North Valley Emergency Specialists v. Santana, Arizona Supreme Court No. CV-03-0279-PR (AZ 7/14/2004)
| Decision Date | 14 July 2004 |
| Docket Number | Arizona Supreme Court No. CV-03-0279-PR.,Court of Appeals Division One No. 1 CA-SA 03-0137.,Maricopa County Superior Court No. CV 2002-015581. |
| Parties | NORTH VALLEY EMERGENCY SPECIALISTS, L.L.C., an Arizona Limited Liability Company, Petitioners, v. THE HONORABLE MARK R. SANTANA, JUDGE OF THE SUPERIOR COURT OF THE STATE OF ARIZONA, in and for the County of Maricopa, Respondent Judge, TEAM PHYSICIANS OF ARIZONA, P.C., an Arizona professional corporation d/b/a EMERGENCY PHYSICIANS, EPI, Real Party in Interest. |
| Court | Arizona Supreme Court |
Lubin & Enoch, P.C., Phoenix, By: Stanley Lubin, And: Nicholas J. Enoch Attorneys for Petitioners.
Robbins & Green, P.A., Phoenix, By: Philip A. Robbins, And: Janet B. Hutchison James O. Ehinger, Attorneys for Real Party in Interest.
¶1 Arizona's arbitration act, Ariz. Rev. Stat. ("A.R.S.") §§ 12-1501 to -1518 (2003), provides that the act has "no application to arbitration agreements between employers and employees or their respective representatives." A.R.S. § 12-1517. We granted review to determine whether Arizona Revised Statutes section 12-1517 applies to all arbitration agreements between employers and employees or only those found in collective bargaining contracts. We hold that § 12-1517 exempts from the Arizona Uniform Arbitration Act ("Act") all arbitration agreements between employers and employees.
¶2 Team Physicians of Arizona, Inc. ("TPA"), provides medical services to hospital emergency departments. To furnish these services, TPA employs physicians and physician assistants. Each of the physicians and physician assistants employed by TPA entered into an employment agreement containing essentially the same arbitration clause requiring "any and all disputes" arising out of the employment agreement to "be settled by arbitration." In 2002, employees left TPA and formed North Valley Emergency Specialists, L.L.C. ("NVES"). NVES provides emergency medical services to hospitals in competition with TPA.
¶3 TPA filed a lawsuit in superior court against NVES and numerous individual physicians and physician assistants, seeking damages and injunctive relief. TPA eventually requested that the individual defendants submit their cases to arbitration in accordance with the arbitration clauses. The individual defendants refused to submit to arbitration.
¶4 TPA filed a motion to compel arbitration under A.R.S. § 12-1502, which provides that a court shall order arbitration when there is a valid arbitration agreement between the parties.1 In response, the defendants argued that the trial court did not have the statutory authority to grant TPA's motion because A.R.S. § 12-1517 exempted employment contracts from the Act. The trial court ruled that § 12-1517 was intended to apply only to collective bargaining agreements, stayed the lawsuit, and ordered that the parties arbitrate the damage claims.
¶5 The defendants filed a petition for special action in the court of appeals, which declined jurisdiction. The defendants then petitioned this court for review, asking us to reverse the order compelling arbitration. We accepted review because many employment agreements now contain arbitration clauses and because no Arizona appellate court has ruled on the issue. We have jurisdiction under Article 6, Section 5(3), of the Arizona Constitution, A.R.S. § 12-120.24 (2003), and Arizona Rule of Civil Appellate Procedure 23.
¶6 TPA asks us to uphold the trial court's interpretation of A.R.S. § 12-1517 for several reasons.2 First, it argues that, based upon the legislative history of Arizona's arbitration statutes, the current version of the Act was intended to exempt only arbitration agreements in collective bargaining contracts. Second, TPA contends that because the Act is based upon a model or uniform act, we should assume the legislature intended to place the same construction on the Act as did the drafters of the uniform act. Third, TPA claims that interpreting § 12-1517 as exempting all arbitration agreements between employers and employees from Arizona's arbitration act contravenes the legislature's policy of favoring arbitration. Finally, TPA contends that a grammatical construction of § 12-1517 does not support the exemption of all employer-employee arbitration agreements from the Act.
¶7 The defendants, on the other hand, contend that the plain language of A.R.S. § 12-1517 precludes all arbitration agreements between employers and employees from being subject to compulsory arbitration. It argues that TPA's assertion that the legislature intended to exclude from compulsory arbitration only collective bargaining agreements that contain arbitration clauses is clearly contrary to the language the legislature used.
