Opinion
T1 Createrra, Inc. appeals from the district court's decision to deny Createrra's motion to vacate an arbitration award in favor of Sundial, LC, on the basis that Createrra's motion to vacate was untimely when it was filed more than ninety days after Createrra had received notice of the award. 1 Createrra asserts that its motion to vacate was not untimely because the arbitrator's decisions had not been served in accordance with the notice requirements of the parties' operating agreement. Createrra also contends that the court wrongly concluded that the parties had orally modified the notice provision of the operating agreement. We affirm.
BACKGROUND
T2 Createrra and Sundial are members of Jordan Village Development, LLC (the LLC), an entity they formed to develop property in Midvale, Utah. In the course of forming the LLC, the parties executed an operating agreement, in which they agreed to serve in writing "any notice, election, or communication" required by the agreement, with delivery either by hand or through certified mail with courtesy copies via email. The
1 3 Disputes soon arose, and from late 2009 through much of 2010, Createrra and Sundial engaged in a series of arbitrations. The first arbitration was held in fall 2009, and the arbitrator issued a written decision, in which he noted that "[alt the conclusion of the hearing, the parties agreed to service of the arbitration decision via email." Createrra did not challenge the accuracy of this statement, nor did it register any objection to the arbitrator's delivery of his decision by email. The parties arbitrated two subsequent disputes. The arbitrator issued a decision on the second arbitration in December 2009. Because he believed that the parties had agreed to electronic service, the arbitrator delivered the decision only via email. Creat-erra did not object to the electronic delivery of the arbitrator's second decision. On October 19, 2010, the arbitrator issued a final arbitration decision ordering dissolution of the LLC. This decision was also served only by email. It is undisputed that both parties received the email, and Createrra again voiced no objection to the use of email for this purpose. The notice of award was never served in accordance with the notice provision of the parties' operating agreement. A supplemental arbitration decision, which included an award to Sundial of $52,731 in attorney fees, was issued on November 3, 2010 2 It too was emailed to the parties. Again, Createrra made no objection to the method of service.
14 On February 2, 2011, ninety-one days after the arbitrator issued the supplemental decision on November 3, 2010, Createrra moved to vacate the arbitration decisions. 3 Sundial filed a motion to dismiss, asserting that Createrra's motion was untimely because it had not been filed within ninety days of Createrra's receipt of notice of the award. See Utah Code Aun. § 78B-11-124(2) (Lexis-Nexis 2012) (allowing a party to file a motion to vacate an arbitration award so long as the motion is "filed within 90 days after the movant receives notice of the award"). 4 Createrra opposed dismissal, asserting that the "[njotice required ... to start the 90-day [motion] filing requirement has not yet been effectuated" because notice had been delivered only by email and therefore not in accordance with the notice provision of the operating agreement.
T5 At a hearing on Sundial's motion to dismiss, the district court observed that the first arbitration award indicated that the parties had orally agreed to electronic service by email rather than strict compliance with the notice provision of the operating agreement. When Createrra denied any such agreement, the court asked if it had ever objected to the arbitrator's statement. Createrra contended that it had but only identified occasions where it had objected to the substance of the award, not the method of service. Ultimately, the district court agreed to hold an evi-dentiary hearing at which it would hear from each side about what, if any, agreement occurred at the first arbitration and how the arbitration - decisions were - subsequently transmitted. Following that hearing, the dis
ISSUE AND STANDARDS OF REVIEW
16 Createrra contends that the district court should not have denied its motion to vacate the arbitration award. " '[TJhere is no special standard governing [an appellate court's] review of a district court's decision' to confirm, vacate, or modify an arbitration award." Buzas Baseball, Inc. v. Salt Lake Trappers, Inc.,
ANALYSIS
T7 For purposes of appeal, we accept Createrra's position that the operating agreement required that notice of an arbitration award be served either by hand delivery or by certified mail with email copies to both the party and its attorney. 5 Sundial asserts that "[the district court made a factual finding that Createrra agreed to receive arbitration awards via email" and that Createrra has not challenged that finding on appeal. Sundial contends that, as a result, even if notice of the arbitration award was required to be hand delivered or sent via certified mail and email under the operating agreement, Createrra orally modified that requirement when it verbally assented to receipt of the arbitration award through email. Createrra counters that its verbal agreement to accept notice by email was void because arbitration agreements cannot be orally modified. Thus, the crux of the inquiry on appeal is whether a term in an arbitration agreement governing how notice is to be served is subject to oral modification.
18 Arbitration agreements are creatures of contract. Central Fla. Invs., Inc. v. Parkwest Assocs.,
19 Createrra argues that any modification to an arbitration agreement must also be in writing. In support of its position, Createrra cites to Pacific Development v. Orton,
€ 10 Pacific Development had subcontract ed for Orton to perform certain work on two plats it was developing (Plats B and C). Id. 12. After disputes arose, the parties entered into negotiations that culminated in a written agreement to arbitrate, which provided that issues relating to Plat B had been resolved and that "arbitration will focus on the remaining issues of the dispute, those which relate to Plat C." Id. (internal quotation marks omitted). Despite this limitation on the seope of arbitration, at the hearing, both parties presented evidence regarding Plat B as well as Plat C and the arbitrator entered a decision in favor of Orton with respect to both plats. Id. 111-2. Pacific Development filed a motion to vacate the award, arguing that the arbitrator had exceeded his authority under the arbitration agreement when he made an order regarding Plat B. Id. 18. The supreme court agreed. Id. TV8-14. It held that a written agreement defining the scope of arbitration could not be "implicitly modified merely by the parties' actions in bringing evidence of matters outside the [agreed-upon] scope of the agreement" because the requirement that arbitration agreements be in writing demands "an explicit expression of the intent of the parties regarding the scope of arbitration." Id. § 14. In this context, the court then stated, "To allow modification of an express written agreement by less than a similarly explicit intent would simply cireum-vent the statutory requirements and the policies they vindicate." Id.
