Gregory G. McGill, P.C. v. Ball

• Docket Number: 1 CA-CV 21-0580
• Decision Date: 11 October 2022
• Citation: 81 Arizona Cases Digest 4,519 P.3d 729
• Parties: GREGORY G. MCGILL, P.C., Plaintiff/Appellee, v. Judson C. BALL, Defendant/Appellant.
• Court: Arizona Court of Appeals

81 Arizona Cases Digest 4

519 P.3d 729

GREGORY G. MCGILL, P.C., Plaintiff/Appellee,

v.Judson C. BALL, Defendant/Appellant.

No. 1 CA-CV 21-0580

Court of Appeals of Arizona, Division 1.

Filed October 11, 2022

McGill Law Firm, Scottsdale, By Gregory G. McGill, Counsel for Plaintiff/Appellee

Ahwatukee Legal Office PC, Phoenix, By David L. Abney, Co-Counsel for Defendant/Appellant

Law Offices of A. Thomas Smith PLLC, Phoenix By A. Thomas Smith, Co-Counsel for Defendant/Appellant

Judge Angela K. Paton delivered the opinion of the Court, in which Presiding Judge Paul J. McMurdie and Chief Judge Kent E. Cattani joined.

PATON, Judge:

¶1 Judson C. Ball ("Ball") appeals the superior court's judgment confirming an arbitration award in favor of the law firm, Gregory G. McGill, PC (the "Firm"), and awarding attorneys’ fees. We affirm confirmation of the arbitration award but vacate the attorneys’ fees award.

FACTS AND PROCEDURAL HISTORY

¶2 In 2018, Ball signed a fee agreement for the Firm to represent Ball in a federal court action. The agreement required arbitration over any fee disputes without expressly designating whether the arbitration was binding or non-binding. Ball then formed Pacesetter Consulting, LLC ("Pacesetter"), and assigned his rights in all claims related to the federal litigation to Pacesetter. The Firm, through its principal attorney, Gregory G. McGill, filed a lawsuit on behalf of Pacesetter in federal court.

¶3 Ball later disputed the fees the Firm billed in that litigation. Ball discharged McGill as counsel and agreed, in writing, to abide by a decision regarding the fee dispute to be determined by an impartial legal authority. Both parties participated in a four-day arbitration, where Ball argued that McGill had overbilled for his work and requested a fee reduction. After the hearing, the arbitrator awarded the Firm its requested fees and costs.

¶4 Ball, however, still refused to pay, so the Firm, represented by McGill, applied for confirmation of the arbitration award in the superior court, citing Arizona's Uniform Arbitration Act ("UAA"), A.R.S. §§ 12-1501 to -1518. Ball moved to dismiss, arguing the fee agreement provided for "nonbinding" arbitration. The court found that Ball was bound by the arbitrator's decision because he had participated in the arbitration. The Firm moved for attorneys’ fees in seeking confirmation of the arbitration award. The court awarded attorneys’ fees and entered a final judgment confirming the arbitrator's decision.

¶5 Ball timely appealed, challenging both the confirmation of the arbitration award and the award of attorneys’ fees to the Firm. We have jurisdiction pursuant to Article 6, Section 9, of the Arizona Constitution and A.R.S. §§ 12-2101(A)(1), and -2101.01(A)(6).

DISCUSSION

I. The superior court did not err in confirming the arbitration award.

¶6 Ball challenges the superior court's confirmation of the arbitration award. McGill argues Ball is bound by the arbitration award because he participated in the arbitration without arguing that it was non-binding and never moved to vacate the award.

¶7 We review the superior court's ruling in the light most favorable to upholding the confirmation of the award, which will be affirmed absent an abuse of discretion. RS Indus., Inc. v. Candrian , 240 Ariz. 132, 135, ¶ 7, 377 P.3d 329, 332 (App. 2016) (citing Atreus Cmtys. Grp. of Ariz. v. Stardust Dev., Inc ., 229 Ariz. 503, 506, ¶ 13, 277 P.3d 208, 211 (App. 2012) ). We review de novo issues of law, including interpretation of a statute. See Smith v. Pinnamaneni , 227 Ariz. 170, 173, ¶ 7, 254 P.3d 409, 412 (App. 2011) (citing Steer v. Eggleston , 202 Ariz. 523, 527, ¶ 16, 47 P.3d 1161, 1165 (App. 2002) ).

¶8 Although both parties cite the UAA in support of their arguments, Arizona's Revised Uniform Arbitration Act ("RUAA"), A.R.S. §§ 12-3001 to -3029, governs this dispute. The fee agreement containing the arbitration clause was signed in 2018, and the RUAA governs agreements to arbitrate made on or after January 1, 2011. See A.R.S. § 12-3003(A)(1).

¶9 Judicial review of an arbitration award is significantly limited by the RUAA. See Candrian , 240 Ariz. at 135, ¶ 7, 377 P.3d at 332 (citing City of Cottonwood v. James L. Fann Contracting, Inc. , 179 Ariz. 185, 189, 877 P.2d 284, 288 (App. 1994) ). By agreeing to arbitrate a fee dispute, Ball agreed to limit his challenges to confirmation of the arbitration award in superior court to those statutorily enumerated in A.R.S. § 12-3023. See Smith , 227 Ariz. at 174-75, ¶ 13, 254 P.3d at 413-14 (addressing the UAA and noting that the "superior court may consider [a] challenge to confirmation of [an] arbitration award only on statutorily enumerated grounds" (citing Heinig v. Hudman , 177 Ariz. 66, 73, 865 P.2d 110, 117 (App. 1993) )).

