                United States Court of Appeals
                    For the First Circuit
                                         

No. 92-1904

             COMMERCIAL UNION INSURANCE COMPANY,

                    Plaintiff, Appellant,

                              v.

                  GILBANE BUILDING COMPANY,

                     Defendant, Appellee.

                                         

         APPEAL FROM THE UNITED STATES DISTRICT COURT

              FOR THE DISTRICT OF MASSACHUSETTS

      [Judge Edward F. Harrington, U.S. District Judge]

                                         

                            Before

                   Torruella, Circuit Judge,
                                           
                Bownes, Senior Circuit Judge,
                                            
                  and Stahl, Circuit Judge.
                                          

                                         

Michael P. Duffy, with  whom Bert J. Capone, John J. O'Connor, and
                                                             
Peabody &amp; Arnold, were on brief for appellant.
            
Peter B. Krupp, with  whom Thomas R. Murtagh, Joseph P.  Crawford-
                                                                  
Kelly, and Mintz,  Levin, Cohn, Ferris, Glovsky and  Popeo, P.C., were
                                                            
on brief for appellee.

                                         

                         May 11, 1993
                                        

          STAHL, Circuit  Judge.  In this  appeal, plaintiff-
                               

appellant   Commercial   Union   Insurance   Company   ("CU")

challenges  the district court's summary denial of its motion

to   stay  defendant-appellee   Gilbane  Building   Company's

("Gilbane") counterclaim pending arbitration.  Finding  error

in the district court's decision, we reverse.

                              I.
                                

                      Factual Background
                                        

          During  the latter half  of the 1980's,  Gilbane, a

general contractor,  entered into thirteen  subcontracts with

Thames Valley  Steel Corporation ("TVS"),  a structural steel

subcontractor, under which  TVS agreed to  perform structural

steel  work  for  Gilbane on  thirteen  separate construction

projects in Massachusetts and Rhode Island.  On each project,

CU  acted as  surety for  TVS,  issuing various  performance,

labor, and material bonds guarantying TVS's proper completion

of  its  obligations.     As  such,  each  of  the   thirteen

construction  projects   was  governed  by   at  least  three

contracts: (1)  the prime  contract between  Gilbane and  the

individual  owner; (2)  the subcontract  between  Gilbane and

TVS; and (3) CU's performance bond. 

          In  1990, TVS  ceased  doing  business  and,  as  a

result,  defaulted on  its  obligations  under  each  of  the

thirteen  subcontracts.  Disputes  then arose between  CU and

Gilbane  concerning CU's obligations as the guarantor of TVS'

                             -2-
                              2

performance  on  these projects.    On  August  16, 1991,  CU

commenced this diversity action against Gilbane alleging that

Gilbane wrongfully  withheld  contract balances  owed  CU  in

connection   with  the   completion   of  the   first  twelve

construction  projects.  In  its answer, Gilbane  denied CU's

allegations  and also brought  a two-count counterclaim.   In

Count  I  of  its  counterclaim,  Gilbane  alleged  that,  in

relation to the thirteenth construction project, TVS breached

the terms of its subcontract by failing to perform in  a good

and workmanlike manner, and that CU breached the terms of its

performance bond by  failing to correct TVS' work.   In Count

II,  Gilbane charged that  CU committed unfair  and deceptive

trade practices in violation of Mass. Gen. Laws Ann. ch. 93A,

   2 and 11 (West  1984 and Supp. 1992) (hereinafter referred

to   simply  as  "ch.  93A"),  and  unfair  claim  settlement

practices in  violation of Mass.  Gen. Laws Ann. ch.  176D,  

3(9) (West 1987 and Supp.  1992), by failing "to effectuate a

prompt, fair and equitable settlement of Gilbane's claims . .

. ."

          In response to Gilbane's  counterclaim, CU filed  a

reply denying any liability in connection with the thirteenth

project and  amended its  complaint to  add a  count alleging

that Gilbane committed  unfair and deceptive trade  practices

in  violation of ch. 93A  by withholding an undisputed amount

"solely in order  to gain leverage with respect  to a dispute

                             -3-
                              3

arising in  connection with  a different project."   At  that

time,  CU also  filed  a  third-party  complaint  against  L.

