This memorandum opinion was not selected for pub lication in the New Mexico Appellate Reports. Please see Rule 12-405 NMRA for restrictions on the citation of unpublished memorandum opinions. Please also note that this electronic memorandum opinion may contain computer-generated errors or other deviations from the official paper version filed by the Court of Appeals and does not include the filing date. IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO 1 NEW MEXICO HIGHLANDS 2 UNIVERSITY, 3 Plaintiff-Appellant, 4 v. NO. A-1-CA-35125 5
MAKWA BUILDERS, LLC, a 6 New Mexico limited liability 7 corporation, 8 Defendant-Appellee. 9 APPEAL FROM THE DISTRICT COURT OF SAN MIGUEL COUNTY 10 Abigail Aragon, District Judge 11 Sutin, Thayer & Browne 12 Stevan Douglas Looney 13 Mariposa Padilla Sivage 14 Albuquerque, NM 15 for Appellant 16 Salamirad, Morrow, Timpane & Dunn, LLP 17 Robert J. Berens 18 Phoenix, AZ 19 P. Reid Griffith, P.A. 20 Philip Dabney 212 Los Alamos, NM 1 for Appellee 2 MEMORANDUM OPINION 3 HANISEE, Judge. 4
{1} In this consolidated appeal , we are asked to consider whether the district court 5 erred by (1) granting Makwa Builders, LLC’s (Makwa) motion to compel arbitration, 6 and (2) denying New Mexico Highlands Univ ersity’s (Highlands) Rule 1-012(B)(6) 7 NMRA motion to dismiss Makwa’s counterclaims. Concluding that there exists a 8 valid and enforceable arbitration agreement between the parties, we affirm the district 9 court’s order granting Makwa’s motion to co mpel arbitration. We quash Highlands’ 10 interlocutory appeal of the district c ourt’s denial of its motion to dismiss as 11 improvidently granted. 12 BACKGROUND 13
{2} We first summarize pertinent events surrounding the ill-fated construction 14 contract the parties entered into that th ey hoped would generate a new student union 15 building on the Highlands campus at a costof $16,006,000. Dr. James Fries, the then16 president of Highlands, signed the contracton behalf of Highl ands on June 15, 2010. 17 The contract contained two provisions critical to this appeal: first, the “Binding 18 Dispute Resolution” section of the contr act contained a check-the-box option for the 193 parties to select either (1) arbitration, (2) litigation in a court of competent jurisdiction, 1 or (3) some other method to be specified by the parties as their method of resolving 2 disputes. The parties selected arbitration. Second, the contractcontained a clause 3 exercisable by Highlands to terminate the contract “for [its] convenience and without 4 cause[,]” along with various ancillary provi sions triggered by Highlands’ exercise of 5 that right. 6
{3} On February 27, 2012, Highlands elected toexercise its right to terminate the 7 contract. Highlands notified Makwa of the termination by letter on that date, which 8 also informed Makwa—based upon Makwa’s rights under the contract as the non9 terminating party—that “[o]n ce Makwa has left the [p]rojectsite, [Highlands] expects 10 to be provided with a substantiated and reasonable figure reflecting amounts due for 11 [w]ork executed in January and throu gh February 27, 2012, costs incurred by 12 reasonable termination, and what [Makwa] believes is reasonable overhead and profit 13 on the remaining contract balance.” On April 30, 2012, Makwa submitted a statement 14 for payment to Highlands, seeking approxi mately $3.2 million in accordance with the 15 terms of the contract’s termination -for-convenience provision. On August 10, 2012, 16 Highlands rejected Makwa’ s statement for payment. 17
