SUPREME COURT OF ARIZONA En Banc
NORTH VALLEY EMERGENCY ) Arizona Supreme Court SPECIALISTS, L.L.C., an Arizona ) No. CV-03-0279-PR Limited Liability Company, ) ) Court of Appeals Petitioners, ) Division One ) No. 1 CA-SA 03-0137 v. ) ) Maricopa County Superior THE HONORABLE MARK R. SANTANA, ) Court JUDGE OF THE SUPERIOR COURT OF ) No. CV 2002-015581 THE STATE OF ARIZONA, in and for ) the County of Maricopa, ) ) O P I N I O N Respondent Judge, ) ) TEAM PHYSICIANS OF ARIZONA, P.C., ) an Arizona professional ) corporation d/b/a EMERGENCY ) PHYSICIANS, EPI, ) ) Real Party in Interest. ) ) __________________________________)
Petition for Review from Special Action Court of Appeals, Division One No. 1 CA-SA 03-0137
Petition for Special Action from the Maricopa County Superior Court No. CV 2002-015581 The Honorable Mark R. Santana, Judge
VACATED AND REMANDED ________________________________________________________________
Lubin & Enoch, P.C. Phoenix By: Stanley Lubin And: Nicholas J. Enoch Attorneys for Petitioners Robbins & Green, P.A. Phoenix By: Philip A. Robbins And: Janet B. Hutchison James O. Ehinger Attorneys for Real Party in Interest ________________________________________________________________
R Y A N, Justice
¶1 Arizona’s arbitration act, Ariz. Rev. Stat. (“A.R.S.”)
§§ 12-1501 to -1518 (2003), provides that the act has “no
application to arbitration agreements between employers and
employees or their respective representatives.” A.R.S. § 12-
1517. We granted review to determine whether Arizona Revised
Statutes section 12-1517 applies to all arbitration agreements
between employers and employees or only those found in
collective bargaining contracts. We hold that § 12-1517 exempts
from the Arizona Uniform Arbitration Act (“Act”) all arbitration
agreements between employers and employees.
I.
¶2 Team Physicians of Arizona, Inc. (“TPA”), provides
medical services to hospital emergency departments. To furnish
these services, TPA employs physicians and physician assistants.
Each of the physicians and physician assistants employed by TPA
entered into an employment agreement containing essentially the
same arbitration clause requiring “any and all disputes” arising
out of the employment agreement to “be settled by arbitration.”
In 2002, employees left TPA and formed North Valley Emergency
- 2 - Specialists, L.L.C. (“NVES”). NVES provides emergency medical
services to hospitals in competition with TPA.
¶3 TPA filed a lawsuit in superior court against NVES and
numerous individual physicians and physician assistants, seeking
damages and injunctive relief. TPA eventually requested that
the individual defendants submit their cases to arbitration in
accordance with the arbitration clauses. The individual
defendants refused to submit to arbitration.
¶4 TPA filed a motion to compel arbitration under A.R.S.
§ 12-1502, which provides that a court shall order arbitration
when there is a valid arbitration agreement between the parties.1
In response, the defendants argued that the trial court did not
have the statutory authority to grant TPA’s motion because
A.R.S. § 12-1517 exempted employment contracts from the Act.
The trial court ruled that § 12-1517 was intended to apply only
to collective bargaining agreements, stayed the lawsuit, and
ordered that the parties arbitrate the damage claims.
¶5 The defendants filed a petition for special action in
the court of appeals, which declined jurisdiction. The
1 Arizona Revised Statutes § 12-1501 states the following: “A written agreement to submit any existing controversy to arbitration or a provision in a written contract to submit to arbitration any controversy thereafter arising between the parties is valid, enforceable and irrevocable . . . .” Section 12-1502(A) gives the court the power to order arbitration when an agreement described in § 12-1501 exists.
- 3 - defendants then petitioned this court for review, asking us to
reverse the order compelling arbitration. We accepted review
because many employment agreements now contain arbitration
clauses and because no Arizona appellate court has ruled on the
issue. We have jurisdiction under Article 6, Section 5(3), of
the Arizona Constitution, A.R.S. § 12-120.24 (2003), and Arizona
Rule of Civil Appellate Procedure 23.