Antonelli  Iron Works and  The Thompson and  Lichter Company,

Inc., both of whom had  entered into subcontracts with TVS to

perform  certain services  in connection with  the thirteenth

construction project.  In that complaint, CU alleged that the

third-party  defendants were  liable to  CU  for any  amounts

Gilbane  might  recover  against   CU  on  Count  I  of   its

counterclaim.

          On November 6, 1991, CU filed the instant motion to

stay Gilbane's counterclaim pending arbitration, arguing that

the  counterclaim  was  subject  to  an  express  arbitration

agreement.1  Gilbane  opposed the motion to  stay, contending

that  the  counterclaim  was not  subject  to  an arbitration

agreement, and  in the  alternative, that  CU had waived  its

right to arbitrate by filing the instant lawsuit.  On May 18,

1992, the  district court entered a margin order denying CU's

motion to stay.  CU appeals from that decision.

                             II.
                                

                    

1.  We think  it important to  emphasize that Count I  of the
counterclaim  concerns   only  the   thirteenth  construction
project.  The other twelve  projects, which are the basis for
the complaint  by CU against  Gilbane, are not  implicated in
the counterclaim.  The counterclaim, therefore, can be viewed
as separate  and distinct from  the complaint  brought by  CU
against  Gilbane.   Neither  party  has  suggested  that  the
dispute as to  the twelve other construction  projects, which
form   the  basis  for   CU's  complaint,  be   submitted  to
arbitration.

                             -4-
                              4

                          Discussion
                                    

          Although  not  raised  by  the  parties,  we  first

explain the  basis of our appellate jurisdiction.   Section 3

of the Federal  Arbitration Act ("FAA") contains  a procedure

by  which parties  to  an arbitration  agreement  may file  a

motion  to  stay  the  trial  of  arbitrable  claims  pending

arbitration.   See 9 U.S.C.A.    3 (West 1970).   Pursuant to
                  

that section of the statute,  a district court must grant the

stay "upon  being satisfied that the issue  involved . . . is

referable to  arbitration under  such an agreement  . .  . ."

The FAA further provides that  "[a]n appeal may be taken from

. . . an order . . . refusing a stay under  section 3 of this

title .  . . ."  9 U.S.C.A.    16(a)(1)(A) (West Supp. 1992).

As CU is  appealing from a denial  of a motion to  stay under

section  3   of  the   FAA,  we   therefore  have   appellate

jurisdiction.

A.  Arbitrability
                 

          The  arbitrability of  this  dispute turns  on  the

interpretation  of contractual terms, a question of law which

we can determine  in the first instance.   See, e.g., Fashion
                                                             

House, Inc. v.  K Mart Corp., 892  F.2d 1076, 1083  (1st Cir.
                            

1989).

1.  Relevant Contract Language
                              

          Gilbane's counterclaim is  based upon CU's  alleged

breach  of its  performance bond  on  the thirteenth  project

                             -5-
                              5

("the  Performance Bond").   Thus, the arbitrability  of this

counterclaim depends upon  whether there is language  in that

contract  subjecting  disputes  between  Gilbane  and  CU  to

arbitration.  

          Although  the  Performance  Bond  has  no  language

dealing   with  arbitration,   it  does   contain   a  clause

incorporating the  subcontract between Gilbane and  TVS ("the

Subcontract"), which, in turn, has a clause incorporating the

prime  contract  between   Gilbane  and  the  owner   of  the

thirteenth project ("the  Prime Contract").  It is  the Prime

Contract that contains  the arbitration clause.   That clause

reads as follows:

               All  claims,   disputes  and   other
          matters in  question arising  out of,  or
          relating to this Agreement or the  breach
          thereof,  .  .  .  shall  be  decided  by
          arbitration   in   accordance   with  the
          Construction  Industry Arbitration  Rules
          of the  American Arbitration  Association
          then   obtaining   unless   the   parties
          mutually agree otherwise.  This agreement
          to   arbitrate   shall   be  specifically
          enforceable    under    the    prevailing
          arbitration law by a three-member panel.

