Cintas Corp. No. 3 v. Art Erickson Tire & Auto, Inc.

383 P.3d 290, 281 Or. App. 201, 2016 Ore. App. LEXIS 1140
CourtCourt of Appeals of Oregon
DecidedSeptember 21, 2016
DocketCV12040725; A154995
StatusPublished

This text of 383 P.3d 290 (Cintas Corp. No. 3 v. Art Erickson Tire & Auto, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cintas Corp. No. 3 v. Art Erickson Tire & Auto, Inc., 383 P.3d 290, 281 Or. App. 201, 2016 Ore. App. LEXIS 1140 (Or. Ct. App. 2016).

Opinion

EGAN, J.

Defendant appeals, challenging the trial court’s grant of plaintiffs motion to strike the trial date and entry of judgment based on an arbitration award. Defendant contends that the trial court erred in denying his request for a trial de novo because ORS 36.425 gives defendant a statutory right to a trial de novo and defendant did not waive that right. We agree because the record does not support the trial court’s finding that the parties agreed that arbitration would be binding arbitration as provided in the renewal agreement. Accordingly, we reverse and remand. Because we reverse on that basis, we do not reach defendant’s other assignments of error.

The facts material to our disposition of this appeal are primarily procedural. Cintas Corporation No. 3 (plaintiff) provided rental and cleaning services for Art Erickson Tire & Auto, Inc. (defendant). Plaintiff and defendant had previously entered into and executed three rental service agreements. On March 30, 2011, a fourth agreement — a standard rental service agreement renewal — was signed by Mike Tappenbeck, plaintiffs employee, and Ray Briggs, defendant’s manager. That renewal agreement included an agreement to submit any contract disputes to binding arbitration.1 Thereafter, defendant canceled services with plaintiff, claiming that the renewal agreement was not valid.

On April 21, 2012, plaintiff filed a complaint in Clackamas County Circuit Court for money damages in the amount of $15,485.67 for breach of contract against defendant. Defendant answered raising affirmative defenses. Neither party mentioned the arbitration provision in the renewal agreement in their pleadings. However, because the alleged damages were less than $50,000, the trial court assigned the case to arbitration as required by ORS 36.405.

[204]*204Prior to defendant filing its answer, the parties’ counsel had discussed the possibility of using binding arbitration to settle the dispute. Plaintiffs counsel then wrote an email to defendant’s counsel summarizing that conversation: “We are also both considering whether to proceed via binding arbitration through the Clackamas County mandatory arbitration program or through an outside agency such as USA&M (now known as ADR Support Services).” (Emphasis added.) However, the parties never revisited the issue discussed in the email.

The case proceeded to arbitration, and the arbitrator issued a written decision finding that “[p]laintiff and defendant entered into a contract on March 30, 2011, defendant breached the contract, and plaintiff is owed the amount specified in the liquidated damages provision in the contract.”

Defendant timely filed a notice of appeal from the entered arbitration award and a request for a jury trial de novo. Plaintiff responded with a motion to strike the trial date, deny defendant’s request for a trial de novo, and for entry of judgment based on the arbitration award. Plaintiff based its motion on the binding arbitration provision in the renewal agreement and the parties’ counsels’ prior discussion to consider binding arbitration.

At the hearing on its motion, plaintiff argued that “the parties clearly agreed to binding and final arbitration, and we’ve had an arbitration. *** [Defendant takes the position that the contract is invalid. That’s really beside the point at this stage of the proceeding, though, because the arbitrator has upheld the contract.” The trial court agreed with plaintiff and found that “[tjhere’s an arbitration that says the contract is valid, the parties clearly agreed to binding arbitration, and I think that means binding arbitration. You don’t get to have another trial, a de novo trial, when the parties have agreed.” (Emphasis added.) Based on that reasoning, the trial court granted plaintiffs motion to strike the trial date and enter judgment based on the arbitration award.

On appeal, defendant contends that the trial court erred because, among other things, ORS 36.425 gave defendant a statutory right to a jury trial and defendant had [205]*205not waived that right. To support that contention, defendant argues that “[t]here is no evidence that *** defendant made a separate written agreement to arbitrate, or agreed to let the arbitrator’s decision be binding and final, and to waive any right to appeal or request a jury trial.” Defendant asserts that it is not bound by a “binding and final” arbitration clause in the disputed document “whose viability is in doubt and depends on whether the disputed document was validly formed and is enforceable.”

Plaintiff responds that the trial court did not err in enforcing the arbitration award because “[t]he arbitrator found that the parties’ March 30, 2011 [,] ‘standard rental service agreement renewal’ was a valid and enforceable agreement,” therefore, “all of [the] contract’s provisions similarly became enforceable, including the provision that any dispute would be resolved by ‘binding and final’ arbitration.”

Thus, the issue on appeal is whether the trial court erred when it denied defendant’s request for a trial de novo following arbitration. For the reasons that follow, we agree that defendant is entitled to a trial de novo in the trial court.

We begin our analysis with the relevant arbitration statutes. ORS 36.405(l)(a) describes the matters that a trial court must refer to court-annexed arbitration. Among those matters are “civil action [s] in a circuit court where all parties have appeared” and “the only relief claimed is recovery of money or damages, and no party asserts a claim for money or general and special damages in an amount exceeding $50,000.” ORS 36.405(l)(a).

ORS 36.425 permits a party to file a notice of appeal and request a trial de novo at the conclusion of an arbitration under ORS 36.400 to 36.425. ORS 36.425(2)(a) provides, as relevant:

“Within 20 days after the filing of a decision and award with the clerk of the court under subsection (1) of this section, a party against whom relief is granted by the decision and award or a party whose claim for relief was greater than the relief granted to the party by the decision and award, but no other party, may file with the clerk a written notice of appeal and request for a trial de novo of the action [206]*206in the court on all issues of law and fact. * * * After the filing of the written notice a trial de novo of the action shall be held. If the action is triable by right to a jury and a jury is demanded by a party having the right of trial by jury, the trial de novo shall include a jury.”

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Cite This Page — Counsel Stack

Bluebook (online)
383 P.3d 290, 281 Or. App. 201, 2016 Ore. App. LEXIS 1140, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cintas-corp-no-3-v-art-erickson-tire-auto-inc-orctapp-2016.