NOTICE: NOT FOR OFFICIAL PUBLICATION.

UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL

AND MAY BE CITED ONLY AS AUTHORIZED BY RULE

.

IN THE 

## A RIZONA 

## C OURT OF 

## A PPEALS

D IVISION O NE

C ALIENTE CONSTRUCTION INC.

, an Arizona corporation, Plaintiff/Appell ee ,

v.

W ILDFLOWER BREAD COMPANY L.L.C.

, a Delaware limited liability

company; 3410 GATEWAY BOULEVARD, L.L.C., a Delaware limited liability company, Defendant s/Appell ants

.

No. 1 CA

- CV 19 -0824

A ppeal from the Superior Court in Yavapai County

No. P1300CV201900074

The Honorable David L. Mackey

, Judge

, Retired

VACATED AND REMANDED

COUNSEL

Caliente Construction, Inc.

, Tempe By Kirk H. Hays Counsel for Plaintiff/Appell ee

U dall Shumway PLC

, Mesa By James B. Reed, Joel E. Sannes, Carson T.H. Emmons

C ounsel for Defendant s/Appell ants FILED 11-17-202 0CALIENTE v. WILDFLOWER et al.

Decision of the Court

2 MEMORANDUM DECISION

Judge David B. Gass delivered the decision of the Court, in which Presiding Judge Jennifer M. Perkins and Judge Michael J. Brown joined.

G A S S

, Judge:

¶1 Defendants, Wildflower Bread Company, L .L.C. and 3410 Gateway Boulevard, L.L.C. ( collectively

, Wildflower), appeal from an order denying their motion to stay the superior court proceedings and compel

arbitration. Because the claim against Wildflower is subject to a binding
arbitration clause, w e vacate the order and remand for further proceedings

consistent with this decision.

FACTUAL AND PROCEDURAL HISTORY

¶2 Wildflower c ontract ed with Caliente Construction, Inc. to

construct a commercial res taurant. The c ontract required Caliente to submit monthly payment applications to Wildflower

.

¶3 C aliente submitted a payment application f or $16 1,715.88.

After Wildflower failed to pay the amount or object in writing , C aliente sent

a demand letter. Forty

- nine days later

, Caliente recorded a mechanics’ lien

. Forty

- eight days after that

, Caliente brought this action to foreclose the

mechanics’ lien and assert a c laim under Arizona’s Prompt Pay Act (PPA)

.

¶4 Under the PPA

, owner s must make progress payments to

contractor s “on the basis of a duly certified and approved billing or estimate of the work performed and the material s supplied ” on a thirty -day billing cycle unless they specify a different billing cycle. See A.R.S. § 32 -1182. A. 1 In general, owner s must make these payments “ within seven days after the date the billing or estimate is certified and approved .” Id. A billing or estimate is deemed certified and approved after fourteen days unless the owner objects in writing for any statutory reason. A.R.S. § 32-1182.D.

1 After Caliente filed its PPA claim, the legislature renumbered the applicable provision without any relevant, substantive changes. See 2019 Ariz. Sess. Laws, ch. 145, §§ 39, 43 (1st Reg. Sess .). We cite the current

statute.CALIENTE v. WILDFLOWER et al.

Decision of the Court

3 ¶5 Calient e moved for summary judgment, alleg ing its payment application was deemed approved when Wildflower failed to object within

fourteen days

. See id. Wildflower cross

- moved to stay the superior court proceedings and compel arbitration under A.R.S. § 12 -3007

, argu ing

Caliente’s claims were subject to the contract’s arb itration clause

. The
superior court denied Wildflower’s motion

, finding arbitration would alter Caliente’s right to prompt payment under subsection 32-1182.P.

¶6 Wildflower timely appeal ed

. This court has jurisdiction under
Article 6, Section 9

, of the Arizona Constitution, and A.R.S. § 12 -2101.01.A.1.

ANALYSIS

¶7 This court reviews de novo the denial of a motion to compel

arbitration. Nat ’l Bank of Ariz. v. Schwartz, 230 Ariz. 310, 311, ¶ 4 (App. 2012).

“A lthough it is commonly said that the law favors arbitration, it is more

accurate to say that the law favors arbitration of disputes that the parties have agreed to arbitrate .” S. Cal. Edison Co. v. Peabody W. Coal Co., 194 Ariz. 47, 51, ¶ 11 (1999) (emphas is added)

. The parties ’ contract ual language determines

the scope of the arbitration agreement. See Clarke v. A SARCO Inc., 123 Ariz. 587, 589 (1979). Arbitration clauses are “construed liberally and any doubts

as to whether or not the matter in question is subject to arbitration should

be resolved infavor of arbitration.” New Pueblo Constructors, Inc. v. Lake Patagonia Recreation Ass ’ n, Inc., 12 Ariz. App. 13, 16 (1970).

¶8 Here, t he c ontract requires Caliente and Wildflower to

mediate any claim, dispute, “ or other matters in controversy arising out of or related to the [c]ontract.” T he parties must arbitrate any claim subject to, but not resolved by, mediation. The c ontract defines a claim as:

a demand or assertion by one of the parties seeking, as a matter of right, payment of money, or other relief with respect

to the terms of the [c] ontract

. The term “Claim” also includes other disputes and matters in question between the Owner and Contractor arising out of or relating to the [c] ontract.

