New Mexico Highlands University v. MAKWA Builders, LLC

CourtNew Mexico Court of Appeals
DecidedJanuary 29, 2018
DocketA-1-CA-35125
StatusUnpublished

This text of New Mexico Highlands University v. MAKWA Builders, LLC (New Mexico Highlands University v. MAKWA Builders, LLC) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
New Mexico Highlands University v. MAKWA Builders, LLC, (N.M. Ct. App. 2018).

Opinion

This memorandum opinion was not selected for publication in the New Mexico Appellate Reports. Please see Rule 12-405 NMRA for restrictions on the citation of unpublished memorandum opinions. Please also note that this electronic memorandum opinion may contain computer-generated errors or other deviations from the official paper version filed by the Court of Appeals and does not include the filing date.

1 IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

2 NEW MEXICO HIGHLANDS 3 UNIVERSITY,

4 Plaintiff-Appellant,

5 v. NO. A-1-CA-35125

6 MAKWA BUILDERS, LLC, a 7 New Mexico limited liability 8 corporation,

9 Defendant-Appellee.

10 APPEAL FROM THE DISTRICT COURT OF SAN MIGUEL COUNTY 11 Abigail Aragon, District Judge

12 Sutin, Thayer & Browne 13 Stevan Douglas Looney 14 Mariposa Padilla Sivage 15 Albuquerque, NM

16 for Appellant

17 Salamirad, Morrow, Timpane & Dunn, LLP 18 Robert J. Berens 19 Phoenix, AZ

20 P. Reid Griffith, P.A. 21 Philip Dabney 1 Los Alamos, NM

2 for Appellee

3 MEMORANDUM OPINION

4 HANISEE, Judge.

5 {1} In this consolidated appeal, we are asked to consider whether the district court

6 erred by (1) granting Makwa Builders, LLC’s (Makwa) motion to compel arbitration,

7 and (2) denying New Mexico Highlands University’s (Highlands) Rule 1-012(B)(6)

8 NMRA motion to dismiss Makwa’s counterclaims. Concluding that there exists a

9 valid and enforceable arbitration agreement between the parties, we affirm the district

10 court’s order granting Makwa’s motion to compel arbitration. We quash Highlands’

11 interlocutory appeal of the district court’s denial of its motion to dismiss as

12 improvidently granted.

13 BACKGROUND

14 {2} We first summarize pertinent events surrounding the ill-fated construction

15 contract the parties entered into that they hoped would generate a new student union

16 building on the Highlands campus at a cost of $16,006,000. Dr. James Fries, the then-

17 president of Highlands, signed the contract on behalf of Highlands on June 15, 2010.

18 The contract contained two provisions critical to this appeal: first, the “Binding

19 Dispute Resolution” section of the contract contained a check-the-box option for the

2 1 parties to select either (1) arbitration, (2) litigation in a court of competent jurisdiction,

2 or (3) some other method to be specified by the parties as their method of resolving

3 disputes. The parties selected arbitration. Second, the contract contained a clause

4 exercisable by Highlands to terminate the contract “for [its] convenience and without

5 cause[,]” along with various ancillary provisions triggered by Highlands’ exercise of

6 that right.

7 {3} On February 27, 2012, Highlands elected to exercise its right to terminate the

8 contract. Highlands notified Makwa of the termination by letter on that date, which

9 also informed Makwa—based upon Makwa’s rights under the contract as the non-

10 terminating party—that “[o]nce Makwa has left the [p]roject site, [Highlands] expects

11 to be provided with a substantiated and reasonable figure reflecting amounts due for

12 [w]ork executed in January and through February 27, 2012, costs incurred by

13 reasonable termination, and what [Makwa] believes is reasonable overhead and profit

14 on the remaining contract balance.” On April 30, 2012, Makwa submitted a statement

15 for payment to Highlands, seeking approximately $3.2 million in accordance with the

16 terms of the contract’s termination-for-convenience provision. On August 10, 2012,

17 Highlands rejected Makwa’s statement for payment.

18 {4} In accordance with Article 15 of the contract, which governs claims and

19 disputes, Makwa next submitted a “Notice of [Termination for Convenience] Claim”

3 1 to Highlands on August 30, 2012. As it had with Makwa’s statement for payment,

2 Highlands rejected Makwa’s August 30 claim on September 10, 2012. The next

3 day—September 11, 2012—Highlands filed a complaint for declaratory judgment in

4 district court seeking to have the arbitration provision of the contract declared “void

5 and unenforceable.” The complaint explained that Highlands’ “rejection of Makwa’s

6 claim allows Makwa to trigger the contractual dispute resolution process that, if it

7 were valid and enforceable, includes the arbitration provision contained in the

8 [c]ontract.” Thus, within twenty-four hours and before Makwa could practically

9 invoke the arbitration provision provided for within the contract governing the parties’

10 agreement and responsibilities, Highlands sought to have the arbitration provision

11 deemed unenforceable.

