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V.I.P., Inc. v. First Tree Development, LLC
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MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2001 ME 73
Docket: Cum-00-586
Submitted
on Briefs: April 2, 2001
Decided: May 4, 2001
Panel:WATHEN, C.J., and CLIFFORD, RUDMAN, DANA, ALEXANDER, and CALKINS, JJ.
V.I.P., INC.
v.
FIRST TREE DEVELOPMENT
LIMITED LIABILITY COMPANY
WATHEN, C.J.
[¶1] First Tree Development Limited Liability Company appeals from
a judgment entered in the Superior Court (Cumberland County, Mills, J.)
confirming an arbitration award in favor of V.I.P., Inc. First Tree contends
that the arbitrator exceeded his powers by deciding that the disputed
matter was subject to arbitration. Finding no error, we affirm.
[¶2] The relevant facts may be summarized as follows: In October
1995, the predecessors in title of the parties to this action, who own
adjacent commercial real estate in South Portland, executed a Reciprocal
Deed Granting Cross-Easements [the "Agreement"]. The Agreement
granted contiguous reciprocal easements to the parties over a discontinued
public way that crossed both parcels and connected with a public road and
established the respective rights and obligations relating to construction in
and care of the easement area. In 1999, V.I.P. sought First Tree's consent to
construction by V.I.P. of certain improvements within the easement area
pursuant to paragraph 3 of the Agreement. First Tree declined to consent
to the improvements and V.I.P. filed an action in Superior Court seeking
inter alia to compel arbitration. The court stayed the balance of the
proceedings and ordered the parties to submit their disputes to arbitration.
The arbitrator rendered a decision in favor of V.I.P. V.I.P. filed an
application to confirm the arbitration award and First Tree followed with an
application to vacate it. The court entered judgment confirming the award.
First Tree now appeals.
[¶3] The sole issue in this case involves substantive arbitrability, that
is, whether the parties intended to submit this dispute to arbitration. "The
final decision on the question of substantive arbitrability rests with the
court." Roosa v. Tillotson, 1997 ME 121, ¶ 2, 695 A.2d 1196. We review
the court's determination of arbitrability for errors of law. Id. The Uniform
Arbitration Act, 14 M.R.S.A. §§ 5927-5949 (1980), requires the court to
vacate an arbitration award if the parties did not agree to arbitrate. Id. ¶ 3
(citation omitted). General rules of contract interpretation apply. Westbrook
Sch. Comm. v. Westbrook Teachers Ass'n, 404 A.2d 204, 207 (Me. 1979).
"A contract is to be interpreted to effect the parties' intentions as reflected
in the written instrument, construed with regard for the subject matter,
motive, and purpose of the agreement, as well as the object to be
accomplished." Handy Boat Serv., Inc. v. Professional Servs., Inc., 1998 ME
134, ¶ 7, 711 A.2d 1306.
[¶4] "Maine has a broad presumption favoring substantive
arbitrability." Roosa, 1997 ME 121, ¶ 3, 695 A.2d 1196. The presumption
requires a finding that the dispute has been subjected to arbitration if "(1)
the parties have generally agreed to arbitrate disputes, and (2) the party
seeking arbitration presents a claim that, on its face, is governed by the
arbitration agreement." Id. (citation omitted). Because of this strong
legislative policy, "a court will find a dispute arbitrable 'unless it may be said
with positive assurance that the arbitration clause is not susceptible of an
interpretation that covers the asserted dispute. Doubts should be resolved
in favor of coverage." Westbrook Sch. Comm., 404 A.2d at 208.
[¶5] The arbitration clause in the present case, as found in
paragraph 3 of the Agreement, reads as follows:
Either party may, at their own expense, improve the
Easement Area with paving, curbing and other entryway and
roadway related improvements, so long as such
improvements do not unduly limit access from Waterman
Drive through the Easement Area to the property of the
other party and are approved in advance by the other party,
such approval not to be unreasonably withheld. Either party
may, at their own expense, have snow removed from the
Easement Area. Once improvements are constructed as
aforesaid, the parties shall share equally in the cost of
maintenance of the Easement Area and maintenance, repair
and replacement of the improvements therein, so long as the
other party has been given reasonable notice of the same and
the opportunity to object. In the case of such an objection
the parties will negotiate in good faith to reach agreement on
planned maintenance, repair or replacement, and if no
agreement is reached shall arbitrate their dispute in an
expeditious and cost effective manner, with the costs of
arbitration shared equally.
[¶6] Contrary to First Tree's arguments, the Agreement to arbitrate
disputes is ambiguous. First Tree contends that paragraph 3 deals with two
separate and distinct situations and that the agreement to arbitrate is
confined solely to the second situation, i.e., a dispute over the sharing of
maintenance and repair costs. They contend that the dispute in this case
involves the first situation, i.e. a dispute over the construction of new
improvements. V.I.P. argues, on the other hand, that it is difficult to
distinguish between planned improvements and planned maintenance,
repair or replacement. As the arbitrator concluded, the arbitration clause
contemplates future modification of the improvements by either party.
Further, the arbitration clause was expressly created to resolve disputes in
an expeditious and cost-effective manner. Therefore, in light of that
objective, the ambiguity, and the legislative presumption favoring arbitration,
we cannot say with positive assurance that the arbitration clause is not
susceptible of an interpretation that covers this dispute. The Superior Court
committed no error of law.
The entry is:
Judgment affirmed.
Attorney for plaintiff:
Elliott L. Epstein, Esq.
Isaacson & Raymond
P O Box 891
Lewiston, ME 04243-0891
Attorney for defendant:
Michael D. Cooper, Esq.
P O Box 529
Westbrook, ME 04098-0529
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