Filed Washington State Court of Appeals Division Two
October 20, 2020
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION II PAGECOM, INC., a Washington corporation, No. 53018-0-II
Respondent,
v.
SPRINT SOLUTIONS, INC., a foreign UNPUBLISHED OPINION corporation; and ANNETTE JACOBS, a Sprint Area President and Washington resident,
Appellants.
SUTTON, A.C.J. — Sprint Solutions, Inc. and Annette Jacobs1 appeal the superior court’s
order denying their motion to compel arbitration and dismiss the lawsuit after Pagecom, Inc.
initiated this lawsuit regarding a contract dispute, despite the parties’ agreement to arbitrate.
Sprint argues that the superior court erred by (1) maintaining jurisdiction under the Federal
Arbitration Act (FAA) to determine the issue of arbitrability and denying Sprint’s motion to
compel arbitration because (2) the Dispute Resolution Clause is not ambiguous and is enforceable,
and (3) neither Sprint’s conduct nor the Dispute Resolution Clause were unconscionable. Sprint
also argues that the superior court erred by (4) maintaining jurisdiction to determine the issue of
1 We refer to Sprint and Annette Jacobs, a Sprint employee, together as “Sprint.” No. 53018-0-II
waiver and determining that Sprint waived its right to compel arbitration. Pagecom argues that (5)
it has presented “uncontroverted evidence” that it is a franchisee and entitled to protection.
We hold that (1) the superior court did not err by maintaining jurisdiction to determine the
issue of arbitrability; but the superior court erred by denying Sprint’s motion to compel arbitration
and ordering dismissal because (2) the Dispute Resolution Clause is not ambiguous and is
enforceable, and (3) neither Sprint’s conduct nor the Dispute Resolution Clause were
unconscionable. We also hold that (4) the superior court erred by maintaining jurisdiction to
determine the issue of waiver. Based on our holding, we (5) decline to reach Pagecom’s argument
regarding whether it is a franchisee. We reverse and remand with an order to the superior court to
grant Sprint’s motion to compel arbitration and dismiss.
FACTS
I. FACTUAL BACKGROUND
Sprint is a nationwide provider of wireless services and products. Sprint markets and sells
its products to its customers through direct sales, as well as through “Authorized Representatives”
(ARs) who enter into contracts with Sprint. Clerk’s Papers (CP) at 4. ARs run their own
storefronts, which are referred to as “doors.” CP at 4.
Pagecom was formed in 1999 and has been a Sprint AR since 2005. At the time Pagecom
initiated this lawsuit, it operated 13 doors. The owner of Pagecom, Jason Suprenant, previously
owned another corporation that operated 39 doors selling T-Mobile goods and services.
Pagecom and Sprint entered into numerous versions of their contract, drafted by Sprint,
since 2005, and Pagecom has, on multiple occasions, requested that Sprint modify particular
2 No. 53018-0-II
provisions. On each of these occasions, Sprint declined to make Pagecom’s requested changes.
The parties entered into the contract at issue (Agreement) in April of 2014.
The Agreement contains a mandatory dispute resolution agreement that states, “Disputes
under this Agreement will be resolved according to Exhibit E.” CP at 57. Exhibit E to the
Agreement (Dispute Resolution Clause) contains the following relevant provisions:
1. Dispute Resolution. All Disputes under this Agreement are subject to the following dispute resolution process. A Dispute means all controversies, disputes, or claims of every kind and nature arising out of or in connection with the negotiation, construction, validity, interpretation, performance, enforcement, operation, breach, continuation or termination of this Agreement. It is expressly understood by AR that this dispute resolution process may only be invoked regarding Sprint’s right to terminate the AR Agreement after the termination has gone into effect. . . .
2. Mediation. In the event of a Dispute pursued by AR, Sprint, may require that the Dispute be submitted to mediation. The mediation will occur at a location chosen by Sprint. If the Parties cannot agree to a mediator, a mediation and/or mediation rules, the mediation will proceed under the Commercial Mediation Procedures and Rules of the American Arbitration Association (AAA).
(A) Conduct of Mediation (if the Parties do not or cannot agree otherwise). .... (3) Additional Rules for Mediation. The mediation: .... (c) will take place at a location chosen by Sprint.
