IN THE

ARIZONA COURT OF APPEALS

DIVISION ONE

MICHELE GRAY, Plaintiff/Appellant,

v.

GC SERVICES, LP, Defendant/Appellee.

No. 1 CA-CV 21-0533

Appeal from the Superior Court in Maricopa County

No. CV 2021-002228

The Honorable Bradley H. Astrowsky, Judge

VACATED AND REMANDED

APPEARANCES

Michele Gray, Rensselaer, NY

Plaintiff/Appellant

Hassett Glasser PC, Phoenix

By Myles P. Hassett, Jamie A. Glasser, David R. Seidman

Counsel for Defendant/Appellee

FILED 12-14-2023
GRAY v. GC SERVICES

Opinion of the Court

2

OPINION

Judge Michael J. Brown delivered the opinion of the Court, in which 

Presiding Judge Maria Elena Cruz and Judge Samuel A. Thumma joined.

B R O W N, Judge:

¶1 Michele Gray appeals the superior court’s order dismissing 

her employment-related claims with prejudice, asserting the court erred by 

failing to order arbitration under the parties’ employment agreement. We 

hold that the parties explicitly agreed to resolve all disputes arising out of 

Gray’s employment through arbitration, including whether Gray’s current 

lawsuit is barred by claim preclusion. Thus, we vacate the dismissal order 

and remand to allow the parties to participate in arbitration to address 

preclusion and other issues in the exclusive forum they selected to resolve 

their dispute. 

BACKGROUND

¶2 In June 2019, GC Services, LP (“GCS”) hired Gray as a homebased customer service representative. As a condition of employment, 

Gray signed a “Mutual Agreement for Dispute Resolution” (“Agreement”)

providing for “mutually binding” arbitration. The Agreement states that it 

is governed by the Federal Arbitration Act (“FAA”) and “shall survive the 

termination of [Gray’s] employment” by GCS.

1

¶3 The employment relationship soured, and in January 2020,

Gray sent GCS a resignation letter, which GCS immediately accepted.

Several months later, Gray sued GCS in the United States District Court for 

the Northern District of New York, alleging GCS wrongfully terminated her 

employment in violation of several federal and state statutes. In February 

2021, Gray sued GCS in Maricopa County Superior Court, raising

substantially the same claims she had alleged in the federal lawsuit, along 

with claims based on state law. Meanwhile, Gray filed a nearly identical 

suit in New York state court. Regardless of the ultimate disposition of the 

1 The Agreement also states that “[t]o the extent any dispute requires 

the application of state law, the parties agree only the laws of the State of 

Texas shall apply.” Neither party, however, has argued Texas law is 

relevant in resolving the issues we address in this appeal. 
GRAY v. GC SERVICES

Opinion of the Court

3

suits Gray filed in New York, they have no bearing on the outcome of this 

appeal. 

¶4 In the case before us, GCS filed a combined motion to compel

arbitration and motion to dismiss. GCS stated it was “seeking to compel 

any cognizable claims to arbitration pursuant to a valid and binding 

arbitration agreement between the parties,” which required them “to 

arbitrate all disputes arising out of or related to [Gray’s] employment or the 

termination thereof.” GCS qualified its motion to compel, however, 

asserting there was nothing the superior court could compel because Gray’s 

complaint failed to state any cognizable claim and thus dismissal was 

appropriate under Arizona Rule of Civil Procedure (“Rule”) 12(b)(6). GCS 

added that, even if a “cognizable claim” existed, Gray’s lawsuit would be 

barred by claim preclusion.

2

¶5 The superior court dismissed Gray’s complaint with 

prejudice, explaining it was unnecessary to decide the “arbitration issue” 

because Gray failed to state a claim under any of the grounds she had 

alleged, and claim preclusion applied. After the court issued a final 

judgment, Gray filed a timely notice of appeal. 

