Nordic Services, Inc. v. Endre D. Glenn ( 2018 )

IN THE COURT OF APPEALS FOR THE STATE OF WASHINGTON
NORDIC SERVICES, INC.,
No. 76501-9-I
Respondent,
DIVISION ONE
V.
UNPUBLISHED OPINION
ENDRE D. GLENN and JANE DOE
GLENN, a married couple, and
MARGARET A. GLENN and JOHN
DOE GLENN,a married couple,
FILED: April 23, 2018
Appellant.
TRicKEY, J. — In a lien foreclosure dispute, Nordic Services, Inc.
successfully moved to compel arbitration over Endre Glenn's objection. After
prevailing at arbitration, Nordic moved the trial court to confirm the arbitration
award and enter judgment. Glenn requested a trial de novo.
The trial court entered a judgment and order confirming the arbitration
award, and struck Glenn's request for a trial de novo. Glenn appeals that order,
arguing that the trial court erred by compelling arbitration, denying a continuance
of the arbitration schedule, and denying his request for a trial de novo. We affirm.
FACTS
Nordic Services, Inc. sued Endre Glenn for $5,995.60, the unpaid balance
for Nordic's construction services repairing water damage at Glenn's home. Nordic
sought to foreclose on a construction lien, obtain a personal judgment against
Glenn, and compel arbitration of its claims pursuant to their agreement for
No. 76501-9-1 /2
services. Glenn answered and counterclaimed for breach of contract and
negligence. In his response to Nordic's motion to compel arbitration, Glenn
objected to Nordic's proposed arbitrators.
The trial court heard and granted Nordic's motion to compel arbitration on
March 4,2016. Glenn then filed several motions, including a motion to amend the
order compelling arbitration,' motion to dismiss complaint and vacate order
compelling arbitration, and an objection to the order compelling arbitration. The
trial court denied or struck Glenn's motions and objection.
Disputes continued throughout the arbitration proceedings. On October 19,
2016, Glenn filed a motion for emergency relief requesting that the trial court
extend the arbitration schedule to permit him to complete discovery, and remove
the arbitrator for bias. The trial court denied the motion.
Glenn did not appear at the October 28, 2016 arbitration hearing. The
arbitrator awarded Nordic $49,109.75. On December 12, 2016, Glenn requested
a trial de novo of the arbitration award under Mandatory Arbitration Rule (MAR)
7.1. Nordic objected to the request, arguing that a trial de novo was not available
for a private arbitration such as theirs. Nordic asked the trial court to confirm the
arbitration award, enter judgment, and strike Glenn's request for a trial de novo.
The trial court entered a judgment and confirmed the arbitration award. It
also struck Glenn's request for a trial de novo. The court denied Glenn's additional
requests for relief in an order denying reconsideration of court ordered sanctions;
'This motion was apparently considered as a motion for reconsideration by the court, and
denied as such.
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an order denying motion to vacate arbitration award,sanctions, and judgment; and
an order denying reconsideration of the motion to vacate.
Glenn filed a notice of appeal of only one trial court order: the judgment and
order confirming arbitration award.
ANALYSIS
Glenn makes three assignments of error on appeal. First, he argues that
the trial court erred In compelling arbitration before the selected arbitrator. Second,
he maintains that the trial court erred by denying his request for a continuance of
the arbitration hearing. Third, he claims that the trial court erred by denying him a
trial de novo. These arguments arise out of the order compelling arbitration, the
denial of the motion for emergency relief to extend the arbitration schedule, and
the judgment and order confirming arbitration award, respectively. Nordic argues
that we should not review Glenn's first two arguments because they relate to
orders not designated in the notice of appeal.
In general,"Dille appellate court will, at the instance of the appellant, review
the decision or parts of the decision designated in the notice of appeal." RAP
2.4(a). However, "[t]he appellate court will review a trial court order or ruling not
designated in the notice, including an appealable order, if (1) the order or ruling
prejudicially affects the decision designated in the notice, and (2) the order is
entered, or the ruling is made, before the appellate court accepts review." RAP
2.4(b). To determine whether an order has prejudicial effect on the appealed
order, we inquire whether the order designated in the notice of appeal would have
occurred absent the other order. Adkins v. Aluminum Co. of Am., 110 Wash. 2d 128,
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134,750 P.2d 1257,756 P.2d 142(1988); Right-Price Recreation, LLC v. Connells
Prairie CmW. Council 146 Wash. 2d 370, 380,46 P.3d 789(2002).
Glenn maintains that we review each of his assignments of error. He argues
that the orders not designated in his notice of appeal did prejudicially affect the
appealed judgment and order confirming the arbitration award. We agree with
Glenn that the order compelling arbitration prejudicially affects the judgment and
order confirming the arbitration award. If arbitration had not been compelled,there
would be no arbitration award to confirm. We therefore review Glenn's first
argument related to the order compelling arbitration.
Glenn argues that his emergency motion to extend the arbitration schedule
did prejudicially affect the judgment and order confirming the arbitration award.
Glenn based his motion on his inability to complete discovery, but he ultimately did
not appear at the arbitration hearing. He does not argue, and the record does not
support, that the arbitration award would not have occurred but for his receipt of
additional discovery. We decline to review Glenn's second argument related to
the denial of the emergency motion to extend the arbitration schedule, because he
does not demonstrate that the denial of the motion to extend the arbitration
schedule prejudicially affected the order confirming the arbitration award.