{4} In accordance with Article 15 of the contract, which governs claims and 18 disputes, Makwa next submitted a “Notice of [Termination for Convenience] Claim” 191 The contract provides that claims “shall be subject to mediation as a condition 17 precedent to binding dispute resolution” and requires the parties to “endeavor to 18 resolve their [c]laims by mediation[.]” 19 4 to Highlands on August 30, 2012. As it had with Makwa’s statement for payment, 1 Highlands rejected Makwa’s August 30 claim on September 10, 2012. The next 2 day—September 11, 2012—Highlands filed a complaint for declaratory judgment in 3 district court seeking to have the arbitration provision of the contract declared “void 4 and unenforceable.” The complaint explaine d that Highlands’ “rejection of Makwa’s 5 claim allows Makwa to trigger the contractual dispute resolution process that, if it 6 were valid and enforceable, includes the arbitration provision contained in the 7 [c]ontract.” Thus, within twenty-four hours and before Makwa could practically 8 invoke the arbitration provision provided for within the contract governing the parties’ 9 agreement and responsibilities, Highlands s ought to have the arbitration provision 10 deemed unenforceable. 11
{5} Rather than immediately answer Highlands’ complaint for declaratory 12 judgment, on September 28, 2012, Makwa filed a request for mediation with the 13 American Arbitration Association (AAA) in accordance with Section 15.3 of the 14
contract. 1 While awaiting mediation and still without having answered Highlands’ 15 complaint for declaratory judgment, on October 3, 2012, Makwa filed a voluntary 16 petition seeking protection from its creditors in the Bankruptcy Court for the District 175 of New Mexico. Makwa’s petition resulted in an automatic stay of Highlands’ 1 declaratory judgment action, which Makwa then removed to the Bankruptcy Court 2 over Highlands’ objection. 3
{6} While Makwa’s bankruptcy petition was pending in the bankruptcy court, the 4 parties twice attempted mediation in 2013—first on January 31, then on November 5 7 and 8—but were unable to settle Makw a’s claims. On February 11, 2014, the 6 bankruptcy court remanded the declaratory judgment action to the district court, 7 finding that the Bankruptcy Court was required to abstain from hearing the matter 8 under 28 U.S.C. § 1334(c)(2) (2012); see N.M. Highlands Univ. v. Makwa Builders, 9 LLC (In re Makwa Builders, LLC), Ch. 11 Case No. 12-13664, Adv. No. 12-01305, 10 2014 WL 555266 (Bankr. D.N.M. Feb. 11, 2014). 11
{7} Thereafter on April 2, 2014, Makwa filed a motion to compel arbitration in the 12 district court under NMSA 1978, Secti on 44-7A-8(a) (2001), of New Mexico’s 13 Uniform Arbitration Act. Highlands opposedMakwa’s motion on the grounds that the 14 motion sought “to have the [district c]ourt prematurely conclude that there is a valid 15 and enforceable arbitration provision, when that question is the very core of the 16 dispute[.]” Highlands also complained that Makwa had never filed an answer or other 17 responsive document to Highlands’ origin al September 2012 complaint and argued 18 that Makwa’s motion was “procedurally improper.” Highlands did not, however, 196 contend that Makwa’s motion was untimely. On May 8, 2014, Makwa filed a demand 1 for arbitration with the AAA in which Makwa asserted claims for (1) breach of 2 contract, (2) violation of the Prompt Payment Act, NMSA 1978, § 57-28-5(A) (2007), 3 (3) unjust enrichment, and (4) breach of the duty of good faith and fair dealing. 4
{8} While Makwa’s motion to compel arbitration was still pending, Makwa on 5 August 8, 2014, filed an answer to Highlands ’ first amended complaint for declaratory 6 judgment in which Makwa asserted counterclaims for breach of contract and other 7 causes of action in connection with the pa rties’ June 2010 contract. Makwa noted that 8 it was asserting counterclaims “[t]o preserve Makwa’s claim in the event that [the 9 district court] determines that the [a]rbi tration [p]rovisions in the [c]ontract [are] 10 invalid and unenforceable[.]” Highlands moved to dismiss with prejudice Makwa’s 11 counterclaims, arguing that Makwa “filed its counterclaims after the expiration of the 12 two-year statute of limitation.” Makwa argued that its counterclaims were timely filed 13 based on either (1) the tolling provision of 11 U.S.C. § 108 (2012) of the Bankruptcy 14 Code, which Makwa contends applies to NMSA 1978, Section 37-1-23(B)’s (1976) 15 two-year waiver of sovereign immunity under the United States Supreme Court 16 decision in Central Virginia Community College v. Katz , 546 U.S. 356 (2006), or (2) 17 the fact that Makwa’s claims did not accrue until August 10, 2012—the date 18 Highlands informed Makwa that it was refusing to pay Makwa’s April 30, 2012, 197 statement for payment—making Makwa’s f iling of counterclaims on August 8, 2014, 1 timely under Section 37-1-23(B). 2
