In re Pascale

• Decision Date: 25 February 2013
• Docket Number: No. 68103–6–1.,68103–6–1.
• Citation: 295 P.3d 805
• Parties: In the Matter of the MARRIAGE OF Lisa R. PASCALE, Respondent, and Michael J. Pascale, Appellant.
• Court: Washington Court of Appeals

295 P.3d 805

In the Matter of the MARRIAGE OF Lisa R. PASCALE, Respondent, and Michael J. Pascale, Appellant.

No. 68103–6–1.

Court of Appeals of Washington, Division 1.

Feb. 25, 2013.

Natalie Rosenbaum De Maar, Law Offices of Natalie De Maar, Bellevue, WA, Patricia S. Novotny, Attorney at Law, Seattle, WA, for Appellant.

Ted D. Billbe, Law Office of Ted D. Billbe, Bellevue, WA, Catherine Wright Smith, Valerie A. Villacin, Smith Goodfriend PS, Seattle, WA, for Respondent.

DWYER, J.

¶ 1 The uniform arbitration act (UAA) stipulates that a “court may not refuse to order arbitration because the claim subject to arbitration lacks merit or grounds for the claim have not been established.” RCW 7.04A.070(3). Instead, when determining whether a dispute must be arbitrated, the court must limit its inquiry to the question of whether that dispute falls within the scope of the parties' agreement to arbitrate. If it can be fairly said that the arbitration agreement covers the dispute, arbitration is required.

¶ 2 Here, the trial court improperly reached the merits of the parties' dispute in refusing to order arbitration. Moreover, because the subject of that dispute clearly fell within the scope of the broad arbitration provision to which the parties contracted, arbitration was in fact required. Accordingly, we reverse and remand.

I

¶ 3 Lisa Pascale and Michael Pascale ¹ filed a joint petition for dissolution of their marriage on February 15, 2011. On September 6, 2011, the parties participated in mediation before Harry R. Slusher. At the conclusion of the one-day mediation, they executed a “stipulation and agreement” pursuant to Civil Rule (CR) 2A. The CR 2A agreement, which was signed by Lisa and Michael, their attorneys, and Slusher, included sections pertaining to a parenting plan for the parties' two sons, child support, spousal maintenance, and the division of property. Section 13(g) of the agreement—relating to the issue of spousal maintenance—was hand-drafted by Slusher. This section, which is reproduced below, stated that Michael would pay to Lisa the following: ²

IMAGE

¶ 4 The CR 2A agreement further specified that “[e]ach party understands that even though final documents yet need to be prepared this stipulation and agreement is effective and binding upon execution and enforceable in court.” In addition, the agreement contained an arbitration clause stipulating that “[a]ny disputes in the drafting of the final documents or any other aspect of this agreement (form or substance), or any issue not discussed shall be submitted to Harry R. Slusher for binding arbitration.”

¶ 5 As contemplated by the CR 2A agreement, following the conclusion of the mediation, Michael drafted the final documents and submitted them to Lisa to be entered in court. However, because Lisa did not agree that the proposed documents embodied the agreement of the parties as set forth in the settlement agreement, she did not present the documents to the court for entry. Instead, Lisa filed a motion to enforce the CR 2A agreement in superior court.

¶ 6 In her motion to enforce, Lisa alleged that Michael had misrepresented the parties' agreement regarding the duration of spousal maintenance. As drafted by Michael, the section pertaining to maintenance stated:

Spousal maintenance shall be provided as follows:

+-------------------------+
                ¦       ¦Amount ¦Duration ¦
                +-------+-------+---------¦
                ¦       ¦$9500  ¦22 months¦
                +-------+-------+---------¦
                ¦then   ¦$7500  ¦14 months¦
                +-------+-------+---------¦
                ¦then   ¦$5000  ¦12 months¦
                +-------+-------+---------¦
                ¦TOTAL  ¦       ¦48 months¦
                +-------------------------+
                

In contrast to the four years (48 months) of maintenance specified in Michael's proposed final dissolution documents, Lisa asserted that section 13 of the CR 2A agreement in fact provided for eight years (96 months) of spousal maintenance. She contended that the draft proposed by Michael eliminated the first 48 months of maintenance at $9,500 per month. Thus, she asked the court to approve entry of final dissolution documents awarding her eight years of maintenance.

¶ 7 Michael thereafter filed a cross-motion asking the court to order the parties to binding arbitration or, in the alternative, to enter the final documents that he had proposed. In addition, he sought an award of attorney fees against Lisa pursuant to CR 11, alleging that her motion to enforce was made in bad faith. Lisa, in turn, requested an award of attorney fees based upon having to respond to Michael's motion.

¶ 8 The trial court granted Lisa's motion to enforce the CR 2A agreement, ruling that section 13 of the agreement awarded 96 months of maintenance. The court explained that “[t]he written document is clear on its face. Extrinsic evidence may not be used to modify an agreement that is clear on its face.” Based upon this determination, the court also denied Michael's motion to compel arbitration. The trial court explained that “[t]here is no arbitrable dispute because of the Court's findings and conclusions regarding the CR 2A Agreement.” The court thereafter awarded attorney fees to Lisa, explaining that her motion “was warranted by the facts and law.”