II.
¶6 TPA asks us to uphold the trial court’s interpretation
of A.R.S. § 12-1517 for several reasons.2 First, it argues that,
based upon the legislative history of Arizona’s arbitration
statutes, the current version of the Act was intended to exempt
only arbitration agreements in collective bargaining contracts.
Second, TPA contends that because the Act is based upon a model
or uniform act, we should assume the legislature intended to
2 In its supplemental brief, citing Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001), TPA argues that the Federal Arbitration Act (“FAA”) preempts the Arizona Arbitration Act because “all forms of employment agreements . . . are subject to compulsory arbitration under the [FAA].” TPA raised this argument neither in the trial court nor in its petition for special action in the court of appeals. Therefore, the issue is waived. See Van Loan v. Van Loan, 116 Ariz. 272, 274, 569 P.2d 214, 216 (1977). Moreover, TPA did not ask the trial court to make any finding that the contracts in this case involve interstate commerce. See Ex parte Webb, 855 So. 2d 1031, 1035- 36 (Ala. 2003); Munoz v. Green Tree Fin. Corp., 542 S.E.2d 360, 363 (S.C. 2001); see also Citizens Bank v. Alafabco, Inc., 539 U.S. 52, 56 (2003) (per curiam) (interpreting the term “involving commerce” to mean “affecting commerce”); S. Cal. Edison Co. v. Peabody W. Coal Co., 194 Ariz. 47, 51, ¶ 13, 977 P.2d 769, 773 (1999) (discussing the scope of the FAA).
- 4 - place the same construction on the Act as did the drafters of
the uniform act. Third, TPA claims that interpreting § 12-1517
as exempting all arbitration agreements between employers and
employees from Arizona’s arbitration act contravenes the
legislature’s policy of favoring arbitration. Finally, TPA
contends that a grammatical construction of § 12-1517 does not
support the exemption of all employer-employee arbitration
agreements from the Act.
¶7 The defendants, on the other hand, contend that the
plain language of A.R.S. § 12-1517 precludes all arbitration
agreements between employers and employees from being subject to
compulsory arbitration. It argues that TPA’s assertion that the
legislature intended to exclude from compulsory arbitration only
collective bargaining agreements that contain arbitration
clauses is clearly contrary to the language the legislature
used.
¶8 Because this case presents a question of statutory
interpretation, our review is de novo. See Canon Sch. Dist. No.
50 v. W.E.S. Constr. Co., 177 Ariz. 526, 529, 869 P.2d 500, 503
(1994).
III.
¶9 A statute’s language is “the best and most reliable
index of a statute’s meaning.” State v. Williams, 175 Ariz. 98,
100, 854 P.2d 131, 133 (1993) (quoting Janson v. Christensen,
- 5 - 167 Ariz. 470, 471, 808 P.2d 1222, 1223 (1991)). In addition,
“[i]f the language is clear, the court must ‘apply it without
resorting to other methods of statutory interpretation,’ unless
application of the plain meaning would lead to impossible or
absurd results.” Bilke v. State, 206 Ariz. 462, 464, ¶ 11, 80
P.3d 269, 271 (2003) (quoting Hayes v. Cont’l Ins. Co., 178
Ariz. 264, 268, 872 P.2d 668, 672 (1994)). The clear language
of § 12-1517 leads us to conclude that an arbitration agreement
between an employer and employee is not subject to the
provisions of the Act, whether the agreement is found in a
contract between a single employer and a single employee or in a
collectively bargained contract.
A.
¶10 Despite the clear language of A.R.S. § 12-1517, TPA,
tracing the history of compulsory arbitration in Arizona, first
maintains that the legislature intended the present version of
the exemption for employer-employee arbitration agreements in
the Act to exclude only arbitration agreements contained in
collective bargaining contracts. It therefore contends that the
agreements here are subject to arbitration. We conclude that
the legislative history does not compel the result TPA urges.