          The  Subcontract,  which  was  drafted by  Gilbane,

contains a  clause  incorporating certain  provisions of  the

Prime Contract:

               [Gilbane] shall be bound to [TVS] by
          the  terms of  this  agre[e]ment, to  the
          extent   that  the   provisions  of   the
          contract documents between  the owner and
          [Gilbane] apply  to the work of  [TVS] as
          defined in  this agreement[.]   [Gilbane]
          shall   assume  toward   [TVS]  all   the

                             -6-
                              6

          obligations and responsibilities that the
          owner, by those documents, assumes toward
          [Gilbane].    [Gilbane]  shall  have  the
          benefit  of  all  rights,  remedies,  and
          redress against [TVS] which the owner, by
          those documents, has against [Gilbane]. .
          . .2

          Finally,  the   Performance  Bond   has  a   clause

incorporating the  Subcontract by reference:  "Whereas, [TVS]

has by written  agreement . . . entered  into a [S]ubcontract

with [Gilbane] . . . which [S]ubcontract is by reference made

a part hereof . . . ."

2.  Relevant Law
                

          In  deciding  whether  a  chain  of   incorporation

rendering  Gilbane's  counterclaim arbitrable  exists  within

these three contracts,  we are mindful of  the strong federal

policy  favoring  arbitration  agreements,  a  policy   which

requires us to resolve  "any doubts" concerning arbitrability

in favor of arbitration.  See Moses H. Cone Memorial Hosp. v.
                                                          

Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983).   See also J
                                                             

&amp; S  Constr. Co., Inc. v. Travelers Indem. Co., 520 F.2d 809,
                                              

810 (1st Cir.  1975) (construing incorporation language  in a

subcontract  broadly  in  light   of  "the  policy   favoring

arbitration").  This  policy applies "whether the  problem at

hand is the  construction of the contract  language itself or

                    

2.  The subcontract  defines "contract documents"  to include
"the  agreement  between   the  owner   and  [Gilbane],   the
conditions  of the agreement between the owner and [Gilbane],
general   conditions,   supplementary,  special   and   other
conditions . . . ."

                             -7-
                              7

an  allegation  of  waiver,  delay,  or  a  like  defense  to

arbitrability."  Moses H. Cone, 460 U.S. at 25.
                              

          In a  remarkably  similar case,  the Sixth  Circuit

held that  a chain of  incorporation running through  a prime

contract,  a  subcontract, and  a  performance bond  rendered

disputes  under the  performance bond  subject  to the  prime

contract's arbitration  clause.   Exchange Mut.  Ins. Co.  v.
                                                         

Haskell Co., 742 F.2d 274, 275-76  (6th Cir. 1984).  Like the
           

Performance Bond at issue here, the bond in that case did not

itself  contain an arbitration  clause.  Rather,  the bond in

Haskell incorporated the subcontract by reference, (employing
       

incorporation  language  almost  identical  to that  involved

here), which,  in turn,  incorporated the  prime contract  by

reference.  Id.  The incorporation clause in that subcontract
               

read  as follows:   "Subcontractor  hereby  assumes the  same

obligations   and  responsibilities   with  respect   to  his

performance under  this Subcontract, that  Contractor assumes

towards Owner with respect to his  performance on the [prime]

[c]ontract."   Id.  at 275.   The  prime contract  in Haskell
                                                             

contained an arbitration provision  almost identical to  that

in the Prime Contract at issue here.  Id.  
                                         

          Without reference  to the federal  policy requiring

it  to construe  any  doubts in  favor of  arbitrability, the

Sixth Circuit  nevertheless reasoned  that the  incorporation

                             -8-
                              8

language  in the performance  bond and subcontract  was broad

enough to include the prime contract's arbitration agreement:

               Here,    the    performance     bond
          specifically referred to and incorporated
          the   subcontract.      The   subcontract
          provides  that the  same obligations  and
          responsibilities apply in the subcontract
          as apply in  the [prime] contract.   And,
          finally,  the  [prime]  contract provides
          that there is a duty to arbitrate.  Thus,
          the  performance  bond   incorporates  by
          reference     the     subcontract,    the
          subcontract incorporates by reference the
          [prime] contract[,] and hence[,] the duty
          to arbitrate.

Id. at 276 (relying on J &amp; S Constr., 520 F.2d at 810).
                                    

