Harvey v. Hooten

CHARLES HARVEY; LADONNA GIRON; TERRY HERTZ; BRYAN MARTINEZ and

ADELITA MARTINEZ; LAURA SANCHEZ; AURELIO SANTANA and TARAH SANTANA;

JESUS SEDILLOS and JOYCE SEDILLOS; DEPAAK SHAH; DANNY WESTand MARSHA WEST; Plaintiffs-Appellees, v. BILL E. HOOTEN, Defendant-Appellant,andJAMES ARIAS; CB & DEVELOPMENT CORPORATION; CHARTER BUILDING AND DEVELOPMENT

CORPORATION; CHARTER HOMES, INC.; CURB SOUTH, LLC; LOS JEFES 1-10, owners

and officers/directors of CHARTER; LOS HOMBRES 1-10, owners and officers/directors of CURB SOUTH, LLC;

SALLS BROTHERS CONSTRUCTION, INC.; VINYARD & ASSOCIATES, INC.;

and STAN STRICKMAN; Defendants,

and

BILL E. HOOTEN; CHARTER BUILDING AND DEVELOPMENT CORPORATION;

CHARTER HOMES, INC.; JAMES ARIAS; and CB & DEVELOPMENT CORPORATION; Cross-Plaintiffs, v. CURB SOUTH, LLC, Cross-Defendant,andJAMES ARIAS; CB & DEVELOPMENT CORPORATION; and CURB SOUTH, LLC; Third-Party Plaintiffs, v. SALLS BROTHERS CONSTRUCTION, INC.; VINYARD & ASSOCIATES, INC.;

CHARLES M. WALKER COMPANY, INC.; HBW SERVICES, LLC; JAMAR INDUSTRIES, INC.;

KEN'S PLUMBING AND HEATING, INC.; and

NATIONAL HOME INSURANCE COMPANY; Third-Party Defendants.

No. 35,685

COURT OF APPEALS OF THE STATE OF NEW MEXICO

February 20, 2017

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 Please see Rule 12-405 NMRA for restrictions on the citation of unpublished memorandum opinions.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.

APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY

Valerie A. Huling, District Judge

The Roehl Law Firm, P.C.

Jerrald J. Roehl

Katherine Channing Roehl

Albuquerque, NMfor Appellee

Sheehan & Sheehan, P.A.

Leah M. Stevens-Block

David P. Gorman

Albuquerque, NM

for Appellant

MEMORANDUM OPINION

VANZI, Chief Judge.

{1} Defendant Bill E. Hooten appeals from the district court's order denying his motion to dismiss and to compel arbitration. This Court issued a notice proposing summary affirmance. Hooten filed a memorandum in opposition to this Court's notice of proposed disposition, which we have duly considered. Remaining unpersuaded, we affirm.

{2} Hooten raised four issues in his docketing statement: (1) the district court erred in failing to determine, as a threshold matter, whether it—or the arbitrator—had the authority to decide Plaintiffs' challenges to the arbitration agreement's enforceability where the arbitration agreement contained a delegation clause; (2) the district court's order compelling arbitration of Plaintiffs' claims against Defendants Charter Homes, Inc., Charter Building and Development Corp., CB & Development Corp. (collectively, the Charter Entities), and James Arias, encompassed Plaintiffs' claimsagainst Hooten as well; (3) Hooten could not waive his right to arbitrate, where the Charter Entities successfully invoked their right to arbitrate; and (4) the district court erred in determining that Hooten waived his right to arbitration. [CN 4]

{3} We initially note that Hooten, in his memorandum in opposition, does not address our proposed disposition as to issues (2) and (3). [See generally MIO 4-11] Accordingly, these issues are deemed abandoned. See State v. Johnson, 1988-NMCA-029, ¶ 8, 107 N.M. 356, 758 P.2d 306 (stating that when a case is decided on the summary calendar, an issue is deemed abandoned where a party fails to respond to the proposed disposition of the issue); cf. Hennessy v. Duryea, 1998-NMCA-036, ¶ 24, 124 N.M. 754, 955 P.2d 683 ("Our courts have repeatedly held that, in summary calendar cases, the burden is on the party opposing the proposed disposition to clearly point out errors in fact or law.").

