Hitorq v. TCC Veterinary Services, 502 P.3d 281

Three veterinarians formed an LLC for a clinic and adopted an operating agreement containing an arbitration clause: any member with a dispute "regarding the enforcement or interpretation of this Agreement" may elect mediation or binding arbitration.
Each veterinarian holds interests through separate entities; Pasquarello owned HITORQ, Artz owned Vetmed, and Stiens owned TCC.
Artz orally agreed to purchase Pasquarello’s membership interests; the sale negotiations later collapsed and Pasquarello alleges she was thereafter prevented from working and was expelled.
Pasquarello sued (on behalf of herself and HITORQ) for breach of the oral purchase agreement, breach of the implied covenant of good faith and fair dealing, and judicial dissolution under Utah Code §48-3a-701, but relied on provisions of the operating agreement in her pleadings.
Defendants moved to compel arbitration under the operating agreement; the district court compelled arbitration, an arbitrator ruled for defendants, the district court confirmed, the court of appeals affirmed, and the Utah Supreme Court granted certiorari and affirmed that the claims are arbitrable. The Court denied defendants’ request for appellate fees.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Are the breach of contract and breach of the covenant claims subject to the operating agreement's arbitration clause?	Claims are based on an oral purchase agreement (no arbitration clause) and thus outside the operating agreement's arbitration scope.	Claims implicate distributions, member expulsion, and other provisions of the operating agreement, so they concern enforcement/interpretation and are arbitrable.	The Court held the claims incorporated and required enforcement/interpretation of the operating agreement and are therefore within the arbitration clause.
Is the statutory dissolution claim arbitrable?	Dissolution under Utah Code §48‑3a‑701 is a statutory remedy and not subject to the operating agreement's arbitration clause.	The dissolution claim is premised on violations of the operating agreement, so determining entitlement requires interpretation of the agreement and is arbitrable.	The Court held the dissolution claim depends on interpreting the operating agreement and falls within the arbitration clause.
Are defendants entitled to appellate attorney fees for defending confirmation of the arbitration award?	Defendants seek fees to discourage relitigation of arbitration awards.	Plaintiff argues her appeal raised legitimate, close legal questions about arbitrability and award validity.	The Court denied fees, finding the appeal raised legitimate concerns and the issue was a close call.

Zions Mgmt. Servs. v. Record, 305 P.3d 1062 (Utah 2013) (arbitration is a matter of contract; interpret clause language first)
Peterson & Simpson v. IHC Health Servs., Inc., 217 P.3d 716 (Utah 2009) (when clause language is clear, determine parties’ intent from plain meaning)
Bybee v. Abdulla, 189 P.3d 40 (Utah 2008) (presumption of arbitrability applies when clause language is ambiguous)
Duke v. Graham, 158 P.3d 540 (Utah 2007) (balancing considerations for awarding fees after judicial review of an arbitration award; close cases may preclude fee awards)
Buzas Baseball, Inc. v. Salt Lake Trappers, Inc., 925 P.2d 941 (Utah 1996) (policy discouraging relitigation of arbitration awards)
Pugh v. Stockdale & Co., 570 P.2d 1027 (Utah 1977) (use ordinary and usual meaning of contractual words)