3. Arbitration. AR party may not commence arbitration until a Dispute has been subject to mediation in accordance with this Agreement. Either party may initiate arbitration with respect to a Dispute by filing a written demand for arbitration pursuant to the Wireless Industry Arbitration Rules of the AAA. AR may only initiate arbitration after the 45th calendar day following the date that a request for mediation of such Dispute was first submitted, or, if earlier, the date that mediation is terminated. This applies to all causes of action, whether nominally a “claim”, “counterclaim”, or “cross-claim”, arising under common law or any state or federal statute. The mediation may continue after the commencement of arbitration if the parties so desire.
3 No. 53018-0-II
.... 4. Waiver of Rights. Sprint and AR each waive: 4.1 their rights to litigate Disputes in court . . . ; 4.2 to receive a jury trial; and 4.3 to participate as a plaintiff or as a class member in any claim on a class or consolidated basis or in a representative capacity.
CP at 108-110.
Sprint pays Pagecom according to a “Commission Plan” in the Agreement. CP at 43.
Sprint may change the Commission Plan at any time under the Agreement. In June 2017, Pagecom
contacted Sprint because it believed that other Sprint ARs were being more favorably compensated
than Pagecom, in violation of Washington law. CP at 6. Pagecom outlined its complaints in a
letter in order “to facilitate an appropriate discussion” and “engage in a meaningful resolution” of
the issues. CP at 6. The parties engaged in communication for a number of months after this, both
through telephonic and written correspondence. On November 21, 2017, Pagecom sent a letter to
Sprint requesting mediation. That same day, Pagecom also submitted a request for mediation to
the American Arbitration Association (AAA), requesting mediation to be held in Renton,
Washington. Sprint responded to Pagecom’s letter, stating that it would not agree to mediation
being held in Renton.
The parties spoke on December 7, and they determined that mediation would not be
successful, so the next step would be to move to arbitration. The parties agreed to hold the
meditation request in abeyance through the holidays, and Pagecom agreed to provide additional
financial information to Sprint by January 5, 2018. Pagecom provided this financial information
to Sprint on January 22. In its letter, Pagecom offered a settlement, and asked if Sprint was
“willing to recognize Washington as the proper locale for arbitration.” Pagecom emailed Sprint
4 No. 53018-0-II
again on March 13, asking if “Sprint is still opposing mediation,” and “if Sprint plann[ed] on
opposing litigation (arbitration or otherwise) in Washington.” CP at 324.
On March 31, Sprint gave notice to Pagecom that Pagecom was in violation of the
Agreement because it was improperly operating other stores on behalf of T-Mobile, and the
Agreement would terminate if Pagecom did not cure the violation within 30 days.2 Pagecom asked
Sprint to rescind the termination notice because a different business entity owned by Suprenant
operated the T-Mobile stores. Pagecom initiated this lawsuit in Pierce County Superior Court on
May 11. On June 8, Sprint rescinded its termination notice.
II. PROCEDURAL BACKGROUND
Pagecom’s complaint alleged that it is a franchisee under Washington law, and
Washington’s Franchise Investment Protection Act (FIPA)3 applied. Pagecom also alleged that
Sprint made changes to the compensation formula in the 2015 and 2017 contracts that were
detrimental to Pagecom, and which violated FIPA. Pagecom alleged that Sprint breached the
Agreement and its duty of good faith and fair dealing.
The parties engaged in mediation in Seattle on July 20, 2018, which proved to be
unsuccessful. Following this, Sprint filed a motion to compel arbitration and dismiss the lawsuit.
The superior court conducted three separate hearings on Sprint’s motion to compel arbitration.
Sprint argued that (1) the Dispute Resolution Clause was valid and thus, enforceable, and (2) the
Dispute Resolution Clause encompassed the entire dispute. Pagecom argued that (1) Sprint waived
2 This was later extended. 3 Ch. 19.100 RCW.
5 No. 53018-0-II
arbitration through its conduct, (2) the Dispute Resolution Clause was illusory and unconscionable,
and (3) the parties were in a franchise relationship and the Dispute Resolution Clause was illegal.
Following the initial briefing and hearing, the superior court ordered supplemental briefing
to determine whether the court or an arbitrator had jurisdiction regarding the issue of arbitrability.
