RM Riggle Ents., Inc. v. Commerce Park Place Holdings, L.L.C. ( 2021 )

[Cite as RM Riggle Ents., Inc. v. Commerce Park Place Holdings, L.L.C., 2021-Ohio-4215.]
COURT OF APPEALS OF OHIO
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
RM RIGGLE ENTERPRISES, INC., :
Plaintiff-Appellant, :
No. 110236
v. :
COMMERCE PARK PLACE :
HOLDINGS, L.L.C., ET AL.,
:
Defendants-Appellees.
JOURNAL ENTRY AND OPINION
JUDGMENT: AFFIRMED
RELEASED AND JOURNALIZED: December 2, 2021
Civil Appeal from the Cuyahoga County Court of Common Pleas
Case No. CV-20-935714
Appearances:
Connick Law, L.L.C., and Thomas J. Connick, for
appellant.
Thompson Hine L.L.P., William J. Hubbard, Daniel M.
Haymond, William J. Thrush, and David J. Walters, for
appellee NRP Contractors L.L.C.
Hahn Loeser & Parks L.L.P., Jeffrey A. Brauer, Aaron S.
Evenchik, and Tara J. Rose, for appellee Commerce Park
Place Holdings, L.L.C.
Travelers Staff Counsel of Ohio and Douglas J. May, for
appellee Travelers Property Casualty Company of
America.
MICHELLE J. SHEEHAN, J.:
This appeal involves the scope of appellate review when a trial court
stays litigation pending arbitration pursuant to an arbitration agreement without
first deciding a separate declaratory judgment action regarding a related arbitration
agreement. Because an appellate court is limited in its review of whether a lower
court abuses its discretion when granting a stay of litigation pending arbitration, we
are unable to conclude that the trial court abused its discretion in this case.
This case concerns a commercial construction project. R.M. Riggle
Enterprises, Inc. (“Riggle”) was a subcontractor for NRP, L.L.C. (“NRP”), who
served as a general contractor in the construction of an apartment complex owned
by Commerce Park Place Holdings, L.L.C. (“CPPH”). Riggle installed the fire
suppression system in the apartment complex. Several years later, the waterlines in
the fire suppression system broke, causing extensive water damage.
Both the contract between the property owner CPPH and the general
contractor NRP and the contract between the NRP and the subcontractor Riggle
contain arbitration agreements. CPPH commenced an arbitration proceeding
before the American Arbitration Association (“AAA”) (hereafter referred to as the
“CPPH/NRP arbitration”). NRP agreed to arbitration and sought to join Riggle in
the CPPH/NRP arbitration. CPPH and its insurer, Travelers Property Casualty
Company of America (“Travelers”), also filed an action in the common pleas court
against NRP and several subcontractors, including Riggle (the “CPPH/NRP case”).
Riggle objected to being joined in the CPPH/NRP arbitration.
According to NRP, the AAA joined Riggle in the arbitration despite Riggle’s
objection. Riggle then filed a declaratory judgment action in the common pleas
court seeking certain judicial declarations regarding the arbitration provisions at
issue; Riggle also filed a motion in the CPPH/NRP case to stay arbitration pending
the resolution of its declaratory judgment action.
Subsequently, NRP filed a motion to stay proceedings in the
CPPH/NRP case pending the CPPH/NRP arbitration. Upon Riggle’s request, the
trial court consolidated the two cases. After the consolidation, the court granted
NRP’s motion to stay proceedings pending arbitration and its judgment entry stated
“all pending motions are rendered moot,” which includes Riggle’s motion to stay
arbitration.
On appeal, Riggle raises the following four assignments of error:
I. The trial court erred by granting NRP LLC’s motion to stay
proceedings pending arbitration.
II. The trial court erred by impliedly denying R.M. Riggle Enterprises,
Inc.’s motion to stay/enjoin arbitration.
III. The trial court erred by finding that NRP LLC did not waive its
right to arbitration.
