Marcus & Millichap Real Estate Inv. Servs. of Seattle, Inc. v. Yates, Wood & MacDonald, Inc.

• Citation: 192 Wash.App. 465,369 P.3d 503
• Decision Date: 01 February 2016
• Docket Number: No. 73199–8–I.,73199–8–I.
• Court: Court of Appeals of Washington
• Parties: MARCUS & MILLICHAP REAL ESTATE INVESTMENT SERVICES OF SEATTLE, INC., a California corporation Appellant, v. YATES, WOOD & MacDONALD, INC., a Washington corporation, Respondent.

192 Wash.App. 465

369 P.3d 503

MARCUS & MILLICHAP REAL ESTATE INVESTMENT SERVICES OF SEATTLE, INC., a California corporation Appellant,

v.YATES, WOOD & MacDONALD, INC., a Washington corporation, Respondent.

No. 73199–8–I.

Court of Appeals of Washington, Division 1.

Feb. 1, 2016.

Michael T. Callan, Peterson Russell Kelly PLLC, Bellevue, WA, for Appellant.

Shannon Jamie Lawless, Bryan Christopher Graff, Roger James Kindley, Ryan, Swanson & Cleveland, PLLC, Seattle, WA, for Respondent.

DWYER, J.

¶ 1 Forty-six years ago, this court set forth the principle that voluntary membership in a professional organization gives rise to a corresponding obligation to comply with that organization's bylaws.¹ Where those bylaws contain an agreement to arbitrate, this principle applies with equal force. Under such circumstances, a binding agreement to arbitrate is adequately evidenced by proof of membership in the organization; a signed agreement is not required. Notwithstanding the subsequent enactment of the uniform arbitration act² (UAA), the rule enunciated by this court retains its viability. Thus, the trial court correctly applied this rule to the facts before it in determining that there exists a valid agreement to arbitrate the underlying dispute at issue herein. Accordingly, we affirm.

I

¶ 2 Marcus & Millichap Real Estate Investment Services of Seattle, Inc. (Marcus & Millichap) is a real estate brokerage firm with its principal offices located in Seattle. On July 31, 2014, Marcus & Millichap, through its agents Scott Morasch and Kellan Moll, executed an exclusive representation agreement with the Goetzinger Family LLP to sell the Ticino Apartments (the Property), located in Seattle. At this time, Yates, Wood & MacDonald, Inc. (Yates), a real estate brokerage and property management firm, was the Property's manager.

¶ 3 Following the execution of the exclusive representation agreement, Marcus & Millichap marketed the Property in-house to its list of potential buyers. It did not list the Property with any multiple listing service. In response to these marketing efforts, Marcus & Millichap received offers to buy the Property. As a result, the Goetzinger Family LLP accepted an offer to purchase the Property from the assignee of BriarBox LLC. On November 24, 2014, the sale of the property closed and Marcus & Millichap both earned and received a commission.

¶ 4 Marcus & Millichap and Yates are both voluntary members of the Commercial Broker's Association (CBA),³ a member-owned trade association that provides commercial real estate multiple listing services to its members. Section X.A of the CBA bylaws contains an arbitration provision requiring arbitration of commission disputes arising among or between CBA members:

A. Duty to Arbitrate. It is the duty of the members of this Association (and each so agrees) to submit all controversies involving commissions, between or among them to binding arbitration by the Association, rather then [sic] to bring a suit to law. The foregoing includes controversies which arose prior to one of the parties becoming a member.

The term "commissions" as used above means commissions or fees arising from the real estate brokerage business as the same is now or in the future defined in RCW 18.85.010(1); together with interest and out-of-pocket costs or expenses related thereto. The terms shall include commissions or fees actually paid, as well as commissions or fees lost as a result of the acts of another member.

Accordingly, no members may institute legal action involving such a controversy against any other member without the prior approval of the Board of Directors.

The applicability of this arbitration provision is the central issue on appeal.

¶ 5 On December 9, 2014, Yates, pursuant to the CBA bylaw arbitration provision, initiated arbitration proceedings against Marcus & Millichap, seeking one-half of the commission earned on the sale of the Property. Marcus & Millichap answered Yates's arbitration complaint denying the allegations. It did not, however, challenge the CBA's arbitral jurisdiction in its answer.

¶ 6 Nevertheless, before arbitration commenced, Marcus & Millichap filed a complaint for declaratory judgment against Yates in the King County Superior Court, alleging that no arbitration agreement between the parties existed. Before substantial discovery had been conducted, Marcus & Millichap and Yates filed cross motions pursuant to RCW 7.04A.070, seeking to stay and compel the arbitration, respectively. The superior court, finding the existence of a valid agreement to arbitrate, granted Yates's motion to compel arbitration and dismissed the suit. Marcus & Millichap appeals.

II

¶ 7 Marcus & Millichap first contends that because its signed CBA membership application form has not been produced by either party, it is under no duty to arbitrate the underlying dispute. This is so, it asserts, because absent a signed membership application form, there is no evidence that Marcus & Millichap manifested assent to the CBA bylaws or to the arbitration agreement contained therein. We disagree.

