Phillips v. GarciaPhillips v. Garcia
Slack-Méndez Law Firm By Charles J. Slack-Méndez, Tempe, Counsel for Plaintiff/Appellee.
Presiding Judge JOHN C. GEMMILL delivered the opinion of the Court, in which Judge KENTON D. JONES and Judge DONN KESSLER joined.
OPINION
GEMMILL, Judge:
¶ 1 In this opinion we address an aspect of the procedure established by the Arizona Rules of Civil Procedure for entry of an award and judgment after a superior court arbitration. Defendant Craig E. Garcia appeals the superior court‘s denial of his motion to dismiss the arbitrator‘s award. We conclude that we lack appellate jurisdiction, but in our discretion we exercise special action jurisdiction and grant relief by ordering dismissal of the action without prejudice.
PROCEDURAL BACKGROUND
¶ 2 In January 2012, Plaintiff Robert Phillips filed a complaint against Garcia in Maricopa County Superior Court alleging breach of contract, breach of the implied duty of good faith and fair dealing, and fraud/misrepresentation. The superior court ordered that the case was subject to compulsory arbitration and appointed an attorney as arbitrator. The matter was arbitrated in December 2012 and the arbitrator issued a ruling that was filed with the court on January 3, 2013. Phillips‘s counsel prepared and submitted to the arbitrator a document entitled “Judgment” (hereinafter “the Judgment“). The arbitrator signed the Judgment on January 29, 2013, and it was filed with the court the same day. The Judgment was not signed by a judge or commissioner of the superior court. The Judgment, in pertinent part, declared that
[t]his matter having come on for arbitration on December 18, 2012, and the parties having presented their evidence and rested, and based on the Arbitrator‘s ruling of January 3, 2013,
IT IS HEREBY ORDERED, ADJUDGED AND DECREED:
1. Plaintiff Robert Phillips shall have and recover from Defendant Craig E. Garcia the sum of $11,967.00, together with interest thereon at the rate of 4.25% per annum until paid.
2. Plaintiff Robert Phillips shall have and recover from Defendant Craig E. Garcia attorney‘s fees and costs in the sum of $8,687.00, together with interest thereon at the rate of 4.25% per annum until paid.
¶ 3 Nothing further was filed with the court until November 2013, approximately 10 months later, when Phillips filed a petition requesting that the court order Garcia to appear as a judgment debtor pursuant to
¶ 4 Garcia moved to dismiss the arbitration award because no application for entry of judgment was timely filed within 120 days after the arbitrator‘s decision, in accordance with Arizona Rule of Civil Procedure (Rule) 76(d). After numerous pleadings by the parties, the court denied Garcia‘s motion in a signed order filed February 26, 2014. Garcia filed his notice of appeal on March 7, 2014.
DISCUSSION
I. Jurisdiction
¶ 5 Garcia asserts this court has jurisdiction over this appeal under
¶ 7 The issue Garcia raises on appeal is primarily a question of law—requiring this court to interpret court rules and a statute. See Orme Sch. v. Reeves, 166 Ariz. 301, 303, 802 P.2d 1000, 1002 (1990) (accepting special action jurisdiction when the question is a pure issue of law that requires neither factual review nor interpretation). Additionally, the parties have briefed the issue and we have a complete record. We are presented a legal issue of first impression, and judicial economy will be served by a substantive ruling now. Therefore, in our discretion we accept special action jurisdiction to consider whether the trial court erred by not dismissing the case. See Ariz. R.P. Spec. Act. 1(a).
II. Merits
¶ 8 Garcia argues the trial court erred when it declined to dismiss the arbitration award in accordance with Rule 76(d), which provides:
If no application for entry of judgment has been filed within 120 days from the date of the filing of the notice of decision, and no appeal is pending, the case shall be dismissed.