IV. The trial court erred by granting NRP LLC’s motion to stay
proceedings pending arbitration without conducting an evidentiary
hearing.1
1 CPPH and Travelers filed a joint appellee’s brief in the appeal, and the joint
brief incorporates fully the appellee brief filed by NRP.
After a careful review of the record and applicable law, we do not find
the trial court abused its discretion staying the proceedings and denying the pending
motions and therefore affirm the trial court’s judgment.
The Contracts and the Arbitration Agreements
In 2013, CPPH entered into a construction contract with NRP for NRP
to serve as a general contractor for the construction of a residential apartment
complex known as “The Vue” located in Beachwood, Ohio. NRP, in turn, entered
into a subcontract agreement with Riggle for the installation of the fire sprinklers.
Both the construction contract and the subcontract agreement contain an
arbitration provision.
Article 21 of the construction contract between CPPH and NRP is titled
“CLAIMS AND DISPUTES.” Section 21.1 states that claims and disputes arising out
of or relating to the contract are subject to arbitration. Section 21.4 states that the
arbitration is to be administered by the AAA in accordance with the Construction
Industry Arbitration Rules. Furthermore, Sections 21.5 and 21.6 state the following
regarding joinder:
21.5 Either party, at its sole discretion, may consolidate an
arbitration conducted under this agreement with other arbitration to
which it is a party provided that (1) the arbitration agreement
governing the other arbitration permits consolidation; (2) the
arbitrations to be consolidated substantially involve common
questions of law or fact; and (3) the arbitrations employ materially
similar procedural rules and methods for selecting arbitrator(s).
21.6 Any party to an arbitration may include by joinder persons
or entities substantially involved in a common question of law or fact
whose presence is required if complete relief is to be accorded in
arbitration provided that the party sought to be joined consents in
writing to such joinder. Consent to arbitration involving an additional
person or entity shall not constitute consent to arbitration of a Claim
not described in the written Consent.
The arbitration agreement contained in the subcontract agreement
between NRP and Riggle states, in pertinent part:
18. BINDING ARBITRAITON. Claims, dispute and other matters in
question arising out of or relating to this Agreement, the Work or the
Project shall be decided by binding arbitration which, unless the
parties mutually agree otherwise, shall be in accordance with the
Construction Industry Arbitration Rules of the American Arbitration
Association currently in effect. The demand for arbitration shall be
filed in writing with the other party to this Agreement and with the
American Arbitration Association and shall be made within a
reasonable time after the dispute has risen. * * * Arbitration arising
out of or relating to the Contract Document shall include, by
consolidation, joinder or in any other manner, any person or entity
having an interest in who may be accountable for the claim.
Arbitration Before the AAA and Litigation in the Common Pleas Court
In January 2018, the fire suppression supply lines broke in several
units, causing extensive water damage. On January 2, 2020, the property owner
CPPH and its insurer Travelers filed a demand for arbitration before the AAA
pursuant to the arbitration provision in its contract with NRP, referred to above as
the CPPH/NRP arbitration.
Simultaneously, CPPH and Travelers filed a complaint in the common
pleas court against NRP and several other parties involved in the construction of the
fire suppression system, including Riggle, claiming defects in the construction,
referred to above as the CPPH/NRP case.2 Subsequently, AAA joined Riggle in the
CPPH/NRP arbitration. In response, Riggle filed a declaratory judgment action in
the common pleas court, seeking a declaration that it should not be joined in the
CPPH/NRP arbitration. In the following, we describe these procedures in more
detail.
a. Arbitration
On January 24, 2020, NRP responded to CPPH’s arbitration demand,
filing an “Arbitration Answering Statement and Counterclaim or Joinder/
Consolidation Request” in the AAA. In the filing, NRP requested joinder of all
subcontractors who had been identified by Travelers and CPPH as potentially
responsible for the alleged damages, including Riggle.
