Marketech v. Process Service

CourtCourt of Appeals of Arizona
DecidedOctober 23, 2025
Docket1 CA-SA 25-0039
StatusPublished

This text of Marketech v. Process Service (Marketech v. Process Service) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Marketech v. Process Service, (Ark. Ct. App. 2025).

Opinion

IN THE ARIZONA COURT OF APPEALS DIVISION ONE

MARKETECH INTERNATIONAL CORPORATION USA, INC., Petitioner,

v.

PROCESS SERVICE SPECIALISTS, L.L.C., Respondent.

No. 1 CA-SA 25-0039 FILED 10-23-2025

Appeal from the Superior Court in Maricopa County No. CV2024-018710 The Honorable Erik Thorson, Judge

VACATED AND REMANDED

COUNSEL

Fennemore Craig, P.C., Phoenix By Timothy J. Berg (argued), John Randall Jefferies, Stacy Porche, Kaitlyn Smith Counsel for Petitioner

Osborn Maledon P.A., Phoenix By Thomas L. Hudson, Eric M. Fraser (argued), Alexandria N. Karpurk Co-Counsel for Respondent

Holden Willits PLC, Phoenix By Michael J. Holden, Ian L. Balitis Co-Counsel for Respondent

Jones Walker LLP, Houston, TX By Neal Sweeney, Tiffany C. Raush, William J. Shaughnessy Co-Counsel for Respondent MARKETECH v. PROCESS SERVICE Opinion of the Court

OPINION

Presiding Judge Brian Y. Furuya delivered the opinion of the Court, in which Chief Judge Randall M. Howe joined. Judge Angela K. Paton dissented.

F U R U Y A, Judge:

¶1 Petitioner Marketech International Corporation USA, Inc. (“Marketech”) seeks special action review of the superior court’s order compelling arbitration and denying its motion for reconsideration.

¶2 This case calls upon us to decide whether the court may compel arbitration by enforcing an arbitration clause contained within an illegal construction contract that, barring applicability of any exceptions, may be void because of a party’s violation of A.R.S. Section 32-1151. As further explained below, contracts that are illegal and void because of such violations cannot be used to compel an unwilling party to arbitrate the issues of that illegality. Instead, the court must resolve any issues regarding illegality in the first instance and may compel arbitration of further issues only upon a determination that the arbitration clause is not void. Because the court improperly delegated the preliminary determination as to illegality and voidness over Marketech’s objection to the arbitration, we accept special action jurisdiction, vacate the court’s order, and remand for an evidentiary hearing to resolve those issues in the first instance.

FACTS AND PROCEDURAL HISTORY

¶3 On July 28, 2022, Marketech entered into a Master Services Agreement (“the Agreement”) with Process Service Specialists, L.L.C. (“PSS”) in connection with the construction of a manufacturing facility. At the time the parties executed the Agreement, PSS was not licensed as a contractor in Arizona. Nevertheless, PSS submitted a $28 million proposal to Marketech on August 4, 2022. Four days later, PSS obtained its contractor’s license on August 8, 2022, and on September 15, 2022, the parties executed their first purchase order.

¶4 A dispute arose between the parties concerning the performance of the construction work. After mediation failed, PSS filed a demand with the American Arbitration Association pursuant to the terms

2 MARKETECH v. PROCESS SERVICE Opinion of the Court

of the Agreement, asserting claims exceeding $50 million. Marketech filed a complaint in the superior court and moved to stay the arbitration, arguing arbitration could not be compelled under the Agreement because PSS lacked legal capacity to contract under Arizona’s licensing statutes at the time of formation. Marketech’s argument was directed at both the Agreement as a whole and also specifically to the arbitration clause contained within it. PSS then moved to stay litigation and compel arbitration. After briefing, the court granted PSS’s motion, reasoning (1) “the arbitrator must decide the contract’s validity in the first instance,” (2) Marketech failed to specifically challenge the delegation clause, and (3) Arizona’s licensing statutes do not bar PSS from initiating arbitration.

