Weiss v. Thi of New Mexico at Valle Norte, LLC

2013 NMCA 054, 4 N.M. 22
CourtNew Mexico Supreme Court
DecidedApril 3, 2013
DocketNo. 34,054; Docket No. 30,296
StatusPublished
Cited by8 cases

This text of 2013 NMCA 054 (Weiss v. Thi of New Mexico at Valle Norte, LLC) is published on Counsel Stack Legal Research, covering New Mexico Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Weiss v. Thi of New Mexico at Valle Norte, LLC, 2013 NMCA 054, 4 N.M. 22 (N.M. 2013).

Opinion

OPINION

CASTILLO, Chief Judge.

A nursing home and its affiliates and administrator (Defendants) appeal from a district court decision denying their motion to compel arbitration and stay proceedings. The court based its denial on its conclusion that Defendants waived their right to arbitrate and that the arbitration agreement is unconscionable. Defendants also appeal the imposition of $25,000 in sanctions against them. The parties have resolved the underlying issues of waiver and unconscionability, so we do not address them. We affirm the imposition of sanctions.

I. BACKGROUND

Because our sole issue on appeal relates to the imposition of sanctions, we provide only a short background of the events leading up to the hearing at which the sanctions were imposed. Rochelle Weiss (Plaintiff), the personal representative for Florence Zuckerman, sued Defendants over alleged injuries and harm to Mrs. Zuckerman, who died in February 2008 at the THI of New Mexico Valle Norte nursing home. Shortly after filing her complaint, Plaintiff in early March 2009 began serving discovery requests on Defendants. Over the next few months, Plaintiff granted several extensions to Defendants to respond to interrogatories and requests for production, but Defendants produced only a small percentage of the documents requested. In mid-August 2009, Plaintiffs filed a motion to compel discovery.

Between the filing of the motion and the motion hearing, on September 1, 2009, a scheduling conference was held, during which the district court established a time line for trial preparation activities, including deadlines for discovery, and it set a date for a ten-day jury trial beginning in August 2010. Several days later, the parties held a teleconference regarding the production of discovery requested, but no agreement was reached. In early October 2009, the court heard Plaintiffs motion to compel, granted the motion orally, and gave Defendants two weeks, until October 21, to produce the documents. The district court issued a written order requiring the production of discovery by October 21, although the written order was not filed until October 22.

About this time, Defendants discovered the admission agreement signed by Mrs. Zuckerman and also noticed that it contained an arbitration clause. Based on this information, Defendants, on October 29, 2009, filed a motion to compel arbitration and to stay the proceedings under the Federal Arbitration Act (FAA), 9 U.S.C. § 3 (2011). Defendants did provide some discovery on November 2 but thereafter refused to engage in discovery because their position was that the proceedings were automatically stayed upon the filing of their motion to compel arbitration.

Plaintiff filed a motion for discovery sanctions onNovember 12,2009. On January 28, 2010, the district court heard Plaintiffs motion for sanctions together with Defendants’ motion to compel arbitration and stay the proceedings. Defendants provided some discovery documents the day before and the day of that hearing.

The court denied Defendants’ motion to compel, granted Plaintiffs motions for sanctions, imposed a $25,000 fine on Defendants, and ordered Defendants to produce all remaining discovery items within five days. Defendants appealed the district court’s order. At oral argument before this Court, the parties explained that they had settled the case except for the matter of the imposition of sanctions. Accordingly, we limit our opinion to the issue of sanctions.

II. DISCUSSION

Defendants make two arguments. First, they argue that sanctions were inappropriate because the sanctions were based in part on litigation activities that occurred after Defendants had filed their motion to compel arbitration. According to Defendants, the filing of the motion should have automatically stayed the proceedings, and they thus were “substantially justified” in resisting discovery and were in compliance with discovery rules because they reasonably believed that the proceedings had been stayed. See Rule 1-037(B)(2) NMRA. In their second point, Defendants contend that the court provided no basis for the amount of the sanctions at $25,000 and did not base it on any evidence or representation of fees incurred by Plaintiff. We address each argument in turn.

A. Stay of the Proceedings

In their memorandum in support of their motion to compel arbitration, Defendants cited the FAA for their contention that proceedings should be stayed upon such an application. See 9 U.S.C. § 3. Defendants reiterated that contention in their response to Plaintiffs motion for sanctions by citing to New Mexico’s Uniform Arbitration Act (the Act), NMSA 1978, §§ 44-7A-1 to -32 (2001). See § 44-7A-8(f). Defendants contend that the district court must automatically stay the proceedings upon receiving a motion to compel arbitration. We disagree with Defendants’ reading of the statutes.

Because this involves a matter of statutory interpretation, we are faced with a question of law, and our review is de novo. See Cooper v. Chevron U.S.A., Inc., 2002-NMSC-020, ¶ 16, 132 N.M. 382, 49 P.3d 61. We follow the plain meaning rule, requiring a court to give effect to a statute’s language and refrain from further interpretation when the language is clear and unambiguous. See Sims v. Sims, 1996-NMSC-078, ¶ 17, 122 N.M. 618, 930 P.2d 153.

We first address the federal law. The FAA states that “the court ... , upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had.” 9 U.S.C. § 3. Rather than occurring automatically upon a motion to compel arbitration, a stay in the proceedings under the FAA occurs only when the court is satisfied that the issue is referable to arbitration. See United Nuclear Corp. v. Gen. Atomic Co. (United Nuclear I), 93 N.M. 105, 123, 597 P.2d 290, 308 (1979) (“Section 3 of the [FAA] provides for a stay of pending court action on application of one of the parties when the [district] court is satisfied that the issue involved is referable to arbitration and that the applicant for the stay of court proceedings is not in default in proceeding with such arbitration.”). That language invokes the discretion of the court and requires either a hearing or a ruling by the court informed by an analysis of the viability of a request for arbitration.

We now turn to the New Mexico statute. The Act states: “If a party makes a motion to the court to order arbitration, the court on just terms shall stay any judicial proceeding that involves a claim alleged to be subject to the arbitration until the court renders a final decision under this section.” Section 44-7A-8(f). Here, too, the stay is not triggered automatically but requires the court, “on just terms,” to assess whether the claim is subject to arbitration.

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Bluebook (online)
2013 NMCA 054, 4 N.M. 22, Counsel Stack Legal Research, https://law.counselstack.com/opinion/weiss-v-thi-of-new-mexico-at-valle-norte-llc-nm-2013.