Background

• Days (property owners) contracted with CTA for architectural/engineering services; dispute arose over alleged negligent design/construction and breach of contract.
• Contract was a standard-form professional services agreement executed in 2000; parties modified several provisions but included an arbitration clause and a mandatory mediation clause.
• In 2012 Days sued CTA (and others); CTA moved to dismiss for lack of jurisdiction, arguing the contract required arbitration; the motion became one for summary judgment when the contract was submitted.
• Days moved for partial summary judgment arguing the arbitration clause was unenforceable because it did not reflect a knowing, intelligent, and voluntary waiver of jury trial/access to courts.
• The District Court denied CTA’s summary judgment and granted Days’ partial summary judgment, finding the arbitration clause unenforceable; CTA appealed.
• Montana Supreme Court reversed: it held the arbitration clause was within Days’ reasonable expectations and was not unconscionable or oppressive, so the clause is enforceable; case remanded for further proceedings.

Issues

Key Cases Cited

• Graziano v. Stock Farm Homeowners Assn., 258 P.3d 999 (Mont. 2011) (arbitration analyzed under contract-law unconscionability framework)
• Kelker v. Geneva-Roth Ventures, Inc., 303 P.3d 777 (Mont. 2013) (arbitration clauses generally enforceable; two-step unconscionability test)
• Kortum-Managhan v. Herbergers NGBL, 204 P.3d 693 (Mont. 2009) (factors for assessing waiver of jury and court access)
• Woodruff v. Bretz, Inc., 218 P.3d 486 (Mont. 2009) (reasonable expectations factors for arbitration clauses)
• Zigrang v. U.S. Bancorp Piper Jaffray, Inc., 123 P.3d 237 (Mont. 2005) (definition and elements of contract of adhesion)