Myhre v. Potter

318 Or.App. 391

507 P.3d 772

Richard MYHRE, Petitioner-Appellant,

v.Robert POTTER, Respondent-Respondent.

A172779

Court of Appeals of Oregon.

Argued and submitted May 18, 2021.

March 16, 2022

Ronald L. Sperry, III, Roseburg, argued the cause and filed the briefs for appellant.

John C. Fisher, Dallas, argued the cause and filed the brief for respondent.

Before Mooney, Presiding Judge, and Pagán, Judge, and DeVore, Senior Judge.^*

DeVORE, S. J.

Petitioner Myhre appeals from a judgment denying his petition to confirm a contractual arbitration award against respondent Potter because the trial court concluded that the petition "was filed after the Statute of Limitations had expired." Petitioner assigns two errors, arguing first that respondent's objection was made too late, after a 20-day time limit on a challenge to confirmation of an arbitration award, and arguing next that the six-year statute of limitations for contract actions did not apply. He argues that a ten-year statute should apply instead. Respondent contends that the trial court did not err, arguing, first, that his limitations argument is not subject to a 20-day time limit and, second, that a six-year statute of limitations does apply. We conclude that no statute of limitations applies to a special statutory proceeding to confirm an arbitration award. We reverse and remand.

PROCEEDINGS

The dispositive facts are procedural and undisputed. In October 2003, petitioner purchased real property from respondent near Drain, Oregon. The parties’ sale agreement contained an arbitration provision requiring that all claims must be submitted to binding arbitration under Oregon law and that "[f]iling for arbitration shall be treated the same as filing in court for purposes of meeting any applicable statutes of limitation ***." After the sale, respondent continued to own property on three sides of petitioner's property. In early 2010, petitioner asserted claims in arbitration, and in July 2010, the arbitrator made an award in favor of petitioner on two of nine claims. The arbitrator directed respondent to specifically perform by making a lot line adjustment at respondent's expense, so as to convey property with a water line; to pay petitioner $6,069.50 for expenses and property loss; and to pay petitioner costs and attorney fees of $8,980. The record does not reflect that respondent had asserted a statute of limitations defense in opposing the merits of petitioner's claims.

In August 2010, petitioner, appearing unrepresented, filed his initial petition to confirm the arbitration award, but, in May 2011, the proceeding was dismissed for want of prosecution, lacking service on respondent. See UTCR 7.020 (91-day rule).

In February 2019, petitioner, appearing with counsel, filed a second petition to confirm the arbitration award. The petition was served on respondent February 23, 2019. Forty days later, respondent filed objections asserting that the proposed judgment did not conform to the requirements of ORS 36.600 to 36.740, the Uniform Arbitration Act. Among other things, respondent asserted that Douglas County was the wrong venue and that the petition was time-barred by a statute of limitations. After a hearing, the trial court sustained the venue objection but deferred ruling on other issues, transferring the matter to Lane County Circuit Court.¹

After venue transferred, petitioner and respondent repeated their arguments in writing and in arguments at another hearing. Later, the trial court entered an order, without explanation, denying the petition to confirm the award and, still later, entered a judgment, adding that the court "finds that the Petitioner's Amended Petition to Confirm [the] Arbitration Award is barred because it was filed after the Statute of Limitations had expired." Petitioner appeals.

LATE OBJECTION?

As his first assignment of error, petitioner argues that the trial court erred when it entertained respondent's objections, because they were not filed within 20 days of service of the petition on respondent. Petitioner relies on ORS 36.700(1), which provides:

"(1) After a party to an arbitration proceeding receives notice of an award, the party may make a petition to the court for an order confirming the award. The party filing the petition must serve a copy of the petition on all other parties to the proceedings. The court shall issue a confirming order unless within 20 days after the petition is served on the other parties :

"(a) A party requests that the arbitrator modify or correct the award under ORS 36.690 ; or

"(b) A party petitions the court to vacate, modify or correct the award under ORS 36.705 or 36.710."

