26 Street Hospitality, LLP v. Real Builders, Inc.

2016 ND 95, 879 N.W.2d 437, 2016 N.D. LEXIS 89, 2016 WL 3022054
CourtNorth Dakota Supreme Court
DecidedMay 26, 2016
Docket20150259
StatusPublished
Cited by12 cases

This text of 2016 ND 95 (26 Street Hospitality, LLP v. Real Builders, Inc.) is published on Counsel Stack Legal Research, covering North Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
26 Street Hospitality, LLP v. Real Builders, Inc., 2016 ND 95, 879 N.W.2d 437, 2016 N.D. LEXIS 89, 2016 WL 3022054 (N.D. 2016).

Opinion

KAPSNER, Justice.

■ [¶ 1] 26th Street Hospitality, LLP (“Partnership”) appeals from the district court’s order granting a motion to compel arbitration; order lifting a stay in the proceedings, confirming the arbitration award, and awarding post-judgment interest; and final judgment. The Partnership argues the district court erred in ordering arbitration because the court was required to determine the validity of the contract before arbitration could be ordered and not all of the claims and parties were subject to arbitration. We affirm. .

*441 I

[¶2] The Partnership was created to acquire, build, own, and operate a hotel in Williston. In 2011, the partners signed the Partnership Agreement setting the terms and conditions of their agreement. Joeleon Holdings was one of the partners, and Joel Feist signed the .Partnership Agreement on behalf of Joeleon -Holdings. Feist was a managing partner of Joeleon Holdings and- was named one of the Partnership’s managing partners. Feist was also the President and principal owner of Real Builders, Inc., which provided construction services to. the .Partnership'for the construction of the hotel.

[¶3] In November 2013, the Partnership • sued Joeleon Holdings, Feist, and Real Builders (collectively “Feist ’ defendants”). The Partnership alleged that Feist, on behalf of the Partnership, entered into a construction contract with Real Builders, that Feist-signed the contract on behalf of both the Partnership and Real Builders, and’that the construction contract was invalid because it was executed without the knowledge and authority of the Partnership or a majority of the partners or managing partners as the Partnership Agreement requires. The Partnership-requested the district court declare the construction contract invalid and sought damages for numerous claims, including breach of contract, negligence, fraud, conversion, unjust enrichment, and breach of statutory and other duties.

[¶4] The Feist defendants answered and counterclaimed; seeking damages for claims of breach of contract and unjust enrichment. The -Feist defendants also moved to stay proceedings and for an order compelling arbitration, arguing arbitration of any dispute was required under the Partnership Agreement.

[¶ 5] After a heating, the district court granted the Feist defendants’ motion compelling arbitration, concluding the Partnership Agreement contained a general arbitration clause requiring arbitration for “any claim or controversy arising out .of or relating to” the Partnership Agreement, the Partnership’s complaint contained allegations -related to. or arising out of the Partnership Agreement,, and arbitration was required under the. arbitration clause of the Partnership Agreement. The court stated aspects of the litigation that cannot be resolved in arbitration would be stayed pending resolution of the arbitration..

[¶ 6] The Partnership moved for clarification or reconsideration, arguing the court should clarify which claims, and parr ties were subject to arbitration, which claims, were stayed pending arbitration, and whether nonsignatory, nonparty strangers .to the Partnership Agreement can have their claims arbitrated without a separate arbitration agreement.. After a hearing, the district court denied the Partnership’s request, ruling arbitration was ordered and anything that cannot be arbitrated was stayed -pending the ordered arbitration.

[¶ 7] Arbitration proceedings were completed, and an arbitration award-was entered. The arbitrator found Feist -had actual and inherent authority as a managing partner to enter into the construction contract with- Real Builders for construction of the hotel and awarded the Feist defendants $681,687,78 in damages' and $263,144.23 in interest for the period of February 16, 2013, to March 11, 2015. The arbitrator awarded the Partnership $576,757.95 in damages -for its claims against the Feist defendants.

