibilities assumed all duties sau to acquired right also cost. Wausau -in prime contract A-l to under the assign rights its Subcontract for the balance contract exchange con- contractor. Wausau completion Indem., al. v. e.g., Travelers et price. See to-assign right it exercised its cedes that (hold (1988) States, 16 Cl.Ct. United However, Rogers.9 the Subcontract party surety became ing to arbitrate obligation contests its executing a Takeover contract This is tantamount agreement. under the States). the United Agreement with recognize asking the Court to Wausau Agreement did While Takeover without under the Subcontract rights its con obligate Wausau specifically duties therein. the correlative negotiated previously provisions tractual not have it could argues A-l, this between obligation to “step arbitrate assumed intent clearly reveals Wausau’s because Bright/A-1 Subcontract A-l. The Ratification into the shoes” of *8 terminated, by automatically Subcontract Bright, guaran Agreement, executed terms, de- upon the Government’s work its own performance of Subcontract teed A fair 1994. April fault of A-l on of terms and conditions “according to the 10.4 the Subcon- paragraph reading of agreement This evinces the Subcontract.” that it suc- Significantly, concedes Georgia applied law to 8. The district court obligations A-l under ceeded interpret based on the choice the Subcontract by assign- could be This provision therein. of law Completion Contract Wausau. See from ment ap- ¶ that Florida law To the extent 15.2. assign to (obligating Wausau place performance, the district plied, in and to right, title interest “[Wausau's] in accord. judge cited law Florida Subcontracts”). executory [A-l's] tract, however, leads us to conclude previously ties have agreed to arbitrate terminable, disputes. became Subcontract but See United States ex. rel. Port automatically did not terminate land when the Constr. Co. v. Weiss Pollution Con Corp., A-l.10 trol Government defaulted Wausau does 532 F.2d Cir. 1976)11 assert, (staying we find no Miller Act suit pending evidence in the record, outcome of arbitration where that Wausau or terminated subcontract contained provision); arbitration United pursuant Subcontract to its termi- Sons, ex. Capolino States rel. Inc. v. Elec provisions. nation We also find it disin- Facilities, tronic & Missile Inc. 364 F.2d genuous for have taken full (2d. Cir.1966) (requiring subcontrac advantage of the Subcontract and now ar- tor to arbitrate Miller Act payment bond gue that it was not in effect. pursuant claim provision arbitration Finally, Wausau contends that it cannot subcontract, provision which pro was not compelled be to arbitrate with Bright be- Act). hibited the Miller Accordingly, places cause the Miller Act juris- exclusive we conclude that Wausau assumed A-l’s diction of Miller Act sure- obligations to arbitrate with Bright when ties in federal court. The district court Wausau Project took over the and ratified found that the Miller Act pre- does not the Subcontract.12 arbitration, clude alternatively, protection Wausau waived such afford- 2. Roger’s Duty to Arbitrate ed it. We agree.