¶11 Before 1929, title II, paragraph 7, of the Revised
Statutes of Arizona (1887) permitted the parties to agree to
submit any “right of action . . . to arbitration.” Subsequent
- 6 - versions of this statute continued to permit parties to submit
their claims to arbitration. See Rev. Code Ariz. § 4294 (1928);
Rev. Stat. Ariz. § 1480 (1913); Rev. Stat. Ariz. tit. III, ¶ 295
(1901). Under these statutes, however, parties could not be
compelled to arbitrate their claims. See San Francisco Sec.
Corp. v. Phoenix Motor Co., 25 Ariz. 531, 538, 220 P. 229, 231-
32 (1923). In 1929, the legislature replaced the permissive
arbitration statute with a compulsory arbitration system. See
1929 Ariz. Sess. Laws, ch. 72, § 1 (codified at Rev. Code Ariz.
§ 4301a (Supp. 1934)). But § 4301a specifically excluded
collective bargaining contracts from being subject to compulsory
arbitration. That statute declared “that the provisions of [the
arbitration] act shall not apply to collective contracts between
employers and employees.” Subsequent editions of the Act
continued to exempt collective contracts from compulsory
arbitration. See, e.g., A.R.S. § 12-1509(B) (1954); Ariz. Code
§ 27-309 (1939).
¶12 In 1955, however, the National Conference of
Commissioners on Uniform State Laws promulgated a revised
version of the Uniform Arbitration Act (“UAA”). Among the
concerns the commissioners had was the practice in many states,
including Arizona, of exempting collectively bargained “labor-
management” contracts from compulsory arbitration. See UAA,
prefatory note at 2. To rectify the perceived problem, section
- 7 - 1 of the revised UAA provided that the act also applied “to
arbitration agreements between employers and employees or
between their respective representatives [unless otherwise
provided in the agreement].”
¶13 In 1962, the Arizona legislature adopted the revised
UAA. 1962 Ariz. Sess. Laws, ch. 108, § 2. But in adopting the
Act, the legislature did not include the language found in
section 1 of the UAA, which would have made Arizona’s
arbitration act applicable to all employer-employee arbitration
agreements, whether collectively bargained or otherwise.
Instead, the legislature took the language from section 1 of the
UAA, cast it in the negative, and included it as a separate
provision, now found in A.R.S. § 12-1517. Thus, unlike the UAA,
Arizona’s arbitration act provides that it has “no application
to arbitration agreements between employers and employees or
their respective representatives.” A.R.S. § 12-1517 (emphasis
added).
¶14 We presume that by amending the language of section 1
of the revised UAA, the legislature intended to change its
meaning. See State v. Garza Rodriguez, 164 Ariz. 107, 111, 791
P.2d 633, 637 (1990) (“[W]e presume that by amending a statute,
the legislature intends to change the existing law.”). If the
legislature had wanted to continue to exclude from the Act only
those employer-employee arbitration agreements that were
- 8 - collectively bargained, as it had done in the past, no change in
statutory language would have been needed.
B.
¶15 TPA next argues that when a statute is based on a
model or uniform act, the courts will “assume that the
legislature ‘intended to adopt the construction placed on the
act by its drafters.’” UNUM Life Ins. Co. v. Craig, 200 Ariz.
327, 332, ¶ 25, 26 P.3d 510, 515 (2001) (quoting State v.
Sanchez, 174 Ariz. 44, 47, 846 P.2d 857, 860 (App. 1993)). But
our legislature specifically rejected the portion of the revised
UAA that made it applicable “to arbitration agreements between
employers and employees or between their respective
representatives.” As such, the rule that the legislature
“intended to adopt the construction placed on the act by its
drafters,” id., has no application to A.R.S. § 12-1517, which is
a departure from the UAA. Thus, we cannot assume that the
legislature intended to exclude only arbitration agreements in
collective bargaining contracts from the Act simply because the
Act was modeled after the revised UAA.
C.
¶16 TPA’s third contention posits that an interpretation
of A.R.S. § 12-1517 that excludes all employer-employee
arbitration agreements is contrary to the purposes of the Act
because it would be inconsistent with the legislature’s policy
- 9 - of favoring arbitration. Although we agree Arizona has a strong
public policy favoring arbitration, see S. Cal. Edison Co. v.
