WPC/ 2#u:#(+zd⤎\، ӓ6Y-2pY@ʴ6oV)aE۴.^2;8-VќǙ EdjIH _ԀQ\k$_3q $63_('*iqY#VkU;01~yMه" خ?5w'##Ixk<ȹ76:?[xApe~zK>lɩ.A\ {2$\(4Κ~eX8 0i"xb[@~K |## b    0   FortheAppellant:     8     FortheAppellee:  C.PaulHarrison     8     BernardE.Bernstein  Knoxville,Tennessee   8     Knoxville,Tennessee H!   DonaldA.Harper     8     CelesteH.Herbert x  Greenville,SouthCarolina  0 8     Knoxville,Tennessee^!8%8%    V!XXOPINION #XX! V # .#'    8.2 8 88XXdXXd8 8  COURTOFAPPEALSAFFIRMED     @     BARKER,J. #    8 88dXXdXXd8 8   Inthisappeal,weaddresstwoprimaryissues:(1)whetherthecontractinthis  caseprovidingforconstructionofahotelinTennessee involvesinterstatecommerce   soastoimplicatetheFederalArbitrationAct,and(2)whetherthechancerycourt  ~ erredinwithholdingcontractformationissuesfromarbitration.Weholdthatthe R J contractinthiscaseplainlyinvolvesinterstatecommerceandthatthepartiesdidnot   intendtoarbitrateaclaimoffraudulentinducementtoenteracontract.Therefore,in   accordancewiththeFederalArbitrationAct,thechancerycourtproperlyretained   jurisdictionovertheclaimoffraudulentinducementtoenteracontract.Thejudgment z  oftheCourtofAppealsisaffirmed. NF    BACKGROUND      OnApril4,1995,Gatlinburg,L.L.C.( Gatlinburg),enteredintoacontractwith  FrizzellConstructionCompany,Inc.( Frizzell),fortheconstructionofahotelinSevier VN County,Tennessee.Gatlinburgownedtheproject,andFrizzellservedasthe "! managementcompanyinchargeofconstructingthehotel.Thecontractcontaineda " provisionstatingthatthelawsofTennesseewouldgovernthecontractandaprovision $! requiringarbitrationof [a]llclaims,disputesandorothermattersinquestionsarising &~# outof,orrelatingto,thisAgreementorthebreachthereof%  ....: #  1       R(J!%  Shortlyafterthesubstantialcompletionofthehotel,adisputearosebetween +$) thepartiesrelatingtocertainpaymentsduetoFrizzellunderthecontract.This -&+ disputeultimatelyculminatedinFrizzellfilinga ComplainttoEnforceMechanicsLien /z(- andforBreachofContractintheSevierCountyChanceryCourtonAugust22,1997. N1F*/ OnOctober27,1997,GatlinburgfileditsAnswer,andinanamendedcounterclaim, 3,1 GatlinburgallegedthatthecontractwasfraudulentlyinducedthroughFrizzells  misrepresentationofitsexpertiseandabilitytocompletetheprojectforthestated  amount.OnNovember3,1997,Frizzellmadeademandforarbitration,andeight   dayslater,Frizzellfiledamotiontostaythecourtproceedingspendingarbitration. l d  ThechancellorgrantedFrizzellsmotiontostayandsubmittedtheissues   concerningoverduepaymenttoarbitration.However,thecourtwithheldfrom   arbitrationGatlinburgsallegationoffraudulentinducementbecauseTennesseelaw   doesnotpermitarbitrationofthisclaim.Inamotiontoreconsider,Frizzellarguedthat h` becausethecontractinvolvesinterstatecommerce,theFederalArbitrationAct( FAA) 4, requiredsubmissionofalldisputes,includingthatoffraudulentinducement,tothe  arbitrator.Thechancellordisagreedandheldthatthecontractdidnot involve  interstatecommercesoastobringthecontractundertheFAA.Thechancelloralso  held,withoutstatinganyreasons,thatevenifthecontractdidinvolveinterstate d\ commerce,theFAAwasneverthelessinapplicable. 0 (  TheCourtofAppealsaffirmedthedecisionofthetrialcourttowithholdthe #  issueoffraudulentinducementfromarbitration.WhiletheCourtofAppealsdidnot %" decidewhetherthecontractinvolvesinterstatecommerce,thecourtheldthatbecause `'X $ thepartieshadchosenTennesseelawtogovernthecontract,theissueoffraudulent ,)$"& inducementcouldnotbesubmittedtothearbitrator.TheCourtofAppealsalsoheld *#( thatanydecisionastowhetherthecontractwassubjecttotheFAAwas premature ,%* untiladeterminationwasmadeunderTennesseelawthatthecontractwasvalid. #  2      ׀ .',   \0T).  