          If  anything,  the  language  in  the   Subcontract

incorporating the terms of the Prime Contract is even broader

than  that in  the  Haskell  subcontract.    The  Subcontract
                           

provides that, to the extent the Prime Contract (with all its

attendant conditions)  applies to  the work  of TVS,  Gilbane

"shall   assume   toward  [TVS]   all  the   obligations  and
                                     

responsibilities" that the owner assumed toward Gilbane under

the  Prime  Contract.   (Emphasis  added).    The Subcontract

further  states that "[Gilbane] shall have the benefit of all

rights,  remedies, and redress against [TVS] which the owner,

by [the  contract documents],  has against  [Gilbane]."   The

parties  do not  dispute that  one of  the obligations  which

Gilbane assumed toward the owner under the Prime Contract was

to  submit  all disputes  arising  out  of  the  contract  to

arbitration.  Nor do they dispute that the bundle of "rights,

                             -9-
                              9

remedies,  and redress"  given  the  owner  under  the  Prime

Contract included the right to  submit all claims relating to

that contract to arbitration.  Accordingly, we find that  the

Subcontract bound  Gilbane to arbitrate  disputes relating to

the work  of TVS.3   Because the Performance  Bond explicitly

incorporated  by reference the  terms of the  Subcontract, we

further find that  Gilbane and CU similarly  bound themselves

to  submit disputes  arising under  the  Performance Bond  to

                    

3.  In  support of  its contention  that the language  in the
Subcontract  should be read  narrowly, Gilbane points  to the
clause  in that  contract  expressly  granting  Gilbane  "the
benefits of all  rights, remedies, and redress  against [TVS]
which  the  owner,  by  [the  Prime  Contract],  has  against
[Gilbane]."    Because  the Subcontract  does  not  contain a
parallel  clause expressly granting  TVS "the benefit  of all
rights,  remedies,  and redress"  under  the Prime  Contract,
Gilbane contends that  the parties did not intend  for TVS to
have the same right  to subject disputes under this  contract
to arbitration.  We do not agree.
     First, this argument  ignores the immediately  preceding
clause which states  that Gilbane "shall assume  toward [TVS]
all the obligations  and responsibilities that the  owner, by
[the Prime Contract],  has against [Gilbane]."   As explained
above, we  interpret this clause  to impose upon  Gilbane the
duty  to arbitrate  "all  disputes  relating  to  [the  Prime
Contract],"  an obligation  assumed by  the  owner under  the
Prime Contract.   Second, adopting Gilbane's  cramped reading
of this language would run  counter to the clearly enunciated
federal policy  of interpreting  "any doubts"  in contractual
language in favor of arbitration.  Moses H. Cone, 460 U.S. at
                                                
24-25.   Finally, because Gilbane drafted the subcontract, we
construe  any ambiguities in that  contract against it.  See,
                                                            
e.g., LFC Lessors,  Inc. v. Pacific Sewer  Maintenance Corp.,
                                                            
739 F.2d 4, 7 (1st Cir. 1984).  

                             -10-
                              10

arbitration.  To  the  extent that  the  district  court held

otherwise, we reverse.4

B.  Waiver
          

          Gilbane alternatively  contends that,  even if  the

counterclaim  is arbitrable, CU waived its right to arbitrate

that  claim based  upon its  pretrial  participation in  this

lawsuit.  This contention we find meritless.

          In  deciding  this  issue,  we  first  discuss  the

appropriate  standard of  review.    As  the  district  court

decided the arbitrability  question by margin order,  we have

no  predicate factual  findings to  review.   In fact,  it is

possible that the  district court did not  reach the question

of waiver but decided against  CU solely on the basis of  its

                    

4.  To support its position that the district court's refusal
to grant the  stay was correct, Gilbane relies  upon a series
of cases which,  it asserts, stand  for the proposition  that
prime  contract provisions  unrelated  to  the  work  of  the
subcontractor  are  not  incorporated  by  reference  into  a
subcontract.   See Washington  Metro. Area  Transit Auth.  v.
                                                         
Norair Eng'g  Corp., 553 F.2d  233, 235-36 (D.C.  Cir. 1977);
                   