DISCUSSION

A. Appellate Jurisdiction

¶6 GCS asks that we dismiss Gray’s appeal, asserting the

substantive issues raised in Gray’s opening brief go beyond her notice of 

appeal. “As a general rule, our review is limited to matters designated in 

the notice of appeal or cross-appeal.” Desert Palm Surgical Grp., P.L.C. v.

Petta, 236 Ariz. 568, 576, ¶ 15 (App. 2015). Whether the notice of appeal is 

sufficient is a question of jurisdiction, and “[w]e have an independent duty 

to determine whether we have jurisdiction over an appeal.” Id.

¶7 Although Gray’s notice of appeal included an extraneous 

comment referencing her amended complaint, the notice plainly stated she 

was appealing the superior court’s dismissal order. Thus, she substantially 

complied with our appellate rules by identifying the correct order she 

wished to appeal. See ARCAP 8(c)(3) (stating that a notice of appeal must 

2 GCS cited Arizona’s arbitration statutes and the FAA as the basis for 

its motion to compel arbitration. Because the parties expressly agreed the 

Agreement is governed by the FAA, we need not decide the applicability of 

Arizona’s arbitration statutes. 
GRAY v. GC SERVICES

Opinion of the Court

4

“[d]esignate the judgment or portion of the judgment from which the party 

is appealing”). Moreover, GCS has made no argument it was misled as to 

which order Gray intended to appeal or was otherwise prejudiced. See Hill 

v. City of Phoenix, 193 Ariz. 570, 572–73, ¶ 10 (1999). We have appellate 

jurisdiction under A.R.S. § 12-2101(A)(1) to decide issues relating to the 

dismissal order. 

B. Waiver

¶8 GCS argues that Gray waived all arguments on appeal

because her opening brief does not comply with ARCAP 13. Among other 

things, GCS asserts that Gray failed to include a statement of the case, her 

statement of the facts is incoherent, she did not provide citations to the law 

or record, and her arguments are a “mishmash of perceived grievances.” 

See Ramos v. Nichols, 252 Ariz. 519, 522, ¶ 8 (App. 2022) (explaining that an 

appellant who fails to make a reasonable effort to comply with the rules 

may waive issues on appeal due to noncompliance). Although the opening 

brief is deficient in some respects, we decline to apply waiver because Gray 

has adequately challenged the court’s decision to dismiss the case on the 

merits without first considering whether her claims must be resolved 

through arbitration. See id. 

C. Motion to Compel Arbitration

¶9 Turning to the substance of her appeal, Gray argues the 

superior court erred when it failed to compel arbitration pursuant to the 

Agreement. We review de novo the superior court’s decision on whether 

to compel arbitration. Allstate Prop. & Cas. Ins. Co. v. Watts Water Techs., Inc., 

244 Ariz. 253, 256, ¶ 9 (App. 2018). When addressing whether the parties 

agreed to arbitrate a certain matter, courts generally apply state-law 

principles governing contract formation. First Options of Chicago, Inc. v. 

Kaplan, 514 U.S. 938, 944 (1995). Once it is determined that the FAA applies 

to a dispute, federal substantive law regarding arbitrability controls. 

Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626 

(1985). 

¶10 In addressing “whether a dispute is subject to arbitration 

governed by the FAA, a court is limited to deciding whether an arbitration 

agreement exists and whether it encompasses the dispute.” United Behav. 

Health v. Maricopa Integrated Health Sys., 240 Ariz. 118, 126, ¶ 28 (2016).

(citing Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 

2000)). “If the response is affirmative on both counts, then the Act requires 

the court to enforce the arbitration agreement in accordance with its terms.” 
GRAY v. GC SERVICES

Opinion of the Court

5

Chiron Corp., 207 F.3d at 1130. The question here is whether the Agreement 

encompasses the disputes between GCS and Gray.

