Opinion
No. 1 CA-CV 14-0823
03-01-2016
CACH, LLC, a limited liability company, Plaintiff/Appellee, v. STEVE FALLON, Defendant/Appellant.
COUNSEL Neuheisel Law Firm PC, Tempe By Kathryn A. Neuheisel, Beth Bruno, Kerry Markert Counsel for Plaintiff/Appellee Steve Fallon, Bullhead City Defendant/Appellant
NOTICE: NOT FOR OFFICIAL PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE. Appeal from the Superior Court in Mohave County
No. B8015CV201204150
The Honorable Charles W. Gurtler, Jr., Judge
AFFIRMED
COUNSEL Neuheisel Law Firm PC, Tempe
By Kathryn A. Neuheisel, Beth Bruno, Kerry Markert
Counsel for Plaintiff/Appellee Steve Fallon, Bullhead City
Defendant/Appellant
MEMORANDUM DECISION
Presiding Judge Andrew W. Gould delivered the decision of the Court, in which Judge John C. Gemmill and Judge Margaret H. Downie joined. GOULD, Judge:
¶1 Appellant Steve Fallon challenges the superior court's judgment confirming a contractual arbitration award in favor of Appellee Cach, LLC ("Cach"). For the reasons set forth below, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
¶2 Cach filed suit against Fallon to recover an outstanding balance due on a credit card account. Fallon moved to dismiss the complaint because, among other reasons, his credit card agreement contained an arbitration clause. The court granted Fallon's motion and dismissed the case "subject to the parties completing arbitration."
¶3 Neither party initiated arbitration, so Cach moved to reinstate the case. Following a hearing to select an arbitrator, the court ordered the parties to arbitrate before the American Arbitration Association. Fallon then moved for a change of judge, claiming the judge exhibited bias against him during the hearing. The Civil Presiding Judge denied Fallon's motion.
¶4 The parties proceeded to arbitration, where Cach prevailed. Cach filed a motion to confirm the arbitrator's award, which was granted. Approximately a week later, Fallon moved to vacate the order. He also tried to appeal the arbitration award by filing a new lawsuit, which was assigned to a different judge (the "new case"). After the new case was filed, the judge assigned to the original case vacated his order confirming the arbitration award. Cach then filed a motion to consolidate the two cases with the judge assigned to the original case.
The original case was filed by Cach in Mohave Superior Court Courthouse located in Bullhead City, Arizona; the new case was filed by Fallon in Mohave Superior Courthouse located in Kingman, Arizona.
¶5 After briefing on Fallon's motion to vacate and Cach's motion to consolidate, the court granted consolidation, denied Fallon's appeal and motion to vacate, and reconfirmed the arbitration award. Fallon timely appealed. We have jurisdiction pursuant to Arizona Revised Statutes ("A.R.S.") § 12-2101.01(A)(6).
DISCUSSION
¶6 Arizona public policy favors arbitration to obtain a speedy and inexpensive disposition of a dispute; therefore, judicial review of an arbitration award is severely limited. Atreus Communities Grp. of Ariz. v. Stardust Dev., Inc., 229 Ariz. 503, 506, ¶ 13 (App. 2012). We will affirm the confirmation of an arbitration award absent an abuse of discretion. Id. We find no abuse of discretion here.
I. Order Compelling Arbitration
¶7 Fallon contends the court lacked jurisdiction to compel arbitration because (1) under the subject credit card agreement, the court had no jurisdiction over the parties until they had completed arbitration, and (2) it lost jurisdiction to compel arbitration when it dismissed Cach's complaint. We disagree.
¶8 The mere existence of a contractual arbitration provision does not deprive a court of jurisdiction; at a minimum, a court has jurisdiction to compel arbitration and confirm the arbitration award. A.R.S. § 12-3007(A) (authorizing a trial court to compel arbitration when a party shows the existence of a valid arbitration agreement and the other party's refusal to arbitrate); see also A.R.S. § 12-3026(A) ("A court of this state having jurisdiction over the controversy and the parties may enforce an agreement to arbitrate."). Here, Fallon argued, and the court agreed, that the dispute must be arbitrated based on the express terms of the credit card agreement.
Both parties cite Arizona's Uniform Arbitration Act, A.R.S. § 12-1501, et seq., extensively in their briefing. The case commenced in December 2012, so our Revised Uniform Arbitration Act applies. A.R.S. § 12-3003(A)(3); Sun Valley Ranch 308 Ltd. P'ship ex rel. Englewood Properties, Inc. v. Robson, 231 Ariz. 287, 291, ¶ 8 (App. 2012). Because the relevant provisions at issue here are nearly identical under both the Uniform and Revised Arbitration Acts, the parties' incorrect citation does not change the result.
¶9 Additionally, while the better course of action would have been for the court to expressly stay the case rather than dismiss it "subject to the parties completing arbitration," the court's order effectively stayed the case while the parties proceeded to arbitration. Indeed, the record shows the court never formally dismissed the case, but continued to check on the status of the case, hold hearings and set deadlines until the arbitration award was filed.