John W.  Johnson, Inc. v.  Basic Constr. Co., Inc.,  429 F.2d
                                                  
764,  774-75 (D.C. Cir. 1970);  United States v. Fryd Constr.
                                                             
Corp., 423  F.2d 980,  983-84 (5th  Cir.), cert.  denied, 400
                                                        
U.S. 820 (1970); United States Steel Corp.  v. Turner Constr.
                                                             
Co., 560 F. Supp. 871, 873-74 (S.D.N.Y. 1983).  None of these
   
cases, however, involved the  incorporation of an arbitration
clause.  Indeed, in  one of the cases relied upon by Gilbane,
the   court   explicitly    distinguished   cases   involving
arbitration clauses  as invoking the  "congressional policies
favoring arbitration  . .  . ."   See Washington  Metro., 553
                                                        
F.2d at 236.  In  light of Haskell, a case on all  fours with
                                  
this one, we find Gilbane's  reliance upon this line of cases
unpersuasive. 

                             -11-
                              11

interpretation  of the contractual  language.  In  any event,

the  facts  concerning  CU's  pretrial participation  in  the

lawsuit are undisputed.  As  a result, the question of waiver

is one  of  law, and  we review  it  de novo.   See  Page  v.
                                                         

Moseley,  Hallgarten, Estabrook &amp; Weeden, Inc., 806 F.2d 291,
                                              

294 n.2 (1st Cir. 1986),  overruled on other grounds sub nom.
                                                             

Shearson/American  Express, Inc.  v.  McMahon,  482 U.S.  220
                                             

(1987).  

          In deference to the  policies favoring arbitration,

"courts have  stated  that  `waiver  is  not  to  be  lightly

inferred,  and mere delay in seeking arbitration without some

resultant prejudice to  a party cannot carry the  day.'"  See
                                                             

id. at 293 (quoting  Rush v. Oppenheimer &amp; Co., 779 F.2d 885,
                                              

887  (2d Cir.  1985)).   See also  Sevinor v.  Merrill Lynch,
                                                             

Pierce, Fenner &amp; Smith, Inc., 807 F.2d 16, 19 (1st Cir. 1986)
                            

("In  order  for  plaintiffs  to prevail  on  their  claim of

waiver, they must show prejudice.");  J &amp; S Constr., 520 F.2d
                                                   

at  809-10 (upholding district  court's finding of  no waiver

where there had been "no showing of prejudice"). 

          Although  Gilbane made no claim below that it would

be prejudiced  by a stay  of its counterclaim, it  asserts on

appeal that it would suffer  prejudice on two bases: (1) that

it could  not properly "defend"  Count I (the  contract claim

for  amounts  allegedly owed  CU  on twelve  of  the thirteen

construction  projects) and  Count II  (CU's  ch. 93A  claim)

                             -12-
                              12

without its  counterclaim; and  (2) that it  would be  forced

into duplicative litigation.  We discuss these contentions in

turn.  

          Gilbane first argues that it would suffer prejudice

from  having to  defend  against Count  I  of CU's  complaint

without its  counterclaim.   Accepting this contention  would

require, in essence, a finding that the thirteen construction

projects are factually inseparable.   This is simply not  the

case.   Suppose, for instance, that the counterclaim proceeds

to arbitration  and is  decided in Gilbane's  favor.   Assume

further that  the underlying lawsuit  results in an  award to

CU.  Under that scenario,  the arbitration award could act as

a stipulated  setoff from the  amount awarded CU  in district

court.5    We are  unable  to  imagine  a scenario  in  which

Gilbane would suffer  prejudice from having to defend Count I

of  CU's  complaint  in the  underlying  lawsuit  without its

counterclaim.   Nor has  Gilbane outlined  such a  scenario.6

                    

5.  We note that  Gilbane's attorney conceded as  much during
oral argument.

6.  Gilbane  also  argues   that,  because  it   pleaded  the
substance  of its counterclaim  as an affirmative  defense in
its  answer  to  the  complaint, it  should  be  permitted to
litigate  the substance  of  that  claim  in  the  underlying
action.  Whether  we characterize the substance  of Gilbane's
claim as  a "counterclaim"  or a  "setoff defense,"  however,
makes no difference  for the purposes of  determining whether
Gilbane  will theoretically be prejudiced by severing it from
                                         
the  underlying lawsuit.  Second, and more important, Gilbane
is, in our opinion, relying upon creative pleading to make an
end run around an arbitration  agreement.  We have previously
rejected a  party's reliance upon procedural  gamesmanship to

                             -13-
                              13

We therefore  find unpersuasive  its belated  contention that

one might exist.