¶8 Because this case presents a question of statutory interpretation, our review is de novo. See Canon Sch. Dist. No. 50 v. W.E.S. Constr. Co., 177 Ariz. 526, 529, 869 P.2d 500, 503 (1994).
¶9 A statute's language is "the best and most reliable index of a statute's meaning." State v. Williams, 175 Ariz. 98, 100, 854 P.2d 131, 133 (1993) (quoting Janson v. Christensen 167 Ariz. 470, 471, 808 P.2d 1222, 1223 (1991)). In addition, "[i]f the language is clear, the court must `apply it without resorting to other methods of statutory interpretation,' unless application of the plain meaning would lead to impossible or absurd results." Bilke v. State, 206 Ariz. 462, 464, ¶ 11, 80 P.3d 269, 271 (2003) (quoting Hayes v. Cont'l Ins. Co., 178 Ariz. 264, 268, 872 P.2d 668, 672 (1994)). The clear language of § 12-1517 leads us to conclude that an arbitration agreement between an employer and employee is not subject to the provisions of the Act, whether the agreement is found in a contract between a single employer and a single employee or in a collectively bargained contract.
¶10 Despite the clear language of A.R.S. § 12-1517, TPA, tracing the history of compulsory arbitration in Arizona, first maintains that the legislature intended the present version of the exemption for employer-employee arbitration agreements in the Act to exclude only arbitration agreements contained in collective bargaining contracts. It therefore contends that the agreements here are subject to arbitration. We conclude that the legislative history does not compel the result TPA urges.
¶11 Before 1929, title II, paragraph 7, of the Revised Statutes of Arizona (1887) permitted the parties to agree to submit any "right of action . . . to arbitration." Subsequent versions of this statute continued to permit parties to submit their claims to arbitration. See Rev. Code Ariz. § 4294 (1928); Rev. Stat. Ariz. § 1480 (1913); Rev. Stat. Ariz. tit. III, ¶ 295 (1901). Under these statutes, however, parties could not be compelled to arbitrate their claims. See San Francisco Sec. Corp. v. Phoenix Motor Co., 25 Ariz. 531, 538, 220 P. 229, 231-32 (1923). In 1929, the legislature replaced the permissive arbitration statute with a compulsory arbitration system. See 1929 Ariz. Sess. Laws, ch. 72, § 1 (codified at Rev. Code Ariz. § 4301a (Supp. 1934)). But § 4301a specifically excluded collective bargaining contracts from being subject to compulsory arbitration. That statute declared "that the provisions of [the arbitration] act shall not apply to collective contracts between employers and employees." Subsequent editions of the Act continued to exempt collective contracts from compulsory arbitration. See, e.g., A.R.S. § 12-1509(B) (1954); Ariz. Code § 27-309 (1939).
¶12 In 1955, however, the National Conference of Commissioners on Uniform State Laws promulgated a revised version of the Uniform Arbitration Act ("UAA"). Among the concerns the commissioners had was the practice in many states, including Arizona, of exempting collectively bargained "labor-management" contracts from compulsory arbitration. See UAA, prefatory note at 2. To rectify the perceived problem, section 1 of the revised UAA provided that the act also applied "to arbitration agreements between employers and employees or between their respective representatives [unless otherwise provided in the agreement]."
¶13 In 1962, the Arizona legislature adopted the revised UAA. 1962 Ariz. Sess. Laws, ch. 108, § 2. But in adopting the Act, the legislature did not include the language found in section 1 of the UAA, which would have made Arizona's arbitration act applicable to all employer-employee arbitration agreements, whether collectively bargained or otherwise.
Instead, the legislature took the language from section 1 of the UAA, cast it in the negative, and included it as a separate provision, now found in A.R.S. § 12-1517. Thus, unlike the UAA, Arizona's arbitration act provides that it has "no application to arbitration agreements between employers and employees or their respective representatives." A.R.S. § 12-1517 (emphasis added).
¶14 We presume that by amending the language of section 1 of the revised UAA, the legislature intended to change its meaning. See State v. Garza Rodriguez, 164 Ariz. 107, 111, 791 P.2d 633, 637 (1990) (). If the legislature had wanted to continue to exclude from the Act only those employer-employee arbitration agreements that were collectively bargained, as it had done in the past, no change in statutory language would have been needed.
¶15 TPA next argues that when a statute is based on a model or uniform act, the courts will "assume that the legislature `intended to adopt the construction placed on the act by its drafters.'" UNUM Life Ins. Co. v. Craig, 200 Ariz. 327, 332, ¶ 25, 26 P.3d 510, 515 (2001) (quoting State v. Sanchez, 174 Ariz. 44,...
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