Wegrantedreviewtodecide(1)whetherthiscontractinvolvesinterstate   commerce,and(2)whetherthetrialcourterredinwithholdingtheclaimoffraudulent  inducementfromarbitration.Weholdthatthiscontractplainlyinvolvesinterstate   commerceandthattheFAAdoesapplytoenforcetheagreementaccordingtoits l d terms.Becausewefindthatthecontractevidencestheintentofthepartiesto 80 judiciallyresolveaclaimoffraudulentinducement,wealsoholdthatthechancellor   properlywithheldthisissuefromarbitration.     ANALYSIS  h`    TheFAAensurestheenforcementofwrittenagreementstoarbitrate inany   maritimetransactionoracontractevidencingatransactioninvolvingcommerce....  See9U.S.C.2(1994).Therefore,wemustfirstdecidewhetherthiscontractisone   evidencingatransactioninvolvingcommercebeforewecandecidetheproper ph applicationoftheFAA. < 4  Ontheirface,thewords evidencingand involvingcommercedonotseemas #  broadasthephrase affectingcommerce,whichisthelanguagetypicallyusedby %" Congresstoinvokethefullrangeofitscommercepower. #  3      ׀However,theUnited l'd $ StatesSupremeCourthasstatedthat thewordinvolvingisbroadandisindeedthe 8)0"& functionalequivalentofaffecting.AlliedBruceTerminixCos.v.Dobson,513U.S. +#( 265,274(1995).Assuch,theFAA embodiesCongress[s]intenttoprovideforthe ,%* enforcementofarbitrationagreementswithinthefullreachoftheCommerceClause. .', Perryv.Thomas,482U.S.483,490(1987).Thisinterpretationissupportedbythe h0`). originalreportoftheHouseofRepresentatives,whichfurtherindicatesthatthephrase   involvingcommerceisnotmeanttorestrictthereachorapplicationoftheFAA.The  reportstatesthat [t]hecontroloverinterstatecommercereachesnotonlytheactual   physicalinterstateshipmentofgoodsbutalsocontractsrelatingtointerstate l d commerce.H.R.Rep.No.96,at1(1924),quotedinPrimaPaintCorp.v.Flood& <4 ConklinMfg.Co.,388U.S.395,401n.7(1967)(emphasisadded).    Aspartofitsconstitutionalauthoritytoregulateinterstatecommerce,Congress   mayregulateintrastateactivitiesthathaveasubstantialrelationtointerstate ld commerce.SeeUnitedStatesv.Lopez,514U.S.549,55759(1995).Afteracareful 80 reviewoftherecord,wefindthatsucharelationispresentinthiscase.Atleastsix  outofstatecontractorsparticipatedintheconstructionofthehotel,atleastnine  employeeswereemployedfromoutsideTennessee,andatleastsevenoutofstate  vendorssuppliedmorethan$380,000worthofmaterialsfortheproject.% #  4      ׀AnOhio h` corporationinsuredtheproject, #  5      ׀andaDelawarecorporationbasedinNewJersey 4 , issuedapaymentandperformancebondalongwithabondtodischargeliensfiled " againsttheprojectasrequiredbythecontract.^ #  6      ׀Theconstructionfinancingwas #  accomplishedwiththeassistanceofthreeoutofstatebanks,  #  7      ׀andthepurposeand %"  scopeoftheagreementwastodevelopacommercialventureextendingbeyond d'\ $ Tennessee. #  8      ׀Whenallofthesefactorsareviewedtogether,itisclearthatthis   contractisonethat involvescommerce.7, #  9      ׀   Becausethecontractinthiscaseisonethatinvolvesinterstatecommerce,the l d FAAappliestoensurethatthearbitrationagreementbetweenthepartiesisenforced 80 accordingtoitsterms.SectiontwooftheFAAstatesthatawrittenagreementto   arbitrate shallbevalid,irrevocable,andenforceable,saveuponsuchgroundsas   existatlaworinequityfortherevocationofanycontract.See9U.S.C.2.   AlthoughtheprovisionsoftheFAAaretobeappliedinbothstateandfederalcourts, h` DoctorsAssocs.,Inc.v.Casarotto,517U.S.681,68485(1996)(citingSouthland 4, Corp.v.Keating,465U.S.1,12(1984)),the FAAcontainsnoexpresspreemptive  provision,nordoesitreflectacongressionalintenttooccupytheentirefieldof  arbitration.VoltInfo.Sciences,Inc.v.BoardofTrustees,489U.S.468,477(1989).    