          Gilbane also asserts that it would suffer prejudice

by  having  to defend  against  Count  II of  CU's  complaint

without  its  counterclaim.   Again,  Gilbane  has  failed to

provide an example of how it might be prejudiced.  It appears
                         

to  be  arguing,   instead,  that  it  would   be  judicially

inefficient to litigate  CU's ch. 93A claim in  one forum and

Gilbane's ch.  93A claim in  another.7  While Gilbane  may be

correct,   we  fail  to   see  how  any   resulting  judicial

inefficiency would prejudice  Gilbane.8   Cf.  Page, 806 F.2d
                                                   

                    

avoid the  dictates of an arbitration agreement.   Cf. Hilti,
                                                             
Inc. v. Oldach,  392 F.2d 368,  373 n.2 (1st Cir.  1968) ("If
              
arbitration  defenses could be foreclosed [by creative use of
the joinder rules], the  utility of such agreements  would be
seriously compromised.").  We do so again today.

7.  At one point  in its brief, Gilbane states  that it would
"be at risk  of inconsistent verdicts .  . . ."   Gilbane has
not,   however,  offered   either  an  explanation   of  this
perfunctory assertion or an example of a scenario in which it
could occur.   As such,  we do not  address it further.   See
                                                             
United States v. St. Cyr,  977 F.2d 698, 701 (1st Cir.  1992)
                        
(reiterating well settled rule in this circuit that arguments
adverted to on appeal in "a perfunctory manner, unaccompanied
by some developed argumentation," are deemed waived) (quoting
Ryan v.  Royal Ins. Co.  of America,  916 F.2d 731,  734 (1st
                                   
Cir. 1990)). 

8.  In  any event, considerations  of judicial efficiency are
not  a  sufficient  basis on  which  to  affirm  the district
court's denial  of the  motion to stay.   See,  e.g., Seguros
                                                             
Banvenez, S.A. v. S/S Oliver  Drescher, 761 F.2d 855, 862 (2d
                                      
Cir. 1985) (holding that a  court "may not refuse to grant  a
stay [of a claim pending arbitration] based on considerations
of  judicial economy");  Surman  v.  Merrill  Lynch,  Pierce,
                                                             
Fenner &amp;  Smith, 733 F.2d  59, 63 (8th Cir.  1984) (similar);
               
Dickinson  v. Heinold Sec.,  Inc., 661 F.2d  638, 644-45 (7th
                                 

                             -14-
                              14

at  294-95 (finding  no prejudice  despite plaintiffs'  claim

that compelled arbitration  would force them to  "restart the

entire [pretrial preparation] process before a  new tribunal"

almost two years after complaint was filed).  

          Gilbane  also argues that it would suffer prejudice

by  having  to  litigate  the  same  facts  in  two  separate

proceedings, and having "to incur increased costs as a result

of having to proceed in two  arenas."  This argument rests on

the  faulty premise that  litigation of the  counterclaim and

CU's underlying  claims  would require  the  adjudication  of

"identical  factual and legal  issues." See supra  pp. 11-12.
                                                 

Moreover,  any  added  costs  that  Gilbane  would  incur  to

arbitrate its counterclaim were bargained for by Gilbane.  As

such, Gilbane's  final attempt to  persuade us  that it  will

suffer undue prejudice falls well short of the mark.

                             III.
                                 

                          Conclusion
                                    

          In  sum, we  find  that Gilbane's  counterclaim was

subject to an express agreement to arbitrate, and that CU did

not waive its right to arbitrate that claim.  Accordingly, we

reverse the district  court's denial of  CU's motion to  stay

Gilbane's  counterclaim pending  arbitration  and remand  for

proceedings consistent with this opinion.

          Reversed and remanded.  No costs. 
          Reversed and remanded.  No costs.
                                           

                    

Cir. 1981) (similar).

                             -15-
                              15