{9} Before deciding Makwa’s earlier and still- pending motion to compel arbitration, 3 the district court denied Highlands’ moti on to dismiss based on its conclusion that 4 Katzand 11 U.S.C. § 108 tolled the two-year statute of limitations, thus making 5 Makwa’s counterclaims timely. On motion by Highlands, the district court certified 6 its order denying Highlands’ motion to dismiss for interlocutory appeal, concluding 7 that resolution of the motion “involves a controlling question of law as to which there 8 is substantial grounds for difference of opini on.” At the same time, the district court 9 considered and granted Makwa’s motion to compel arbitration, having concluded that 10 the contract’s arbitration provision was “valid and enforceable.” 11
{10} This Court granted Highlands’ application for interlocutory appeal of the 12 district court’s order denying its motion to dismiss Makwa’s counterclaims, and 13 Highlands appealed by right the district court’s order granting Makwa’s motion to 14 compel arbitration. SeeRule 12-203 NMRA; Sisneros v. Citadel Broad. Co. , 2006- 15 NMCA-102, ¶ 9, 140 N.M. 266, 142 P.3d 34 (explai ning that the district court’s order 16 granting a motion to compel arbitration “is a final order subject to immediate appeal”). 17 The two cases were consolidated on appeal. 18 DISCUSSION 198 {11} The initial dispute between the parties involved only the question of the 1 enforceability of the contract’s arbitrati on provision. Had the district court initially 2 resolved this central dispute in the manner it later did, the court would then have been 3 divested of jurisdiction to render decisions on other matters related to the case, i.e., 4 Highlands’ motion to dismiss Makwa’s counterclaims based on the timeliness thereof. 5 See§ 44-7A-8(g) (“If the court orders arbitrati on, the court on just terms shall stay any 6 judicial proceeding that involves a claim subject to the arbitration.”); K.L. House 7 Const. Co. v. City of Albuquerque , 1978-NMSC-025, ¶ 7, 91 N.M. 492, 576 P.2d 752 8 (“[C]ourts perform the initial screening pro cess designed to determine in general terms 9 whether the parties have agreed that the subject matter under dispute should be 10 submitted to arbitration. Once it appears that th ere is, . . . the court’ s inquiry is ended.” 11 (internal quotation marks and citation omitted)); cf. Lyman v. Kern , 2000-NMCA-013, 12 ¶ 9, 128 N.M. 582, 995 P.2d 504 (explaining that “[t]he fact that all issues between 13 the parties were referred to arbitration indi cates that the trial court divested itself of 14 any further power to address any of the issues of law orfact presented by the case,” 15 and holding that the district court’s order compelling arbitration was a final order for 16 purposes of appeal). However, for reasons that are not clear from the record, the 17 district court did not “proceed summarily to decide the issue” presented by Makwa’s 18 motion to compel arbitration as required by the Uniform Arbitration Act. See§ 44-7A- 199 8(a)(2) (“On motion of a person showing an agreement to arbitrate and alleging 1 another person’s refusal to arbitrate[,] . . . if the refusing party opposes the motion, the 2 court shall proceed summarily to decide th e issue and order the parties to arbitrate 3 unless it finds that there is no enforceableagreement to arbitrate.”). Instead, the 4 district court first considered and deci ded Highlands’ motion to dismiss Makwa’s 5 counterclaims, which Makwa filed months af ter its motion to compel arbitration and 6 only as a precautionary measure in the event the district court concluded there was no 7 enforceable arbitration provision. 8
