                              UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT


                              No. 07-1056



PERDUE FARMS, INCORPORATED,

                                                 Plaintiff - Appellee,

           versus


DESIGN BUILD CONTRACTING CORPORATION,

                                                Defendant - Appellant.



Appeal from the United States District Court for the Western
District of North Carolina, at Charlotte. Graham C. Mullen, Senior
District Judge. (3:06-cv-00245)


Argued:   October 30, 2007                  Decided:   February 8, 2008


Before WILLIAMS, Chief Judge, TRAXLER, Circuit Judge, and Louise W.
FLANAGAN, Chief United States District Judge for the Eastern
District of North Carolina, sitting by designation.


Affirmed by unpublished per curiam opinion.


ARGUED: Mark Raymond Kutny, HAMILTON, MOON, STEPHENS, STEELE &
MARTIN, P.L.L.C., Charlotte, North Carolina, for Appellant. George
Faulkner Ritchie, IV, VENABLE, L.L.P., Baltimore, Maryland, for
Appellee. ON BRIEF: Bentford E. Martin, HAMILTON, MOON, STEPHENS,
STEELE & MARTIN, P.L.L.C., Charlotte, North Carolina, for
Appellant. George E. Rahn, Jr., Gregory J. Wartman, SAUL EWING,
L.L.P., Philadelphia, Pennsylvania, for Appellee.


Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

     Perdue Farms, Incorporated (“Perdue”), a Maryland corporation,

brought     an   action   in    district    court        against    Design    Build

Contracting Corporation (“Design Build”), a Tennessee corporation,

for damages resulting from an alleged breach of a construction

contract.    Design Build now appeals the district court’s denial of

its motion to dismiss the complaint, or in the alternative to stay

and compel arbitration.          For the reasons presented below, we

affirm.



                                       I.

     In March 2004, Perdue hired Design Build to perform certain

architectural and construction work at Perdue’s processing facility

in Concord, North Carolina.            The parties utilized a modified

version of the American Institute of Architects Standard Form of

Agreement Between Owner and Contractor (AIA Document A101-1997),

and incorporated, pursuant to articles 1 and 8.1.2, a modified

version of the General Conditions of the Contract for Construction

(AIA Document A201-1997).

     The breach of contract allegedly resulted from Design Build’s

default on its obligation to reimburse Perdue for monies Perdue

paid directly to Design Build’s subcontractors after Perdue agreed,

in an October 2004 modification to the contract, to advance certain

subcontractors’      payments     on    behalf      of     Design    Build.    The


                                        2
modification       allowed    Perdue    to       count     direct      payments      to   the

subcontractors against the amount Perdue otherwise owed to Design

Build.        Perdue      alleges     that       the     monies       it     paid   to    the

subcontractors exceeded the contract sum, and it seeks to recover

that portion of the payments.

       Perdue filed a complaint in the United States District Court

for the District of Maryland on February 2, 2006.                             Design Build

subsequently       moved     to   dismiss        for     lack   of     jurisdiction       or,

alternatively,       to    transfer    jurisdiction             and    stay    proceedings

pending arbitration. The court granted the motion in part, finding

that    it    lacked      personal    jurisdiction          over       the    non-resident

defendant and venue was improper.                 The court transferred the case

to the United States District Court for the Western District of

North Carolina, where the construction site is located.

       On January 8, 2007, the court rejected Design Build’s renewed

motion to dismiss, or in the alternative to stay and compel

arbitration.        The court found that it possessed the jurisdiction

necessary to entertain the dispute.                    In rejecting Design Build’s

argument      to   the    contrary,    the       court    found       that    the   parties’

contract “eliminated . . . a broad mandatory arbitration clause,”

and instead conditioned arbitration on voluntary mediation.                              (J.A.

at 70.)      Because the parties chose not to mediate and, in fact, did

not mediate the dispute, arbitration never was triggered. “[T]hus,

the contract reveals that the parties chose not to make arbitration


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mandatory.” (Id.)     Moreover, the court found that while there is a

federal    policy   favoring   arbitration,    embodied   in   the   Federal

Arbitration Act, 9 U.S.C. § 1 et seq. (“FAA”), that policy does not

compel arbitration where the parties’ contract does not require

arbitration.     (Id.)   Design Build now appeals that decision.

        Two questions are before this court on appeal. First, whether

the contract’s terms compel the parties to arbitrate Perdue’s

breach of contract claim.       If not, whether the FAA can force the

parties to arbitrate the claim.            We address these questions de

novo.     See Cara’s Notions, Inc. v. Hallmark Cards, Inc., 140 F.3d

566, 569 (4th Cir. 1998)(“Because the examination of the scope of

an   arbitration    agreement    is   primarily    a   task    of    contract

interpretation, we review a district court’s determination of the

arbitrability of a dispute de novo.”).



                                      II

        The first question we address is whether the contract’s terms

compel the parties to arbitrate Perdue’s breach of contract claim.

Article 4.6.1, which the parties deleted from the contract, set

forth a broad arbitration provision, providing:

        Any claim arising out of or related to the Contract,
        except Claims relating to aesthetic-effect and except
        those waived as provided for in Subparagraphs 4.3.10,
        9.10.4, and 9.10.5, shall, after decision by the
        Architect or 30 days after submission of the Claim to the
        Architect, be subject to arbitration.          Prior to
        arbitration, the parties shall endeavor to resolve


                                      4
     disputes by mediation in accordance with the provisions
     of Paragraph 4.5.