{4} With respect to Hooten's first issue—that pursuant to the delegation clause, the arbitrator, as opposed to the district court, should have decided whether he waived arbitration—we suggested in our calendar notice that this issue did not appear to have been preserved for appellate review. [CN 4-6] Specifically, we noted that Hooten did not indicate to us in his docketing statement that he invoked a ruling from the district court with respect to the delegation clause. See Benz v. Town Ctr. Land, LLC, 2013-NMCA-111, ¶ 24, 314 P.3d 688 ("To preserve an issue for review on appeal, it must appear that appellant fairly invoked a ruling of the trial court on the same groundsargued in the appellate court." (internal quotation marks and citation omitted)). [CN 5] We further noted that we reviewed Hooten's reply in support of his motion to dismiss and to compel arbitration, wherein he made several arguments in response to Plaintiffs' assertion that he waived his right to arbitration but made no mention of the delegation clause. [CN 5] Notably, in his reply in support of his motion, Hooten put forth his arguments for why the district court should determine that he did not waive arbitration. [CN 5] In light of our inability to locate any indication of preservation, we urged Hooten, if he chose to file a memorandum in opposition, to point out exactly where—in the eighteen-volume record proper—this issue was preserved for appellate review. [CN 5-6] See Crutchfield v. N.M. Dep't of Taxation & Revenue, 2005-NMCA-022, ¶ 14, 137 N.M. 26, 106 P.3d 1273 ("[O]n appeal, the party must specifically point out where, in the record, the party invoked the court's ruling on the issue. Absent that citation to the record or any obvious preservation, we will not consider the issue.").

{5} In his memorandum in opposition, Hooten does not point us to evidence of preservation, nor does he challenge our proposed disposition that he failed to preserve the delegation clause issue. See Hennessy, 1998-NMCA-036, ¶ 24. Instead, Hooten argues that the delegation clause "implicates the district court's subject matter jurisdiction over issues of arbitrability" and that he may raise the issue for the first time on appeal. [MIO 5 (citing Chavez v. Cty. of Valencia, 1974-NMSC-035, ¶ 15, 86N.M. 205, 521 P.2d 1154 (stating that an objection to the district court's subject matter jurisdiction may be raised at any time during the proceedings and may be raised for the first time on appeal.))]

{6} In support of his position, Hooten cites to Felts v. CLK Mgmt., Inc., 2011-NMCA-062, ¶ 18, 149 N.M. 681, 254 P.3d 124, for the proposition that "the parties can agree to have an arbitrator, rather than a court, decide gateway questions of arbitrability in addition to deciding the parties' underlying claims." [MIO 6] Hooten also cites to Horne v. Los Alamos Nat. Sec., LLC, 2013-NMSC-004, ¶ 23, 296 P.3d 478, which looked to the arbitration agreement and determined that the parties contractually agreed to give the arbitrator authority to resolve disputes over the interpretation and scope of the arbitration agreement. [MIO 6-7]

{7} We are not convinced, however, that these cases support Hooten's contention that a delegation clause divests the district court of subject matter jurisdiction. See State ex rel. Foy v. Austin Capital Mgmt., 2015-NMSC-025, ¶ 7, 355 P.3d 1 (stating that "New Mexico district courts are courts of general jurisdiction having the power to hear all matters not excepted by the [C]onstitution and those matters conferred by law). Instead, as Felts recognized, a delegation provision is "simply an additional, antecedent agreement the party seeking arbitration asks the . . . court to enforce[.]" 2011-NMCA-062, ¶ 18 (quoting Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63, 70 (2010)). It stands to reason, then, that a delegation clause, like an arbitration clause,is subject to waiver. See Ruppelt v. Laurel Healthcare Providers, LLC, 2013-NMCA-014, ¶ 8, 293 P.3d 902 (determining under similar circumstances that the defendants waived any delegation argument by voluntarily addressing the issue in the district court and by "never even suggest[ing] that the court did not have authority to address the issue"). Thus, in the absence of any challenge below to the district court's authority to determine whether Hooten waived arbitration—and in fact, in light of Hooten's apparent acquiescence to the district court's authority on the waiver issue—we conclude that Hooten waived any delegation argument that the arbitrator should determine whether he waived arbitration. Consequently, because the delegation clause issue was not preserved for appellate review and because we are not convinced that the delegation clause affects the district court's subject matter jurisdiction, we do not address this issue. See id. ¶ 9 (stating that the delegation clause issue was not preserved where the defendants "did not address or even mention the question of authority to decide arbitrability during arguments to the district court" and refusing to address the issue further).

{8} We therefore need only address Hooten's contention that the district court erred in its determination that he waived arbitration. [MIO 8-11] In our calendar notice, we recognized that three principles govern our review of the district court's waiver finding in the context of a motion to compel arbitration: (1) the strong public policy preference in favor of arbitration, (2) "relief [should] only be granted upon a showingof prejudice to the party opposing arbitration[,]" and (3) "the extent to which the party now urging arbitration has previously invoked the machinery of the judicial system." [CN 8] Bd. of Educ. Taos Mun. Sch. v. The Architects, 1985-NMSC-102, ¶¶ 7-10, 103 N.M. 462, 709 P.2d 184.

{9} Our analysis thus begins with a presumption in favor of arbitration and against waiver; that presumption is so strong that "all doubts as to whether there is a waiver must be resolved in favor of arbitration." Am. Fed'n of State, Cty. & Mun. Emps. v. City of Albuquerque (AFSCME), 2013-NMCA-049, ¶ 10, 299 P.3d 441 (internal quotation marks and citation omitted). The party opposing arbitration will only be granted relief if it can...