Sun Valley Ranch 308 Ltd. Partnership v. Robson

294 P.3d 125, 231 Ariz. 287, 648 Ariz. Adv. Rep. 42, 2012 WL 5862464, 2012 Ariz. App. LEXIS 183
CourtCourt of Appeals of Arizona
DecidedNovember 20, 2012
DocketNo. 1 CA-CV 11-0711
StatusPublished
Cited by31 cases

This text of 294 P.3d 125 (Sun Valley Ranch 308 Ltd. Partnership v. Robson) 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
Sun Valley Ranch 308 Ltd. Partnership v. Robson, 294 P.3d 125, 231 Ariz. 287, 648 Ariz. Adv. Rep. 42, 2012 WL 5862464, 2012 Ariz. App. LEXIS 183 (Ark. Ct. App. 2012).

Opinion

OPINION

DOWNIE, Judge.

¶ 1 This case requires us to determine whether non-signatories may compel parties bound by an arbitration clause to arbitrate. We also consider an arbitrator’s authority to appoint receivers, dissolve limited partnerships, and adjudicate claims for unjust enrichment. Because we conclude that all of the pending claims are subject to arbitration, we vacate the superior court’s contrary order and remand with instructions to order arbitration.

FACTS AND PROCEDURAL HISTORY

¶ 2 In February 2000, the following entities signed an agreement establishing Sun Valley Ranch 308 Limited Partnership (“SVR 308”):

• General partner Timberline Village Corporation (“Timberline”) by Steven Robson,1 president;
• Limited partner Englewood Properties, Inc. (“Englewood”) by its president;
• Limited partner The Steven S. Robson Separate Property Trust Agreement of 1988 Dated October 30, 1984 by Steven Robson;
• Limited partner Kimberly Management Inc. by Steven Robson, president;
• Special limited partner Scott Homes Multifamily, Inc. (“Scott Homes”) by Steven Robson, president.

¶ 3 On December 20, 2000, the parties signed an Amended and Restated Agreement of Limited Partnership of Sun Valley Ranch 308 Limited Partnership (“Partnership Agreement”). That same day, Scott Homes as “Contractor” and SVR 308 as “Owner” signed a U.S. Department of Housing and Urban Development (“HUD”) contract (“Construction Contract”) for the construction of Sun Valley Ranch Apartments (“the Project”).

¶ 4 Afer the Project was completed, Timberline and Scott Management Company (“SMC”), of which Robson is president and CEO, signed a HUD Management Certification, agreeing to enter into a written management agreement for SMC to manage apartment rental operations. SMC was reportedly paid for its management services beginning in 2001, although Timberline and SMC apparently did not sign a HUD management agreement until several years later.

¶ 5 Timberline began marketing the Project for sale in 2006. The Project sold in February 2008 for $32 million. Ater sales [291]*291proceeds were distributed to the Robson Entities and Englewood, approximately $2.6 million remained in escrow. Timberline and the Robson Entities asserted claims to those funds. Englewood hired a forensic accountant, who opined that Timberline and the Robson Entities owed SVR 308 $5,156,067 and that Englewood was entitled to $2,578,034 based on its ownership interest in SVR 308.

¶ 6 Englewood filed a lawsuit on behalf of itself and SVR 308 (collectively, “plaintiffs”) against the Robson Entities, SMC, and Steven and Kimberly Robson (collectively, “defendants”). The complaint asserted ten counts: breach of contract; breach of the implied covenant of good faith and fair dealing; unjust enrichment as to Scott Homes, the Robson Entities, the SVR partners, and SMC; fraud/negligent misrepresentation; breach of fiduciary duty; dissolution and accounting; and piercing the corporate veil of the Robson Entities.

¶ 7 Defendants moved to compel arbitration based on an arbitration clause contained in the Partnership Agreement. Plaintiffs objected, arguing, inter alia, that the arbitration clause did not apply to all of their claims or to all parties named in the lawsuit. The superior court denied defendants’ motion. Defendants timely appealed. We have jurisdiction pursuant to Arizona Revised Statutes (“A.R.S.”) section 12-2101.01(A)(1).

DISCUSSION

¶ 8 In 2010, the Arizona legislature adopted the Revised Uniform Arbitration Act (“AZ-RUAA”). See A.R.S. §§ 12-3001 through -3029. The parties agree that AZRUAA applies to this proceeding. See A.R.S. § 12-3003(A)(3) (AZ-RUAA applies if the arbitration or legal proceeding is commenced after January 1, 2011); Bruce E. Meyerson, Arizona Adopts the Revised Uniform Arbitration Act, 43 Ariz. St. L.J. 481, 486 (2011) (same). Because AZ-RUAA substantially mirrors the Revised Uniform Arbitration Act (“RUAA”), we look to cases arising thereunder and to RUAA’s commentary for guidance. See In re Estate of Dobert, 192 Ariz. 248, 252, ¶ 17, 963 P.2d 327, 331 (App.1998) (if an A-izona statute is based on a uniform act, courts assume the legislature “intended to adopt the construction placed on the act by its drafters,” and commentary to the uniform act is “highly persuasive unless erroneous or contrary to settled policy in this state”) (quoting State v. Sanchez, 174 Ariz. 44, 47, 846 P.2d 857, 860 (App.1993)).

¶ 9 A.R.S. § 12-3006(A) states:

A agreement contained in a record to submit to arbitration any existing or subsequent controversy arising between the parties to the agreement is valid, enforceable and irrevocable except on a ground that exists at law or in equity for the revocation of a contract.

The court decides “whether an agreement to arbitrate exists or a controversy is subject to an agreement to arbitrate.” A.R.S. § 12-3006(B). We review the denial of a motion to compel arbitration de novo. Nat’l Bank of Ariz. v. Schwartz, 230 Aiz. 310, 311, ¶ 4, 283 P.3d 41, 42 (App.2012) (citations omitted).

¶ 10 ‘Although it is commonly said that the law favors arbitration, it is more accurate to say that the law favors arbitration of disputes that the parties have agreed to arbitrate.” S. Cal. Edison Co. v. Peabody W. Coal Co., 194 Ariz. 47, 51, ¶ 11, 977 P.2d 769, 773 (1999). Section 13.14 of the Partnership Agreement (“the arbitration clause”) reads, in pertinent part:

Arbitration. In the event any controversy or dispute arises out of or relating to this Agreement or the breach hereof, each party shall name an arbitrator with in [sic] twenty (20) days after either party notifies the other in writing that there is such a dispute [o]r controversy existing....

I. Claims Arising Under the Construction Contract

¶ 11 Plaintiffs contend they are only required to arbitrate disputes relating to the Partnership Agreement, whereas “most” of their claims arise under the Construction Contract, which lacks an arbitration clause. Defendants counter that the Construction Contract was incorporated into the Partnership Agreement and that claims arising from or related to the Construction Contract are subject to arbitration.

[292]*292¶ 12 Other courts have “rejected the notion that disputes arising out of an agreement that lacks an arbitration clause are ipso facto

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294 P.3d 125, 231 Ariz. 287, 648 Ariz. Adv. Rep. 42, 2012 WL 5862464, 2012 Ariz. App. LEXIS 183, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sun-valley-ranch-308-ltd-partnership-v-robson-arizctapp-2012.