The parties provided supplemental briefing, and the court held a second hearing on November 19.
The court determined that it had jurisdiction to determine the issue of arbitrability. The court then
set a third hearing to determine the remaining issues. The parties filed further briefing in support
of their positions. The court held its final hearing on December 24, 2018. At this hearing, Pagecom
stated the following:
No, I don’t really want to be in arbitration. Who would? What franchisee ever wants to be in arbitration? These are preprinted clauses that are there for a reason. They benefit the party that drafted the contract.
I don’t want to be off in Kansas listening to some Kansas lawyer who doesn’t even have a statute telling me, “I don’t quite get what’s going on here.” I don’t want to have to educate him. I don’t want to have to travel, the expense involved in traveling.4
If we can be in court, we would rather be in court. I would also rather be bringing the motion that this thing is a franchise in front of [y]our [h]onor so we can just have that legal issue heard like the rights of appeal.
I mean nobody really wants to go to arbitration when they’re the party that wants something. The institution wants arbitration when it figures that may create procedural hang-ups and mute results.
Verbatim Report of Proceedings (VRP) (Dec. 24, 2018) at 46.
The court found that the Dispute Resolution Clause was ambiguous, the termination
provision was unconscionable, Sprint’s conduct was unconscionable, and Sprint waived its right
4 The Agreement contained a provision stating that the laws of Kansas would govern any disputes.
6 No. 53018-0-II
to arbitration through its pre-litigation conduct. The court did not reach Pagecom’s argument
regarding whether it was a franchisee. The court also refused to sever the provisions it found
unconscionable from the remainder of the Dispute Resolution Clause, stating:
Well, if I sever the clause, which part of it do I sever? Do I sever the part that requires termination? Do I sever the part in paragraph 2 that says that, at least in one method of reading, Sprint may require that the dispute be submitted to mediation and that there is no right to compel mediation on behalf of the AR? And then if Sprint doesn’t submit the dispute to resolution, what part of paragraph 3 do I sever, the part that says, you know, the AR may only initiate arbitration after the 45th calendar day following the date the request for mediation of such dispute was first submitted when, in fact, by some reading of the language, they don’t have a right to request such a mediation?
I don’t think that cutting and pasting – you know, the Court’s preference as to the contract language through this mechanism of severance is the solution to the problem.
VRP (Dec. 24, 2018) at 57. The court entered findings of fact and conclusions of law consistent
with its oral ruling and denied Sprint’s motion to compel arbitration and dismiss.
Sprint appeals the superior court’s order denying its motion to compel arbitration and
dismiss.
ANALYSIS
I. LEGAL PRINCIPLES
RCW 7.04A.070 governs disputes between parties as to whether an arbitration agreement
exists. Marcus & Millichap Real Estate Inv. Servs. of Seattle, Inc. v. Yates, Wood & Macdonald,
Inc., 192 Wn. App. 465, 472, 369 P.3d 503 (2016). Courts must indulge every presumption in
favor of arbitration, including in the contract language itself. Adler v. Fred Lind Manor, 153
Wn.2d 331, 342, 103 P.3d 773 (2004). The FAA was adopted “in response to a perception that
courts were unduly hostile to arbitration.” Epic Sys. Corp. v. Lewis, -- U.S. --, 138 S. Ct. 1612,
7 No. 53018-0-II
1621, 200 L. Ed. 2d 889 (2018). Under the FAA, “an agreement in writing to submit to arbitration
an existing controversy arising out of [] a contract . . . shall be valid, irrevocable, and enforceable,
save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C.
§ 2.
We review an order denying a motion to compel arbitration de novo. Neuson v. Macy’s
Dep’t Stores, Inc., 160 Wn. App. 786, 792, 249 P.3d 1054 (2011). The burden of proving an
agreement is not enforceable is on the party seeking to avoid arbitration. McKee v. AT & T Corp.,
164 Wn.2d 372, 383, 191 P.3d 845 (2008). If a party opposes a motion to compel arbitration, “the
court shall proceed summarily to decide the issue. Unless the court finds that there is no
enforceable agreement to arbitrate, it shall order the parties to arbitrate. If the court finds that there
is no enforceable agreement, it may not order the parties to arbitrate.” RCW 7.04A.070(1).