Riggle objected to being joined in the CPPH/NRP arbitration in
multiple filings, on the ground that it did not consent to joinder in writing as
required by the arbitration agreement between NRP and CPPH. AAA overruled
Riggle’s objections and joined Riggle, along with other subcontractors, in the
arbitration.3
2 On February 5, 2020, Riggle removed the CPPH/NRP case to the federal court, claiming
diversity jurisdiction. On April 29, 2020, the federal court remanded the case to the
common pleas court due to a lack of jurisdiction. The case was then transferred to the
common pleas court’s commercial docket.
3Riggle’s filings and the decisions issued by the AAA are not part of the record before us.
In one of their court filings, Travelers and NRP represented to the trial court that on
February 28, 2020, Riggle objected to the joinder request by NRP and the objection was
overruled by the AAA on April 21, 2020. On May 10, 2020, Riggle moved for
b. Riggle’s Declaratory Judgment Action
After unsuccessful attempts before the AAA to avoid being joined in
the CPPH/NRP arbitration, Riggle turned to the common pleas court for a judicial
declaration that it should not be joined in the CPPH/NRP arbitration. On August 7,
2020, Riggle filed a declaratory judgment action in the common pleas court and, at
the same time, moved the trial court to consolidate the declaratory judgment action
and the CPPH/NRP case. The court granted the motion to consolidate on
November 12, 2020.
In the declaratory judgment action, Riggle cited the arbitration
agreement between CPPH and NRP, which states that any party to an arbitration
“may include by joinder persons or entities substantially involved in a common
question of law or fact whose presence is required * * * provided that the party
sought to be joined consents in writing to such joinder.” Riggle maintained that the
only way it can be involved in arbitration is if NRP commenced an arbitration
proceeding against Riggle pursuant to their own arbitration agreement, and it
claimed that NRP had not commenced arbitration against it pursuant to that
agreement. Riggle claimed the AAA wrongfully ordered that Riggle be joined in the
CPPH/NRP arbitration because NRP had not demanded arbitration against Riggle
and Riggle did not consent in writing to the joinder.
reconsideration of its objection to joinder and the AAA denied the request for
reconsideration on June 9, 2020.
Riggle also claimed that because NRP had not demanded or
commenced arbitration against Riggle under the subcontract agreement within a
reasonable time, NRP has waived its right to arbitration. Riggle sought a declaration
from the trial court that (1) Riggle cannot be joined in the arbitration between CPPH
and NRP because Riggle did not consent in writing to the joinder, (2) NRP waived
its rights to arbitration under the subcontract agreement because NRP had engaged
in activities inconsistent with its right to arbitration against Riggle, (3) Travelers
waived its right of subrogation as to Riggle, and (4) the AAA is prohibited from
hearing any claims against Riggle in arbitration or render an award against Riggle.
c. Riggle’s Motion to Stay Arbitration
A day after filing the declaratory judgment action, on August 8, 2020,
Riggle filed a motion in the CPPH/NRP case to enjoin and stay the CPPH/NRP
arbitration pending the resolution of Riggle’s declaratory judgment action.
In the motion, Riggle reiterated its arguments set forth in the
declaratory judgment action, citing Section 21.6 of the contract between CPPH and
NRP and argued that it never consented in writing to be joined in the CPPH/NRP
arbitration. Riggle maintained that it could only be involved in arbitration related
to the construction if NRP commenced arbitration against Riggle “directly.” Riggle
argued that NRP failed to “commence” arbitration against Riggle in accordance with
their arbitration agreement. Riggle claimed NRP waived its arbitration right against
Riggle because it had not commenced arbitration against Riggle.
Travelers and CPPH filed an opposition to Riggle’s motion to stay
arbitration. They challenged Riggle’s reliance on the provision in CPPH and NRP’s
contract requiring a third party’s consent for joinder, pointing out that section 22.3
of CPPH and NRP’s contract provides that “[t]he duties and obligations to the
Contractor under the Contract Document are intended solely for the benefit of
[CPPH] and should not be construed to establish any third-party beneficiary rights
in any other person or entity.”