12 {5} Rather than immediately answer Highlands’ complaint for declaratory

13 judgment, on September 28, 2012, Makwa filed a request for mediation with the

14 American Arbitration Association (AAA) in accordance with Section 15.3 of the

15 contract.1 While awaiting mediation and still without having answered Highlands’

16 complaint for declaratory judgment, on October 3, 2012, Makwa filed a voluntary

17 petition seeking protection from its creditors in the Bankruptcy Court for the District

1 17 The contract provides that claims “shall be subject to mediation as a condition 18 precedent to binding dispute resolution” and requires the parties to “endeavor to 19 resolve their [c]laims by mediation[.]”

4 1 of New Mexico. Makwa’s petition resulted in an automatic stay of Highlands’

2 declaratory judgment action, which Makwa then removed to the Bankruptcy Court

3 over Highlands’ objection.

4 {6} While Makwa’s bankruptcy petition was pending in the bankruptcy court, the

5 parties twice attempted mediation in 2013—first on January 31, then on November

6 7 and 8—but were unable to settle Makwa’s claims. On February 11, 2014, the

7 bankruptcy court remanded the declaratory judgment action to the district court,

8 finding that the Bankruptcy Court was required to abstain from hearing the matter

9 under 28 U.S.C. § 1334(c)(2) (2012); see N.M. Highlands Univ. v. Makwa Builders,

10 LLC (In re Makwa Builders, LLC), Ch. 11 Case No. 12-13664, Adv. No. 12-01305,

11 2014 WL 555266 (Bankr. D.N.M. Feb. 11, 2014).

12 {7} Thereafter on April 2, 2014, Makwa filed a motion to compel arbitration in the

13 district court under NMSA 1978, Section 44-7A-8(a) (2001), of New Mexico’s

14 Uniform Arbitration Act. Highlands opposed Makwa’s motion on the grounds that the

15 motion sought “to have the [district c]ourt prematurely conclude that there is a valid

16 and enforceable arbitration provision, when that question is the very core of the

17 dispute[.]” Highlands also complained that Makwa had never filed an answer or other

18 responsive document to Highlands’ original September 2012 complaint and argued

19 that Makwa’s motion was “procedurally improper.” Highlands did not, however,

5 1 contend that Makwa’s motion was untimely. On May 8, 2014, Makwa filed a demand

2 for arbitration with the AAA in which Makwa asserted claims for (1) breach of

3 contract, (2) violation of the Prompt Payment Act, NMSA 1978, § 57-28-5(A) (2007),

4 (3) unjust enrichment, and (4) breach of the duty of good faith and fair dealing.

5 {8} While Makwa’s motion to compel arbitration was still pending, Makwa on

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Central Virginia Community College v. Katz
546 U.S. 356 (Supreme Court, 2006)
Barron v. Evangelical Lutheran Good Samaritan Society
2011 NMCA 94 (New Mexico Court of Appeals, 2011)
Christmas v. Cimarron Realty Co.
648 P.2d 788 (New Mexico Supreme Court, 1982)
Lyman v. Kern
2000 NMCA 013 (New Mexico Court of Appeals, 1999)
Hart v. J. J. Newberry Co.
587 P.2d 11 (Montana Supreme Court, 1978)
Lovelace Medical Center v. Mendez Ex Rel. Mendez
805 P.2d 603 (New Mexico Supreme Court, 1991)
K. L. House Construction Co. v. City of Albuquerque
576 P.2d 752 (New Mexico Supreme Court, 1978)
DeArmond v. Halliburton Energy Services, Inc.
2003 NMCA 148 (New Mexico Court of Appeals, 2003)
Ellis v. Cigna Property & Casualty Companies
2007 NMCA 123 (New Mexico Court of Appeals, 2007)

Cite This Page — Counsel Stack

Bluebook (online)
New Mexico Highlands University v. MAKWA Builders, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/new-mexico-highlands-university-v-makwa-builders-llc-nmctapp-2018.