General contract defenses apply to invalidate arbitration agreements. McKee, 164 Wn.2d at 383.
Arbitration is a matter of contract, and parties may be forced to submit disputes to
arbitration only when they have agreed to submit those disputes to arbitration. Hill v. Garda CL
NW, Inc., 179 Wn.2d 47, 53, 308 P.3d 635 (2013). Gateway disputes regarding the validity of the
contract or the arbitration provision “are preserved for judicial determination, as opposed to
arbitrator determination, unless the parties’ agreement clearly and unmistakably provides
otherwise.” Hill, 179 Wn.2d at 53.
II. JURISDICTION TO DETERMINE ARBITRABILITY
Sprint argues that the superior court erred by maintaining jurisdiction under the FAA to
determine the issue of arbitrability. We disagree, and hold that the superior court did not err by
maintaining jurisdiction to determine the threshold issue of arbitrability.
8 No. 53018-0-II
Sprint argues that this case is analogous to Rent-A-Center, West, Inc. v. Jackson, 561 U.S.
63, 130 S. Ct. 2772, 177 L. Ed. 2d 403 (2010). But that case is distinguishable. In Rent-A-Center,
the arbitration clause at issue
provided for arbitration of all present, past or future disputes arising out of [the] employment with Rent-A-Center, including claims for discrimination and claims for violation of any federal . . . law. It also provided that [t]he Arbitrator, and not any federal, state, or local court or agency, shall have exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability or formation of this Agreement including, but not limited to any claim that all or any part of this Agreement is void or voidable.
Rent-A-Center, 561 U.S. at 65-66 (alterations in original) (internal citation and quotation marks
omitted).
Here, the Dispute Resolution Clause states in relevant part that “[a]ll Disputes under this
Agreement are subject to the following dispute resolution process. A Dispute means all
controversies, disputes, or claims of every kind and nature arising out of or in connection with the
negotiation, construction, validity, interpretation, performance, enforcement, operation, breach,
continuation or termination of this Agreement.” CP at 108, par. 1.
This case is not analogous to Rent-A-Center because the Dispute Resolution Clause here
does not clearly and unmistakably establish that an arbitrator has jurisdiction over the threshold
issue of arbitrability rather than the court. There is no specific and unequivocal language in the
Dispute Resolution Clause here, as there was in the agreement in Rent-A-Center, conferring an
unmistakable grant of that authority to the arbitrator. Further, the presumption is that the court
will determine the issue of arbitrability rather than an arbitrator.
Because the presumption is that the court will determine the issue of arbitrability rather
than the arbitrator, and because there is no specific unequivocal language showing an unmistakable
9 No. 53018-0-II
grant of that authority to the arbitrator, we hold that the superior court did not err by maintaining
jurisdiction to determine the issue of arbitrability.
III. MOTION TO COMPEL ARBITRATION
Sprint argues that the superior court erred by denying its motion to compel arbitration
because (1) the Dispute Resolution Clause is not ambiguous and is enforceable, and (2) neither
Sprint’s conduct nor the Dispute Resolution Clause were unconscionable. Sprint also argues that
(3) the superior court erred by maintaining jurisdiction over the issue of waiver and determining
that Sprint waived its right to compel arbitration. We hold that (1) the Dispute Resolution Clause
is not ambiguous and is enforceable, (2) neither Sprint’s conduct nor the Dispute Resolution Clause
were unconscionable, and (3) the superior court erred by maintaining jurisdiction to determine the
issue of waiver.
A. ENFORCEABILITY
The primary objective in contract interpretation is to ascertain the mutual intent of the
parties at the time they executed the contract. Int’l Marine Underwriters v. ABCD Marine, LLC,
179 Wn.2d 274, 282, 313 P.3d 395 (2013). The focus is on determining the parties’ intent based
on the reasonable meaning of the contract language. Hearst Commc’ns, Inc. v. Seattle Times Co.,
154 Wn.2d 493, 503, 115 P.3d 262 (2005). We review the contract as a whole, interpreting
particular language in the context of other contract provisions. See Weyerhaeuser Co. v.