Travelers and CPPH alleged that the main reason CPPH filed the case
in the common pleas court was to address the fact that there was no arbitration
agreement between plaintiffs and the project’s architect. Travelers and CPPH
alleged that there was no dispute among the parties involved in this construction
matter regarding a joint arbitration, and the only “holdout” was Riggle.
Regarding Riggle’s claim, Travelers and CPPH contended that the
application filed by NRP to join Riggle constituted a written demand for arbitration
pursuant to the subcontractor agreement and that the two-step process Riggle
claimed to be necessary was not required, as the AAA had decided. Travelers and
CPPH maintained that Riggle was improperly requesting the trial court to review a
purely procedural issue that had been decided by the AAA under its own rules.
NRP also filed an opposition to Riggle’s motion to stay arbitration. It
argued that the subcontract agreement requires Riggle to arbitrate all claims arising
from the construction or the construction contract and NRP properly exercised its
right to arbitration against Riggle by joining it in the arbitration proceeding
commenced by CPPH against NRP. NRP also maintained that the subcontract
agreement does not require a “second” consent to arbitration. NRP furthermore
alleged that Riggle could have sought declaratory relief in the common pleas court
as early as January 24, 2020, when NRP sought to join Riggle in the CPPH/NRP
arbitration, yet Riggle waited until after it received two adverse orders from the AAA
to raise this issue in the court.
d. NRP’s Motion to Stay Proceedings and the Trial Court’s
Decision
On October 8, 2020, NRP filed a motion in the CPPH/NRP case to
stay proceedings pending the CPPH/NRP arbitration. CPPH and Travelers did not
oppose the motion. On November 12, 2020, the trial court consolidated the two
cases upon Riggle’s request. The motions pending before the trial court in the
consolidated case are Riggle’s motion to enjoin arbitration pending the resolution of
the declaratory judgment action and NRP’s motion to stay proceedings pending
arbitration.
On January 7, 2021, the trial court issued a ruling in the consolidated
case. It granted NRP’s motion to stay pending arbitration and stated that “all
pending motions are rendered moot.”
Riggle appealed from the court’s judgment, raising four assignments
of error. We address them in turn in the following.
First Assignment of Error: NRP’s Motion to Stay Proceedings Pending
Arbitration
Under the first assignment of error, Riggle argues the trial court erred
in granting NRP’s motion to stay proceedings pending arbitration. Riggle maintains
that, pursuant to section 21.6 of the contract between CPPH and NRP, a third party
can be joined in the CPPH/NRP arbitration only when that party consents in
writing. Riggle argues that because Riggle did not consent in writing pursuant to
that provision, the trial court erred in granting NRP’s motion to stay proceedings,
because it would effectively “force” Riggle into arbitration without its written
consent as required by the arbitration agreement between CPPH and NRP.
We review this appeal with the recognition that arbitration is a
favored method to settle disputes. Both the Ohio General Assembly and the courts
have expressed a strong public policy favoring arbitration. Hayes v. Oakridge
Home, 122 Ohio St.3d 63, 2009-Ohio-2054, 908 N.E.2d 408, ¶ 15; R.C.
Chapter 2711. “Arbitration is favored because it provides the parties thereto a
relatively expeditious and economical means of resolving a dispute.” Schaefer v.
Allstate Ins. Co., 63 Ohio St.3d 708, 712, 590 N.E.2d 1242 (1992). The courts
encourage arbitration also because it has the additional advantage of unburdening
crowded court dockets. Mahoning Cty. Bd. of Mental Retardation v. Mahoning Cty.
TMR Edn. Assn., 22 Ohio St.3d 80, 83, 488 N.E.2d 872 (1986).