¶11 Section 1 of the Agreement (”All Disputes Must be 

Arbitrated”) states in part:

Claims subject to arbitration include all legally cognizable 

claims in the broadest context and include, but are not limited 

to, any dispute about the interpretation, applicability, 

validity, existence, enforcement, or extent of arbitrability of or 

under this Agreement . . . This includes, by way of nonexhaustive illustration only, any claim of employment 

discrimination in any alleged form . . . or any other claim, 

whether contractual, common-law, statutory, or regulatory 

arising out of, or in any way related to, Individual’s 

application for employment with and/or employment with 

Company, the termination thereof, this Agreement, or any 

other matter incident or in any manner related thereto.

¶12 In interpreting a contract, we consider the language used 

according to its plain and ordinary meaning, viewed in context of the entire 

contract, unless “it can be shown that the parties intended a special 

meaning.” Terrell v. Torres, 248 Ariz. 47, 50, ¶ 14 (2020). We also “attempt 

to reconcile and give effect to all terms of the contract to avoid any term 

being rendered superfluous.” Id. 

¶13 “Absent some ambiguity in the agreement, . . . it is the 

language of the contract that defines the scope of disputes subject to 

arbitration.” Equal Emp. Opportunity Comm’n v. Waffle House, Inc., 534 U.S. 

279, 289 (2002). Ambiguities in an agreement “should be resolved in favor 

of arbitration,” but courts will not override parties’ intent, “or reach a result 

inconsistent with the plain text of the contract, simply because the policy 

favoring arbitration is implicated.” Id. at 294; see also Morgan v. Sundance, 

Inc., 596 U.S. 411, 418 (2022) (noting that the federal policy favoring 

arbitration is not intended to “favor arbitration over litigation[,]” but rather 

to “hold a party to its arbitration contract just as the court would to any 

other [contract]”). And except in limited circumstances not applicable here, 

arbitration agreements in employment contracts are valid and enforceable. 

See Cir. City Stores v. Adams, 532 U.S. 105, 119 (2001); see also Hamblen v. 

Hatch, 242 Ariz. 483, 488, ¶ 20 (2017). 
GRAY v. GC SERVICES

Opinion of the Court

6

1. Legally Cognizable Claims 

¶14 GCS argues the FAA does not apply because its dispute with 

Gray is not a “legally cognizable claim” as that phrase is used in the 

Agreement. But that argument overlooks the Agreement’s expansive 

language requiring arbitration and the FAA’s broad applicability to 

arbitration agreements. See 9 U.S.C. § 2 (establishing the validity and 

enforceability of agreements to arbitrate disputes arising out of contract 

“save upon such grounds as exist at law or in equity for the revocation of 

any contract”); see also S. Cal. Edison Co. v. Peabody W. Coal Co., 194 Ariz. 47, 

51, ¶ 13 (1999) (“The FAA preempts state law and governs all written 

arbitration agreements involving interstate commerce, making such 

agreements enforceable in both federal and state courts.”). 

¶15 According to GCS, the phrase “legally cognizable claims” 

limits the scope of the Agreement because a claim barred by claim 

preclusion is not cognizable. That argument, however, presupposes a 

specific resolution of a legal issue, and the question here is whether that 

legal issue should be resolved in arbitration. As GCS argued in the superior 

court, the parties entered into an enforceable agreement, which contained a 

“mutual, broad, and unambiguous arbitration provision” mandating 

arbitration of any claim arising out of Gray’s employment. GCS also 

asserted “the plain terms of the arbitration clause” meant that Gray’s claims 

must be arbitrated. On appeal, GCS seeks to retreat from those assertions, 

arguing its motion to compel was merely an alternative theory presented to 

the superior court, and in any event, it only moved to compel arbitration of 

any “cognizable claims.” GCS now takes the view that, because Gray’s 

claims are not cognizable, the Agreement is essentially irrelevant based on 

application of claim preclusion. For several reasons, we disagree. 