Peabody W. Coal Co., 194 Ariz. 47, 51, ¶ 11, 977 P.2d 769, 773
(1999), the plain language of A.R.S. § 12-1517 carves out an
exception to that policy. A straightforward reading of the
statute reveals that § 12-1517 specifically exempts employer-
employee arbitration agreements from compulsory arbitration
under the Act; therefore, TPA’s argument fails.
D.
¶17 TPA next contends that because A.R.S. § 12-1517 refers
to “employers and employees” in the plural, the statute must be
interpreted as applying only to collective bargaining
agreements, and not to arbitration agreements between a single
employer and a single employee. It cites Wilson v. McGrow,
Pridgeon & Co., 467 A.2d 1025, 1031 (Md. 1983), in support of
this contention.
¶18 We decline to adopt TPA’s interpretation of A.R.S. §
12-1517 for two reasons. First, under Arizona’s rules of
statutory construction, “[w]ords in the singular number include
the plural, and words in the plural number include the
singular.” A.R.S. § 1-214(B) (2002). And unless the
legislature expresses “‘manifest intent’ to the contrary,” a
plural noun will be construed to include the singular of that
noun. Homebuilders Ass’n of Cent. Ariz. v. City of Scottsdale,
- 10 - 186 Ariz. 642, 649, 925 P.2d 1359, 1366 (App. 1996).
Accordingly, under our rules of statutory construction, § 12-
1517 plainly includes arbitration agreements between a single
employer and a single employee as well as arbitration agreements
in collectively bargained contracts.
¶19 Second, we find TPA’s reliance on Wilson misplaced.
Maryland’s Uniform Arbitration Act, like Arizona’s, has a
provision exempting arbitration agreements between employers and
employees. That provision states, in part, the following: “This
subtitle does not apply to an arbitration agreement between
representatives . . . .” Md. Code Ann., Cts. & Jud. Proc. § 3-
206(b) (1974).
¶20 Like Arizona, Maryland has a rule of statutory
interpretation that declares “[t]he singular always includes the
plural, and vice versa, except where such construction would be
unreasonable.” Md. Ann. Code art. 1, § 8 (1957). But the
Wilson court questioned whether this rule of statutory
interpretation was applicable because when the entire Maryland
Code was revised, many terms were changed from the plural to the
singular to reflect a uniform style, 467 A.2d at 1027 (citing
Revisor’s Note to Md. Code (1974) (stating that “[t]he only
changes made are in style”)), but the plural of the words
“employers” and “employees” remained in the Maryland Uniform
- 11 - Arbitration Act, along with the singular of the word
“agreement.” Id. The court noted that had the language been
changed to the singular — employer and employee — an inference
could be drawn “that conversion to the singular in conformity
with the code revision style guideline would not be a change in
style, but one of substance.” Id. (citing Md. Code Ann., Cts. &
Jud. Proc. § 3-206(b)). Noting that the revisors of the
Maryland Code elected not to make this change, but instead
retained the plural “employers” and “employees,” the court
questioned whether the statute intended to exclude an
arbitration agreement between an individual employer and
individual employee. Id.
¶21 Consequently, the Wilson court looked to the
legislative history of the Maryland Uniform Arbitration Act.
See id. at 1028-29. The court pointed out that, in adopting the
UAA, the Maryland legislature, at the urging of labor union
representatives, specifically intended to exclude the Maryland
Uniform Arbitration Act from applying to arbitration agreements
in collective bargaining contracts, but not other employer-
employee contracts. Id. As a result, the court concluded “that
the primary purpose of that Maryland variation from the [UAA]
was to exclude arbitration agreements in collective bargaining
contracts from the Act.” Id. at 1031.
- 12 - ¶22 We distinguish Wilson on two bases. First, as stated
above, Arizona’s rules of statutory construction provide that
“[w]ords in the singular number include the plural, and words in
the plural number include the singular.” A.R.S. § 1-214(B).
