City of Rochester v. Kottschade

• Decision Date: 07 June 2017
• Docket Number: A16-1203
• Citation: City of Rochester v. Kottschade, 896 N.W.2d 541 (Minn. 2017)
• Parties: CITY OF ROCHESTER, Appellant, v. Franklin P. KOTTSCHADE, et al., Respondents.
• Court: Minnesota Supreme Court

896 N.W.2d 541

CITY OF ROCHESTER, Appellant,

v.Franklin P. KOTTSCHADE, et al., Respondents.

A16-1203

Supreme Court of Minnesota.

Filed: June 7, 2017

Monte A. Mills, Greene Espel PLLP, Minneapolis, Minnesota, for appellant.

Gary A. Van Cleve, Bryan J. Huntington, Larkin Hoffman Daly & Lindgren Ltd., Minneapolis, Minnesota, for respondents.

OPINION

CHUTICH, Justice.

Appellant City of Rochester (City) sued respondents Franklin P. Kottschade and S.J.C. Properties (collectively SJC) to stop arbitration proceedings after SJC demanded arbitration and an arbitrator determined that the dispute was arbitrable. The district court denied the City's motion for summary judgment, granted SJC's motion for summary judgment, and compelled arbitration. Rather than stay the underlying action, as required by Minnesota Statutes section 572B.07(f) (2016), the district court directed the entry of judgment, and judgment was entered. The City appealed. When the court of appeals questioned its jurisdiction, the City argued that the district court's order was a final judgment because it dismissed, rather than stayed, the underlying proceeding and, therefore, the court of appeals could review the district court's order compelling arbitration. The court of appeals disagreed and dismissed the appeal as taken from a nonfinal order and judgment. Rochester v. Kottschade , No. A16-1203, Order (Minn. App. filed Aug. 16, 2016).

Although a final judgment entered as directed by the district court is generally appealable under Rule 103.03(a) of the Minnesota Rules of Civil Appellate Procedure, we conclude that the district court erred by directing the entry of that judgment rather than staying the proceeding as directed by section 572B.07(f). Accordingly, we reverse the court of appeals' dismissal and we remand to the district court with instructions to vacate the judgment and to enter a stay pending the completion of arbitration.

FACTS

The City and SJC have been involved in numerous land disputes. In 2010, the City and SJC entered into a settlement agreement resolving two separate lawsuits. The agreement contained an arbitration clause that required the parties to submit "[a]ny dispute regarding the interpretation of [the] [a]greement that cannot be resolved" to a specified mediator "for final binding arbitration."

In 2015, SJC demanded arbitration with the City regarding two new parcels of land, claiming that the City had failed to comply with its obligations under the 2010 settlement agreement. The City objected to SJC's demand for arbitration because, it asserted, no interpretation of the 2010 settlement agreement was required. But, the City agreed to allow the arbitrator to decide the issue of arbitrability. The arbitrator concluded that the disputes involved the interpretation of the 2010 settlement agreement and, thus, were subject to arbitration.

Following the arbitrator's determination, the City filed a complaint in Olmsted County District Court, challenging the arbitrator's determination that the disputes were arbitrable and moving for a temporary injunction. SJC then moved for summary judgment to compel arbitration, asking the district court to dismiss the City's action with prejudice. The City also moved for summary judgment to permanently enjoin the arbitration proceedings. The parties agreed to a temporary stay of arbitration until the court could hear the parties' motions.

Following the hearing on the parties' motions, the district court determined that the parties had an "enforceable agreement to arbitrate and that the disputes raised fall within the scope" of the agreement, see Minnesota Statutes § 572B.06(b) (2016). The court granted SJC's motion for summary judgment, which had the effect of requiring the parties to submit the dispute to arbitration. After the court denied the City's motion, it ordered the entry of judgment, stating: "LET JUDGMENT BE ENTERED ACCORDINGLY." The district court administrator entered judgment.

The City appealed from the district court's decision, relying on both Rule 103.03 of the Rules of Civil Appellate Procedure and Minnesota Statutes section 572B.28(a)(6) (2016) as authority for its appeal. The City argued to the court of appeals that the district court erred in compelling arbitration. Although recognizing that an appeal may be taken from a final judgment under Rule 103.03(a), the court of appeals questioned its jurisdiction because the Minnesota Uniform Arbitration Act (the Act), Minn. Stat. §§ 572B.01 -.31 (2016), "does not authorize entry of judgment on an order granting a motion to compel arbitration." Rochester v. Kottschade , No. A16-1203, Order at 2-3 (Minn. App. filed July 27, 2016). The court of appeals reasoned that "[i]f the May 31, 2016 judgment was not entered pursuant to sections 572B.01 to 572B.31, then the judgment is not appealable under Minn. Stat. § 572B.28(a)(6)." Id. at 2.

