James Valley Grain Llc v. David

• Decision Date: 18 August 2011
• Docket Number: No. 20110050.,20110050.
• Citation: 802 N.W.2d 158,2011 ND 160
• Parties: JAMES VALLEY GRAIN, LLC, Plaintiff and Appelleev.Loren DAVID, Defendant and Appellant.
• Court: North Dakota Supreme Court

802 N.W.2d 158

2011 ND 160

JAMES VALLEY GRAIN, LLC, Plaintiff and Appellee

v.Loren DAVID, Defendant and Appellant.

No. 20110050.

Supreme Court of North Dakota.

Aug. 18, 2011.

Laurance Waldoch(argued) and Adam Ballinger(appeared), Minneapolis, MN, and Fred Strege(on brief), Wahpeton, ND, for plaintiff and appellee.Katrina Annette Turman Lang(argued), Fargo, ND, for defendant and appellant.CROTHERS, Justice.

[¶ 1]Loren David appeals the district court's judgment confirming the arbitration panel's award of damages to James Valley Grain, LLC.David argues the district court erred by confirming the arbitration decision because a valid arbitration agreement does not exist, the arbitration agreement was unconscionable and the arbitration panel failed to properly apply the law and arbitration rules.James Valley argues David waived his right to challenge the arbitration award because he did not move to vacate the award within the statutory time limit.We affirm the district court's judgment confirming the arbitration award.

I

[¶ 2] On July 3 and 10, 2007, James Valley and David contracted to sell James Valley soybeans to be grown during the 2008 season.On August 5, 2008, James Valley sued, alleging David improperly cancelled the contracts in April 2008 and claiming damages for anticipatory repudiation, breach of contract and promissory estoppel.David answered, stating he lawfully cancelled the contracts on September 1, 2007 and James Valley is estopped from claiming damages after he cancelled the contracts.

[¶ 3] On October 6, 2008, James Valley moved to compel arbitration, arguing the National Grain and Feed Association(“NGFA”) Rules were incorporated into the contracts by the terms “Trade rules: NGFA” and the rules require arbitration.David opposed the motion, arguing that no valid arbitration agreement existed and, if there was a valid arbitration agreement, it was unconscionable and that James Valley waived arbitration by filing the complaint.On December 18, 2008, the district court ordered arbitration, finding that the arbitration clause was properly incorporated, that the arbitration clause was not unconscionable and that James Valley did not waive its right to arbitrate by filing the complaint.The parties arbitrated the case before a panel from the National Grain and Feed Association.

[¶ 4] On August 31, 2010, James Valley moved to confirm the June 22, 2010 arbitration award.On September 21, 2010, the parties stipulated to David having seven additional days to respond to the motion to confirm the arbitration award, and the district court entered an order based on the stipulation.On September 28, 2010, David opposed confirmation of the arbitration award, and as part of his “Brief in Opposition to Confirming Arbitration Award,”he argued the district court should vacate the award because the arbitration panel refused to consider the evidence he presented and because no agreement to arbitrate existed.James Valley responded that David forfeited these arguments because David did not move to vacate the arbitration award within the ninety-day time period specified in N.D.C.C. § 32–29.3–23.

[¶ 5] On October 28, 2010, a hearing about confirmation of the arbitration award was held.On December 15, 2010, the district court issued a memorandum opinion confirming the arbitration award, finding that David did not move to vacate or modify the arbitration award within the time limit, that a valid arbitration clause existed and that, even if the motion had been timely, no reason to vacate the arbitration decision was established.Judgment was entered in favor of James Valley, and David appeals.

II

[¶ 6] David argues his response to James Valley's motion to confirm the arbitration award timely challenged the award.James Valley asserts David forfeited his right to challenge the arbitration award by failing to move to vacate the award within the time limit provided in N.D.C.C. § 32–29.3–23(2).Whether David waived challenging the arbitration award by failing to move to vacate the award within ninety days is a question of statutory interpretation.“Statutory interpretation is a question of law, which is fully reviewable on appeal.”Nelson v. Johnson,2010 ND 23, ¶ 12, 778 N.W.2d 773.This Court has explained:

“The primary purpose of statutory interpretation is to determine the intention of the legislation.In re Estate of Elken,2007 ND 107, ¶ 7, 735 N.W.2d 842.Words used in a statute are given their plain, ordinary, and commonly understood meaning unless defined by statute or unless a contrary intention plainly appears.N.D.C.C. § 1–02–02.Statutes are construed as a whole and are harmonized to give meaning to related provisions.N.D.C.C. § 1–02–07.If the language of a statute is clear and unambiguous, ‘the letter of [the statute] is not to be disregarded under the pretext of pursuing its spirit.’N.D.C.C. § 1–02–05.In construing statutes, we consider the context of the statutes and the purposes for which they were enacted.Falcon v. State,1997 ND 200, ¶ 9, 570 N.W.2d 719(citingVan Klootwyk v. Arman,477 N.W.2d 590, 591–92(N.D.1991)).”