Rogers concedes that it is bound Act, Under the Miller a claim arbitration in the Subcontract. surety arising under a Miller Act However, Rogers objects to arbitration on bond shall be brought in federal court. the basis of exception an to arbitration § See 40 U.S.C. 270a-e. The Miller Act contained the Subcontract. Specifically, does not here because alleges 14.2(b) § claims that Subcontract; Wausau breached the Bright/A-1 expressly Subcontract excludes Bright does pursue a claim against from “pass claims, arbitration through” Wausau’s bond. Even if ap claims asserted Bright up the ladder to plies, the Miller Act preclude does not the Government.13 Pursuant excep- to this tion, arbitration under the FAA where par- to arbitrate between provides: The Subcontract obligations released Wausau from its 4; Subcontract. See 9 U.S.C. see also 10.4 TERMINATION BY OWNER. Aluminum, Brick & Glass WorkersInt’l Union Should the Owner terminate its contract Plumbing Pottery Corp., AAA with the any part Contractor or of which (11th Cir.1993) (explaining Work, courts includes the Subcontractor’s permitted are not to address defenses to dis- notify Contractor shall so the Subcontractor putes notification, scope within the writing of an written clause). this shall be terminated.... Subcontract, ¶ Bright/A-1 10.4. 13.Paragraph 14.2 pro- of the Subcontract October, 11. Fifth Circuit cases decided before part: vides in relevant *9 binding 1981 are precedent in this Circuit. 14.2 Prichard, EXCEPTIONS. The City ar- Bonner v. 661 F.2d of bitrate 1981). apply any shall not claim: Cir. arbitrable, Having (b) 12. dispute found that the by against asserted the Subcontractor we do not address Wausau's claim that the Contractor if the Contractor asserts said $50,000 money exceeding of any for apply not would Rogers the Dis- under Contract not a claim was Rogers against by Bright brought “claim” by the it was certified Act until putes claim, in whole the that asserted Rogers if Contractor.15 the Government against part, inor was Rog- (“Owner”) the contract between court, since Rogers conceded In the district provide not the against does a claim the submitted ers and Government exceeding an amount the Based on Government binding arbitration. for $1,000,000 delays damages caused for the district findings, Judge’s Magistrate Re See Roger’s by the Government. does exception the court concluded Compel. Ul Bright’s Motion to sponse to 1) Bright’s for two reasons: not advised timately, Rogers and/or under the Subcon- a “claim” REA was not REA, claim as an to submit its 2) was never tract; Bright’s REA the claim under than as a certified rather by the required as Rogers against asserted parties agree Act. The Disputes Contract exception provision. certified, never as REA was for required prime the contract record evidence Our review $50,000. See Prime Con exceeding Magistrate findings the with accords ¶ Thus, tract, REA is not forth exception set Judge. The arbitration 37 of the in Article “claim” as defined does the Subcontract 14.2 of paragraph contract, may rely not prime is not Bright’s REA apply because exception Subcon the arbitration on The Sub under “claim” re that same Subcontract tract because relating to that claims provides contract relating to certify claims quired by submitted had to be Wil e.g., the Government See Woodrow the Government. Co., time MMR-Radon Con and within the Inc. v. “in manner son Constr. structors, (La.Ct.App. Documents 635 So.2d in Contract provided elements order, 1994) under (affirming by the Contractor like claims arbitra providing for ¶ subcontract terms of Subcontract, 6.2. [Government].” claim contractor submitted unless tion A-l and the Gov between contract prime owner, contractor general where against (A-l and required the Contractor ernment in ac claim owner not submit did in accor all claims Rogers) to submit later specified). procedures with cordance Disputes Act.14 Contract dance Moreover, REA Contract, Article 37. our Given decision Prime subject to not a “claim” was a demand provided that contract seeking a mat- contracting parties as claim, part against the or in whole either money in a sum Owner, right, payment of the Owner ter asserted or Contractor, certain, interpretation of adjustment between or when contract provide terms, arising and Owner does the Contractor or other relief contract arbitration.... binding relating to this contract. or ¶ 14.2. However, asser- a written demand written 1978, Ú.S.C. Disputes Act Contract seeking the Contractor tion seq. § 601 et $50,000 un- a claim money exceeding is not required provides Act until Contract der the of the Prime 15. Article 37 certified (d)(2)below. subparagraph pertinent part: July dated Prime Contract clause, "Claim”, (c) means a Government/A-1 in this as used added). ¶ (emphasis by one or written assertion written demand *10 1326 Subcontract,