Unlike the legislative history in Maryland, Arizona’s
legislative history does not indicate that we should depart from
that rule. Second, and more important, we conclude that the way
in which our legislature adopted the language found in A.R.S. §
12-1517, discussed supra part III(A), demonstrates that it had
intended a result contrary to the result reached in Wilson. For
these reasons, we find Wilson unpersuasive.
E.
¶23 TPA also argues that under the last antecedent rule,
the term “their respective representatives” applies only to
“employees.” Thus, according to TPA, A.R.S. § 12-1517 “must be
read to refer to labor-management agreements, rather than to
individual employment contracts.” We determine that the last
antecedent rule does not apply to § 12-1517.
¶24 “The last antecedent rule is recognized in Arizona and
requires that a qualifying phrase be applied to the word or
phrase immediately preceding as long as there is no contrary
intent indicated.” Phoenix Control Sys., Inc. v. Ins. Co. of N.
Am., 165 Ariz. 31, 34, 796 P.2d 463, 466 (1990). But “[t]he
last antecedent rule is not inflexible and it will not be
- 13 - applied where the context or clear meaning of a word or phrase
requires otherwise.” Id.
¶25 Section 12-1517 expressly uses the phrase “respective
representatives.” “Words and phrases shall be construed
according to the common and approved use of the language.”
A.R.S. § 1-213 (2002). The word respective is commonly defined
as “[r]elating or pertaining to two or more persons or things
regarded individually.” The American Heritage Dictionary 1107
(1979). If the statute had read “employees or their
representatives,” TPA’s argument might prevail. But the word
“respective” refers to two or more persons or things.
Therefore, considering the context and the clear meaning of the
phrase “respective representatives,” we conclude that the phrase
relates equally to both employers and employees.
¶26 In addition, the use of the word “or” signals that the
last antecedent rule was not meant to apply. Plainly read, the
disjunctive provision in § 12-1517 works to preclude enforcement
of arbitration clauses between the following: an employer and an
employee, an employer and an employee representative, an
employer representative and an employee, and an employer
representative and an employee representative. Thus, we decide
that the last antecedent rule does not apply to A.R.S § 12-1517.
¶27 Finally, we reject the trial court’s reasoning that
the absence of a comma after the word “employees” in the phrase
- 14 - “employees or their respective representatives” means “that the
reference to ‘representatives’ is used in the conjunctive, so
that [A.R.S. § 12-1517] must be read as referencing employers on
the one hand and ‘employees or their respective representative’
on the other.” The fact that the legislature did not use a
comma after the word “employees” does not affect the usual and
common meaning of the word “respective” as used in § 12-1517.
Thus, plainly read, § 12-1517 applies to arbitration agreements
between an employer and employee, whether such agreements are in
individual contracts or collectively bargained contracts.
IV.
¶28 In sum, the plain language of A.R.S. § 12-1517 exempts
all employer and employee employment agreements from the
provisions of Arizona’s arbitration act.3 Accordingly, the trial
court erred in ordering that this matter proceed to arbitration.
¶29 Citing A.R.S. §§ 12-341 (2003) and 12-341.01(A)
(2003), the defendants request an award of attorneys’ fees and
costs. We grant the request. See Wagenseller v. Scottsdale
Mem’l Hosp., 147 Ariz. 370, 393-94, 710 P.2d 1025, 1048-49
(1985).
3 Neither party argued whether the arbitration clauses are enforceable as a common-law contract term. Nor did they argue that an employer and an employee can agree to engage in binding arbitration without the benefit of the statute. Therefore, we do not decide whether these types of agreements are enforceable under the common law.
- 15 - V.
¶30 For the foregoing reasons, we vacate the order of the
trial court that compelled arbitration and remand this matter to
that court for further proceedings consistent with this opinion.
__________________________________ Michael D. Ryan, Justice
CONCURRING:
_________________________________________ Charles E. Jones, Chief Justice
_________________________________________ Ruth V. McGregor, Vice Chief Justice
_________________________________________ Rebecca White Berch, Justice
_________________________________________ Andrew D. Hurwitz, Justice
- 16 -