According to Garcia, no true judgment was entered, no appeal filed, and the 120 day period allowed by Rule 76(d) has expired; therefore, the action must be dismissed. Phillips contends that the Judgment is a valid judgment under Rule 76(a) and
A. A True Judgment Was Never Entered
¶ 9 This court reviews de novo the interpretation of rules and statutes. M-11 Ltd. P‘ship v. Gommard, 235 Ariz. 166, 168, ¶ 6, 330 P.3d 356, 358 (App.2014). We look to the plain meaning of the language as the most reliable indicator of the construction and meaning. See State v. Hansen, 215 Ariz. 287, 289, ¶ 7, 160 P.3d 166, 168 (2007); New Sun Bus. Park, LLC v. Yuma Cnty., 221 Ariz. 43, 46, ¶ 12, 209 P.3d 179, 182 (App.2009). When the language of a statute or rule is “clear and unequivocal, it is determinative of the statute‘s construction.” See Janson v. Christensen, 167 Ariz. 470, 471, 808 P.2d 1222, 1223 (1991).
¶ 10 Rule 76(a) provides:
Within ten days after completion of the hearing, the arbitrator shall:
(1) render a decision;
(2) return the original superior court file by messenger or certified mail to the Superior Court Clerk;
(3) notify the parties that their exhibits are available for retrieval;
(4) notify the parties of the decision in writing (a letter to the parties or their counsel shall suffice); and
(5) file the notice of decision with the court.
Within ten days of the notice of decision, either party may submit to the arbitrator a proposed form of award or other final disposition, including any form of award for attorneys’ fees and costs whether arising out of an offer of judgment, sanctions or otherwise, an affidavit in support of attorneys’ fees if such fees are recoverable,
(Emphasis added.) This rule grants the arbitrator the power to render a decision, and the parties may then propose the form of award for the arbitrator to sign. After the parties have been given an opportunity to voice any objections, the arbitrator‘s duty is to then “pass upon the objections and file one signed original award or other final disposition” with the clerk of the court. Ariz. R. Civ. P. 76(a) (emphasis added). Rule 76(b) directs that when no award is filed with the court, the notice of decision becomes the award of the arbitrator.
¶ 11 This court has explained that the rules of arbitration “clearly contemplate two separate filings” by the arbitrator: the “notice of decision” and “the award.” See Bittner v. Superior Court (Galati), 182 Ariz. 434, 436, 897 P.2d 736, 738 (App.1995).2 The arbitrator here filed a notice of decision on January 3, 2013. Phillips‘s counsel submitted the Judgment to the arbitrator, and it was signed and filed on January 29. The Judgment, despite its name, must be correctly understood to be the “award or other disposition” under Rule 76(a), because it was signed by the arbitrator rather than a superior court judge or commissioner. See
¶ 12 Phillips also argues that, based on the “or other final disposition” language in the rule, the mislabeling of the award should not matter. In Bittner, the mislabeling of an award was analyzed in the context of whether an appeal from an arbitrator‘s award was untimely. Bittner, 182 Ariz. at 435, 897 P.2d at 737. An arbitrator first filed an “Arbitration Award” with the court but the award failed to provide for costs to the prevailing party. Id. at 436, 897 P.2d at 738. On the same day, the prevailing party was instructed to submit an affidavit in support of attorney fees and costs. Id. After the submittal, the arbitrator filed an “Amended Arbitration Award,” which included costs. Id. The non-prevailing party appealed after the “Amended Arbitration Award.” Id. The court held that the mislabeling of the awards was not fatal to the appeal because the “Arbitration Award” was not intended to be the final award from which a party could appeal and given the absence of costs in that award, it would have been impossible to treat it as final. Id. Based on Bittner, we agree that the mislabeling of an arbitration award does not necessarily affect an award for purposes of an appeal from the award. But the mislabeling of an award as a judgment does not make it a true judgment under the rules.
¶ 13 Rule 76(c) confirms an additional step within the compulsory arbitration procedure by providing that any party may, after the time for appeal of the award has expired, “file to have judgment entered on the award.” In other words, after an “award or other final disposition” is signed and filed by the arbitrator, a separate judgment is to be entered by the court.
¶ 14 Rule 74 also supports our understanding of Rule 76. Under Rule 74, the arbitrator does not have the power to dispose of the case. Rather, the arbitrator has the power to determine the admissibility of evidence, decide the law and facts of the case, and make legal rulings. See
114 Ariz. 85, 86, 559 P.2d 205, 206 (App.1977) (holding that after an arbitrator filed an award he was divested of jurisdiction and the case file was returned to the superior court).
¶ 15 Phillips nonetheless contends that
The arbitration award shall be in writing, signed by a majority of the arbitrators and filed with the court. The court shall enter the award in its record of judgments. The award has the effect of a judgment on the parties unless reversed on appeal.