This language denotes a broad arbitration clause because “’[r]elating to’ is

broader than ‘arising from.’” See Sun Valley Ranch 308 Ltd. P’ship ex rel. Englewood Props., Inc. v. Robson, 231 Ariz. 287, 292, ¶ 14 (App. 2012).

¶9 Caliente argues the c ontract defines two types of claims and

its statutory PPA claim does not meet either definition

. The first is a demand for “ payment of money or other relief with respect to the terms of

the [c] ontract .” Caliente contends its PPA claim is a statutory demand forCALIENTE v. WILDFLOWER et al.

Decision of the Court

4 payment

, not a demand for payment under the contract . T he second

“i ncludes other disputes and matters in question

. . . arising out of or relating to the [c] ontract .” Caliente argues the second definition necessarily

exclude s “ demands for payment ” because those are included in the first

sentence . A ccording to Caliente

, this separationmeans only demands for

payment under the c ontract are subject to arbitration but its statutor il y- based

PPA claim

— which is based on the contract with Wildflower

— is not.

¶10 T he c ontract d oes d efine two types of claims

. The distinction

, however, is between disputes over “ relief with respect to the terms of the [c] ontract ,” and those “arising out of or relating to the [c] ontract.” In Dusold

v. Porta

- John Corporation

, this court considered whether a similar contractual
provisionrequir ing the parties to arbitrate “any controversy or claim arising out of, or relating to this agreement” applied to the plaintiff ’s tort

claim. See 167 Ariz. 358, 359 (App. 1990). The Dusold court held a dispute

arises out of

, or relates to , a contract if the resolution“requires a reference

to or construction of some portion of the contract itself.” Id. at 362.

¶11 Contrary to Caliente ’s arguments, its PPA claim is a dispute “arising out of or relating to the [c] ontract.” See id. T he c ontract required Caliente to provide a schedule of values to be us ed “as a basis for reviewing [its] Applications for Payment.” Caliente’s p ayment a pplication s must be itemized and prepared in accordance with this schedule and “ supported by

such data subst antiating [Caliente’s] right to payment as [ Wildflower ] may require, such as copies of requisitions from S ubcontractors and material suppliers .” R esolution of Caliente’s PPA claim , therefore, “requires a

reference to ” the contract, making the claim subject to arbitration. See id.

¶12 Caliente

, however, c ontends the claim does not require

reference to the contract because Wildflower cannot challenge the amount

owed after it failed to object timely to the payment application. But this

argument goes to the merits of Caliente’s claim and ignores the issue on appeal

— whether the claim is subject to arbitration. Simply asserting Wildflower owes $161,715.88 in a complaint does not make it so

. Regardless
of the forum, determining whether Caliente made a proper payment application, whether Wildflower waived any objection, and what

— if anything

— Wildflower owes , all require reference to the c ontract

.

¶13 Caliente also argues the arbitration clause does not apply to

the mechanics’ lien and PPA claims because they are purely statutory, citing as persuasive authority Masaryk v. Mendelsohn Constr uction , LLC

. See 1 CA

CV 13

- 0085, 2015 WL 1456636 (Ariz. App. Mar

. 31, 2015) (mem. decision)

. Masaryk , however, dealt with a separate issue

— whether a PPA claim isCALIENTE v. WILDFLOWER et al.

Decision of the Court

5 “separate and distinct” from a breach of contract claim

. See id. at *2 –3 , ¶ ¶

10–12. Here, i n contrast, we must decide if the PPA claim “ requires a

reference to or construction of some portion of ” the c ontract

. See Dusold, 167

Ariz. at 362

. Masaryk

, therefore, is not persuas ive

. Further, t his court has previously applied similar ly broad arbitration provisions to statutory

claims

. S ee , e.g. , Estate of DeCamacho ex rel. Guthrie v. La Solana Care & Rehab,

Inc

. , 234 Ariz. 18, 23 –25 , ¶¶ 19 –27 (App. 2014) ( claims brought under the

Adult Protective Services Act ); Sun Valley, 231 Ariz. at 295, ¶ ¶ 30– 31 ( claims to dissolve a partnership under § 29-345).

¶14 The superior court concluded arbitrating the PPA claims

would violate subsection 32-1182.P. We disagree. The arbitration requirement does not alter or delay Caliente’s right to receive payment . I t only identifies the venue where C aliente must bring its claim. The superior

court’s conclusion also is contrary to language in the PPA . The PPA expressly contemplates arbitration of PPA claims. See A.R.S. § § 32 -1182.S (“In any action or arbitration broug ht to collect payments . . . pursuant to this section, the successful party shall be awarded costs and attorney fees in a reasonable amount.”) (emphasis added), -1183.J (same), -1185. F (same).

¶15 Finally, the mechanics’ lien claim is moot because the lien wa s released and replaced with a bond. Once the underlying right to payment is resolved, any amount owed will come from the bond

.

ATTORNEY FEES ON APPEAL

¶16 Both parties request attorney fees on appeal

. We deny Caliente’s request because it is not the successful party on appeal

. See A.R.S.

§ 32 -1182.S. W e also exercise our discretion and decline to award Wildflower its attorney fees on appeal , but a s the successful party on appeal

, Wildflower is entitled to recover its reasonable costs under § 12 -342

up on compliance with ARCAP 21.CALIENTE v. WILDFLOWER et al.

Decision of the Court

6 CONCLUSION

¶17 For the above reasons, w e vacate the order denying Wildflower’s motion to stay proceedings and compel arbitration. On remand, the superior court shall stay its proceedings pending arbitration of

the PPA claim.