United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued December 4, 2007 Decided July 8, 2008
No. 06-7130
ALIRON INTERNATIONAL, INC.,
APPELLANT
v.
CHEROKEE NATION INDUSTRIES, INC.,
APPELLEE
Appeal from the United States District Court
for the District of Columbia
(No. 05cv00151)
Kenneth A. Martin argued the cause and filed the briefs for
appellant.
James J. Proszek argued the cause for appellee. With him
on the brief was John B. Rudolph. Steven D. Cundra entered an
appearance.
Before: HENDERSON, GARLAND, and BROWN, Circuit
Judges.
Opinion for the Court filed by Circuit Judge GARLAND.
2
GARLAND, Circuit Judge: The question presented on this
appeal is whether Aliron International, Inc. must arbitrate its
breach of contract dispute with Cherokee Nation Industries, Inc.
The district court decided that arbitration is required, and we
agree.
I
In November 1998, the United States Army awarded
Cherokee Nation Industries, Inc. (CNI) a “Prime Contract” to
provide dental services to Army personnel stationed in
Germany. Because it had never before performed such work for
the government, CNI entered into a “Subcontract” with Aliron
International, Inc. to provide the service and staffing resources
that CNI needed to fulfill its duties under the Prime Contract.
The Subcontract provided that Aliron would perform 49% of the
work and receive 49% of the Prime Contract’s net revenue. The
parties agreed that the Subcontract “shall be construed and
interpreted in accordance with the laws of the State of
Oklahoma,” Subcontract ¶ 22.0 (Appellant’s Appendix (A.A.)
23), and that “any dispute between the parties will be submitted
to binding arbitration in the State of Oklahoma,” id. ¶ 28.0 (A.A.
26). Oklahoma law, the parties further agreed, “shall govern the
arbitration proceedings.” Id.
Approximately two weeks after Aliron began contract
performance, CNI notified Aliron that the Status of Forces
Agreement (SOFA) between the United States and Germany
precluded CNI from employing a subcontractor to perform its
obligations under the Prime Contract. To comply with the
SOFA without harming CNI’s ability to fulfill its Prime
Contract responsibilities, CNI and Aliron entered into an
“Agreement for Administrative Support and Transfer of
Personnel” (the “Support Agreement”). Under the Support
Agreement, Aliron effectively transferred its employees to CNI,
3
thereby avoiding the SOFA’s subcontracting prohibition. The
parties’ financial arrangement remained the same: CNI agreed
to pay Aliron 49% of the Prime Contract’s net revenue in return
for access to Aliron’s employees. Like the Subcontract, the
Support Agreement provided that it “shall be construed and
interpreted according to the law of the State of Oklahoma.”
Support Agreement ¶ 13 (A.A. 14). Unlike the Subcontract, the
Support Agreement did not include an express provision
requiring arbitration of all disputes.
On January 21, 2005, Aliron filed this action against CNI in
the United States District Court for the District of Columbia,
invoking the court’s diversity jurisdiction. Aliron alleged that,
after April 1, 2004, CNI ceased making payments to Aliron in
breach of its obligations under the Support Agreement. Aliron
claimed damages exceeding $1,800,000. Compl. ¶ 16. Pursuant
to the Federal Arbitration Act, 9 U.S.C. § 4, CNI moved to
compel arbitration of the dispute. CNI argued that, although
only the Subcontract contains an express arbitration clause, the
two documents should be read together.
The district court agreed. Following the relevant Oklahoma
rule of contract construction, the court held that, “because the
Subcontract and the Support Agreement involve the same
subject matter, and because the plain language on the face of the
Support Agreement indicates that it was entered into to preserve
the intent of the Subcontract, they must be construed together as
one contract.” Aliron Int’l, Inc. v. Cherokee Nation Indus., Inc.,
2006 WL 1793295, at *3 (D.D.C. June 28, 2006). The court
concluded that the arbitration provision “of the Subcontract . .
. governs [Aliron]’s claims that CNI has breached the Support
4
Agreement,” and it granted CNI’s motion to compel arbitration
and dismissed the case in its entirety. Id. Aliron now appeals.1
II
The district court properly examined CNI’s motion to
compel arbitration under the summary judgment standard of
Federal Rule of Civil Procedure 56(c), as if it were a request for
“‘summary disposition of the issue of whether or not there had
been a meeting of the minds on the agreement to arbitrate.’”