¶5 Marketech filed this special action challenging that ruling. While it does not dispute that the Federal Arbitration Act (“FAA”) would apply if the Agreement were validly formed, it argues that PSS’s lack of a contractor’s license at the time the Agreement was signed rendered it void at inception.

DISCUSSION

I. We Accept Special Action Jurisdiction.

¶6 The Rules of Procedure for Special Actions guide us in accepting or declining special action jurisdiction and “should [be] use[d] and construe[d] . . . in a just manner that avoids unnecessary delay and expense.” Ariz. R.P. Spec. Act. 1(c). Special action jurisdiction “is ‘highly discretionary[.]’” Yauck v. W. Town Bank & Tr., ___ Ariz. ___, ___ ¶ 12, 568 P.3d 386, 390 (App. 2025) (citing Prosise v. Kottke, 249 Ariz. 75, 77 ¶ 10 (App. 2020)); see also Ariz. R.P. Spec. Act. 12(a) (“Whether to accept jurisdiction of an appellate special action is within the court’s discretion . . . . In accepting or declining jurisdiction, the court is determining whether remedy by appeal is equally plain, speedy, and adequate.”). In the exercise of that discretion, we are directed to consider, among other factors, whether the petition for special action asks us to resolve questions “the resolution of which will materially advance the efficient management of the case, other than issues presented by ordinary dispositive motion practice[.]” Ariz. R.P. Spec. Act. 12(b)(7); see also State Comp. Fund v. Superior Court, 190 Ariz. 371, 374 (App. 1997) (“Special action jurisdiction is appropriate because . . . resolution of the issues will avoid undue expense and delay for both the litigants and others.”).

¶7 Although A.R.S. Section 12-2101.01(A)(1) allows appeals from orders denying arbitration, it does not mention orders granting

3 MARKETECH v. PROCESS SERVICE Opinion of the Court

arbitration—which our supreme court has interpreted as an intent to minimize interlocutory review. See S. Cal. Edison Co. v. Peabody W. Coal Co., 194 Ariz. 47, 52–53 ¶¶ 16–17 (1999). Thus, under normal circumstances, an order compelling arbitration is not immediately appealable. But though such orders may be reviewed on appeal after a final judgment confirms an award following full arbitration, see Roeder v. Huish, 105 Ariz. 508, 510 (1970), nevertheless, the “general rule [prohibiting appeals from orders compelling arbitration] provides little comfort in those cases in which there are complex issues and in which a bona fide dispute exists over arbitrability. In those instances, justice might be better served by pre- arbitration resolution of arbitrability.” Peabody, 194 Ariz. at 53 ¶ 18.

¶8 This special action presents one such instance because it concerns whether a party can be compelled to expend very substantial time and resources arbitrating a dispute when the order to arbitrate is predicated on a potentially illegal and void contract. Specifically, the parties here agreed unequivocally at oral argument that PSS was unlicensed when the Agreement was signed and that the Agreement concerns provision of construction services. The question presented in the petition, therefore, raises only the narrow legal issue regarding whether PSS’s lack of licensure under A.R.S. Sections 32-1151 and -1153 rendered the arbitration clause illegal and void. See State v. Bergin, 256 Ariz. 516, 521 ¶ 10 (App. 2023) (“[Petition] raises a purely legal issue, making it particularly appropriate for special-action review.”).

¶9 PSS argues against accepting jurisdiction, observing that an arbitrator would be capable of deciding the issue of whether the Agreement is illegal. That may be so, but capacity and ability of the arbitrator are not the issue. Resolving this issue early via special action will materially advance the efficient management of the case. See Ariz. R.P. Spec. Act. 12(b)(7).

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Marketech v. Process Service, Counsel Stack Legal Research, https://law.counselstack.com/opinion/marketech-v-process-service-arizctapp-2025.