Both the Uniform Arbitration Act and the Revised Uniform Arbitration Act require the trial court to stay, not dismiss, judicial proceedings that involve an issue subject to arbitration pending the completion of arbitration. A.R.S. § 12-1502(D); A.R.S. § 12-3007(G). --------
II. Consolidation
¶10 Fallon contends the court erred when it consolidated the new case with the original case. Ariz. R. Civ. P. 42(a) permits consolidation of "actions involving a common question of law or fact." We review an order consolidating cases for an abuse of discretion. Cypress on Sunland Homeowners Ass'n v. Orlandini, 227 Ariz. 288, 295, ¶ 21 (App. 2011).
¶11 We find no error. Fallon's new case sought to vacate the same arbitration award Cach sought to confirm in the original case. The two cases clearly involved common questions of law and fact and were properly consolidated.
¶12 Fallon also appears to argue that the compulsory arbitration rules, Ariz. R. Civ. P. 72-77, foreclosed any possibility of consolidation. Fallon is incorrect. The compulsory arbitration rules do not apply to the parties' contractual arbitration provision, and did not preclude consolidation of the subject cases.
III. Confirmation of the Arbitration Award.
¶13 Fallon argues the court erred when it reconfirmed the arbitration award and dismissed his appeal. He asserts the award is void because of "corruption, fraud or other undue means." Specifically, he alleges Cach presented an invalid credit card account number in the arbitration. A.R.S. § 12-3023(A)(1); A.R.S. § 12-1512(A)(1).
¶14 Fallon had the burden of showing bad faith or intentional misconduct before the arbitration award could be overturned under either A.R.S. § 12-3023(A)(1) or § 12-1512(A)(1). Nolan v. Kenner, 226 Ariz. 459, 461, ¶ 5 (App. 2011); FIA Card Services, N.A. v. Levy, 219 Ariz. 523, 525, ¶ 7 (App. 2008). Fallon also bore the burden of showing (1) corruption, fraud or undue means by clear and convincing evidence, and (2) this misconduct could not have been discovered before the arbitration through the exercise of due diligence. Nolan, 226 Ariz. at 462, ¶ 7.
¶15 The only evidence Fallon submits in support of his claim is the allegation Cach "fraudulently" presented an incorrect account number, which does not meet this heavy burden. The trial court did not abuse its discretion in rejecting this allegation.
¶16 Fallon also challenges the arbitrator's denial of his request for a three-arbitrator panel and his discovery motion. We find no error. Pursuant to A.R.S. § 12-3015(A), "[a]n arbitrator may conduct an arbitration in such manner as the arbitrator considers appropriate for a fair and expeditious disposition of the proceeding." Additionally, under A.R.S. § 12-3017(C) "[a]n arbitrator may permit such discovery as the arbitrator decides is appropriate in the circumstances . . .." See also Chang v. Siu, 234 Ariz. 442, 446, ¶ 14 (App. 2014) (unless an arbitrator exceeds his authority, his decisions are "final both as to questions of fact and law.").
¶17 For these reasons, we find the court did not abuse its discretion in confirming the arbitration award. A.R.S. § 12-3022.
IV. Change of Judge.
¶18 Fallon also contends the Civil Presiding Judge improperly denied his motion for change of judge as of right under Rule 42(f)(1). A party may obtain a change of judge by right before the assigned judge rules on a contested issue, holds a scheduled conference, or holds a contested hearing. Ariz. R. Civ. P. 42(f)(1)(D).
¶19 Here, Fallon did not seek a change of judge until after the court ordered the parties to arbitrate. Thus, the court ruled on a contested issue before Fallon's motion, and he was not entitled to a change of judge as a matter of right. See Flagel v. Southwest Clinical Physiatrists, P.C., 157 Ariz. 196, 199 (App. 1988) ("[T]he right to a change of judge is lost as soon as the parties have reason to know how the assigned judge feels about any aspect of the merits of the action.").
¶20 Fallon also sought a change of judge for cause based on alleged bias. We review the denial of a motion for change of judge for cause for an abuse of discretion. Stagecoach Trails MHC, L.L.C. v. City of Benson, 232 Ariz. 562, 568, ¶ 21 (App. 2013). We presume trial judges are free of bias and prejudice. Id.
¶21 Here, the Fallons offered affidavit testimony stating their subjective beliefs and suspicions the trial judge was biased against them. Based on this evidence, the Civil Presiding Judge did not abuse his discretion in denying Fallon's motion for change of judge. See id. ("A change of judge for cause is not warranted if based merely on 'speculation, suspicion, apprehension, or imagination.'") (quoting State v. Ellison, 213 Ariz. 116, 128, ¶ 37 (2006)).
V. Attorneys' Fees and Costs
¶22 Cach requests an award of attorneys' fees and costs incurred on appeal. Because Cach has failed to cite any basis for its fees as required by ARCAP 21(a), in our discretion, we deny Cach's request for fees.
CONCLUSION
¶23 We affirm the court's rulings as set forth above.