We review a trial court’s decision to grant a motion to stay
proceedings pending arbitration for an abuse of discretion. Avery v. Academy
Invests., L.L.C., 8th Dist. Cuyahoga No. 107550, 2019-Ohio-3509, ¶ 9, citing
McCaskey v. Sanford-Brown College, 8th Dist. Cuyahoga No. 97261, 2012-Ohio-
1543, ¶ 7. Abuse of discretion implies that the trial court’s ruling is “unreasonable,
arbitrary, or unconscionable” and requires “more than an error of law or judgment”
to warrant a reversal. Blakemore v. Blakemore, 5 Ohio St.3d 217, 219, 450 N.E.2d
1140 (1983). When applying this standard, “an appellate court is not free to
substitute its judgment for that of the trial judge.” Berk v. Matthews, 53 Ohio St.3d
161, 169, 559 N.E.2d 1301 (1990).
Pursuant to R.C. 2711.02(B), if an action is brought upon any issue
referable to arbitration under an arbitration agreement, “the court in which the
action is pending, upon being satisfied that the issue involved in the action is
referable to arbitration * * *, shall on application of one of the parties stay the trial
of the action until the arbitration of the issue has been had in accordance with the
agreement * * *.” (Emphasis added.) Under the statute, “a court may stay trial of
an action upon application of a party ‘if (1) the action is brought upon any issue
referable to arbitration under a written agreement for arbitration, and (2) the court
is satisfied the issue is referable to arbitration under the written agreement.’”
Seyfried v. O’Brien, 2017-Ohio-286, 81 N.E.3d 961, ¶ 18 (8th Dist.), quoting Austin
v. Squire, 118 Ohio App.3d 35, 37, 691 N.E.2d 1085 (9th Dist.1997), citing Jones v.
Honchell, 14 Ohio App.3d 120, 122, 470 N.E.2d 219 (12th Dist.1984).
It is undisputed that CPPH’s claims against NRP regarding the
construction defect are subject to arbitration. Pursuant to R.C. 2711.02, therefore,
the trial court did not abuse its discretion in granting NRP’s motion to stay
proceedings pending arbitration pursuant to CPPH and NRP’s arbitration
agreement.
As to the pending declaratory judgment action filed by Riggle, which
had been consolidated with the CPPH/NRP case upon Riggle’s request, the courts
“have consistently held that when a trial court grants a motion to stay proceedings,
the entire action must be stayed, not only the arbitrable claims between parties to
the arbitration agreement.” Neel v. A. Perrino Constr., Inc., 2018-Ohio-1826, 113
N.E.3d 70, ¶ 38 (8th Dist.), citing Maclin v. Greens Nursing, 8th Dist. Cuyahoga
No. 101085, 2014-Ohio-2538, ¶ 9, citing Cheney v. Sears, Roebuck & Co., 10th Dist.
Franklin No. 04AP-1354, 2005-Ohio-3283, ¶ 12, Pyle v. Wells Fargo Fin., 10th Dist.
Franklin No. 05AP-644, 2005-Ohio-6478, ¶ 12, and Marquez v. Koch, 4th Dist. Ross
No. 11CA3283, 2012-Ohio-5466, ¶ 11. While the trial court’s judgment leaves the
declaratory judgment action unresolved until the CPPH/NRP arbitration is
completed, we cannot say that the trial court abused its discretion in enforcing
CPPH and NRP’s arbitration agreement and staying litigation pending the
completion of the CPPH/NRP arbitration. The first assignment of error is without
merit.
Second Assignment of Error: Riggle’s Motion to Enjoin and Stay
Arbitration
After the AAA joined Riggle in the NRP/CPPH arbitration and
subsequently denied Riggle’s request for a reconsideration, Riggle sought a judicial
determination of the issue by filing a declaratory judgment action and then a motion
to stay arbitration in the NRP/CPPH case pending a ruling of the declaratory
judgment action. Under the second assignment error, Riggle claims the trial court
erred in granting NRP’s motion to stay proceedings in the consolidated case without
addressing this issue raised in Riggle’s declaratory judgment action and motion to
enjoin arbitration.
