Shipp v. Peterson, 486 P.3d 70

John Peterson and Rex Shipp formed P&S Group, LLC (P&S) as a 50/50 single-asset LLC; P&S held commercial property and the partners ran a restaurant on the property.
In 2006 Peterson took out a $500,000 life policy naming Shipp as owner and beneficiary; P&S paid the premiums and reported them as company expenses.
Peterson died in 2010; Shipp collected the proceeds; the Estate, Peterson’s spouse, and P&S sued to recover the proceeds, claiming the policy/proceeds belonged to P&S.
The district court found most claims arose under P&S’s Operating Agreement and ordered arbitration under its Arbitration Clause; on the arbitration-day parties signed an additional “Arbitration Document” that did not name P&S but stated the arbitration was under the Operating Agreement.
First Arbitrator awarded the proceeds to P&S; the district court vacated that award reasoning P&S was not a party to the arbitration; a second arbitrator later awarded the proceeds to Shipp and the district court confirmed that award.
The Estate appealed; the Court of Appeals reversed the district court’s vacatur, reinstated the First Arbitrator’s award to P&S, and ordered vacatur of the second arbitration award.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether P&S was a party to the arbitration under the Operating Agreement	Arbitration was compelled by the Operating Agreement; P&S’s interests were the basis of the claims and P&S participated via pre‑arbitration filings	The one‑page Arbitration Document omitted P&S and P&S did not sufficiently participate to become a party	P&S was a party: the Operating Agreement framed the submission and the Arbitration Document was a supplement; district court erred in treating P&S as nonparty
Whether First Arbitrator exceeded authority by awarding proceeds to P&S	The submission (via Operating Agreement and parties’ pleadings) encompassed P&S’s claim; arbitrator had authority to decide whether proceeds belonged to P&S or Shipp	Award to a non‑named/non‑signatory exceeded the arbitrator’s scope	Arbitrator did not exceed authority; vacatur was improper
Whether the First Arbitrator’s award lacked foundation in reason or fact	Evidence supported P&S ownership: P&S paid premiums, actions taken in manager capacity, and lack of Shipp’s personal insurable interest	Policy named Shipp individually, supporting Shipp’s claim to proceeds	Award had a reasonable factual and legal foundation; arbitration decision was within arbitrator’s province

Evans v. Nielsen, 347 P.3d 32 (Utah Ct. App. 2015) (standard of review for district court actions confirming or vacating arbitration awards)
Softsolutions, Inc. v. Brigham Young Univ., 1 P.3d 1095 (Utah 2000) (narrow, deferential judicial review of arbitration awards; arbitrator may reframe submitted questions)
Intermountain Power Agency v. Union Pac. R.R. Co., 961 P.2d 320 (Utah 1998) (arbitrator has jurisdiction to resolve matters on any reasonable grounds presented; courts should not reassess arbitrator’s wisdom)
Duke v. Graham, 158 P.3d 540 (Utah 2007) (vacatur appropriate where award covers matters not contemplated by submission or is without foundation in fact or reason)
Buzas Baseball, Inc. v. Salt Lake Trappers, Inc., 925 P.2d 941 (Utah 1996) (remedy of vacatur is narrow and courts must defer to arbitrators)
Denison Mines (USA) Corp. v. KGL Inc., 381 P.3d 1167 (Utah Ct. App. 2016) (judicial review of arbitration awards limited to statutory grounds)
Pacific Dev., LC v. Orton, 982 P.2d 94 (Utah Ct. App. 1999) (resolve doubts in favor of arbitration)