ThepurposeoftheFAAis toensuretheenforceability,accordingtotheir 0 ( terms,ofprivateagreementstoarbitrate.Mastrobuonov.ShearsonLehmanHutton, ! Inc.,514U.S.52,57(1995);VoltInfo.Sciences,Inc.,489U.S.at476.However, #  partiescannotbeforcedtoarbitrateclaimsthattheydidnotagreetoarbitrate.Asthe %" UnitedStatesSupremeCourthasstated, `'X $ X   Arbitrationunderthe[FAA]isamatterofconsent,notcoercion,andparties *#( aregenerallyfreetostructuretheirarbitrationagreementsastheyseefit. +$) Justastheymaylimitbycontracttheissueswhichtheywillarbitrate,sotoo ,%* maytheyspecifybycontracttherulesunderwhichthatarbitrationwillbe  conducted.   9X999VoltInfo.Sciences,Inc.,489U.S.at479(citationsomitted).    TheFAAs proarbitrationpolicydoesnotoperatewithoutregardtothewishes 80 ofthecontractingparties.Mastrobuono,514U.S.at57.Because arbitrationisa   matterofcontract[,]...apartycannotberequiredtosubmittoarbitrationanydispute   whichhehasnotagreedsotosubmit.AT&TTechs.,Inc.v.Communications   WorkersofAm.,475U.S.643,648(1986).Whenpartiesagreetoarbitration,the h` FAAensuresenforcementofthatagreementbywithdrawing thepowerofthestates 4, torequireajudicialforumfortheresolutionofclaimswhichthecontractingparties  agreedtoresolvebyarbitration.SouthlandCorp.,465U.S.at10.However,  consistentwiththeFAA,partiesmayagreethatonlycertainissueswillbesubmittedto  arbitrationorthattheywillnotarbitrateatall.Cf.MitsubishiMotorsCorp.v.Soler d\ ChryslerPlymouth,Inc.,473U.S.614,628(1985). 0 (  Therefore,thequestionessentiallybecomes whatthecontracthastosay #  aboutthearbitrabilityofpetitionersclaim....Mastrobuono,514U.S.at58.Ifthe %" partiesinthiscaseagreedtoarbitratetheclaimoffraudulentinducement,then `'X $ despitesuchaprohibitionunderTennesseelaw,X #  10      ׀theclaimmustbesubmittedto ,)$"& arbitration.Conversely,ifthepartiesdidnotagreetoarbitratetheclaimoffraudulent *#( inducement,thentheycannotbecompelledtoarbitratetheclaimdespiteits ,%* arbitrabilityundertheFAA. #  11      ׀ .', Ї Courtsshouldgenerallyapply ordinarystatelawprinciplesindeciding  whetherthepartiesagreedtosubmitcertainissuestoarbitration.SeeFirstOptionsof  Chicago,Inc.v.Kaplan,514U.S.938,944(1995)(citingMastrobuono,514U.S.at   6263).UnderTennesseelaw,thelawgoverningthiscontract,the cardinalrule[in l d interpretingcontracts]...istoascertaintheintentionofthepartiesandtogiveeffect 80 tothatintention,consistentwithlegalprinciples.BobPearsallMotors,Inc.v.Regal   Chrysler-Plymouth,Inc.,521S.W.2d578,580(Tenn.1975).Courtsmaydetermine   theintentionoftheparties byafairconstructionofthetermsandprovisionsofthe   contract,bythesubjectmattertowhichithasreference,bythecircumstancesofthe h` particulartransactiongivingrisetothequestion,andbytheconstructionplacedonthe 4, agreementbythepartiesincarryingoutitsterms.PenskeTruckLeasingCo.v.  Huddleston,795S.W.2d669,671(Tenn.1990).Nosingleclauseinacontractisto  beviewedinisolation;rather,thecontractistobe viewedfrombeginningtoendand  allitstermsmustpassinreview,foroneclausemaymodify,limitorilluminate d\ another.CockeCountyBd.ofHighwayCommrsv.NewportUtils.Bd.,690S.W.2d 0 ( 231,237(Tenn.1985). !  