¶16 First, GCS does not address why Gray’s suit does not fit 

squarely within the phrase “all legally cognizable disputes.” See

Agreement, § 1 (confirming the parties’ intent “that all legally cognizable 

disputes between them that cannot be resolved to the parties’ satisfaction

through use of the Company’s personnel policies, must be resolved by final 

and binding arbitration” and stating that the Agreement “shall be 

construed as broadly as legally possible and shall apply to any and all 

legally cognizable disputes between” the parties). We presume the parties 

meant something different by using “legally cognizable disputes” in certain 

places in the Agreement and “legally cognizable claims” in others. See

Terrell, 248 Ariz. at 50, ¶ 14 (recognizing that courts “attempt to reconcile 

and give effect to all terms of the contract to avoid any term being rendered 

superfluous”). Gray has alleged she was wrongfully terminated by GCS, 
GRAY v. GC SERVICES

Opinion of the Court

7

and GCS provides no authority showing her allegation does not constitute 

a legally cognizable dispute between them, even if it ultimately might fail. 

¶17 Second, whether analyzed as a claim or a dispute, the 

Agreement contemplates that any claim or dispute arising out of Gray’s 

employment must be resolved through arbitration. And as our supreme 

court has recognized, trial courts “must carefully avoid deciding the merits 

of an arbitrable claim or any defenses to it.” United Behav. Health, 240 Ariz. 

at 126, ¶ 28; see also U.S. Fire Ins. Co. v. Nat’l Gypsum Co., 101 F.3d 813, 817 

(2d Cir. 1996) (recognizing that “a defense based on the issue-preclusive 

effect of the prior judgment is part of the dispute on the merits”); Republic 

of Nicaragua v. Standard Fruit Co., 937 F.2d 469, 478 (9th Cir. 1991) 

(explaining that a court’s “role is strictly limited to determining arbitrability 

and enforcing agreements to arbitrate, leaving the merits of the claim and 

any defenses to the arbitrator”). 

¶18 Third, GCS’s argument ignores the Agreement’s broad 

language requiring arbitration. As noted, § 1 says that matters to be 

arbitrated shall “include all legally cognizable claims in the broadest 

context . . . [including] any claim arising under any federal, state, or local 

statute, regulation, or ordinance, any alleged contract, or under the 

common law.” That section also states that “[t]he parties jointly agree neither 

may file any lawsuit to resolve any dispute between them.” (Emphasis added.) 

These provisions leave no doubt what the parties agreed to and compels 

the conclusion that Gray’s claims must be arbitrated. GCS’s reliance on 

Charlton v. Estate of Charlton, 48 B.R. 1012 (D. Ariz. 1985), is without merit

because that case does not involve any issues relating to arbitration or the 

FAA. 

¶19 Fourth, we reject GCS’s attempt to narrow the scope of the 

Agreement by focusing only on the term “cognizable.” Although Gray’s 

amended complaint includes discussion of many irrelevant matters, 

regardless of merit, her claims are nonetheless capable of being heard and 

determined by a judicial officer. Given the language of the Agreement,

Gray’s claims are subject to arbitration. See Agreement, § 6 (stating that in 

any dispute, “the arbitrator may grant any relief, legal or equitable, interim 

or final, which could be granted by a court of competent jurisdiction”); id., 

§ 1 (stating that the Agreement applies to any claim, “whether contractual, 

common-law, statutory, or regulatory arising out of, or in any way related 

to, [Gray’s] . . . employment with [GCS] . . . or any other matter incident or 

in any manner related thereto”). 
GRAY v. GC SERVICES

Opinion of the Court

8

¶20 Finally, § 2 of the Agreement provides additional support for 

our analysis. It states that the Judicial Arbitration and Mediation Services 

(“JAMS”) rules and procedures for employment matters “applicable to the 

dispute” apply. Section 2 also says that any dispute between Gray and 

GCS, including “the interpretation, applicability, validity, existence, 

enforcement, or extent of arbitrability of or under this Agreement, shall be 

resolved exclusively by final and binding arbitration administered by 

JAMS.” Inclusion of this language further confirms the parties’ Agreement 

that all disputes between them will be resolved through arbitration, 

including whether claim preclusion bars Gray’s claims.