Commercial Union Ins. Co., 142 Wn.2d 654, 669-70, 15 P.3d 115 (2000). We must attempt to
interpret contractual language in a way that gives effect to all provisions. Realm, Inc. v. City of
Olympia, 168 Wn. App. 1, 5, 277 P.3d 679 (2012). We also attempt to harmonize clauses that
10 No. 53018-0-II
appear to conflict in an attempt to give effect to all of the contract provisions. Realm, Inc., 168
Wn. App. at 5.
We will not read ambiguity into an unambiguous contract. Berg v. Hudesman, 115 Wn.2d
657, 669, 801 P.2d 222 (1990); Syrovy v. Alpine Res., Inc., 122 Wn.2d 544, 551, 859 P.2d 51
(1993). A contract provision is ambiguous if its meaning is uncertain or is subject to two or more
reasonable interpretations after we analyze the language and consider extrinsic evidence if
appropriate. Viking Bank v. Firgrove Commons 3, LLC, 183 Wn. App. 706, 713, 334 P.3d 116
(2014). We generally construe ambiguities against the contract’s drafter. Viking Bank, 183 Wn.
App. at 713.
The superior court found that the Dispute Resolution Clause describing Pagecom’s general
“ability to initiate Dispute Resolution” was “at best ambiguous” because it found there were
multiple ways of reading the clause. CP at 440. This was an error because the Dispute Resolution
Clause is not susceptible of two or more reasonable meanings. The language clearly provides that
if an issue arises, Sprint may require that the parties mediate the dispute. The language then
proceeds to establish the procedure by which an AR can initiate arbitration.
The Agreement specifically states that Sprint may require mediation prior to the dispute
being submitted to arbitration. If Sprint does not agree to mediation, Pagecom may initiate
arbitration after the 45th calendar day following the date it submitted the request for mediation.
The Agreement also provides that Pagecom may request mediation before the 45th day, if a
mediation is terminated. The language is clear that Pagecom could have submitted the matter to
mediation and if Sprint ignored it, Pagecom could have proceeded then to arbitration. The
language is also clear that the Agreement anticipates that the parties attempt to mediate any
11 No. 53018-0-II
disputes, and if mediation is unsuccessful for any reason, then the dispute should proceed to
arbitration.
Because the language is unambiguous, we hold that the superior court erred by finding it
was ambiguous and thus, unenforceable.
B. UNCONSCIONABILITY
Sprint argues that the superior court erred by finding the Dispute Resolution Clause to be
unconscionable because it mistakenly found that the contract was an adhesion contract and that
Sprint’s post-formation conduct was unconscionable. We hold that the Dispute Resolution Clause
is neither substantively nor procedurally unconscionable, and that Sprint’s post-formation conduct
is irrelevant to the issue of this contract’s enforceability.
A superior court’s final conclusion of unconscionability is a question of law reviewed
de novo. McKee, 164 Wn.2d at 383. We recognize both substantive and procedural
unconscionability. Adler, 153 Wn.2d at 344. “[S]ubstantive unconscionability involves cases
‘where a clause or term in the contract is . . . one-sided or overly harsh.’” Torgerson v. One Lincoln
Tower, LLC, 166 Wn.2d 510, 519, 210 P.3d 318 (2009) (some alterations in original) (internal
quotation marks omitted) (quoting Adler, 153 Wn.2d at 344). “However, such unfairness must
truly stand out. ‘Shocking to the conscience,’ ‘monstrously harsh’, and ‘exceedingly calloused’
are terms sometimes used to define substantive unconscionability.” Torgerson, 166 Wn.2d at 519
(internal quotation marks omitted) (quoting Adler, 153 Wn.2d at 344-45)).
Procedural unconscionability is “‘the lack of meaningful choice, considering all the
circumstances surrounding the transaction including [t]he manner in which the contract was
entered, whether each party had a reasonable opportunity to understand the terms of the contract,
12 No. 53018-0-II
and whether the important terms [were] hidden in a maze of fine print.’” Adler, 153 Wn.2d at 345
(alteration in original) (internal quotation marks omitted) (quoting Nelson v. McGoldrick, 127
Wn.2d 124, 131, 896 P.3d 1258 (1995)). Those factors should “‘not be applied mechanically
without regard to whether . . . a meaningful choice existed.’” Adler, 153 Wn.2d at 345 (quoting
Nelson, 127 Wn.2d at 131).
