Archer Mechanical, Inc. v. Precision Control Services, Inc.

Archer Mechanical, Inc. v. Precision Control Services, Inc.

IN THE UTAH COURT OF APPEALS

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Archer Mechanical, Inc., a

Utah corporation,

Plaintiff and Appellee,

v.

Precision Control Services,

Inc., a Utah corporation,

Defendant and Appellant.

MEMORANDUM DECISION

(Not For Official Publication)

Case No. 981345-CA

F I L E D

(December 10, 1998)

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Third District, Salt Lake Department

The Honorable Dennis M. Fuchs

Attorneys: D. Bruce Oliver, Salt Lake City, for Appellant

H. Burt Ringwood and D. Joseph Cartwright, Salt Lake

City, for Appellee

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Before Judges Davis, Wilkins, and Orme.

DAVIS, Presiding Judge:

Precision Control Services, Inc. (Precision) appeals the trial court's (1) order of arbitration; (2) order dismissing the case without prejudice; and (3) order denying Precision Rule 11 sanctions.

Order of Arbitration

Precision argues the trial court erred in entering an order of arbitration when that relief was not requested in Precision's motion to dismiss. The basis for Precision's motion, however, was that the disputes between the parties were, under the terms of their contract, subject to arbitration. "The court, upon motion of any party showing the existence of an arbitration agreement, shall order the parties to arbitrate." Utah Code Ann. § 78-31a-4(1) (1996) (emphasis added). Further, the order of arbitration is consistent with Precision's position before the trial court and it cannot now, on appeal, disavow the parties' agreement to arbitrate. See Bailey-Allen Co. v. Kurzet, 945 P.2d 180, 185 (Utah Ct. App. 1997) ("[A party is] not at liberty to argue one position below and then take the opposite position on appeal."). Thus, the trial court properly ordered arbitration in response to Precision's motion to dismiss.

Motion to Dismiss

Precision also argues that although the trial court dismissed the case without prejudice, that somehow amounted to a dismissal on the merits under Rule 41 of the Utah Rules of Civil Procedure. We review this legal question for correctness, according the trial court no deference. State v. Sterkel, 933 P.2d 409, 411 (Utah Ct. App. 1997). It is difficult to imagine a better way for the trial court to specify that the dismissal was not an adjudication on the merits than by including the words, "without prejudice." Cf. Alvarez v. Galetka, 933 P.2d 987, 990 (Utah 1997).

More importantly, section 78-31a-4(3) of the Utah Code provides, in relevant part, "An order to submit an agreement to arbitration stays any action or proceeding involving an issue subject to arbitration under the agreement. . . . [T]he order for arbitration shall include a stay of the action or proceeding." Utah Code Ann. § 78-31a-4(3) (1996) (emphasis added). Thus, having ordered arbitration, it was inappropriate for the trial court to dismiss the matter at all, and it should have instead stayed the action pending arbitration. That portion of the trial court's order dismissing the case without prejudice is hereby modified in accordance with section 78-31a-4(3), and the action is stayed pending the conclusion of arbitration proceedings. See Utah R. App. P. 30(a) ("The [appellate] court may . . . modify . . . any order or judgment appealed from."); see also Bailey-Allen Co., 945 P.2d at 189.

Sanctions

Lastly, Precision argues that the trial court erroneously denied its motion for sanctions. Whether a party's conduct amounts to a Rule 11 violation is a question of law, which we review for correctness. See In re R.N.L., 913 P.2d 761, 763 (Utah Ct. App. 1996).

Precision argues that by filing the complaint in the district court, instead of pursuing its claim via arbitration, Archer violated Rule 11. Archer responds by arguing that, in good faith, it believed that its claim fell outside the scope of the arbitration agreement. Considering the arbitration language contained in the contract at issue, Archer's theory was arguable, although unavailing. We therefore affirm the trial court's denial of Rule 11 sanctions.

Conclusion

The trial court properly ordered the parties to arbitration. The trial court's order of dismissal is hereby modified to stay the proceedings pending arbitration. The trial court's order denying Rule 11 sanctions is affirmed. Remanded for further proceedings consistent with this decision.

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James Z. Davis,

Presiding Judge

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WE CONCUR:

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Michael J. Wilkins,

Associate Presiding Judge

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Gregory K. Orme, Judge