     Articles 1 and 8.1.2 of AIA Document A101-1997 incorporate, in

part, article 4.6.2 of AIA Document A201-1997. Design Build argues

that article 4.6.2 requires Perdue’s breach of contract claim to

proceed through arbitration before reaching federal district court,

because article 4.6.2 requires that “[c]laims not resolved by

mediation shall be decided by arbitration . . . .”      A claim is

defined in article 4.3.1 as “a demand or assertion by one of the

parties seeking, as a matter of right, adjustment or interpretation

of Contract terms, payment of money, extension of time or other

relief with respect to the terms of the Contract.”     Because the

dispute “aris[es] out of . . . the Contract,” and “seek[s] as a

matter of right . . . payment of money,” article 4.3.1 covers

Perdue’s claim for beach of contract. Design Build concludes that,

because no mediation took place, the dispute should proceed to

arbitration.

     Perdue counters that article 4.6.2's meaning must be construed

in light of article 4.5.1's permissive mediation clause.   Article

4.5.1 states that a claim is subject to mediation only “if mutually

agreed by the parties.”    The parties inserted this language in

article 4.5.1 and deleted the requirement that claims be submitted

to a third-party architect prior to mediation.      (J.A. at 53.)

Unlike article 4.6.1, which the parties deleted in its entirety,



                                5
the contract retained article 4.5.1, but premised its mediation

requirement on mutual agreement.

      Where a condition precedent to arbitration is not fulfilled,

a party to a contract does not have a right to arbitration.              See

Kansas Gas Elec. Co. v. Westinghouse Elec. Corp., 861 F.2d 420,

422-23 (4th Cir. 1988)(unfulfilled condition precedent renders

arbitration     inappropriate).           Interpreting    article   4.6.2's

requirement that claims “not resolved by mediation shall be decided

by   arbitration”   in   light   of   article   4.5.1    demonstrates   that

arbitration is mandatory only where the parties mutually agree to

mediate the claims, in fact do attempt to mediate the claims, and

fail.

      Where the plain language of an article demonstrates that the

purpose of the article is to limit arbitration, then such clauses

will be enforced.     Clinchfield Coal Co. v. Dist. 28, United Mine

Workers of Am., CA-97-41-A, 1998 WL 808188, at *1 (4th Cir. Nov.

23, 1998) (unpublished decision) (“any arbitration decision must

draw its essence from the parties’ agreement and may not contradict

the agreement’s plain language”) (citing United Steel Workers v.

Enter. Wheel & Car Corp., 363 U.S. 593, 599 (1960)).



                                      III

        Because we answered the first question presented on appeal in

the negative, we now turn to the question of whether the FAA


                                      6
compels arbitration in this case. Congress enacted the FAA in 1925

to place arbitration agreements “upon the same footing as other

contracts”          and     to    render        arbitration       agreements     “valid,

irrevocable, and enforceable, save upon such grounds as exist at

law or in equity for the revocation of any contract.”                       E.E.O.C. v.

Waffle       House,     Inc.,     534    U.S.    279,    288-89    (2002)   (containing

extensive discussion of legislative history)(quoting Gilmer v.

Interstate/Johnson Lane Corp., 500 U.S. 20, 24 (1991)).                         The FAA,

however, “does not mandate the arbitration of all [contract]

claims, but merely the enforcement . . . of privately negotiated

arbitration agreements.”                Dean Witter Reynolds, Inc. v. Byrd, 470

U.S. 213, 219 (1985).

      Characterizations of the FAA which purport to give it a more

robust meaning than that of simply enforcing private arbitration

agreements misstate the federal policy on arbitration.                          “The Act

was designed to overrule the judiciary’s longstanding refusal to

enforce agreements to arbitrate,” and the argument that courts

ought       to   look     suspiciously     on       contracts   avoiding    arbitration

“fundamentally misconceives the nature of the rights created by the

FAA.”       Volt Info. Sciences, Inc. v. Bd. of Tr. of Leland Stanford

Jr. Univ., 489 U.S. 468, 475 (1989).                    Therefore, neither section 2

of   the     FAA*     nor   any    other    section      compels    a   court   to   stay


        *
      Section 2 of the FAA, titled “Validity, irrevocability, and
enforcement of agreements to arbitrate,” states the following: “A
written provision in any maritime transaction or a contract

                                                7
litigation where the contract itself does not call for arbitration.

The FAA cannot change the terms of a contract to make the contract

more susceptible to arbitration.           Id. at 476.

     The parties explicitly limited the instances in which they

intended to arbitrate, and this limited arbitration agreement is

binding.     While the FAA favors arbitration where the parties’

intent is unclear, that preference cannot override a contract that

clearly does not allow for arbitration in the instances in which

Design Build seeks it.          For the foregoing reasons, and after

careful    consideration   of    the   record,    the    decision   below   is

affirmed.

                                                                    AFFIRMED




evidencing a transaction involving commerce to settle by
arbitration a controversy thereafter arising out of such contract
or transaction, or the refusal to perform the whole or any part
thereof, or an agreement in writing to submit to arbitration an
existing controversy arising out of such a contract, transaction,
or refusal, shall be valid, irrevocable, and enforceable, save upon
such grounds as exist at law or in equity for the revocation of any
contract.”

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