Aliron Int’l, Inc., 2006 WL 1793295, at *1 (quoting, inter alia,
Par-Knit Mills, Inc. v. Stockbridge Fabrics Co., 636 F.2d 51, 54
n.9 (3d Cir. 1980)); see Bensadoun v. Jobe-Riat, 316 F.3d 171,
175 (2d Cir. 2003). Under Rule 56(c), summary judgment is
appropriate only if “there is no genuine issue as to any material
fact and . . . the moving party is entitled to a judgment as a
matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
247 (1986) (quoting FED. R. CIV. P. 56(c)). We review the
district court’s resolution of this question de novo. See
Czekalski v. Peters, 475 F.3d 360, 362 (D.C. Cir. 2007).
The Federal Arbitration Act provides as follows:
A written provision in any . . . contract evidencing a
transaction involving commerce to settle by arbitration
a controversy thereafter arising out of such contract . .
1
In Green Tree Financial Corp. v. Randolph, the Supreme Court
held that “an order compelling arbitration and dismissing a party’s
underlying claims is a ‘final decision with respect to an arbitration’
within the meaning of § 16(a)(3) of the Federal Arbitration Act, 9
U.S.C. § 16(a)(3), and thus is immediately appealable pursuant to that
Act.” 531 U.S. 79, 82 (2000).
5
. or the refusal to perform the whole or any part
thereof, . . . shall be valid, irrevocable, and enforceable,
save upon such grounds as exist at law or in equity for
the revocation of any contract.
9 U.S.C. § 2. “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); see National R.R. Passenger Corp. v. ExpressTrak,
L.L.C., 330 F.3d 523, 529 (D.C. Cir. 2003). The parties here
agree that the relevant state law is that of Oklahoma, as both the
Subcontract and the Support Agreement state that they are to be
construed in accordance with Oklahoma law. Cf. National R.R.
Passenger Corp., 330 F.3d at 530 (applying the law of the
District of Columbia where “[t]he parties’ agreements provide
that they are to be interpreted under District of Columbia law”).
In Oklahoma, “[d]etermining whether a contract is ambiguous
and interpretation of an unambiguous contract are questions of
law” for the court. Otis Elevator Co. v. Midland Red Oak
Realty, Inc., 483 F.3d 1095, 1101 (10th Cir. 2007); see Palace
Exploration Co. v. Petroleum Dev. Co., 374 F.3d 951, 953 (10th
Cir. 2004) (citing Lewis v. Sac & Fox Tribe of Okla. Hous.
Auth., 896 P.2d 503, 514 (Okla. 1994)); Pitco Prod. Co. v.
Chaparral Energy, Inc., 63 P.3d 541, 545 (Okla. 2003).
A
The Oklahoma Supreme Court has long instructed that
“[w]here two contracts, not executed at the same time, refer to
the same subject matter and show on their face that one was
executed to carry out the intent of the other, it is proper to
construe them together as if they were one contract.” Bixler v.
Lamar Exploration Co., 733 P.2d 410, 411-12 (Okla. 1987)
(citing Davis v. Hastings, 261 P.2d 193 (Okla. 1953)); see
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Strickland v. American Bakery & Confectionery Workers Union,
527 P.2d 10, 13 (Okla. 1974); Doss Oil Royalty Co. v. Lahman,
302 P.2d 157, 161 (Okla. 1956). The parties do not dispute that
the rule of contract construction set forth in Bixler controls this
case. Hence, two criteria must be satisfied before we can
conclude that the Subcontract’s arbitration provision governs
disputes under the Support Agreement: (1) the Subcontract and
Support Agreement must each refer to the same subject matter,
and (2) the Support Agreement must show on its face that it was
executed to carry out the intent of the Subcontract.
The first element of the Bixler test is satisfied here. Both
the Subcontract and the Support Agreement refer to the same
subject matter -- the manner in which Aliron and CNI will work
together to enable CNI to perform its obligation under the Prime
Contract to provide dental services for Army personnel, and the
amount that Aliron will be paid in compensation therefor. The
Subcontract contemplates cooperation through a traditional
subcontracting relationship: under it, CNI would have utilized
Aliron’s medical personnel in return for a 49% share of the
Prime Contract’s net revenue. Subcontract ¶ 3.0 (A.A. 18). The
Support Agreement, made necessary by the SOFA’s prohibition
on subcontracting, simply altered the technical form of the
relationship: instead of establishing a subcontract, it effectively
transferred Aliron’s employees to CNI’s payroll, again for 49%
of net revenue. Support Agreement ¶ 2 (A.A. 12).
Notwithstanding that the two agreements took slightly different
approaches to achieving the same outcome -- effective
performance of the Prime Contract and compensation to Aliron
therefor -- a single subject matter unites both documents.
The second element of the Bixler test is also readily
satisfied. The Support Agreement states that “CNI and Aliron
agree to continue their relationship under this Administrative
Support Agreement with the intent of preserving the benefits and
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obligations undertaken by the parties in the Subcontract.” Id.
preamble (A.A. 12) (emphasis added). It further states that
“[t]his arrangement is entered into to preserve the bargain
between the parties reached in the Subcontract between Aliron
and CNI, . . . which the parties could not implement because of
limitations on subcontracting imposed by the applicable SOFA.”
