Lyman v. KernLyman v. Kern
{1} This appeal arises from a trial court order compelling the parties to arbitrate. The underlying dispute arose out of an automobile collision between the parties in May 1994. On appeal, Defendants argue two points: (1) that the trial court’s order was not a final order, and they were therefore not obligated to appeal at the time the order was entered; and (2) that the trial court’s order compelling the parties to arbitrate was unconstitutional because the order deprived Defendants of their right to a jury trial without a knowing or intentional waiver. We hold that the order compelling the parties to arbitrate was a final order from which Defendants were obligated to appeal within thirty days. Because Defendants failed to timely appeal the order, and instead chose to postpone an appeal until after an arbitration award was rendered against them, we dismiss their appeal.
Facts and Procedural History
{2} In May 1994, the motor vehicles driven by Defendant Charlie Kern, a fifteen-year-old, and Plaintiff Carol Lyman collided at an intersection in Roswell, New Mexico. Plaintiff filed her complaint in the Chaves County District Court in June 1996 against Defendant Charlie and her mother Patti Kern (collectively Defendants). Plaintiff sought compensatory damages for medical expenses and property damage. Defendants filed an answer and a jury demand in August 1996.
{3} On November 13, 1996, the trial court held a pretrial hearing in which the court inquired as to whether the parties were amenable to resolving their dispute through the use of alternative dispute resolution. Defendants’ counsel responded that he was agreeable to participating in alternative dispute resolution. Defendants’ counsel explained,
[W]e would be happy to participate in mediation or perhaps an arbitration if that’s the case rather than proceed through the full trial. I mean, I’d like to exhaust those other avenues before we go through to a three-day trial in this thing.
When asked by the court about his thoughts on arbitration, Defendants’ counsel replied, “I would be agreeable with an arbitration in this matter if your Honor can select an arbitrator or provide us with perhaps three names.”
{4} After this hearing, Plaintiff submitted a proposed order compelling the parties to proceed to arbitration. The order stated that “all issues between the parties are hereby ordered to be resolved by arbitration.” Upon receipt of the order, Defendants filed a motion for presentment, in which they disputed the order submitted by Plaintiff. At the hearing on the motion on April 21, 1997, Defendants’ counsel argued that he did not agree to final, binding arbitration. He claimed he had instead contemplated a nonbinding form of arbitration that would be appealable de novo to the trial court. Defendants’ counsel, an Albuquerque attorney, explained that the second judicial district had adopted a non-binding form of arbitration by local court rule. See Rule LR 2-603 NMRA 1999. The trial court determined that the parties had agreed to binding arbitration and that it would sign Plaintiffs order compelling arbitration. The order compelling arbitration was entered on the same day.
{5} Defendants then filed a motion for reconsideration. The trial court held a hearing on this motion on May 20,1997 and again determined that the parties had formed an agreement to arbitrate. The court noted that the word “arbitration” generally refers to binding arbitration, despite the fact that other judicial districts had implemented other forms of arbitration. It denied Defendants’ motion to reconsider.
Finality of the Order to Compel Arbitration
{7} The key issue in this appeal is whether the trial court’s order compelling the parties to arbitrate was a final order from which Defendants must have appealed within thirty days. See NMSA 1978, § 39-3-2 (1966); Rule 12-201 NMRA 1999. Defendants filed their notice of appeal on August 21, 1998, sixteen months after the April 21,1997 order compelling arbitration was entered. Thus, if the order compelling arbitration was a final order, Defendants failed to appeal the order in a timely fashion and in the absence of unusual circumstances, this court does not have jurisdiction to consider their appeal. See Aragon v. Westside Jeep/Eagle,
{8} Our Supreme Court has considered whether an order compelling arbitration is a final order. See Britt v. Phoenix Indem. Ins. Co.,
{9} In the case on appeal, the order compelling the parties to arbitrate states that “all issues between the parties are hereby ordered to be resolved by arbitration.” This statement demonstrates that the trial court delegated resolution of the merits to the arbitration process. The fact that all issues between the parties were referred to arbitration indicates that the trial court divested itself of any further power to address any of the issues of law or fact presented by the ease, and had therefore effectively disposed of the case. See Britt,
{10} Defendants’ motions for presentment and reconsideration indicate that they were aware of the impact of the referral of the case to arbitration for the ultimate determination of the merits of the case.- Defendants strenuously argued at the hearings on both motions that they did not agree to binding arbitration with no right to a de novo appeal in the trial court. Despite these arguments, Defendants did not seek to appeal
{11} Defendants dispute Britt’s applicability to the present case and argue that Britt’s underpinnings are questionable because our Supreme Court relied on federal case law that was decided before Congress amended the Federal Arbitration Act to add a section governing appeals. See 9 U.S.C. § 16 (1994). Defendants also argue that our Supreme Court would be inclined to adopt the new federal standards for determining when an order compelling arbitration is final. See Ermenegildo Zegna Corp. v. Zegna,
{12} Defendants further question the role of the Act in considering finality in this case. While the Act contemplates a process for enforcing arbitration agreements, the language of the Act describes the arbitration agreements to which it applies as either “[a] written agreement to submit any existing controversy to arbitration or a provision in a written contract to submit to arbitration any controversy thereafter arising between the parties.” Section 44-7-1. Plaintiff argues that the Act applies to her case because the agreement to arbitrate was preserved in the transcript of the hearing below. Plaintiff also argues that if the Act does not apply, the common law of arbitration precludes our review of the order compelling arbitration.