We turn now to Glenn's contention that the trial court erred in compelling
arbitration before the selected arbitrator. Nordic argues that Glenn waived this
argument because he did not timely object to the selection of arbitrators at the trial
court. But the record supports that Glenn did timely object to the proposed
arbitrators. In Glenn's October 22, 2015 response to Nordic's motion to compel
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arbitration, he argued that "[h]e did not have the option to select the arbitration
agency, JAMS, WAMS,JDR or review a list of potential arbitrators. He disagrees
with opposing counsel['s] selection of arbitrators."2 Glenn filed this response
before the hearing to compel arbitration, and reiterated his objection to the
selection of a JDR arbitrator In his motion to amend the order compelling
arbitration. Glenn did not waive this assignment of error.
Glenn's argument, however,fails on the merits. The arbitration provision of
the agreement between Glenn and Nordic states, in pertinent part:
If any dispute or disagreement arises out of, or with respect to work
performed under this Agreement, the same shall be arbitrated in
accordance with the following terms and procedures:
(a) Arbitration shall be by a single arbitrator to be selected upon
agreement of the parties under the auspices of Judicial Arbitration
and Mediations Service (JAMS), Judicial Dispute Resolution (JDR)
or Washington Arbitration and Mediation Service (WAMS). If the
parties cannot agree upon an arbitrator, either party may apply to
King County Superior Court for the appointment of a qualified
arbitrator from the above services or, if those services no longer
exist, from the [American Arbitration Association] roster.P1
After filing its motion to compel arbitration, Nordic attempted to reach an
agreement with Glenn on the selection of arbitrators by sending a letter to Glenn
noting his objection to the three proposed arbitrators and requesting an alternative.
Apparently unable to agree, Nordic continued with its request that the court appoint
an arbitrator. This process complies with the terms of the arbitration provision.4
2 Clerk's Papers (CP) at 67 (Judicial Arbitration and Mediations Service (JAMS);
Washington Arbitration and Mediation Service (WAMS); and Judicial Dispute
Resolution (JDR)).
3 CP at 51.
4 Glenn also argues that this arbitrator selection provision is substantively unconscionable.
"'Substantive unconscionability involves those cases where a clause or term in the
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The trial court did not err in entering the order to compel arbitration before the
selected arbitrator.
Next, Glenn argues that the trial court erred in denying his request for a trial
de novo. He contends that he was entitled to a trial de novo under the mandatory
arbitration rules. Nordic argues that Glenn waived his right to challenge the
Judgment and order confirming arbitration award by not presenting his arguments
to the trial court. On the merits, Nordic argues that theirs was a private arbitration,
so a trial de novo does not apply.
We disagree that Glenn waived his argument. Glenn requested a trial de
novo pursuant to MAR 7.1 and LMAR 7.1. The trial court denied a trial de novo in
Its order confirming the arbitration award. Glenn appeals that order, arguing that
the trial court erred in striking his request for a trial de novo. He preserved the
error.
Nevertheless, Glenn's argument fails on the merits. The arbitration
agreement with Nordic calls for appeals of an arbitration award under chapter
7.04A ROW,which applies to voluntary arbitration.5 This chapter does not apply
to mandatory arbitrations. ROW 7.04A.030(3) (citing chapter 7.06 ROW). The
contract is alleged to be one-sided or overly harsh."' Zuver v. Airtouch Commens, Inc.,
153 Wash. 2d 293, 303, 103 P.3d 753(2004)(quoting Schroeder v. Faneol Motors. Inc., 86
Wash. 2d 256, 260, 544 P.2d 20 (1975)). We disagree that this provision is substantively
unconscionable. It allows for either party to request that the superior court appoint a
particular arbitrator if agreement between the parties fail. Thus, it Is neither one-sided nor
overly harsh.
5 The arbitration agreement actually refers to former chapter 7.04 ROW, which was
repealed in 2005 and effective January 1, 2006. See former ROW 7.04.010 through .220
(2005), repealed by LAWS OF 2005, ch. 433, §§ 1-32. The trial court interpreted this
contract provision to refer to chapter 7.04A RCW, a finding that Is not challenged on
appeal.
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mandatory arbitration rules under which Glenn requests a trial de novo apply only
to chapter 7.06 RCW. MAR 1.1. Thus, the rules by which Glenn made his trial de
novo request do not apply to the parties' arbitration.
Glenn argues that the parties stipulated to mandatory arbitration rules by
agreement. Parties may stipulate to enter into arbitration under mandatory
arbitration rules in civil matters that are not otherwise subject to mandatory
arbitration. MAR 8.1. Any ambiguity with respect to whether the parties invoked
mandatory arbitration is resolved in favor of voluntary binding arbitration. Dahl v.
Parquet & Colonial Hardwood Floor Co., 108 Wash. App. 403, 412, 30 P.3d 537
(2001). Glenn and Nordic did not invoke mandatory arbitration and the
accompanying rules in their agreement for services. They agreed to conduct their
arbitration under the mandatory arbitration rules "to the maximum extent
possible."6 This is not sufficient to stipulate to arbitration under mandatory
arbitration rules. The trial court did not err by striking the request for a trial de novo
under MAR 7.1,
Attorney Fees
Nordic requests an award of attorney fees on appeal. Under RCW
60.04.181(3), the prevailing party in a lien foreclosure action may be awarded
reasonable attorney fees and costs on appeal. We award Nordic reasonable
attorney fees and costs on appeal, subject to compliance with RAP 18.1.
6 CP at 51.
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Affirmed.
"Tr% tik e ll J
WE CONCUR:
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