L.D. Miller Construction, Inc. v. Kirschenbaum
34,253
| N.M. Ct. App. | Dec 1, 2016Background
- In December 2011 Miller and the Kirschenbaums signed a written Arbitration Agreement providing disputes be decided "under AAA" and stating the designated arbitrator "shall be Roger Lengyel."
- Miller later sued in district court; a default judgment was entered, then vacated after the Kirschenbaums moved to compel arbitration under the December 2011 Agreement. The district court ordered arbitration under the AAA with Lengyel designated.
- Miller sought AAA removal of Lengyel under AAA Rule 20, alleging ex parte contacts and non-neutral conduct; the Kirschenbaums opposed removal, arguing the court had fixed Lengyel as their arbitrator and that the parties intended him to be a non-neutral appointee.
- AAA asked the district court to clarify whether AAA had authority to remove a designated arbitrator given the court's order; the district court ruled the parties’ agreement incorporated all AAA rules and that AAA may disqualify a designated arbitrator under its procedures.
- AAA removed Lengyel; the Kirschenbaums moved for reconsideration (filed late), which the district court denied; they appealed the denial.
Issues
| Issue | Plaintiff's Argument (Miller) | Defendant's Argument (Kirschenbaums) | Held |
|---|---|---|---|
| Whether an arbitrator designated by the parties can be disqualified by AAA for cause when the parties did not expressly agree in writing that the arbitrator would be non-neutral | The Arbitration Agreement's phrase "under AAA" incorporated all AAA rules, including Rule 20 permitting disqualification; a designated arbitrator is presumed neutral unless the parties expressly agree in writing otherwise | The parties expressly designated Lengyel and intended him to serve regardless of AAA disqualification authority; the designation should prevent AAA removal | Court held AAA rules were incorporated; absent a written agreement that the arbitrator be non-neutral, a designated arbitrator may be disqualified under AAA rules (affirmed) |
| Whether the Kirschenbaums’ late Rule 1-060(B) motion for reconsideration and their appeal were untimely so as to warrant dismissal | Miller argued the late motion circumvented the appeal deadline and the appeal should be dismissed under Deerman | Kirschenbaums explained counsel issues and sought reconsideration; district court considered and denied the motion on the merits | Court held the appeal was timely for review purposes; district court did not abuse its discretion in denying reconsideration |
Key Cases Cited
- Rivera v. Am. Gen. Fin. Servs., Inc., 259 P.3d 803 (N.M. 2011) (discusses when an arbitration-provider requirement is "integral" to an agreement and its limits)
- ConocoPhillips Co. v. Lyons, 299 P.3d 844 (N.M. 2013) (courts may imply reasonable terms consistent with an agreement)
- Deerman v. Bd. of Cty. Commr’s, 864 P.2d 317 (N.M. Ct. App. 1993) (late Rule 1-060(B) motions ordinarily cannot substitute for direct appeal)
- Wells Fargo Bank, N.A. v. City of Gallup, 265 P.3d 1279 (N.M. Ct. App. 2011) (limits Deerman where motion is not used to evade appeal deadlines)
- Borst v. Allstate Ins. Co., 717 N.W.2d 42 (Wis. 2006) (arbitrators are presumed neutral absent clear, convincing written agreement otherwise)
- Edens v. Edens, 109 P.3d 295 (N.M. Ct. App. 2005) (standard for abuse of discretion review of Rule 1-060(B) rulings)
- Phelps Dodge Corp. v. Guerra, 582 P.2d 819 (N.M. 1978) (appellate review will not disturb district court's Rule 1-060(B) rulings absent abuse of discretion)
- Centex/Worthgroup, LLC v. Worthgroup Architects, L.P., 365 P.3d 37 (N.M. Ct. App. 2016) (limitations in incorporated contracts control scope of incorporation)