Riggle argues that by granting the motion to stay proceedings pending
arbitration without ruling on the issue of whether Riggle can be joined in the
arbitration, the trial court’s judgment effectively forced Riggle to participate in
CPPH and NRP’s arbitration without its written consent, which is required in CPPH
and NRP’s arbitration agreement.
Riggle does not seem to dispute the existence of the arbitration
agreement between Riggle and NRP contained in the subcontract agreement, which
provides that “[c]laims, dispute and other matters in question arising out of or
relating to this Agreement, the Work, or the Project shall be decided by binding
arbitration.” What Riggle disputes in essence is the way in which NRP initiated
arbitration against Riggle: instead of commencing a separate arbitration against
Riggle, NRP applied to the AAA to join all subcontractors involved, including Riggle,
in the CPPH/NRP arbitration.
We first address briefly whether the trial court’s ruling regarding
Riggle’s motion to stay arbitration (i.e., considering it “moot”) is a final appealable
order.
R.C. 2711.02(C) states:
Except as provided in division (D) of this section, an order under
division (B) of this section that grants or denies a stay of a trial of any
action pending arbitration, including, but not limited to, an order that
is based upon a determination of the court that a party has waived
arbitration under the arbitration agreement, is a final order and may
be reviewed, affirmed, modified, or reversed on appeal pursuant to
the Rules of Appellate Procedure and, to the extent not in conflict with
those rules, Chapter 2505 of the Revised Code.
Under the statute, an order denying or granting a motion to stay
proceedings pending arbitration is a final appealable order and subject to immediate
review. See, e.g., Discover Bank v. Bennington, 11th Dist. Geauga No. 2017-G-0123,
2017-Ohio-7455, ¶ 24. The statute, however, does not provide for the immediate
appellate review of a judgment regarding a motion to stay arbitration. Rather, there
is case precedent suggesting that an order regarding arbitration that does not
“prevent a judgment” may not be a final appealable order. See Summit Constr. Co.
v. Am. Arbitration Assoc., 9th Dist. Summit No. 24765, 2010-Ohio-874.4 The trial
4 In Summit Constr., a property owner filed a demand for arbitration against a contractor.
The contractor objected on the ground that a certain condition precedent provided in the
parties’ arbitration agreement was not met. The AAA decided the condition precedent
had been satisfied and appointed an arbitrator. The contractor then challenged the
suitability of the arbitrator. The AAA determined the arbitrator was suitable. The
contractor then filed an application in the common pleas court asking the court to remove
the arbitrator and appoint a new arbitrator. The substance of the contractor’s claim in its
application was that the arbitration itself was not proper because the condition precedent
had not been met. The trial court denied the application on the ground that the issue of
whether the condition precedent was met was for the arbitrator to decide. The contractor
appealed from the trial court’s decision. The appellate court dismissed the appeal for the
lack of a final appealable order pursuant to R.C. 2505.02(B)(1), which defines a final
appealable order as one “that affects a substantial right in an action that in effect
determines the action and prevents a judgment[.]” The appellate court explained that the
trial court’s order did not prevent a judgment; rather, it allowed the matter to proceed to
judgment because the trial court’s order did not dispose of the merits of the construction
court’s order here regarding Riggle’s motion to stay arbitration certainly does not
“prevent a judgment” in this construction dispute and would appear not to be a final
appealable under the reasoning by the Ninth District in Summit Constr.
Even if we are to assume, without deciding, that the trial court’s ruling
regarding Riggle’s motion to stay arbitration (considering it moot and holding it in
abeyance) is a final appealable order, Riggle’s claim that the trial court should have
decided the motion instead of staying the entire consolidated case pending
arbitration is not supported by any case law authority.
“When the subject matter of a dispute is arbitrable, procedural
questions that grow out of the dispute and bear on its final disposition are to be left
to the arbitrator.” FOP Capital City Lodge No. 9 v. Reynoldsburg, 10th Dist.
