Whatley v. Chapman

Whatley v. Chapman

IN THE UTAH COURT OF APPEALS
 

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Bryan J. Whatley,

    Plaintiff and Appellant,

v.

Bruce E. Chapman, Cheri Chapman, James L. Christensen, and Does I-V,

    Defendant and Appellees.

MEMORANDUM DECISION
(Not For Official Publication)
 

Case No. 20030481-CA
 

F I L E D
(September 23, 2004)
 

2004 UT App 325

 

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Fourth District, Provo Department

The Honorable Claudia Laycock

Attorneys: Timothy M. Willardson, Sandy, for Appellant

    James L. Christensen and Christopher G. Jessop, Salt Lake City, for Appellee

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Before Judges Greenwood, Jackson, and Thorne.

GREENWOOD, Judge:

        Bryan Whatley appeals the trial court's decision granting Bruce and Ceri Chapman's (the Chapmans) motion to dismiss and motion to compel arbitration. We affirm.

        Whatley first argues that the trial court lacked jurisdiction over the case when, in November 2003, it amended its prior ruling after Whatley had filed his notice of appeal. This presents a question of law that we review for correctness. See Starways Inc. v. Curry, 1999 UT 50,¶2, 980 P.2d 204 (noting that a jurisdictional issue "'presents only legal questions that are reviewed for correctness'" (citation omitted)).

        Normally, "[a]n appeal divests the trial court of jurisdiction and transfers it to the appellate court, where it remains until the trial court regains jurisdiction." Hi-Country Estates Homeowners Ass'n. v. Foothills Water Co., 942 P.2d 305, 306 (Utah 1996). However, the Utah Supreme Court has "recognized exceptions to that rule, 'in the interest of preventing unnecessary delay, where any action by the trial court is not likely to modify a party's rights with respect to the issues raised on appeal.'" Cheves v. Williams, 1999 UT 86,¶45, 993 P.2d 191 (citation omitted).

        In this case, the trial court's amended order addressed only whether the case should be dismissed or stayed pending arbitration. Whatley's central issue on appeal is whether the trial court erred by referring all of his claims against the Chapmans to arbitration, a question which is not affected by whether the trial court dismissed or stayed the case. Actually, modifying the order from a dismissal to a stay of proceedings benefits Whatley and is consistent with Utah's arbitration statute. See Utah Code Ann. § 78-31a-4(3) (2002).(1) Further, Whatley's argument about the right to conduct discovery is the same whether the trial court stayed or dismissed his case. Therefore, the amended order did not "modify [Whatley's] rights with respect to the issues raised on appeal." Cheves, 1999 UT 86 at ¶45 (quotations and citation omitted).(2)

    Whatley next argues that the trial court erred by granting the Chapmans' motion to compel arbitration and ordering the parties to arbitrate all of Whatley's claims against the Chapmans. "[W]hether a trial court correctly decided a motion to compel arbitration is a question of law which we review for correctness, according no deference to the trial judge." Central Fla. Invs., Inc. v. Parkwest Assocs., 2002 UT 3,¶10, 40 P.3d 599.

    The Utah Arbitration Act requires that the trial court, rather than the arbitrator, determine whether the scope of an arbitration clause includes the claims at issue. See Utah Code Ann. § 78-31a-4(1) (1996); see also AT&T Techns. v. Communications Workers of Am., 475 U.S. 643, 649 (1986) (noting that under federal arbitration laws, "the question of whether the parties agreed to arbitrate is to be decided by the court, not the arbitrator."). In this case, the parties agreed to arbitrate any "dispute under this agreement."

    To determine whether Whatley's claims fall within the "scope of the matters covered by the agreement," Utah Code Ann. § 78-31a-4(1), this court must examine Whatley's factual allegations. Courts in other states have held that arbitration agreements with broad language like the clause at issue in this case, can include tort as well as contract claims as long as they "'have their roots in the relationship between the parties which was created by the contract.'" Izzi v. Mesquite Country Club, 231 Cal. Rptr. 315, 317 (Cal. Ct. App. 1986) (citation omitted). Stated another way, claims can be arbitrated if the basis for the claims "lies in obligations accruing or resulting from [the agreement]." Ronbeck Constr. Co. v. Savanna Club Corp., 592 So. 2d 344, 347 (Fla. Dist. Ct. App. 1992); see also Ottman v. Fadden, 575 N.W.2d 593, 596 (Minn. Ct. App. 1998) (holding that defamation claim arose out of an agreement and is subject to arbitration).

    After reviewing Whatley's complaint and the factual allegations supporting each claim, we hold that the trial court did not err in finding that all of Whatley's claims against the Chapmans arose under the agreement. Because arbitration is not limited to breach of contract claims, see Izzi, 231 Cal. Rptr. at 317, we need not decide which claims constitute a claim for breach of contract. Because the facts alleged in the complaint are all rooted in the parties' agreement and the actions of the parties resulting from the agreement, the claims should be arbitrated.

    Our disposition of Whatley's first two issues on appeal renders moot his remaining issues. The trial court's amended ruling set aside its dismissal of Whatley's claims; thus his argument that the trial court improperly converted the motion to dismiss into a motion for summary judgment becomes irrelevant.(3) Furthermore, Whatley's argument that he was deprived of his right to discovery is unpersuasive because it was inappropriate given the pendency of a motion to dismiss. Moreover, he will have the opportunity to conduct discovery as part of the arbitration process.

    Accordingly, we affirm the trial court's determination that all of Whatley's claims against the Chapmans be referred to arbitration as agreed to and encompassed in their agreement.

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Pamela T. Greenwood, Judge

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WE CONCUR:

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Norman H. Jackson, Judge

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William A. Thorne Jr., Judge

1. The Utah Arbitration Act, Utah Code sections 78-31a-1 to -20, see Utah Code Ann. §§ 78-31a-1 to -20 (2002), was repealed effective May 15, 2003. The Utah Uniform Arbitration Act, Utah Code sections 78-31a-101 to -131, was enacted in its place and became effective May 15, 2003. See Utah Code Ann. §§ 78-31a-101 to -131 (2002). Because the Agreement between these parties was signed in 2001, we rely on the former Utah Arbitration Act.

2. We also affirm the trial court's ruling in both its original and its amended decision dismissing Mr. Christensen as a defendant in this case. Although Whatley does not appear to challenge Mr. Christensen's dismissal on appeal, we agree with the trial court that Whatley failed to plead fraud with specificity as to Mr. Christensen.

3. Even if the trial court had not set aside its ruling dismissing the claims, it clearly specified in its first ruling that it did not rely on the affidavit when it decided the motion to dismiss and, therefore, did not wrongly convert the motion into a motion for summary judgment.