exception under we do holds that by Wausau is bound the arbitra- not reach the district court’s alternate ba provisions tion in the Bright/A-1 Subcon- compelling Rogers sis submit tract. I respectfully dissent from the lat- Rog arbitration.16 We also do not address ter holding. argument Bright’s er’s claim did not majority correctly recognizes that require certification to be submitted as an September Bright/A-1 1993 Subcon- REA, alternatively tract does not of itself bind Wausau to its certify Bright’s Regardless could claim. provisions, notwithstanding
who responsible was for certification or Wausau’s status as Miller Act whether claim Bright’s should have been surety project bond certified, exception to arbitration does A-l, general contractor because Wausau because there is no “claim” as was not a party Bright/A-1 to the Subcon- by defined Article 37 of the contract. Aluminum, tract.1 The majority instead See Brick holds that & Glass Workers Int'l Wausau became bound Plumbing Union v. AAA Pottery 1545, Cir.1993) Corp., Subcontract, Bright/A-1 including its arbi- (explaining permitted courts are clause, tration by the combined effect of disputes address defenses within the three documents Wausau executed subse- clause). scope of an arbitration quent to the Government’s termination of A-l for project, A-l’s default on the name- claim Wausau and Rog- ly: May Agreement Takeover simple. ers is had no between Government; Wausau and the right to settle million dollar claim May Completion Contract be- government for any sum and tween Wausau and Rogers, the new com- $10,000. certainly not for dispute This pleting prime project contractor for the clearly arises out of the contractual rela- Wausau; tionship by hired parties between and the these and is June cov- by ered clause. between Wausau Bright, as a result of which Bright IV. Conclusion later that month began and ultimately (or completed mostly completed), as a reasons, For these we AFFIRM the dis- subcontractor, the remaining work trict court’s order compelling arbitration called Bright/A-1 as to both and Wausau and dis- I interpret documents, these and their col- missing the underlying cases. effect, lective differently than does the ma- jority. GARWOOD, Judge, Circuit dissenting in
part: The combined effect of the three docu-
I concur in all Judge Fay’s cogent by ments relied on the majority is simply opinion except only Wausau, so much thereof as as authorized the Govern- Namely, the district court suing found that Miller Act general bond as to Bright never contract, asserted its demand for addition- surety agree did not to arbitrate compensation against al Rogers, required merely subcontractor because the exception provision. subcontract between the subcontractor and ¶ 14.2, supra at n. 11. general contractor contained an arbitra- clause). tion Canfield, U.S. v. Pool and Cf. F.Supp. (W.D.Mo.1991) (by at 1090 is- *11 contractor, except and completion prime the overall ment, completion of undertook recognized discharged and its for that Wausau contracting Rogers with by project pay for payment obligation Bright bond to remaining work complete all the Rogers to unpaid performed prior for work to A-l’s in A-l’s contract with Gov- called for to termination. ernment, assign to agreeing uncompleted in sub- rights Rogers its with the Agreement Wausau’s Takeover would, effect, in Rogers contracts so Wausau, in allows order to Government A-l in those subcon- be substituted performance obligations bond to fulfill its work respect to the unfinished tracts with Government, completion a to hire thereunder, agree- Bright and complete job, to con- prime contractor for all pay Bright would ing that Wausau (and incorpo- tains no arbitration clause prior to A-l’s termi- unpaid work done no which contains such a rates day a 120 that Wausau had nation and clause), expressly provides it would to Bright agree to so option require to in any rights “be deemed to create not option which was Rogers, complete of, inure to the benefit of favor or The net result was timely exercised. (and party parties” third or would not un- paid Bright for that Wausau essence its enlarge obligations Wausau’s performed to date and paid work bonds). A-l in the was substituted for Subcontract thereunder, uncompleted work as to Completion Contract Wausau’s arbitration clause and the subcontract’s assign Rogers obligates Wausau to its Wausau, Bright, but binds uncompleted subcontracts to rights A-l, but just Bright it had bound as purport recognize to Rogers, but does not unusual or nothing There is Wausau. part on the of Wausau any obligations protected unfair this. was about subcontracts, which Wausau under those the work it had done bond for And, course, Bright party a to. was not