(Emphasis added.) Phillips relies primarily on the italicized sentence to equate the award (the Judgment) with a formal, final judgment. Garcia argues that subsection (E) only applies to cases submitted to arbitration by an agreement of reference pursuant to
¶ 16 In order “[t]o harmonize a rule and a statute, a court should consider the purpose each is meant to serve.” State ex rel. McDougall v. Superior Court, 173 Ariz. 385, 387, 843 P.2d 1277, 1279 (App.1992). Section 12-133 creates the system of compulsory non-binding arbitration and “mandates the arbitration of certain cases filed in the superior court.” Graf v. Whitaker, 192 Ariz. 403, 405, ¶ 6, 966 P.2d 1007, 1009 (App.1998). The statute relies on “judicial rulemaking to implement a workable arbitration scheme.” Id. at 403, 406, ¶ 13, 966 P.2d at 1010. When a dispute is within the jurisdictional dollar amount, it is subject to compulsory non-binding arbitration.
¶ 17 As the court held in Graf, we conclude Rule 76 “does not frustrate but rather advances the intent behind the statute.” Graf, 192 Ariz. at 407, ¶ 14, 966 P.2d at 1011. We have considered the purpose each is meant to serve and have avoided an interpretation that would render portions of the statute or rules meaningless or of no effect. See id.; see also State v. Clifton Lodge No. 1174, Benevolent & Protective Order of Elks, 20 Ariz.App. 512, 513, 514, 514 P.2d 265, 266 (App.1973) (“Courts must avoid construction of statutes which would render them meaningless or of no effect.“) (citation omitted). To require a party in a compulsory arbitration proceeding to request entry of judgment by the court does not render any portion of § 12-133(E) meaningless. Rules 76 and 58(a) supplement the statute by clarifying that the court must enter judgment and any party may request the court to do so.
Legal Effect of Award or Other Final Disposition. Upon expiration of the time for appeal and if no appeal has been taken, the arbitrator‘s award or other final disposition shall become binding as a judgment of the Superior Court and shall be entered in the judgment docket.
See Ariz. R. Civ. P. 75(c) (West 2007). This provision was removed from the rules in 2007 and the provision in current Rule 76(c) requiring a party to apply for entry of judgment was created. See Ariz. R. Civ. P. 76(c) (West 2008). This rulemaking history confirms that the Arizona Supreme Court intended by these rules to require an affirmative act by the court to enter the formal judgment. No such affirmative act occurred here and no true judgment was entered.
B. Dismissal of the Action is Required Under Rule 76(d)
¶ 19 Garcia argues that because a judgment was never entered, the superior court should have dismissed the case in accordance with Rule 76(d), which provides that “[i]f no application for entry of judgment has been filed within 120 days from the date of the filing of the notice of decision, and no appeal is pending, the case shall be dismissed.” This language is plain and unambiguous, and should be enforced. See State ex rel. Romley v. Superior Court (Stewart), 168 Ariz. 167, 169, 812 P.2d 985, 987 (1991) (noting that when the language of a rule “is not subject to different interpretations, we need look no further than that language to determine the drafters’ intent“).
¶ 20 The parties had until May 3, 2013, within which to request entry of judgment (120 days after the notice of decision was filed on January 3, 2013). Because no application for entry of judgment was filed and because no appeal from the arbitrator‘s award was pending, the trial court should have dismissed the action.
ATTORNEY FEES AND COSTS
¶ 21 Both parties request attorney fees based on
CONCLUSION
¶ 22 We lack appellate jurisdiction over this attempted appeal from the denial of a motion to dismiss. But, in our discretion, we exercise special action jurisdiction to reach the merits of the issues presented. We determine that the Judgment signed by the arbitrator constituted the award under Rule 76, and no true judgment as described in Rules 58(a) and 76 was entered. In accordance with Rule 76(d), therefore, the action should have been dismissed. At oral argument before this court, both parties conceded that—if we determined dismissal was required—a dismissal without prejudice would be the appropriate disposition of this action. We therefore vacate the trial court‘s denial of Garcia‘s motion to dismiss and also the judgment entered in favor of Phillips, and we direct the entry of a judgment of dismissal without prejudice.