T 11 Pacific Development, therefore, focuses on modification of the seope of an arbitration agreement and does not address the question raised here: whether a change to a notice procedure specified in an arbitration agreement must be made in writing. And because Createrra depends entirely on the language of Pacific Development, it provides us with no authority for extending the written modification requirement to the method for giving notice. Nor do we see any reason to do so.
$12 The requirement that the seope of an arbitration agreement, including any modifications thereof, be in writing is a deviation from a widely-accepted principle of contract law. Ordinarily, " '[plarties to a written contract are free to modify that contract by oral or verbal agreement'" R.T. Nielson Co. v. Cook,
T The legislature, however, deemed it appropriate to except arbitration agreements from the general rule because an agreement to arbitrate deprives a party of many of the protections of the judicial process. Arbitration is considered a "speedy and inexpensive method[ ] of adjudicating disputes," compared to the traditional legal process, because it resolves disputes outside of the court system with little opportunity for judicial review. Pacific Dev., LC v. Orton,
114 Further, the terms of the operating agreement itself do not preclude the parties from modifying it. To the contrary, the operating agreement expressly contemplates its revision, defining the term - "Operating Agreement" to "mean this Operating Agreement as amended from time to time." (Emphasis added.) There is neither a provision requiring that modifications be in writing, nor an integration clause. Furthermore, the parties' conduct does not, contrary to Creat-erra's contention, mandate that modifications to the operating agreement be written. Createrra claims that the parties agreed to confine any contract modifications to writing when Createrra sent an email to Sundial and its counsel on February 18, 2010, advising that in order to "mitigate future misunderstandings," it was putting them "on notice that any agreement, waiver, or any other modification of the ... arbitration agreement or arbitration proceeding ... will ... be done only in writing and signed by Creater-ra." This statement, however, amounts to no more than an attempt to unilaterally impose a requirement not otherwise part of the operating agreement. 'To the extent the statement may be evidence of Createrra's own intent to abjure future oral modification of the arbitration procedure, that intent was belied by Createrra's continued acceptance, without objection, of the emailed arbitration decisions in accordance with its earlier oral
CONCLUSION
{15 Utah law does not require that a modification to the provisions of an arbitration agreement governing the method of service be in writing, and Createrra has not disputed the district court's findings both that Createrra agreed to an oral modification to the parties' operating agreement that allowed the arbitrator to issue his decisions by email and that Createrra then accepted service of the arbitrator's decisions by email without objection. Because there is no dispute that Createrra received the arbitrator's last emailed decision by November 3, 2010, the motion to vacate filed ninety-one days later, on February 2, 2011, was untimely. We therefore affirm the district court's decision.
Notes
. Based on its determination that Createrra's motion was untimely, the district court entered an order denying Createrra's motion to vacate, granting Sundial's cross-motion to dismiss, and summarily confirming the arbitration award. See Utah Code Ann. § 78B-11-124(4) (LexisNex-is 2012) ("If the court denies a motion to vacate an award, it shall confirm the award. ...").
. The arbitrator actually issued the supplemental arbitration decision on October 28, 2010, but allowed Createrra an opportunity to object to the amount of attorney fees awarded. When Creat-erra did not timely respond, the arbitrator, on November 3, "affirmed" its October 28 decision and deemed the "arbitration concluded." The precise date of the "final" decision does not affect our analysis, and for purposes of appeal, we accept that the "arbitration concluded" on November 3, 2010.
. Createrra's pleadings treat all three arbitration awards as being eligible for vacatur both because the first two decisions were referenced in the final decision, which Createrra interprets as indicating neither was final until November 2010, and because Createrra takes the position that it has yet to receive notice of any of the decisions in accordance with the notice provision of the operating agreement. The first two arbitration decisions, however, simply "provide[d] guidance and input regarding the ongoing relationship between Createrra and Sundial" and did not involve the exchange of any assets or liabilities or result in the payment of damages. The final arbitration resulted in an order that the parties dissolve the LLC and that Createrra pay Sundial $52,731 in attorney fees. It is that decision that prompted Createrra to move to vacate the awards.
. The statute has not been amended since the parties entered into the operating agreement in October 2008.
. The operating agreement contains a Hprovision that requires that "any notice, election, or communication required or permitted to be given by any provision of this Operating Agreement" be served personally or via certified mail and email. Because the parties' agreement to arbitrate is contained within the operating agreement, it is ostensibly governed by this notice provision, as Createrra asserts. Sundial, however, has raised a question about whether the notice provision only governs "any notice, election, or communication required or permitted to be given" by the parties to each other and not by a third person, who is not a party to the operating agreement, such as the arbitrator. We need not resolve this dispute.
. Createrra has not contested the district court's determination that email notification satisfies these statutory requirements for notice in an arbitration proceeding.