subcontractors) hav- agree (like and did not have to to Wausau was not the other into option step to cause ing the Completion party to either the Contract but, Subcontract; under the A-l’s shoes Agreement. the Takeover subject to termination was Subcontract executed both only agreement A-l’s termination and by virtue of is the work; and complete right had no The Ratification Agreement. gave as it did agreeing with Wausau thus that A-l has been by recitals commences performed which had about Bright, Government, which has by the terminated opportunity, third (referred throughout called on Wausau materialized, of thereafter shortly which bond, under its “Surety”) as awarded the contract being (referred as throughout work on the same terms the balance of the “Subcontractor”) made a claim under has contractor, Rogers. for a solvent bond, and that the total Sub- $493,653, the value of contract amount relied on Nothing the documents $154,609, of which completed is on the work majority any agreement contains a balance $39,038.25 paid, leaving has been by A-l’s obli- part be bound Wausau’s $7,730.45 $107,040.30 plus as owing now unless Wau- gations under the Subcontract (specified in clause work, retainage percent five complete the itself undertook to sau (1) recitals). (8) Paragraph states by a having it done new opposed *12 $107,040.30 Rather, paid Bright has bound it ex- Wausau pressly provides days if releases Wausau from “all within 120 Bright assigns rights” “its thereunder day, excluding claims for due this monies (2) Agreement and under the Ratification to a Paragraph pro- withheld.” retainage contractor,” completion prime Bright “new ratifies and vides that “Subcontractor assignee “will then look to the all fur- its subcontract ... and agrees complete to payments.” just hap- ther This is what agrees further to start work within seven pened. assign rights Wausau did its (7) (em- ...” days request by Surety after Rogers, the Ratification to added). (3) phasis provides: Paragraph Bright complete in June 1994 did to start “Since the work under the contract the unfinished Subcontract work as a sub- project may with the Owner of the be Rogers, Bright contractor of did look completed by completion prime a new payments. Bright to for further contractor, agrees Subcontractor full, paid including has been retainage, Surety may assign rights its under the prior for work done to A-l’s termination. agreement subcontract and this to the illogical say It is to that in these circum- if completing contractor done stances Wausau is somehow implicitly (120) twenty days within one hundred Bright bound when agreement. of the date of this Subcon- expressly agreed has to look to the assignee tractor will then look to the prime completion new contractor-Rogers- payments including for all further payments” agreed for “all further and has retainages whether withheld now as set $7,730.45 payment that Wausau’s forth above or the future.” retainage for work done for A-l “will con- complete stitute fulfillment of the obli- (4), Paragraph paragraph, the last makes gations Surety of to Subcontractor.” provision respecting payment by Wausau $7,730.45 retainage for work, previously performed and states that payment
“such will complete constitute ful- obligations
fillment of the Surety
Subcontractor.”2
Nowhere does the Agree-
ment state that Wausau ratifies or is paid Bright
2. On December
days)
complete
call on
for Wau-
$7,730.45
itself,
retainage
executed a
opposed
completing
sau
Arguably,
release in favor of Wausau.
completing prime
(Rogers).
new
contractor
(4),
required by paragraph
was not
However,
arguably
that construction is
incon-
provides
which
in full:
portion
sistent with the
last sentence of
(120)
twenty
days
“If within one hundred
(3)
paragraph
relating
retainages
withheld
Surety,
agent
date of this
its
possible
"now as set forth above.” That
in-
assigns
has not called
Subcontrac-
is, however,
consistency
irrelevant to
is-
complete, Surety
pay
tor to
will
the retain-
appeal,
sue on this
as is also whether the
(8)
ages
pro-
withheld as set forth in Item
$7,730.45 payment
required by
pay-
was
place
accepted
vided the work in
has been
paid
ment bond.
has been
the retain-
the Owner. Tender of such
termination,
age for work' done before A-l's
will constitute
fulfillment of the
accomplished long prior
and that was
to the
obligations
Surety
to Subcontractor.”
giving
present controversy.
events
rise to the
explains
paragraph
that it construed
(4)
(within
whenever Wausau did not
notes
of Review
II. Standard
is final when
of the district court
decision
disposes
the issues framed
ques
is a
jurisdictional
issue
nothing for the dis
litigation and leaves
law,
de novo. See
which we review
tion of
judgment.
to do but execute the
trict court
Corp.-Ala
Fin.
Tree
Randolph
Green
Randolph,
(quoting