We look to the following factors to determine whether a contract is an adhesion contract:
“‘(1) whether the contract is a standard form printed contract, (2) whether it was prepared by one
party and submitted to the other on a take it or leave it basis, and (3) whether there was no true
equality of bargaining power between the parties.’” Adler, 153 Wn.2d at 347 (internal quotation
marks omitted) (quoting Yakima County Fire Prot. Dist. No. 12 v. City of Yakima, 122 Wn.2d 371,
393, 858 P.2d 245 (1993)). “The fact that a contract is an adhesion contract is relevant but not
determinative.” Burnett v. Pagliacci Pizza, Inc, No. 97429-2, slip. op. at 15 (Wash. Aug. 20,
2020). “An adhesion contract is not necessarily procedurally unconscionable.” Burnett, slip. op.
at 15. “The key inquiry is whether the party lacked meaningful choice.” Burnett, slip op. at 15.
1. SUBSTANTIVELY UNCONSCIONABLE
The Dispute Resolution Clause is not substantively unconscionable. The superior court
held that the Dispute Resolution Clause is unconscionable because it prevents Pagecom from
initiating arbitration. However, this is based on an incorrect reading of the Dispute Resolution
Clause. Pagecom mistakenly argued that it could not initiate arbitration unless and until mediation
occurred. And the court seemed to conflate this argument with the termination provision to support
its finding that the Dispute Resolution Clause was unconscionable.
13 No. 53018-0-II
The relevant language clearly states that Sprint may require the parties to mediate a dispute,
and it then expressly lays out how Pagecom may initiate arbitration—if Sprint does not require
mediation, mediation fails, or on the “45th calendar day following the date that a request for
mediation of such Dispute was first submitted.” CP at 109. The plain language of the Dispute
Resolution clause clearly allows Pagecom to initiate arbitration. Pagecom submitted a request for
mediation on November 21, 2017, thereby commencing a 45-day period after which it could
initiate arbitration. Therefore, even though Sprint chose not to mediate during that 45 day period,
Pagecom could have initiated arbitration on or after January 4, 2018, according to the express
terms of the Dispute Resolution Clause.
Pagecom also argues that the termination provision in section one is unconscionable
because it does not allow for Pagecom to initiate mediation until termination of the Agreement is
final. This argument fails. Pagecom submitted a request for mediation on November 21, 2017.
At this point, the only dispute was Pagecom’s claim that it was being unfairly compensated. As
discussed above, Pagecom had the ability to then initiate arbitration on January 4, even though
Sprint was not willing to mediate in Washington. The termination provision in the Dispute
Resolution Clause is irrelevant for the purposes of the dispute regarding the compensation plan.
Moreover, Pagecom’s lawsuit sought only an injunction to stop Sprint from terminating the
Agreement, which was accomplished when Sprint rescinded the termination notice. Termination
is no longer an issue.
Because the Dispute Resolution Clause does not include any language barring Pagecom
from initiating arbitration, and because the termination provision is irrelevant for purposes of this
appeal, we hold that the Dispute Resolution Clause is not substantively unconscionable.
14 No. 53018-0-II
2. PROCEDURALLY UNCONSCIONABLE
The Dispute Resolution Clause is not procedurally unconscionable. The court found
Sprint’s post-formation conduct callous and unconscionable.5 However, Sprint’s conduct here is
irrelevant in determining whether the Dispute Resolution Clause is unconscionable. We do not
base a determination of procedural unconscionability on a party’s post-formation conduct. Adler,
153 Wn.2d at 345 (stating the three factors a court looks at when determining whether a contract
is procedurally unconscionable). And, as discussed above, even if Sprint’s conduct regarding
denying mediation in Washington was unconscionable, Pagecom was never barred from initiating
arbitration under the language of the Dispute Resolution Clause.
Finally, this is not an adhesion contract because Pagecom is run by a sophisticated owner
who has over 20 years of experience in various businesses, and it has negotiated contracts with
Sprint in the past. CP at 4, 342, 346. Because Pagecom did not lack a meaningful choice as to
whether to enter into the Agreement with the Dispute Resolution Clause, the contract is not an
adhesion contract.
Because Sprint’s post-formation conduct is irrelevant to determine whether the Dispute
Resolution Clause is procedurally unconscionable, and because this was not an adhesion contract,
we hold that the Dispute Resolution Clause is not procedurally unconscionable.