¶ 8 Where the parties dispute the validity of an agreement to arbitrate, RCW 7.04A.070⁴ directs the court to "proceed summarily to decide the issue." While no Washington court has squarely addressed the requirements of this "summary proceeding," courts in other jurisdictions have considered the issue in greater depth.⁵ See, e.g., J.A. Walker Co. v. Cambria Corp., 159 P.3d 126 (Colo.2007); Moffett v. Life Care Ctrs. of Am., 219 P.3d 1068 (Colo.2009); Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266 (Tex.1992). In J.A. Walker Company, the Colorado Supreme Court recognized that, pursuant to the Colorado UAA, the determination of "the existence of an arbitration agreement is an expedited process that starts with the trial court considering 'affidavits, pleadings, discovery, and stipulations' submitted by the parties." 159 P.3d at 130(quoting Jack B. Anglin Co., 842 S.W.2d at 269). "The court must then determine 'whether material issues of fact are disputed and, if such factual disputes exist, [it must] conduct[ ] an expedited evidentiary hearing to resolve the dispute.' " J.A. Walker Co., 159 P.3d at 130(alterations in original) (quoting Haynes v. Kuder, 591 A.2d 1286, 1290 (D.C.1991)). "Thus an evidentiary hearing only is necessary if 'the material facts necessary to determine the issue are controverted, by an opposing affidavit or otherwise admissible evidence....' " J.A. Walker Co., 159 P.3d at 130(quoting Jack B. Anglin Co., 842 S.W.2d at 269). "If the material facts are undisputed, then the trial court can resolve the challenge on the record before it." J.A. Walker Co., 159 P.3d at 130(citing Jack B. Anglin Co., 842 S.W.2d at 269).

¶ 9 This case authority properly describes the procedure envisioned by RCW 7.04A.070. Thus, both trial and appellate courts act properly by applying familiar summary judgment principles when the validity of an agreement to arbitrate is challenged under RCW 7.04A.070.

¶ 10 When reviewing an order granting summary judgment this court "perform[s] the same inquiry as the trial court." Owen v. Burlington N. & Santa Fe R.R. Co., 153 Wash.2d 780, 787, 108 P.3d 1220 (2005)(citing Hisle v. Todd Pac. Shipyards Corp., 151 Wash.2d 853, 860, 93 P.3d 108 (2004)). Summary judgment is proper if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." CR 56(c); see also Owen, 153 Wash.2d at 787, 108 P.3d 1220.

¶ 11 In determining whether a genuine issue of material fact exists, we must "assume facts most favorable to the nonmoving party." Ruff v. County of King, 125 Wash.2d 697, 703, 887 P.2d 886 (1995)(citing Hartley v. State, 103 Wash.2d 768, 774, 698 P.2d 77 (1985)); (Braegelmann v. County of Snohomish, 53 Wash.App. 381, 383, 766 P.2d 1137 (1989)). The nonmoving party "must set forth specific facts that sufficiently rebut the moving party's contentions" and "may not rely on speculation, argumentative assertions that unresolved factual issues remain, or in having its affidavits considered at face value." Seven Gables Corp. v. MGM/UA Entm't Co., 106 Wash.2d 1, 13, 721 P.2d 1 (1986)(citing Dwinnell's Cent. Neon v. Cosmopolitan Chinook Hotel, 21 Wash.App. 929, 587 P.2d 191 (1978)); see also Lane v. Harborview Med. Ctr., 154 Wash.App. 279, 288, 227 P.3d 297 (2010)("A declaration that contains only conclusory statements without adequate factual support does not create an issue of material fact that defeats a motion for summary judgment." (citing Guile v. Ballard Cmty. Hosp., 70 Wash.App. 18, 25, 851 P.2d 689 (1993))).

¶ 12 Moreover, we review a trial court's order granting a motion to compel or deny arbitration de novo.

Satomi

Owners Ass'n v. Satomi, LLC,

167 Wash.2d 781, 797, 225 P.3d 213(citing Adler v. Fred Lind Manor, 153 Wash.2d 331, 342, 103 P.3d 773 (2004)). "Courts resolve the threshold legal question of arbitrability of the dispute by examining the arbitration agreement without inquiry into the merits of the dispute." Heights at Issaquah Ridge, Owners Ass'n v. Burton Landscape Grp., Inc., 148 Wash.App. 400, 403, 200 P.3d 254 (2009).

¶ 13 Washington courts apply a " 'strong presumption in favor of arbitrability,' " and " '[d]oubts should be resolved in favor of coverage.' " Peninsula Sch. Dist. No. 401 v. Pub. Sch. Emps. of Peninsula, 130 Wash.2d 401, 414, 924 P.2d 13 (1996)(quoting Council of Cty. & City Emps. v. Spokane County, 32 Wash.App. 422, 424–25, 647 P.2d 1058 (1982)). "If the dispute can fairly be said to invoke a claim covered by the agreement, any inquiry by the courts must end." Heights at Issaquah Ridge, 148 Wash.App. at 403, 200 P.3d 254.

¶ 14 The UAA, which governs the validity of arbitration agreements, provides that "[a]n agreement contained in a record ^{[6 ]} to submit to arbitration any existing or...