The City contended that the court of appeals had jurisdiction in part because the district court determined arbitrability under section 572B.06(b) of the Act and, after resolving the parties' motions, final judgment was entered. In support, the City cited cases from other jurisdictions holding that an order compelling arbitration is appealable when the order dismisses, rather than stays, the case. SJC disagreed, asserting that the court of appeals should dismiss the appeal because the district court improperly directed the entry of judgment. SJC also argued that the statute listing appealable orders under the Act, section 572B.28(a), does not include an order granting a motion to compel arbitration.

The court of appeals dismissed the appeal as taken from a nonfinal order and judgment. The court concluded that "[a]n order granting a motion to compel arbitration is not an appealable order under Minn. Stat. § 572B.28" because such an order "is not a final judgment entered on an order confirming, vacating without directing a rehearing, modifying, or correcting an award." Rochester v. Kottschade , No. A16-1203, Order at 2 (Minn. App. filed Aug. 16, 2016). The court of appeals also determined that the City's alternative argument—that the district court's order was appealable under Rule 103.03(b) of Minnesota Rules of Civil Appellate Procedure because it effectively denied injunctive relief—failed because the order was "analogous to an order that denies a stay of arbitration," which is not appealable. Id. at 3. The court of appeals noted that the City could obtain appellate review "in a proper and timely appeal, if necessary, from an appealable order or judgment under Minn. Stat. § 572B.28(a)." Id. We granted the City's petition for review.

ANALYSIS

This case requires us to decide whether the court of appeals correctly concluded that the district court's order was not a final order and judgment and, therefore, not appealable. See Pulju v. Metro. Prop. & Cas. , 535 N.W.2d 608, 608 (Minn. 1995) (order) (granting review of a decision of the court of appeals that dismissed an appeal as untimely); see also Minn. R. Civ. App. P. 117 (authorizing our review of "any decision of the Court of Appeals"). The City primarily asserts¹ that the court of appeals erred by dismissing its appeal because the district court's order is reviewable on appeal under section 572B.28(a) of the Act, which provides:

An appeal may be taken from:

(1) an order denying a motion to compel arbitration;

(2) an order granting a motion to stay arbitration;

(3) an order confirming or denying confirmation of an award;

(4) an order modifying or correcting an award;

(5) an order vacating an award without directing a rehearing; or

(6) a final judgment entered pursuant to sections 572B.01 to 572B.31.

Minn. Stat. § 572B.28(a). Specifically, the City argues that because "the district court made a decision about arbitrability under section 572B.06(b) —which is within chapter 572B—and then entered final judgment, that judgment [is] appealable under 572B.28(a)(6)." The City asks us to reverse and remand to the court of appeals to address the question of arbitrability.

SJC disagrees, asserting that the Act does not allow appeals from orders that compel arbitration; rather, the only pre-award circumstances permitting appeal are from orders that deny a motion to compel arbitration or grant a motion to stay arbitration. Further, relying on Metropolitan Airports Commission v. Metropolitan Airports Police Federation , 443 N.W.2d 519, 523 (Minn. 1989), SJC contends that the appealable final judgments under the Act are limited to "judgments on orders confirming, modifying or correcting an award."² SJC also contends that, to the extent we determine that the judgment entered here was a final appealable judgment, then the appropriate action is to reverse the district court's dismissal order and remand with instructions to vacate the judgment and enter an order staying the underlying civil proceedings pending arbitration.³

"We review questions of statutory interpretation de novo." Sumner v. Jim Lupient Infiniti , 865 N.W.2d 706, 708 (Minn. 2015) (citing Larson v. State , 790 N.W.2d 700, 703 (Minn. 2010) ). When interpreting a statute, we must give the statute's words and phrases their plain and ordinary meaning. W. Bend Mut. Ins. Co. v. Allstate Ins. Co. , 776 N.W.2d 693, 698 (Minn. 2009). "We interpret a statute ‘as a whole so as to harmonize and give effect to all its parts, and where possible, no word, phrase, or sentence will be held superfluous, void, or insignificant.’ " 328 Barry Ave., LLC v. Nolan Props. Grp., LLC , 871 N.W.2d 745, 749 (Minn. 2015) (quoting Jackson v. Mortg. Elec. Registration Sys., Inc. , 770 N.W.2d 487, 496 (Minn. 2009) ). Finally, when interpreting this uniform law, we will consider other jurisdictions' interpretations of their uniform arbitration acts. See Minn. Stat. § 572B.29(a) (explaining that when "applying and construing this uniform act, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that...