Rhode Island Supreme Court Decides Parties’ Intent Based on the Agreement’s Expiration Date

According to the Rhode Island Supreme Court, contract duration disputes are not arbitrable under a broad arbitration agreement if the contract includes an expiration date.

In Radiation Oncology Associates, Inc. v. Roger Williams Hospital, No. 2005-218-Appeal, 2006 WL 1689209 (R.I. June 21, 2006), Radiation Oncology Associates, Inc. (“ROA”) brought an action to request the appointment of an arbitrator regarding a dispute related to the duration of its contract with Roger Williams Hospital (“Hospital”). The Hospital objected to the arbitrator and argued that the arbitration clause “did not extend to disputes about the contract’s duration.”

The Court rejected ROA’s argument that the law’s “presumption” in favor of arbitration requires reading the broad arbitration agreement to include duration disputes. Parties are only required to arbitrate disputes which they agreed to submit, and “determining whether the parties agreed to submit a particular dispute to arbitration turns upon the parties’ intent when they entered in the contract…”

Relying on these contract law principles and similar federal court decisions, the Court held that a contract that includes “ strong and specific” expiration date language indicates that the parties did not intend to include duration disputes in the arbitration provision.

The Court refused to rule on the Hospital’s argument that “the arbitration clause became unenforceable by operation of the contract’s expiration” in order to avoid contradicting the U.S. Supreme Court’s decision in AT&T v. Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 649 (1986) which held that, “in deciding whether the parties have agreed to submit a particular grievance to arbitration, a court is not to rule on the potential merits of the underlying claims.”

The trial court denied BBS’ motion to compel arbitration. The Court affirmed that ruling for two reasons. First, Heritage was not a party to the agreement between Remington and BBS and thus had no obligation to arbitrate. Second, the Court found that there was no actual controversy between BBS and Remington.