¶ 9 Michael appeals.

II

¶ 10 Michael first contends that, because a court is not permitted to consider the underlying merits of a dispute in determining the arbitrability of that dispute, the trial court erred by denying his motion to compel arbitration based upon its determination that the spousal maintenance provision was clear on its face. We agree.

¶ 11 Normal contract principles apply to the interpretation of a CR 2A agreement. Morris v. Maks, 69 Wash.App. 865, 868, 850 P.2d 1357 (1993). We review de novo a trial court's interpretation of the language of a contract. Knipschield v. C–J Recreation, Inc., 74 Wash.App. 212, 215, 872 P.2d 1102 (1994). A trial court's determination regarding the arbitrability of a dispute is also reviewed de novo. Heights at Issaquah Ridge Owners Ass'n v. Burton Landscape Grp., Inc., 148 Wash.App. 400, 404, 200 P.3d 254 (2009); Stein v. Geonerco, Inc., 105 Wash.App. 41, 45, 17 P.3d 1266 (2001).

¶ 12 “Washington law vests courts with the power to determine ‘whether ... a controversy is subject to an agreement to arbitrate.’ ” Saleemi v. Doctor's Assocs., Inc., 176 Wash.2d 368, 292 P.3d 108, ¶ 13 (2013) (quoting RCW 7.04A.060(2)). The arbitrability of a dispute is determined by examining the arbitration agreement between the parties. Heights, 148 Wash.App. at 403, 200 P.3d 254. If the reviewing court “can fairly say that the parties' arbitration agreement covers the dispute, the inquiry ends because Washington strongly favors arbitration.” Davis v. Gen. Dynamics Land Sys., 152 Wash.App. 715, 718, 217 P.3d 1191 (2009); Mendez v. Palm Harbor Homes, Inc., 111 Wash.App. 446, 454, 45 P.3d 594 (2002). Any doubts regarding the applicability of an arbitration agreement “should be resolved in favor of coverage.” Heights, 148 Wash.App. at 405, 200 P.3d 254 (citing Peninsula Sch. Dist. No. 401 v. Pub. Sch. Emps. of Peninsula, 130 Wash.2d 401, 413–14, 924 P.2d 13 (1996)).

¶ 13 Furthermore, as the UAA makes clear, a court “may not refuse to order arbitration because the claim subject to arbitration lacks merit or grounds for the claim have not been established.” RCW 7.04A.070(3). “ ‘Although it is the court's duty to determine whether the parties have agreed to arbitrate a particular dispute, the court cannot decide the merits of the controversy, but may determine only whether the grievant has made a claim which on its face is governed by the contract.’ ” Peninsula, 130 Wash.2d at 413, 924 P.2d 13 (alteration in original) (quoting Council of County & City Emps. v. Spokane County, 32 Wash.App. 422, 424–25, 647 P.2d 1058 (1982)). As our Supreme Court first explained in 1961:

[I]f the parties have promised to submit the subject matter to arbitration, the court should not consider the merits, but should enforce the mutual promises and leave consideration even in the clearest cases to the arbitrator. It is the evaluation and conclusion of the arbitrator, and not those of the courts, that the parties have promised to abide by. There is no reason why, in the face of their solemn agreement, the parties should be given an alternative of invoking the time consuming and costly machinery of the courts in lieu of the relative expedience of an arbitration proceeding.... If the parties have promised to arbitrate, the court should not refuse to enforce the contract because the solution seems simple.

Hanford Guards Union of Am., Local 21 of Int'l Guards Union of Am. v. Gen. Elec. Co., 57 Wash.2d 491, 498, 358 P.2d 307 (1961) (citations omitted).

¶ 14 Here, the trial court determined that “a dispute arose between the parties regarding ... Section 13 of the CR 2A Agreement relating to spousal support.” As the court characterized it, this dispute involved the “wife[s] assert[ion] that the agreement requires the husband to pay spousal support in decreasing amounts for a total of 96 months” and “the husband['s] content[ion] that the parties' agreement was that he would pay spousal support for only 48 months.” The trial court then determined that the dispute was not arbitrable because “[t]he written document is clear on its face.”

¶ 15 In so ruling, however, the trial court improperly examined the merits of the controversy. As noted above, a court must resolve “the threshold legal question of arbitrabilityof the dispute by examining the arbitration agreement without inquiry into the merits of the dispute.” Heights, 148 Wash.App. at 403, 200 P.3d 254. Here, the subject of the parties' dispute was the meaning of the CR 2A agreement's spousal maintenance provision. However, in determining the arbitrability of that dispute, the trial court turned, not to the arbitration agreement, but directly to the language of the spousal maintenance provision. Because, the trial court concluded, this language was “clear on...