Id. ¶ 1 (A.A. 12) (emphasis added). It is hard to imagine a more
definitive statement that one contract “was executed to carry out
the intent of the other.” Bixler, 733 P.2d at 412. Because both
Bixler elements are thus satisfied, we must construe the two
contracts “together as if they were one contract.” Id.
Aliron has little to say about the second element of the
Bixler test, but it does maintain that the two contracts do not
refer to the same subject matter. Under the Subcontract, Aliron
argues, it “was to perform 49% of the prime contract with its
own employees,” while under the Support Agreement it
“effectively sold its employees to CNI to enable CNI to perform
[the] Prime Contract.” Appellant’s Reply Br. 14. This
distinction is insufficient. Oklahoma law does not require that
two contracts be identical in all respects to be construed as one.
See, e.g., Strickland, 527 P.2d at 13-14 (construing a welfare
benefit plan and a collective bargaining agreement together as
one contract to determine a beneficiary’s death benefits). The
fact that the Subcontract and the Support Agreement travel
along separate paths to reach the same goal is of no moment. As
CNI aptly puts it:
Regardless of whether the personnel supplied by
Aliron worked as “subcontractors” to CNI or were
“sold” to CNI, the substance of the arrangement was
the same -- CNI used dental personnel hired,
credentialed and supplied by Aliron to perform CNI’s
obligations to the Army under the Prime Contract in
8
return for CNI’s payment to Aliron of 49% of the net
revenue CNI received under the Prime Contract.
Appellee’s Br. 19.
B
Aliron makes two additional arguments in favor of
reversing the district court’s judgment. First, it asserts that
extrinsic evidence shows the parties entered into the Support
Agreement with the intent that it not contain an arbitration
requirement. That evidence is in the form of an affidavit from
Aliron’s vice president, Ron Grow, who represents that he
negotiated to exclude an arbitration clause from the Agreement.
But Oklahoma law bars the consideration of such extrinsic
evidence unless a contract is ambiguous. See, e.g., Pitco Prod.
Co., 63 P.3d at 546 (“If a contract is complete in itself, and
when viewed as a totality, is unambiguous, its language is the
only legitimate evidence of what the parties intended. That
intention cannot be divined from extrinsic evidence but must be
gathered from a four-corners’ examination of the instrument.”).
It further provides that the question of whether a contract is
ambiguous, and thus requires extrinsic evidence to clarify its
meaning, is a question of law for the court. See Palace
Exploration Co., 374 F.3d at 953; Pitco Prod. Co., 63 P.3d at
545. Following Bixler, we have read the Subcontract and
Support Agreement together as a single contract. And because
we have concluded that the contract is not ambiguous, we
cannot consider the extrinsic evidence that Aliron offers.
Second, Aliron argues that it should not be required to
submit to arbitration because it never agreed to the Subcontract
that contains the arbitration requirement. Specifically, Aliron
alleges: “[T]he Subcontract that CNI relies [on] is not signed by
Aliron. Therefore, CNI failed to sustain its burden to establish
9
that an agreement to arbitrate exists.” Appellant’s Reply Br. 11.
This contention -- based on the fact that the only copy of the
Subcontract in the record is unsigned -- is inconsistent with
Aliron’s repeated representations that it did enter into a
subcontract with CNI. See, e.g., Compl. ¶ 6 (“CNI
subcontracted with Aliron to perform 49% of the work.”); see
also Support Agreement ¶ 1 (A.A. 12) (discussing the “bargain
between the parties reached in the Subcontract between Aliron
and CNI”). Moreover, it is a contention that Aliron never raised
in the district court. Following our well-settled practice, we will
not consider Aliron’s missing-signature contention for the first
time on appeal. See, e.g., Kassem v. Washington Hosp. Ctr., 513
F.3d 251, 255 n.3 (D.C. Cir. 2008); Chappell-Johnson v. Powell,
440 F.3d 484, 489 (D.C. Cir. 2006); District of Columbia v. Air
Fla., Inc., 750 F.2d 1077, 1084 (D.C. Cir. 1984).
III
We conclude that, because the Subcontract and Support
Agreement refer to the same subject matter, and because the
Support Agreement plainly evidences that it was executed to
preserve the intent of the Subcontract, the two contracts must be
read together as one under Oklahoma law. See Bixler, 733 P.2d
at 411-12. Accordingly, paragraph 28.0 of the Subcontract,
which requires that “any dispute between the parties” be
submitted to binding arbitration, applies with equal force to any
dispute that arises under the Support Agreement. The judgment
of the district court is therefore
Affirmed.