Franklin Nos. 12AP-451 and 12AP-452, 2013-Ohio-1057, ¶ 26, citing John Wiley &
Sons, Inc. v. Livingston, 376 U.S. 543, 557, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964). See
also Blanchard Valley Health Sys. v. Canterbury Holdings, Inc., 3d Dist. Hancock
No. 5-12-08, 2012-Ohio-5134, ¶ 24 (once the court determines the parties are
obligated to submit a dispute to arbitration, procedural questions growing out of the
dispute are left to the arbitrator), citing Council of Smaller Ents. v. Gates, McDonald
& Co., 80 Ohio St.3d 661, 665, 687 N.E.2d 1352 (1998); N. Elec. v. Amsdell Constr.,
claim. The appellate court explained that, after the award has been made, R.C. 2711.13
provides a mechanism by which the contractor may petition the court to vacate or modify
the award and, at that time, the contractor may raise arguments concerning the arbitrator
and other procedural or substantive issues, and, once the trial court has entered a
judgment regarding the arbitrator’s award, the contractor may appeal that ruling
pursuant to R.C. 2711.15. Summit Constr. at ¶ 24.
Inc., 8th Dist. Cuyahoga No. 85293, 2005-Ohio-4134, ¶ 21; Council of Smaller Ents.
v. Gates, McDonald & Co., 8th Dist. Cuyahoga Nos. 68510 and 69868, 1996 Ohio
App. LEXIS 1455 (Apr. 11, 1996) (procedural questions, such as whether a party
made a timely demand for arbitration, should be left to the arbitrator); and Bd. of
Library Trustees, Shaker Hts. Pub. Library v. Ozanne Constr. Co., Inc., 100 Ohio
App.3d 26, 651 N.E.2d 1356 (8th Dist.1995) (once arbitration is selected as the
proper forum, the arbitrator determines all issues of procedural arbitrability).
Here, the trial court appropriately determined that the matter should
be stayed pending arbitration pursuant to the arbitration agreement between CPPH
and NRP. In accordance with the foregoing case law authority, the procedural issue
regarding whether NRP could join the subcontractor Riggle in that arbitration
without first initiating its own arbitration against Riggle is left to the arbitrator.
Even if the AAA were to have committed a legal error, “‘[b]ecause the
parties have contracted to have disputes settled by an arbitrator chosen by them
rather than by a judge * * * [c]ourts thus do not sit to hear claims of factual or legal
error by an arbitrator as an appellate court does in reviewing decisions of lower
courts.’” Ironton v. Rist, 4th Dist. Lawrence No. 10CA10, 2010-Ohio-5292, ¶ 12,
quoting Southwest Ohio Regional Transit Auth. v. Amalgamated Transit Union,
Local 627, 91 Ohio St.3d 108, 110, 2001-Ohio-294, 742 N.E.2d 630. See also Util.
Workers Union of Am. Local 436-A v. E. Ohio Regional Wastewater Auth., 2017-
Ohio-7794, 97 N.E.3d 960, ¶ 39 (7th Dist.).
Riggle claims a judicial determination of the joinder issue is
necessary at this juncture of the proceedings and that the court’s judgment staying
proceedings pending arbitration would effectively “force” Riggle to participate in the
arbitration between CPPH and NRP. Champion Chrysler v. Dimension Serv. Corp.,
2018-Ohio-5248, 118 N.E.3d 490 (10th Dist.), appeal not accepted, 156 Ohio St.3d
1446, 2019-Ohio-2498, 125 N.E.3d 925, addressed a similar procedural question. In
that case, the Tenth District considered whether consolidation is a threshold
question of arbitrability for a court to decide. Citing federal case law, the court held
that consolidation is a matter of procedure for the arbitrator. Id. at ¶ 24, citing
Certain Underwriters at Lloyd’s London v. Westchester Fire Ins. Co., 489 F.3d 580,
587 (3d Cir.2007); Emps. Ins. Co. of Wausau v. Century Indemn. Co., 443 F.3d 573,
577 (7th Cir.2006); Shaw’s Supermarkets, Inc. v. UFCW, 321 F.3d 251, 254 (1st
Cir.2003); and Blimpie Internatl. Inc. v. Blimpie of the Keys, 371 F.Supp.2d 469,
473-474 (S.D.N.Y.2005). Joinder is similarly a procedural matter. As such, the trial
court did not abuse its discretion in staying the matter pending arbitration without
ruling on the joinder issue raised in Riggle’s motion to stay arbitration. The second
assignment is without merit.