¶10 Here, Ball did not move to vacate the arbitration award on any of the grounds specified in the RUAA. And, as discussed below, we find that none of his arguments raised on appeal provide any reason to vacate the award.

A. Waiver of the Right to Jury Trial

¶11 Ball argues the superior court erred in confirming the arbitration award because he never agreed to waive his constitutional right to a jury trial. But Ball necessarily waived his right to a jury trial by signing a fee agreement providing for arbitration. See Harrington v. Pulte Home Corp ., 211 Ariz. 241, 249, ¶ 27, 119 P.3d 1044, 1052 (App. 2005) (rejecting the argument that an arbitration clause must conspicuously or explicitly waive the right to a jury trial to be valid and citing other cases noting that the "loss of the right to a jury trial is a necessary and fairly obvious consequence of an agreement to arbitrate." (quoting Snowden v. CheckPoint Check Cashing , 290 F.3d 631, 638 (4th Cir. 2002) )).

B. Enforceability

¶12 Ball contends the arbitration award is not binding or judicially enforceable and that non-binding arbitration, which he seems to equate to mediation, was the sole remedy provided in the fee agreement. We disagree.

¶13 We interpret the provisions of a contract de novo. Dunn v. FastMed Urgent Care PC , 245 Ariz. 35, 38, ¶ 10, 424 P.3d 436, 439 (App. 2018). While we construe ambiguous terms in a contract against a drafter, we will enforce unambiguous terms according to their plain meaning, taken in the context of the contract as a whole. See United Cal. Bank v. Prudential Ins. Co. of Am. , 140 Ariz. 238, 258, 681 P.2d 390, 410 (App. 1983) ; Prieve v. Flying Diamond Airpark , LLC , 252 Ariz. 195, 198, ¶ 8, 500 P.3d 1045, 1048 (App. 2021) (citing IB Prop. Holdings, LLC v. Rancho Del Mar Apts. Ltd. P'ship , 228 Ariz. 61, 66-67, ¶ 16, 263 P.3d 69, 74-75 (App. 2011) ).

¶14 Although both are forms of alternative dispute resolution, arbitration and mediation are quite different. Arbitration is a binding dispute resolution process where parties submit their dispute to one or more neutral third parties. Arbitration , Black's Law Dictionary (3d. pocket ed. 2006). Mediation, by contrast, is a non-binding form of alternative dispute resolution. Mediation , Black's, supra ; see also A.R.S. § 12-2238(G)(4) (defining mediation in the context of privileged communications); but see 1 Sarah R. Cole et al., Mediation: Law, Policy and Practice § 6.8 (Nov. 2021 Update) ("Courts, like contract drafters, erroneously use the term ‘mediation’ to describe processes other than mediation."). (Emphasis added). The terms are not interchangeable.

¶15 We agree with other jurisdictions that have concluded that using the word arbitration in a contract refers to binding dispute resolution. See e.g. , Rainwater v. National Home Ins. Co ., 944 F.2d 190, 192 (4th Cir. 1991) ("[W]e note the presumption that one submits to arbitration, as opposed to mediation, precisely because of the binding quality of the process.") (citing 2A Michie's Jurisprudence, Arbitration § 4)); Moncharsh v. Heily & Blase , 3 Cal.4th 1, 9, 10 Cal.Rptr.2d 183, 832 P.2d 899 (1992) ("[I]t is the general rule that parties to a private arbitration impliedly agree that the arbitrator's decision will be both binding and final."); Ringwelski v. Pederson , 919 P.2d 957, 958-59 (Colo. App. 1996) ; Kelleher v. Cersosimo , 2 Mass.App.Ct. 904, 320 N.E.2d 840, 840-41 (1974).

¶16 Our examination of other jurisdictions merely reinforces what we know from the plain meaning of the word arbitration in Arizona: the parties here agreed to a binding process. This resolution is consistent with Arizona case law concerning the binding effect of an arbitration award. See e.g. , Smitty's Super-Valu, Inc., v. Pasqualetti , 22 Ariz. App. 178, 180, 525 P.2d 309 (1974) ; Atreus , 229 Ariz. at 506, ¶ 13, 277 P.3d at 211. And the binding nature of such an award is consistent with the limited challenges to enforceability specified in the RUAA. See A.R.S. §§ 12-3022, -3023. While we construe ambiguous contract provisions against the drafter, there is no ambiguity here. If the contract provided for non-binding alternative dispute resolution, either the word arbitration would not have been used or the parties would have stated that the process would be non-binding. Because they did not, and because Ball voluntarily participated without objection, the arbitration was binding. Under Section 12-3022, when the Firm applied for confirmation of the arbitration award, the superior court was required to confirm the award unless a statutorily enumerated ground to modify, correct, or vacate the award was implicated. Russell Piccoli P.L.C. v. O'Donnell , 237 Ariz. 43, 49, ¶ 23, 344 P.3d 345, 351 (App. 2015) (quoting Nolan v. Kenner , 226 Ariz. 459, 461, ¶ 5, 250 P.3d 236, 238 (App. 2011) ("The superior court may reject an arbitration award only on narrow statutorily enumerated grounds ....")); see also Hamblen v. Hatch , 242 Ariz. 483, 490, ¶ 31, 398 P.3d 99, 106 (2017) (RUAA "strictly limits the superior court's options after the arbitration process is complete." (citing A.R.S. § 12-3022 )). None of those grounds were implicated there. The...