(Emphases added.) Petitioner stresses the mandatory language that the court "shall" confirm the arbitration award unless the objecting party files to modify, correct, or vacate the award as provided elsewhere by related statutes. The grounds to vacate an award are described in ORS 36.705, which provides:

"(1) Upon petition to the court by a party to an arbitration proceeding, the court shall vacate an award made in the arbitration proceeding if:

"(a) The award was procured by corruption, fraud or other undue means;

"(b) There was:

"(A) Evident partiality by an arbitrator appointed as a neutral arbitrator;

"(B) Corruption by an arbitrator; or

"(C) Misconduct by an arbitrator prejudicing the rights of a party to the arbitration proceeding;

"(c) An arbitrator refused to postpone the hearing upon showing of sufficient cause for postponement, refused to consider evidence material to the controversy or otherwise conducted the hearing contrary to ORS 36.665 so as to prejudice substantially the rights of a party to the arbitration proceeding;

"(d) An arbitrator exceeded the arbitrator's powers;

"(e) There was no agreement to arbitrate, unless the person participated in the arbitration proceeding without raising an objection under ORS 36.665 (3) not later than the beginning of the arbitration hearing; or

"(f) The arbitration was conducted without proper notice of the initiation of an arbitration as required in ORS 36.635 so as to prejudice substantially the rights of a party to the arbitration proceeding."

See also ORS 36.710 (grounds for modification or correction of an award). Petitioner concludes that, because respondent's objections were filed 40 days after receipt of the petition, the court erred by entertaining any objections other than, conceivably, objections to the form of the judgment.

Respondent does not deny that he failed to respond within 20 days of receipt of the petition. Instead, he observes that his objections are not the kind of objections that ORS 36.705 provides as grounds to vacate an arbitration award or for modification of an award under ORS 36.710. Therefore, he argues, ORS 36.700 does not apply to his objections to venue or, by extension, to the lapse of the statute of limitations. In his view, ORS 36.700 only applies to what he terms "substantive" objections that could have been raised in arbitration and does not apply to "procedural" objections like venue, lack of jurisdiction, or, arguably by extension, the lapse of a statute of limitations on seeking a judgment to confirm an arbitration award.

We review for legal error the trial court's refusal to confirm the arbitration award, based on an assertion of a lapse of a statute of limitations. Couch Investments, LLC v. Peverieri , 270 Or. App. 233, 239, 346 P.3d 1299 (2015), aff'd , 359 Or. 125, 371 P.3d 1202 (2016).

We credit respondent's initial proposition that a problem of venue is not identified as grounds to vacate an award under ORS 36.705, nor grounds to modify an award under ORS 36.710 ; and yet, venue could become, as here, a procedural objection to the locale for a proceeding to confirm an award. The Uniform Arbitration Act does include a venue provision, ORS 36.725,² and mentions no time limit on interposing a venue objection.³

Similarly, respondent compares an objection based on lack of personal jurisdiction. Again, the issue relates to text in the Uniform Arbitration Act. In relevant part, ORS 36.615 specifies:

"(2) Unless a civil action involving the agreement to arbitrate is pending, notice of a first petition to the court under ORS 36.600 to 36.740 must be served in the manner provided by ORCP 7 D."

A failure of personal jurisdiction in a proceeding to confirm an arbitration award is not listed in ORS 36.705 or ORS 36.710, because, of course, a jurisdictional failure does not concern the grounds provided for vacating or modifying the arbitration award itself. Given the requirements of personal jurisdiction over the parties, an objection that respondent had not been duly served with the petition could be asserted despite the 20-day time limit in ORS 36.700. See generally Wallace v. Holden , 297 Or. App. 824, 830-31, 445 P.3d 914 (2019) (regarding the need for personal jurisdiction in a proceeding).

Therefore, we acknowledge that the 20-day time limitation on interposing an objection to vacate or modify an arbitration award under ORS 36.705 and ORS 36.710 is not a shield against certain purely procedural objections to the confirmation proceeding, like venue or personal jurisdiction. For that reason, we cannot conclude, as petitioner urges, that the trial court erred simply because, in contravention of ORS 36.700(1), it considered respondent's objection—one based on the asserted lapse of a statute of limitations—which was filed more than 20 days after service of the petition.⁴

LATE PROCEEDING?

In his second assignment, petitioner contends that the trial court erred in determining that a petition to confirm the arbitration award was subject to a six-year statute of limitations. Both parties agree that the Uniform Arbitration Act, ORS 36.600 to 36.740, does not contain a statute of limitations. But they reach different conclusions about what limitation period should apply.

Respondent assumes that the court must look to ORS chapter 12, which contains general provisions for the...