Third Assignment of Error: Waiver
Under the third assignment of error, Riggle argues NRP has not
timely initiated arbitration against Riggle in accordance with the arbitration
provision in their contract and, therefore, waived its right of arbitration as to Riggle.
Riggle claims the trial court erred in failing to find that NRP waived its right to
arbitration.
Riggle sought a judicial declaration that NRP waived its right to
arbitration in its declaratory judgment action, which was stayed by the trial court
pending arbitration. We determined in the foregoing analysis that the trial court did
not abuse its discretion in staying the instant case pending arbitration based on the
arbitration agreement between CPPH and NRP. As such, the trial court did not err
in not resolving this issue before staying the case. The third assignment is without
merit.
Fourth Assignment of Error: Hearing
Riggle did not request a hearing at the trial court. Under the fourth
assignment of error, however, Riggle argues the trial court erred in granting NRP’s
motion to stay proceedings pending arbitration without conducting an evidentiary
hearing.
As the Supreme Court of Ohio explained in Maestle v. Best Buy Co.,
100 Ohio St.3d 330, 2003-Ohio-6465, 800 N.E.2d 7, R.C. 2711.02 (“Court may stay
trial”) and R.C. 2711.03 (“Enforcing arbitration agreement”) are distinct statutory
provisions: R.C. 2711.02 applies when a party files a motion to stay proceedings,
and R.C. 2711.03 applies where there is a petition for an order to compel the parties
to proceed to arbitration. 5 Id. at ¶ 15 and 17. While R.C. 2711.03 states “the court
shall hear the parties,” R.C. 2711.02 does not obligate the court to conduct an
evidentiary hearing. Id. at ¶ 16 and 19.
While NRP’s motion referenced both statutes, it is a motion to stay
proceedings pending arbitration, rather than a motion to compel arbitration, and
the trial court granted the stay. Pursuant to R.C. 2711.02 and Maestle, the trial court
was not mandated to hold an evidentiary hearing before granting NRP’s motion to
stay proceedings pending arbitration. The fourth assignment of error is without
merit.
5 R.C. 2711.02 (B) provides:
If any action is brought upon any issue referable to arbitration under an
agreement in writing for arbitration, the court in which the action is
pending, upon being satisfied that the issue involved in the action is
referable to arbitration under an agreement in writing for arbitration, shall
on application of one of the parties stay the trial of the action until the
arbitration of the issue has been had in accordance with the agreement,
provided the applicant for the stay is not in default in proceeding with
arbitration.
R.C. 2711.03 (A) provides:
The party aggrieved by the alleged failure of another to perform under a
written agreement for arbitration may petition any court of common pleas
having jurisdiction of the party so failing to perform for an order directing
that the arbitration proceed in the manner provided for in the written
agreement. * * *. The court shall hear the parties, and, upon being satisfied
that the making of the agreement for arbitration or the failure to comply
with the agreement is not in issue, the court shall make an order directing
the parties to proceed to arbitration in accordance with the agreement.
(Emphasis added.)
Judgment affirmed.
It is ordered that appellees recover of appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the
common pleas court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27
of the Rules of Appellate Procedure.
______________________________
MICHELLE J. SHEEHAN, JUDGE
FRANK D. CELEBREZZE, JR., P.J., and
LISA B. FORBES, J., CONCUR