[¶ 8] The Partnership moved for entry of judgment on the arbitration award. The Feist defendants responded, arguing judgment should be entered only after the stay was lifted and the arbitration award was confirmed. They further, requested *442 that the court’s judgment reflect that all claims and counterclaims in the litigation between the Partnership and Feist defendants were, fully resolved in arbitration and that the court award eighteen percent post-judgment interest. The Feist defendants later moved for an order lifting the stay and confirming the arbitration award, entering judgment, and awarding post-judgment interest.

[¶9] The district court entered an order lifting the stay, confirming the arbitration award, entering judgment, and awarding post-judgment interest. The court ruled.the arbitration award fully resolved all of the claims and counterclaims between the Partnership and Feist defendants and no claims remained outstanding. The court ordered post-judgment interest at a rate of eighteen percent per annum because the arbitrator determined that to be the contractual rate of interest. A judgment dismissing the action with prejudice was entered.

II

[¶ 10] The Partnership argues the district court erred in granting the motion to compel arbitration because the court; rather. than an arbitrator, should have determined whether the construction contract was valid, some of the claims were not subject to arbitration under the arbitration clause of the Partnership Agreement, and Real Builders was not a party to the Partnership Agreement.

[¶ 11] An order granting a motion to compel arbitration is reviewed de novo on appeal, unless the district court’s decision was based on factual findings, which will only be reversed on appeal if they are clearly erroneous. See Schwarz v. Gierke, 2010.ND 166, ¶ 11, 788 N.W.2d 302. In this case, the district court’s decision does not rest upon any factual findings; rather, it is based on the court’s interpretation of the Partnership Agreement. The interpretation of a written contract to determine its legal effect is a question of law, which is fully reviewable on appeal. Id. We have summarized the rales for construing contracts:

Contracts are construed to give effect to the mutual intention of the parties at the time of contracting. N.D.C.C. § 9-07-03; Lire; [Inc. v. Bob’s Pizza Inn Restaurants, Inc., 541 N.W.2d 432, 433-34 (N.D.1995) ]. The parties’ intention must be ascertained from the writing'alone; if possible. N.D.C.C. § 9-07-04; Lire, at 434. A contract must be construed as a whole to give effect to each provision if reasonably practicable. N.D.C.C. § 9-07-06; Lire, at 434_Words in a contract are construed in their ordinary and popular sense, unless used by the parties in a technical sense or given a special meaning by the parties. N.D.C.C. § 9-07-09. If the parties’ intention in a .written contract can.be ascertained from the writing alone, the interpretation of the contract is a question of law for the court to decide. Ohio Farmers. Ins. Co. v. Dakota Agency, Inc., 551 N.W.2d 564, 565 (N.D.1996).

State ex rel. Stenehjem v. Philip Morris, Inc., 2007 ND 90, ¶ 14, 732 N.W.2d 720 (quoting Grynberg v. Dome Petroleum Corp., 1999 ND 167, ¶ 10, 599 N.W.2d 261).

A

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Mountainside v. Vt Mutual Ins
Vermont Superior Court, 2024
Pagel v. Weikum
2023 ND 224 (North Dakota Supreme Court, 2023)
RTS Shearing v. BNI Coal
2021 ND 170 (North Dakota Supreme Court, 2021)
Melaas v. Diamond Resorts U.S. Collection Development
2021 ND 1 (North Dakota Supreme Court, 2021)
Minard v. Moore (In Re Estate of Moore )
2018 ND 221 (North Dakota Supreme Court, 2018)
Melendez v. Horning III
2018 ND 70 (North Dakota Supreme Court, 2018)
Kramlich v. Hale
2017 ND 204 (North Dakota Supreme Court, 2017)
Thompson v. Lithia ND Acquisition Corp. 1
2017 ND 136 (North Dakota Supreme Court, 2017)

Cite This Page — Counsel Stack

Bluebook (online)
2016 ND 95, 879 N.W.2d 437, 2016 N.D. LEXIS 89, 2016 WL 3022054, Counsel Stack Legal Research, https://law.counselstack.com/opinion/26-street-hospitality-llp-v-real-builders-inc-nd-2016.