C. WAIVER
Sprint argues that the superior court erred by maintaining jurisdiction over the issue of
waiver. We agree.
5 “After this lawsuit had been filed Sprint rescinded the termination notice. Such conduct is found to be callous and unconscionable.” CP at 441.
15 No. 53018-0-II
[C]ourts presume that the parties intend arbitrators, not courts, to decide disputes about the meaning and application of particular procedural preconditions for the use of arbitration. These procedural matters include claims of “waiver, delay, or a like defense to arbitrability.”
BG Group, PLC v. Republic of Argentina, 572 U.S. 25, 34-35, 134 S. Ct. 1198, 188 L. Ed. 2d 220
(2014) (internal citation omitted) (quoting Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp.,
460 U.S. 1, 25, 103 S. Ct. 927, 74 L. Ed. 2d 765 (1983).
Arbitration is a matter of contract, and “courts must ‘rigorously enforce’ arbitration
agreements according to their terms.” Am. Express Co. v. Italian Colors Rest., 570 U.S. 228, 233,
133 S. Ct. 2304, 186 L. Ed. 2d 417 (2013) (quoting Dean Witter Reynolds, Inc. v. Byrd, 470 U.S.
213, 221, 105 S. Ct. 1238, 84 L. Ed. 2d 158 (1985)). Procedural questions growing out of the
dispute and bearing on its final disposition should be left to the arbitrator. Yakima County Law
Enforcement Officers Guild v. Yakima County, 133 Wn. App. 281, 288, 135 P.3d 558 (2006).
In River House Development, Inc. v. Integrus Architecture, P.S., 167 Wn. App. 221, 232,
272 P.3d 289 (2012), we distinguished between waiver caused by delay and waiver caused by
litigation conduct. We reaffirmed this distinction in Saili v. Parkland Auto Center, Inc., 181 Wn.
App. 221, 226, 329, P.3d 915 (2014). While we did not explicitly address the issue of jurisdiction,
we cited to three Washington cases where the court determined the party seeking arbitration had
waived its right to compel arbitration. Saili, 181 Wn. App. at 226-27. In all three of these cases,
the party seeking arbitration had taken action during litigation which the respective courts found
to constitute waiver. Saili, 181 Wn. App. at 226-27.
Here, Pagecom alleges that Sprint waived its right to compel litigation due to its conduct
before Pagecom filed the lawsuit. As a result, the arbitrator should determine the issue of waiver
16 No. 53018-0-II
rather than the superior court. We hold that the superior court erred by maintaining jurisdiction
over the issue of waiver.
IV. FRANCHISEE
Although not addressed by the superior court, Pagecom argues that we should find that it
is a franchisee entitled to FIPA’s protections. Based on our holdings, we decline to reach this
issue.
The legislature enacted FIPA to curtail franchisor sales abuses and unfair competitive
practices. East Wind Express, Inc. v. Airborne Freight Corp., 95 Wn. App. 98, 102, 974 P.2d 369
(1999). RCW 19.100.180 provides a list of rights and prohibitions that “govern the relation
between the franchisor or subfranchisor and the franchisees,” including dealing in good faith and
practicing unfair competition.
We do not make initial findings of fact and, where the superior court fails to enter sufficient
findings, remand is the generally proper remedy. State v. J.C., 192 Wn. App. 122, 133, 366 P.3d
455 (2016); see also Bale v. Allison, 173 Wn. App. 435, 458, 294 P.3d 789 (2013). “However,
‘[w]hen a trial court fails to make any factual findings to support its conclusion, and the only
evidence considered consists of written documents, an appellate court may, if necessary,
independently review the same evidence and make the required findings.’” Satomi Owners Ass’n
v. Satomi, LLC, 167 Wn.2d 781, 808, 225 P.3d 213 (2009) (alteration in original) (quoting In re
Firestorm 1991, 129 Wn.2d 130, 135, 916 P.2d 411 (1996)).
Because the superior court explicitly chose not to make any findings or conclusions
regarding this issue, and because the superior court erred by denying Sprint’s motion to compel
17 No. 53018-0-II
arbitration, this is a proper issue for the arbitrator, and given our holdings, we decline to consider
this issue.