2. Existing Controversy

¶21 The FAA states that agreements to arbitrate “an existing 

controversy arising out of such a contract” are valid and enforceable “save 

upon such grounds as exist at law or in equity for the revocation of any 

contract.” 9 U.S.C. § 2 (emphasis added). GCS contends there is no 

“existing controversy” here, meaning the FAA does not apply to this 

dispute, because Gray’s claims are barred by claim preclusion.

¶22 GCS relies again on Charlton. As noted, that case did not 

involve arbitration; rather, the bankruptcy court held that the Declaratory 

Judgment Act (“DJA”), 28 U.S.C. § 2201, only applied to “cases of actual 

controversy,” which did not exist if the issues were barred by claim 

preclusion. 48 B.R. at 1014. Unlike the FAA, the DJA gives judges discretion 

in deciding what matters are appropriate for a declaratory action. Compare

28 U.S.C. § 2201(a) (“[A]ny court of the United States . . . may declare the 

rights and other legal relations of any interested party seeking such 

declaration”) (emphasis added), with 9 U.S.C. § 3 (When a court is satisfied 

that a matter is subject to arbitration, the court “shall on application of one 

of the parties stay the trial of the action until such arbitration has been had 

in accordance with the terms of the agreement”) (emphasis added).

Nothing in Charlton suggests its reasoning extends to arbitration 

agreements governed by the FAA. 

3. Mootness

¶23 GCS also argues the arbitration issue became moot when the 

superior court determined Gray failed to state a claim for relief. That 

argument fails because the court was limited to “deciding whether an 

arbitration agreement exists and whether it encompasse[d] the dispute” 

and should have avoided deciding the merits of Gray’s claims. See United 

Behav. Health, 240 Ariz. at 126, ¶ 28; see also AT&T Techs., Inc., v. Commc’ns 
GRAY v. GC SERVICES

Opinion of the Court

9

Workers of Am., 475 U.S. 643, 649 (1986) (recognizing “that, in deciding 

whether the parties have agreed to submit a particular grievance to 

arbitration, a court is not to rule on the potential merits of the underlying 

claims”). Under these circumstances, the court lacked the authority to 

dismiss Gray’s complaint for failure to state a claim or based on claim 

preclusion because those issues must be resolved through arbitration. 

4. Full Faith and Credit

¶24 Finally, GCS relies on the Full Faith and Credit Clause to 

argue that the resolution of its motion to compel arbitration and motion to 

dismiss the complaint does not depend on the FAA. See U.S. Const. art. IV, 

§ 1 (“Full Faith and Credit shall be given in each State to the . . . judicial 

Proceedings of every other State.”). Thus, each State must generally give

“a judgment at least the [preclusive] effect which the judgment would be 

accorded in the State which rendered it.” Durfee v. Duke, 375 U.S. 106, 109 

(1963). GCS argues that because Gray’s claims were resolved in New York

litigation, if she tried to collaterally attack that resolution in a subsequent 

proceeding in New York, she would be barred by claim preclusion. 

Therefore, GCS concludes Arizona courts must accord the same preclusive 

effect. Again, GCS fails to acknowledge the language of the Agreement. 

All disputes, including whether preclusion doctrines apply, are questions 

for the arbitrator. 

CONCLUSION

¶25 We vacate the superior court’s order dismissing Gray’s claims

because they are subject to binding arbitration, which means her sole option 

moving forward is to litigate those claims through arbitration. On remand 

the superior court shall issue appropriate orders to implement our decision. 

See 9 U.S.C. § 3. Because GCS has not prevailed on appeal, we deny its 

request for attorneys’ fees and costs under A.R.S. §§ 12-341.01 and -349. We 

also deny GCS’s request for sanctions under ARCAP 25, as nothing in 

Gray’s briefing merits sanctions. Gray is awarded taxable costs subject to 

compliance with ARCAP 21.