Woolley v. Clifford Chance

UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

No. 02-10521
Summary Calendar

ROBERT E. WOOLLEY;
MINNESOTA HOTEL COMPANY, INC.,
formerly known as Robert E. Woolley, Inc.,

Plaintiffs - Appellees,

versus

CLIFFORD CHANCE ROGERS & WELLS, L.L.P.;
ROGERS & WELLS, L.L.P.,

Defendants – Appellants.

Appeal from the United States District Court
For the Northern District of Texas
(No. 3:01-CV-2185-D)

October 16, 2002

Before JOLLY, DAVIS and PARKER, Circuit Judges.

PER CURIAM:*

Defendant-Appellant Clifford, Chance, Rogers & Wells, L.L.P.

appeals the district court’s refusal to stay proceedings pending

arbitration of Plaintiff Robert E. Woolley’s suit against it.

Finding no error, we affirm.

*
Pursuant to 5TH CIR. R. 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
 This matter arises from a dispute between Woolley and his

former law firm, Clifford Chance. Woolley hired the firm to

defend him in several class-action securities-related suits in

California. Woolley ultimately decided to settle those suits,

but claims he did not want to do so in a way that would expose

him to personal liability. Clifford Chance drafted the

settlement papers and Woolley executed them. Thereafter, the

class plaintiffs brought suit against Woolley in his personal

capacity, claiming that he had breached the terms of the

settlement agreement by not buying out the plaintiff investors.

Woolley later settled this suit, too, but argues that it was

Clifford Chance’s negligence in drafting the settlement papers

(and the concomitant personal liability) that forced him to do

so.

Woolley brought a Texas state-court malpractice action

against Clifford Chance, which the firm removed to federal

district court in accordance with that court’s diversity

jurisdiction. The firm then moved to stay all proceedings

pending arbitration of the dispute pursuant to the arbitration

provision contained in the attorney-client agreement between it

and Woolley. The district court, in a succinct but carefully

reasoned opinion, concluded that Woolley’s malpractice action

lied outside the scope of the arbitration provision. Clifford

Chance appeals.

We review the district court’s construction of an

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arbitration agreement de novo. See Neal v. Hardee’s Food Sys.,

Inc., 918 F.2d 34, 37 (5th Cir. 1990). In determining whether an

arbitration provision encompasses a particular dispute, we apply

the usual state-law rules of contract interpretation, see OPE

Int’l, L.P. v. Chet Morrison Contractors, Inc., 258 F.3d 443,

445-46 (5th Cir. 2001), keeping in mind the strong federal

preference for arbitration, see Personal Security & Safety Sys.,

Inc. v. Motorola, Inc., 297 F.3d 388, 392 (5th Cir. 2002).

Looking at the arbitration provision in this case, we

conclude that it was meant to include attorney’s fees disputes,

not malpractice actions like this one. The first sentence of the

provision reads: “We seldom have disagreements with our clients

concerning fees, but some occasionally do occur.” What then

follows is an explanation how any arbitration between Clifford

Chance and its client would take place. Specifically, it

provides that arbitration shall be conducted by the Los Angeles

County Bar Association, pursuant to § 6200 of the California

Business and Profession Code, which is entitled “Arbitration of

Attorney’s Fees.” Clifford Chance focuses on the fourth sentence

of the provision, which says, in part, “you and we agree that any

dispute under this representation agreement . . . shall be

submitted to binding arbitration . . . .” (emphasis added). One

of the fundamental tenets of contract interpretation is that

contracts should be read as a whole, viewing particular language

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in the context in which it appears. See RESTATEMENT (SECOND) OF

CONTRACTS § 202 (1981). Doing this, we agree with the district

court that the term “any dispute” refers back to questions

arising from attorney’s fees.

We discern no ambiguity in the instant arbitration

agreement. The district court’s refusal to stay proceedings is

AFFIRMED.

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