CONCLUSION
We reverse and remand with an order to the superior court to grant Sprint’s motion to
compel arbitration and dismiss.
A majority of the panel having determined that this opinion will not be printed in the
Washington Appellate Reports, but will be filed for public record in accordance with RCW 2.06.040,
it is so ordered.
SUTTON, A.C.J. I concur:
WORSWICK, J.
18 No. 53018-0-II
MELNICK, J. (dissent) — Because the trial court did not err in denying Sprint Solutions’s
motion to compel arbitration and dismiss Pagecom’s lawsuit under the terms of the written
“Dispute Resolution” provisions, I respectfully dissent. Pagecom had no ability to initiate
mediation, and except in rare circumstances not at issue here, it had no ability to initiate its claims
in arbitration.6
The salient facts I rely on are as follows: Pagecom has been a Sprint authorized
representative (AR) since 2005. “Pagecom’s entire business is associated with being a Sprint
Authorized Retailer.” Clerk’s Papers (CP) at 345. The parties have entered into numerous
contracts since 2005. On multiple occasions, Pagecom has asked Sprint to modify the terms of the
AR agreement (Agreement) before renewals. Sprint has consistently said it will not change any
terms of the Agreement. It has never done so.
Pagecom and Sprint had disagreements since late 2015. By mid-2017, Pagecom proposed
mediation; however, Sprint refused. Pagecom proposed arbitration, but Sprint refused. Sprint said
that Pagecom “had no right to initiate arbitration because mediation had not occurred.” CP at 343.
Sprint refused to engage in mediation.
Pagecom filed the instant lawsuit. After that, mediation did occur. Sprint then filed a
motion to compel arbitration and dismiss the lawsuit. The trial court denied the motion.
The heart of this dispute is the interpretation of the Dispute Resolution portion of the
Agreement between Sprint and Pagecom, drafted by Sprint. The Dispute Resolution clauses start
6 I agree with the majority on the applicable law of this case. I diverge on how the facts apply to the law. I also rely on Burnett v. Pagliacci Pizza, Inc., No. 78356-4-I (Wash. Ct. App. June 17, 2019) (unpublished) https://www.courts.wa.gov/opinions/pdf/783564.pdf., aff’d, 470 P.3d 486 (2020).
19 No. 53018-0-II
with a broad statement that, “All Disputes under this Agreement are subject to the following
dispute resolution process.” CP at 108. It then has sections identified for Mediation, Arbitration,
Waiver of Rights, No Class Arbitration, Injunctive Relief, and Survival.
In pertinent part, the Mediation section states, “In the event of a Dispute by AR, Sprint[]
may require that the Dispute be submitted to mediation.” CP at 108. The section on mediation
does not contain any language that Pagecom can initiate mediation. Sprint obviously read these
provisions in that manner when it refused to participate in mediation.
Then, as relevant here, the Arbitration section states, Pagecom “may not commence
arbitration until a Dispute has been subject to mediation in accordance with this Agreement.” CP
at 109. It further says that either party may initiate arbitration by filing a written demand.
However, if Sprint refused to mediate, as it did in this case, Pagecom could not commence
arbitration. The plain wording of the Agreement supports this position.
The majority glosses over Pagecom’s contention that it cannot initiate mediation. The
majority’s conclusion that Pagecom can initiate arbitration after the 45th calendar day upon one of
two conditions being satisfied, is read out of context and not in conjunctions with the pre-condition
previously noted, i.e. Pagecom cannot start arbitration until mediation has occurred.
The Agreement is also vague and subject to more than one interpretation. Sprint wrote the
Dispute Resolutions provisions. Sprint always refused to amend any provisions of the contract.
The record shows that Sprint interpreted the Agreement as I have. Pagecom attempted to
invoke the alternative dispute resolution provisions; however, Sprint thwarted them. Sprint not
only refused to negotiate the terms of the renewal contracts, but it unilaterally controlled whether
20 No. 53018-0-II
alternative dispute resolution would occur. Sprint refused Pagecom’s request for mediation and
its request for arbitration. Thus, the trial court did not err in denying Sprint’s motion to compel
arbitration and dismiss Pagecom’s lawsuit. I respectfully dissent.
MELNICK, J.