Gergel v. High View Homes, LLC

996 P.2d 233, 1999 Colo. J. C.A.R. 5564, 1999 Colo. App. LEXIS 264, 1999 WL 770955
CourtColorado Court of Appeals
DecidedSeptember 30, 1999
Docket98CA0884
StatusPublished
Cited by11 cases

This text of 996 P.2d 233 (Gergel v. High View Homes, LLC) is published on Counsel Stack Legal Research, covering Colorado Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gergel v. High View Homes, LLC, 996 P.2d 233, 1999 Colo. J. C.A.R. 5564, 1999 Colo. App. LEXIS 264, 1999 WL 770955 (Colo. Ct. App. 1999).

Opinion

Opinion by

Judge ROY.

Defendants, High View Homes, LLC (builder), and Linda A. Elliott (builder’s manager), appeal from the trial court’s denial of their motion to stay these proceedings brought by plaintiffs, James and Carol Ger-gel, and compel arbitration. We reverse and remand.

Plaintiffs contracted with builder for the construction and purchase of a residence. Builder’s manager acted as an agent of builder in the transaction.

The Contract to Purchase (contract) provided that at closing the parties would execute a Limited Warranty Agreement (warranty) that required arbitration of all *235 disputes relating to warranty issues. In addition, the contract provided that the claims, rights, and remedies of the plaintiffs under the contract were limited to those set forth in the warranty. The warranty stated that any disputes which could not be resolved between the parties would be submitted to binding arbitration.

Plaintiffs alleged that shortly after moving into the residence, they observed significant distress to the structure caused by the swelling of expansive soil. Plaintiffs filed this action alleging five claims for relief, including negligence, violation of § 6-1-113, C.R.S. 1999 (Colorado Consumer Protection Act), negligent misrepresentation, negligent concealment, and a breach of § 6-6.5-101, C.R.S.1999 (Soils Disclosure Act).

Defendants moved to stay the proceedings pursuant to § 13-22-204, C.R.S.1999, pending the completion of arbitration. The trial court denied the motion, concluding that the arbitration clause of the warranty covered only the claim for negligence. It further concluded that the intertwining doctrine precluded severance of the claims because of the possibility of inconsistent findings by different tribunals on the same evidence. Therefore, the trial court ordered that all of plaintiffs’ claims be tried in the district court.

I.

Defendants assert that the trial court erred in failing to stay the proceedings to permit arbitration. We agree.

In denying the motion as to all of the claims except the negligence claim, the trial court applied the intertwining doctrine. The purpose of the intertwining doctrine is to prevent inconsistent determinations by different forums. If the factual and legal issues are inextricably intertwined, then the claims must not be severed because severance could result in an arbitrator infringing upon a court’s duty to decide the non-arbitrable claim. City & County of Denver v. District Court, 939 P.2d 1353 (Colo.1997). But see Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985). However, if ail claims fall within the scope of an arbitration clause, the intertwining doctrine does not come into play.

Accordingly, we must determine: (1) what claims, if any, fall under the arbitration provision; and (2) if there are claims that are not subject to the arbitration agreement, whether those claims are so inextricably intertwined with those subject to arbitration as to prevent severance.

Arbitration is a favored means of dispute resolution. See National Camera, Inc. v. Love, 644 P.2d 94 (Colo.App.1982). Any doubts about the scope of an arbitration clause should be resolved in favor of arbitration. See Cabs, Inc. v. Delivery Drivers, Warehousemen & Helpers Local Union, 39 Colo.App. 241, 566 P.2d 1078 (1977).

A court may refuse to compel arbitration only upon a showing that there is no agreement to arbitrate or that the issue sought to be arbitrated is clearly beyond the scope of the arbitration provision. Jefferson County School District No. R-1 v. Shorey, 826 P.2d 830 (Colo.1992).

Arbitration is. a matter of contract, and the ordinary principles of contract interpretation apply. See Eychner v. Van Vleet, 870 P.2d 486 (Colo.App.1993). The primary goal of contract interpretation is to give effect to the expressed intention of the parties. In determining that intent, the court must examine the wording of the arbitration clause and accord its terms their plain and ordinary meanings. Austin v. U.S. West, Inc., 926 P.2d 181 (Colo.App.1996). The scope of an arbitration clause must faithfully reflect the reasonable expectations of the parties. See City & County of Denver v. District Court, supra.

In determining whether an arbitration provision encompasses a particular dispute, a court must determine whether the factual allegations underlying the claim are within the scope of the arbitration clause, regardless of how the claim is characterized in the pleading. The fact that a claim sounds in tort does not necessarily take it out of a clause requiring arbitration of a contract dispute. If that were the rule, parties could avoid arbitration, or frustrate any agreement *236 to arbitrate, by simply framing their claims in tort. See City & County of Denver v. District Court, supra.

Here, although the trial court determined that only the negligence claim was arbitrable, the plain meaning of the warranty does not suggest an intent of the parties that tort or statutory claims be excluded from arbitration. As quoted below, the express language of the warranty agreement provides that all claims, disputes, and other matters in question “arising out of, or relating to” the warranty were to be submitted to arbitration if the claims were not resolved by the parties. The inclusion of the phrase “relating to” in the warranty indicates that the scope of the arbitration provision is broad and inclusive, rather than narrow and exclusive. See City & County of Denver v. District Court, supra.

At the outset, plaintiffs contend that none of their claims relate to the warranty, and that the trial court erred in finding that the negligence claim was arbitrable. They have not, however, appealed the trial court’s order to that effect, and, therefore, we do not address that issue. See City of Delta v. Thompson, 37 Colo.App. 205, 548 P.2d 1292 (1975).

Here, the contract provided, in pertinent part:

Seller and Purchasers agree ... to execute at closing Seller’s Limited Warranty Agreement which requires all disputes relating to warranty issues to be submitted to arbitration. After closing, all claims, rights and remedies of Purchasers arising out of this contract and Seller’s construction shall be limited to those set forth in such Limited Warranty Agreement,

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Bluebook (online)
996 P.2d 233, 1999 Colo. J. C.A.R. 5564, 1999 Colo. App. LEXIS 264, 1999 WL 770955, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gergel-v-high-view-homes-llc-coloctapp-1999.