Inthiscase,thearbitrationclausepurportstogovern [a]llclaims,disputesand %" othermattersinquestionsarisingoutof,orrelatingto,thisAgreement....Viewed `'X $ inisolation,thebreadthofthisclauseappearstoevidenceanintenttosubmitall ,)$"& issuestoarbitration,includingissuesofcontractformation.However,readingthe *#( contractasawhole,thearbitrationclause"alongwitheveryclauseinthecontract"is ,%* limitedandsubjecttotheadditionalqualificationthatTennesseelawprovidesthe .', basisfordecidingquestionsconcerningitsscopeandinterpretation. \0T). Ї AlthoughtheappellanturgesthattheTennesseechoiceoflawclauseis  withouteffectuponthearbitrationclause,wecanfindnosupportforthispropositionin  thecontractitself.Thechoiceoflawclauseplainlystatesthatitgovernstheentire   agreement,andnoprovisioninthecontractappearstobeexemptfromtheeffectsof l d thechoiceoflawclause.BystatingthatthecontractistobegovernedbyTennessee 80 law,thepartieshaveindicatedtheirintentiontoarbitratealldisputes arisingoutof,or   relatingtotheiragreement"butonlytotheextentallowedbyTennesseelaw. #  12      ׀   Interpretingeachclauseinlightoftheother,wereadthearbitrationclausetomore   accuratelystate, InaccordancewithTennesseelaw,allclaims,disputes,andother h` mattersinquestionsarisingoutof,orrelatingto,thisAgreement...shallbedecided 4, byarbitration....Therefore,becauseTennesseelawcontemplatesjudicial  resolutionofcontractformationissues,weconcludethatthepartieshaveindicated  theirintentionnottosubmitsuchissuestoarbitration.   TheFAArequiresthecourtsofthisstatetoenforcearbitrationagreements 0 ( accordingtotheirterms.Becausethepartiesinthiscasehaveagreedtoarbitrate ! theirdisputestotheextentallowedbyTennesseelaw,wethereforeholdthatthe #  chancerycourtproperlysubmittedallissuesrelatingtothemeritsofthecontractto %" arbitration.Wealsoholdthatthechancerycourtproperlywithheldtheissueof `'X $ fraudulentinducementfromarbitrationinaccordancewiththeintentionoftheparties. ,)$"&  Asevidencethatachoiceoflawclausecannotmodifyanarbitrationclause, ,%* theappellantquotesourstatementinTennesseeRiverPulp&PaperCo.v.Eichleay .', Corp.,637S.W.2d853(Tenn.1982),that partiesshouldnotbeabletorender[the \0T). FAA]inapplicablebyprovidingforarbitrationunderthelawsofaparticularstate.See  637S.W.2dat857.InTennesseeRiver,however,wedidnotspecificallyaddressthe  effectsofachoiceoflawclauseuponothercontractprovisions.Weonlyheldthatthe   FAArenderedarbitrationagreementsfullyenforceableaccordingtotheirownterms, l d therebymodifyingourcommonlaw.Wedidnotholdthatpartiesareincapableof 80 choosingthelawbywhicharbitrationistobeconducted.Sucharulewouldbe   contrarytothedeclarationthat theFAAsproarbitrationpolicydoesnotoperate   withoutregardtothewishesofthecontractingparties.SeeMastrobuono,514U.S.   at57. h`  Therefore,consistentwiththepoliciesunderlyingtheFAA,ourholdinginthis  casesimplyreflectsthatpartiesmaychoosethearbitrationlawbywhichtheyintendto  begoverned.Theenforcementofthisagreementaccordingtotheintentoftheparties  isinfullaccordwiththeFAA,eveniftheresultisthatthepartiesagreetosubmitsome d\ issuesforjudicialresolutionthattheFAAwouldotherwisepermitarbitrationtoresolve. 0 ( ThisCourt maygiveeffecttothecontractualrightsandexpectationsoftheparties, ! withoutdoingviolencetothepoliciesbehindtheFAA.SeeVoltInfo.Sciences,Inc., #  489U.S.at479. %"   CONCLUSION  ,%*    Tosummarize,weholdthatthechancerycourterredinfindingthatthis 0). contractisonenot evidencingatransactioninvolvingcommerce.Wealsoholdthat X2P+0 whenviewedasawhole,thecontractrevealstheintentionofthepartiestoarbitrateall $4-2 disputestotheextentallowedbyTennesseelaw.Becausethepartiesdidnotintend 5.4 toarbitratecontractformationissues,thechancellorsdecisionnottosubmittheclaim  offraudulentinducementtoarbitrationwasconsistentwiththeFAA.Therefore,we  affirmthejudgmentoftheCourtofAppealsandremandthesoleissueoffraudulent   inducementtothechancerycourtforfurtherproceedingsconsistentwiththisopinion. l d XZXXXر Costsareassessedtotheappellant,FrizzellConstructionCompany,Inc.     0       0      8     ___________________________    0      8     WilliamM.Barker,Justice  PANEL: | Anderson,C.J., d\ Drowota,Birch,JJ.#XرXXXZa# TL Byers,S.J.