Nelson,at ¶ 12.

[¶ 7]Section 32–29.3–23, N.D.C.C., dictates the procedure for vacating an arbitration award.An arbitration award shall be vacated by the district court if:

“a.The award was procured by corruption, fraud, or other undue means;

b. There was:

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

(2) Corruption by an arbitrator; or

(3) 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 section 32–29.3–15, 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 the objection under subsection 3 of section 32–29.3–15 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 section 32–29.3–09 so as to prejudice substantially the rights of a party to the arbitration proceeding.”

N.D.C.C. § 32–29.3–23(1)(a)–(f).The statute also provides, “A motion under this section must be filed within ninety days after the movant receives notice of the award pursuant to section 32–29.3–19.”N.D.C.C. § 32–29.3–23(2).

[¶ 8] David received notice of the award on June 22, 2010.On August 31, 2010, seventy days after David received notice of the arbitration award, James Valley moved to confirm the arbitration award.On September 21, 2010, ninety-one days after David received notice of the arbitration award, the parties stipulated that David “shall be permitted an additional 7 days to file and serve a response to the Motion to Confirm Arbitration Reward, Request for Judgment, and Request for Attorney's Fees.”

[¶ 9] In MBNA America Bank, N.A. v. Hart, a bank filed an arbitration claim for a customer's unpaid balance on a credit card.2006 ND 33, ¶ 3, 710 N.W.2d 125.MBNA America Bank, N.A. was decided under the Uniform Arbitration Act, and this case is governed by the Revised Uniform Arbitration Act, which was adopted in 2003.SeeN.D.C.C. §§ 32–29.3–23and32–29.2–12 (1996).However, the language in both Acts about vacating an arbitration award is similar.When language in a new uniform act does not change, the case law interpreting the previous uniform act is highly persuasive.Timothy J. Heinsz, The Revised Uniform Arbitration Act: Modernizing, Revising, and Clarifying Arbitration Law,2001 J. Disp. Resol. 1, 26(2001)(“Sometimes the importance of a revision is not in what is changed but in what is not.”).In MBNA America Bank, N.A., the arbitration panel issued an award in favor of the bank.Id.at ¶ 3.The bank asked the district court to confirm the award over ninety days after the customer received notice of the arbitration award.Id.at ¶ 4.The customer opposed confirmation, arguing that “there was no valid arbitration agreement, there was evident partiality by the arbitrator, and the Bank had no valid claim against him because of an accord and satisfaction.”Id.at ¶ 10.The district court confirmed the award stating that because the customer failed to timely challenge the award, “this Court has no choice but to enter Judgment accordingly.”Id.at ¶ 4.This Court affirmed the district court's judgment, stating:

“It is well settled that a court must confirm an arbitration award upon application of any party to the award unless a party has filed a motion with the court to vacate, modify, or correct the award within 90 days after delivery of a copy of the award, or within 90 days after grounds are known or should have been known to the injured party if the motion to vacate is based on corruption, fraud, or other undue means.”

Id.at ¶ 9.

[¶ 10] Our holdings on the ninety-day deadline are consistent with most jurisdictions handling this issue.See, e.g., Choice Hotels Int'l, Inc. v. Shiv Hospitality, L.L.C.,491 F.3d 171, 177(4th Cir.2007)(holdinga party forfeits arguments to vacate arbitration award by failing to file motion within time limit);Abd Alla v. Mourssi,680 N.W.2d 569, 573(Minn.Ct.App.2004)(“Failure to file an application to vacate an arbitration award within 90 days when the application is not predicated on fraud, corruption, or other undue means prevents judicial review of the award.”);Springfield Teachers Ass'n v. Springfield Sch. Dirs.,167 Vt. 180, 705 A.2d 541, 544(1997)(holding the Vermont Arbitration Act requires filing a timely motion to vacate in all cases);Thomas H. Oehmke, Appealing Adverse Arbitration Awards, 94 Am.Jur.Trials211 § 28(2011)(“The failure to...