Castillo v. Arrieta

2016 NMCA 040, 9 N.M. 615
CourtNew Mexico Court of Appeals
DecidedFebruary 2, 2016
DocketS-1-SC-35772; Docket 34,108
StatusPublished
Cited by8 cases

This text of 2016 NMCA 040 (Castillo v. Arrieta) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Castillo v. Arrieta, 2016 NMCA 040, 9 N.M. 615 (N.M. Ct. App. 2016).

Opinion

OPINION

VANZI, Judge.

{1} In 2006 Plaintiff Ray Castillo signed a document with a provision requiring him to arbitrate “any dispute” arising between him and his attorneys, who are now defendants in this case. The present lawsuit—alleging legal malpractice and related claims'—can only proceed to a jury trial if, as a matter of contract, the arbitration clause does not apply, or if it is otherwise unenforceable.

{2} An arbitration clause in a fee agreement between attorney and client implicates unique legal and ethical concerns that are presently being debated, with other jurisdictions taking varied approaches to enforceability. See generally Terese M. Schireson, Comment, The Ethical Lawyer-Client Arbitration Clause, 87 Temp. L. Rev. 547, 557-64 (2015). For the reasons discussed in this Opinion, we hold that the plain text of this unusually broad arbitration provision reasonably applies to Plaintiffs malpractice claim, but that it is unenforceable if it was signed without Plaintiffs informed consent. We reverse the district court’s decision compelling arbitration and remand for proceedings to determine the circumstances surrounding negotiation of the fee agreement.

I. BACKGROUND

{3} On August 7, 2006, Plaintiff signed a contingency fee agreement with Jose Luis Arrieta and the Arrieta Law Firm, P.C., which Plaintiff alleges was then also the firm of Jose’s brother and co-counsel, Manuel Arrieta. The representation was related to injuries Plaintiff allegedly suffered less than a month earlier in a work site accident—'the severity of which is now disputed by the parties. This dispute, along with most other factual disputes raised in the briefs, is not relevant to our analysis.

{4} The fee agreement at issue contains fourteen numbered paragraphs. The final numbered paragraph succinctly provides:

ARBITRATION CLAUSE: Should any dispute arise, Client and Attorney agree to submit their dispute to arbitration.

Plaintiff signed the fee agreement, affirming that he “read the foregoing terms and agree[d] to them withoutreservation.” There is no other language in the agreement that discusses the scope or meaning of the arbitration clause or provides any explanation of arbitration generally. There is no indication in the agreement that Plaintiff was waiving his right to a jury trial should he sue his attorney for malpractice. Nor is there any suggestion that Plaintiff seek advice of independent counsel before agreeing to such a waiver.

{5} In 2013 Plaintiff brought this lawsuit against Jose, Manuel, and their law firms (collectively, Defendants), alleging that Defendants breached their obligations in the fee agreement, breached an implied covenant of good faith and fair dealing, and committed legal malpractice resulting in Plaintiffs inability to present his personal injury case. When Defendants moved to compel arbitration, Plaintiff opposed the motion on grounds that the arbitration clause was ambiguous, did not clearly apply to a legal malpractice claim, and was otherwise unconscionable and unenforceable as a matter of public policy. With respect to enforceability, Plaintiff argued, in part, that an attorney has fiduciary obligations to his client, which includes an obligation to explain the meaning and scope of an agreement to arbitrate, including the relative advantages and disadvantages of prospectively giving up the right to a jury trial for any future malpractice claim.

{6} Plaintiff and Defendants submitted conflicting affidavits related to the circumstances surrounding negotiation of the fee agreement. According to Defendants, each paragraph was reviewed with and explained to Plaintiff before the agreement was signed. Specifically, the defense affidavit states that Plaintiff was told that any dispute arising from the representation “would be subject to arbitration through a neutral arbitrator selected by both parties.” In contrast, Plaintiffs affidavit states that Defendants never discussed anything about arbitration with him and that he was never told that he would be waiving his right to a jury trial if he sued Defendants for malpractice.

{7} Plaintiff sought leave to depose Defendants in order to investigate the factual dispute evinced by the affidavits. Without any evidentiary hearing, the district court—either believing the factual dispute to be irrelevant, or else resolving the dispute on the face of the conflicting affidavits'—denied Plaintiffs request to conduct discovery and granted Defendants’ motion to compel arbitration.

II. DISCUSSION

{8} Plaintiff makes several related arguments on appeal, which we summarize as: (1) the arbitration provision, which was included in an agreement dealing primarily with attorney fees, does not clearly apply to the malpractice claim; and (2) enforcement of the provision violates public policy unless Plaintiff was sufficiently informed “of the details of the arbitration process and the pros and cons of arbitration,” and given the opportunity to seek advice of independent counsel. “We review de novo the grant of the motion to compel arbitration in the same manner we would review a grant of a summary judgment motion.” DeArmond v. Halliburton Energy Servs., Inc., 2003-NMCA-148, ¶ 4, 134 N.M. 630, 81 P.3d 573. As such, the question cannot be resolved as a matter of law if there remain disputed issues of material fact. See Campbell v. Millennium Ventures, LLC, 2002-NMCA-101, ¶¶ 13-14,132 N.M. 733, 55 P.3d 429.

A. The Legal Malpractice Claim Is Within the Scope of the Arbitration Clause

{9} As an initial matter, we are asked to determine whether the arbitration provision relied upon is even intended to apply to Plaintiffs legal malpractice claim. See Clay v. N.M. Title Loans, Inc., 2012-NMCA-102, ¶ 14, 288 P.3d 888 (“[Arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.” (internal quotation marks and citation omitted)). “Under contract law, the scope of an arbitration provision—whether the parties intended to submit to arbitration—is determined by applying the plain meaning of the contract language.” Id. (alteration, internal quotation marks, and citation omitted). The clause in this case is included in an agreement that deals primarily with attorney fees, and is broadly worded to apply to “any dispute” that may arise between the parties. Plaintiff considers this language to be ambiguous, and asks us to construe any ambiguity strictly against Defendants.

{10} “We construe ambiguities in a contract against the drafter to protect the rights of the party who did not draft it.” Heye v. Am. Golf Corp., 2003-NMCA-138, ¶ 14, 134 N.M. 558, 80 P.3d 495. But “[arbitration clauses such as the one before us are drafted with broad strokes and, as a result, require broad interpretation.” Santa Fe Techs., Inc. v. Argus Networks, Inc., 2002-NMCA-030, ¶ 55, 131 N.M. 772, 42 P.3d 1221. “When parties voluntarily contract to arbitrate their grievances, an order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.” Horne v.

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

Related

Salazar v. Voss
New Mexico Court of Appeals, 2025
Gillies v. Odelia Healthcare
New Mexico Court of Appeals, 2023
State ex rel. Balderas v. ITT Educ. Servs., Inc.
421 P.3d 849 (New Mexico Court of Appeals, 2018)
In re Venie
2017 NMSC 18 (New Mexico Supreme Court, 2017)
Castillo v. Arrieta
2016 NMCA 40 (New Mexico Court of Appeals, 2016)

Cite This Page — Counsel Stack

Bluebook (online)
2016 NMCA 040, 9 N.M. 615, Counsel Stack Legal Research, https://law.counselstack.com/opinion/castillo-v-arrieta-nmctapp-2016.