{13} We agree with Defendants that the agreement to arbitrate does not fall within the plain language of Section 44-7-1. The agreement was not written, nor was it a provision in a contract between the parties directing the parties to arbitrate in the future. However, the Act’s description of disputes subject to arbitration is not exclusive. See id. Although preferably any agreement to arbitrate should be placed in writing, New Mexico continues to recognize common law arbitration. See Daniels Ins. Agency, Inc. v. Jordan,
{14} While Britt holds that an order compelling arbitration of a written agreement to arbitrate (and thus under the Act) is a final order, no clear rule in New Mexico exists as to whether an order compelling common law arbitration is final. At least one other jurisdiction has recognized such an order as non-final. See Brennan v. General Accident Fire & Life Assurance Corp.,
{15} Generally, a party has only thirty days in which to appeal a final order. See § 39-3-2. However, failure to meet the time requirement does not always preclude review, because untimeliness is not necessarily a jurisdictional bar. See Trujillo,
Waiver of Jury Trial
{16} Defendants also argue that the order compelling arbitration was unconstitutional because it deprived Defendants of their right to a jury trial without a knowing or intentional waiver. See N.M. Const, art. II, § 12. In their argument, Defendants rely primarily on the assertion that the order compelling arbitration was not a final order in that it did not say that the arbitration was final and binding. In other words, Defendants argue that the order to arbitrate did not put Defendants on notice that it would operate to waive the right to a trial by jury. Defendants contend that the ambiguity of the order in that regard would have caused this Court to hold the order interlocutory had Defendants appealed from that order. We are not persuaded by this argument. While Defendants appeal now from the trial court’s judgment confirming the arbitration award, Defendants’ appeal is essentially aimed at the court’s order that compelled arbitration. An order compelling arbitration based on the stipulation of the parties does not have to state that the arbitration is binding and that the order is a final order to trigger its appealability.
{17} In addressing the finality of the order compelling arbitration under Britt, we have addressed Defendants’ arguments concerning the waiver of their jury trial. Because the order was final, Defendants were obligated to appeal to preserve their right to jury trial and to challenge the order compelling arbitration. By submitting to arbitration without first appealing the order compelling arbitration, Defendants forfeited their ability to challenge not only the order itself, but also the loss of the opportunity to try their case to a jury. We agree with the Texas Court of Appeals which wrote in similar circumstances:
It is clear that when a party agrees to have a dispute resolved through arbitration rather than judicial proceeding, that party has waived its right to a jury trial. The situation is analogous to those situations where a party has paid its jury fee and properly requested a jury but proceeds in a trial before the court. In such a situation, the party cannot complain that it was entitled to have a jury decide the issue rather than the court once the court rules adversely to the party’s position. Similarly,appellants cannot claim they were entitled to a jury trial after they submitted to arbitration and the arbitrators made an award appellants felt was in error.
Massey v. Galvan,
{18} Defendants made a jury demand in August 1996 but nonetheless submitted to the arbitration proceedings. Although Defendants challenged the nature of the arbitration and requested the trial court to reconsider its order, Defendants did not appeal and proceeded to arbitrate. Only when the arbitration proceedings resulted unfavorably did, Defendants seek to challenge the order compelling them to arbitrate. As a consequence, Defendants cannot complain that the order compelling arbitration deprived them of their right to a jury trial.
Conclusion
{19} For the foregoing reasons, we dismiss this appeal.
{20} IT IS SO ORDERED.