Central Florida Investments, Inc. v. Parkwest Associates

2002 UT 3, 40 P.3d 599, 438 Utah Adv. Rep. 20, 2002 Utah LEXIS 3, 2002 WL 27617
CourtUtah Supreme Court
DecidedJanuary 11, 2002
DocketNo. 20000558
StatusPublished
Cited by93 cases

This text of 2002 UT 3 (Central Florida Investments, Inc. v. Parkwest Associates) is published on Counsel Stack Legal Research, covering Utah Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Central Florida Investments, Inc. v. Parkwest Associates, 2002 UT 3, 40 P.3d 599, 438 Utah Adv. Rep. 20, 2002 Utah LEXIS 3, 2002 WL 27617 (Utah 2002).

Opinion

WILKINS, Justice.

1 1 The issue on appeal is whether the trial court erred in refusing to compel arbitration. [602]*602We conclude that the parties agreed to arbitrate and that Parkwest Associates and Beaver Creek Associates did not waive their right to arbitrate. The order of the trial court is reversed.

BACKGROUND

" 2 The following facts are undisputed. In June 1998 Central Florida Investments, Inc. ("CFI") entered into a real estate purchase contract with Parkwest Associates and Beaver Creek Associates (collectively, "PWA"). CFI agreed to buy approximately twenty acres of land in Summit County from PWA for $15,000,000, contingent upon, among other things, Summit County's approval of a final master plan, and the deal closing on or before December 31, 1998. The deal fell apart, allegedly because the contingencies were not satisfied by PWA. Subsequently, CFI filed an action against PWA in the district court on November 9, 1999, claiming breach of contract and breach of the covenant of good faith and fair dealing, and seeking specific performance and damages. CFI also recorded a notice of lis pendens against seventy-five acres of PWA property.

13 On November 12, 1999, three days after CFI filed its complaint, counsel for PWA sent counsel for CFI a letter, indicating that PWA "has consistently taken the position that the Purchase Contract terminated on December 31, 1998, due to the fact that several special contingencies ... were not satisfied...." The letter then notified CFI "that the Purchase Contract is canceled by the Buyer" because the special contingen-cles in the contract were not satisfied. The letter also expressed that "Paragraph 12 of Addendum No. 1 expressly provides that 'any disagreement over the terms of this agreement shall be arbitrated by parties agreed upon by both Buyer and Seller, " and then declared that CFT's filing of the complaint and recording of the lis pendens were improper and constituted breach of contract. In the letter, PWA also declared its position that paragraph 12 of the addendum superseded other sections of the contract.

T4 The Real Estate Purchase Agreement contains more than one provision addressing dispute resolution. Sections 15 and 16, found in the pre-printed portion of the contract, read:

[15.] DISPUTE RESOLUTION. The parties agree that any dispute or claim relating to this Contract, including but not limited to the disposition of the Earnest [Monljley Deposit and the breach or termination of this Contract, shall first be submitted to mediation in accordance with the Utah Real Estate Buyer/Seller [Med]Jiation Rules of the American Arbitration Association. Each party agrees to bear its own costs of mediation. Any agreement signed by the parties [pursuant to the mediation shall be binding. If mediation fails, the procedures applicable and remedies available under this Contract shall apply. Nothing in this [Sect/ton shall prohibit the Buyer from seeking specific performance by the seller by filing a complaint with the court, serving it on the seller by means of [SumJmons or as otherwise permitted by law, and recording a lis pendens with regard to the action provided that the Buyer permits the Seller to refrain from [an-swlering the complaint pending mediation. Also the parties may agree in writing to waive mediation.
[16] DEFAULT. If Buyer defaults, Seller may elect to either retain the Earnest Money Deposit as liquidated damages or to return the Earnest Money Deposit [and] sue Buyer to enforce Seller's rights. If Seller defaults, in addition to return of the Earnest Money Deposit, Buyer may elect to either accept from Seller as [liqui-dlated damages a sum equal to the Earnest Money Deposit or sue seller for specific performance and/or damages. If Buyer elects to accept the liqui[dateld damages, Seller agrees to pay the liquidated damages to buyer upon demand. Where a Section of this Contract provides a specific remedy, the parties [ Ind that the remedy shall be exclusive regardless of rights which might otherwise be available under common law.

The parties also agreed to Addendum 1, which reads, in relevant part:

12. Any disagreement over the terms of this agreement shall be arbitrated by parties agreed upon by both Buyer and Seller. [603]*603If agreement cannot be reached within 60 days from the beginning of an arbitration process Buyer shall receive its money back and this agreement shall be null and void.

T5 In response to CFT's complaint, on December 13, 1999, after PWA sent the November 12, 1999 letter to CFI, PWA filed an answer and counterclaim. The answer portion of this single document does not raise as a defense or mention arbitration. The counterclaim portion, however, raises the issue of arbitration, declaring that the addendum modified the real estate purchase contract and provides that any disagreement over terms would be arbitrated. In the background section of the counterclaim, PWA states, "Addendum No. 1 further modified the Purchase Contract by providing that any disagreement over its terms 'shall be arbitrated by parties agreed upon by both Buyer and Seller. If agreement cannot be reached within 60 days from the beginning of the arbitration process Buyer shall receive its money back and this agreement shall be null and void. " In the background section of the counterclaim PWA further asserts that "CFT's actions [of filing the complaint and recording the lis pendens] are expressly barred by paragraph 12 of Addendum No. 1 [the arbitration provision]." Then, in the first cause of action raised in the counterclaim, PWA mentions the November 12 letter and asserts that "PWA further notified CFI that the filing of the Complaint was not permitted by the Purchase Contract in that section 15 was superseded by paragraph 12 of Addendum No. 1, which provides that 'any disagreement over the terms of this agreement shall be arbitrated by parties agreed upon by both Buyer and Seller' "; and that "the recording of the lis pendens was wrongful." PWA reincorporates these previous assertions by reference in the other causes of action, and further expressly states, "CFI, by and through its principals, promised, agreed and represented, among other things, that in the event a disagreement arose the parties would submit the matter to arbitration...." In alleging breach of the covenant of good faith and fair dealing, PWA alleges that by recording a lis pendens and filing a complaint, CFI breached the purchase agreement "in direct violation of section 12 of Addendum No. 1... ."

T 6 On the same day it filed its answer and counterclaim, PWA filed a motion to dismiss and requested a release of the notice of lis pendens. The memorandum in support of the motion to dismiss also raises the issue of arbitration. In the second paragraph of the introduction section of the memorandum in support of the motion to dismiss, PWA states that the recording of the lis pendens was improper because the purchase contract terminated on its own terms and because "See-tion 15 was superseded by Addendum No. 1, whereby the parties agreed to arbitrate any disagreement over the terms of the agreement without the threat of an action being filed or lis pendens being recorded." While the focus of PWA's motion to dismiss is the assertion that the purchase contract expired on its terms because the contingencies were not met, PWA raises the arbitration provi-gion as a reason to dismiss CFI's complaint. In the recitation of the facts, PWA declares that CFI's complaint and lis pendens were "expressly barred by paragraph 12 of Addendum No.

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2002 UT 3, 40 P.3d 599, 438 Utah Adv. Rep. 20, 2002 Utah LEXIS 3, 2002 WL 27617, Counsel Stack Legal Research, https://law.counselstack.com/opinion/central-florida-investments-inc-v-parkwest-associates-utah-2002.