{12} This resulted in a ruling on Highlands’ motion to dismiss that not only was 9 unnecessary but also transmuted a potentiallystraightforward matter into a far more 10 complex undertaking. That is because in denying Highlands’ motion to dismiss 11 Makwa’s counterclaims, the district court relied on Katz , a federal case dealing with 12 the constitutional question of the ability of state agencies to invoke the defense of 13 sovereign immunity in bankruptcy proceedings, see id. , 546 U.S. at 360-62, in order 14 to construe the applicable statute of limitations period under Section 37-1-23. In turn, 15 this Court granted interlocutory appeal to review the district court’s order denying the 16 motion to dismiss because it indeed invol ved what appeared to be a controlling 17 question of law as to which there is substantial grounds for differe nce of opinion, i.e., 1810 whether Katzand § 108 of the Bankruptcy Code to lled the statute of limitations for 1 Makwa to bring a contract-based countercl aim against Highlands in the instant case. 2
{13} Upon review of the complete record, how ever, it is clear that the question of 3 whether Katzand § 108 compel the tolling of the limitations period under Section 37- 4 1-23 does not control the disposition of this case and, in fact, should not have been 5 reached in the first instan ce by the district court. See§ 44-7A-8(a)(2) (providing that 6 upon a party’s motion to compel arbitration and the other party’s refusal to arbitrate, 7 “the court shall proceed summarily to decide the issue and order the parties to arbitrate 8 unless it finds that there is no en forceable agreement to arbitrate”); Bernalillo Cty. 9 Med. Ctr. Emps.’ Ass’n v. Cancelosi , 1978-NMSC-086, ¶ 4, 92 N.M. 307, 587 P.2d 10 960 (“Under [the Uniform Arbitration] Act it is the court’s duty to order arbitration 11 where provision for it is clear. Where provision for arbitration is disputed, the court’s 12 function is to determine whether there is an agreement to arbitrate and to order 13 arbitration where an agreement to arbitrate is found.”); see also Lovelace Med. Ctr. 14 v. Mendez , 1991-NMSC-002, ¶ 12, 111 N.M. 336, 805 P.2d 603 (“It is, of course, a 15 well-established principle of statutory cons truction that statutes should be construed, 16 if possible, to avoid constitutional questions.”). We thus exercise our discretion to 17 quash Highlands’ interlocutory app eal as improvidently granted. See Ellis v. Cigna 18 Property & Cas. Cos. , 2007-NMCA-123, ¶¶ 15-16, 142 N.M. 497, 167 P.3d 945. 1911 {14} The only issue before this Court, then, is whether the district court properly 1 granted Makwa’s motion to compel arb itration. We conclude that it did. 2
{15} Highlands argues that the district court erred by not holding an evidentiary 3 hearing on “the factual issues raised in” Highlands’ complaint for declaratory 4 judgment before granting Makwa’s motion tocompel arbitration. Highlands argues 5 that “[o]nly if there is no dispute over th e existence of an arbitration agreement can 6 the court find such an agreement exists as a matter of law.” According to Highlands, 7 there exist genuine disputed issues regarding whether Dr. Fries “had the authority, or 8 was delegated the authority by the Board, to bind [Highlands] to arbitration” and 9 whether “there was a meeting of the minds or intent by the Board to waive sovereign 10 immunity in an arbitration forum.” We disagree. 11
{16} The undisputed facts establish that Dr. Fries, “on behalf of” and in his capacity 12 as the president of Highlands, signed the c ontract with Makwa, and that the contract 13 contained a provision requiring the parties to arbitrate their disputes. Highlands argues 14 not that Dr. Fries was unauthorized to enter into the contract with Makwa but rather 15 that the Board has “exclusive authority to su e or be sued” and “did not, and as a matter 16 of law, could not, delegate to Dr. Fries” thatauthority. At the hearing in the district 17 court on Makwa’s motion to compel arb itration, Highlands framed the issue as 18 follows: 1912 The issue is not[,] as [Makwa] res ponded, the authority of Dr. Fries to 1 enter into the contract. It is the authority of Dr. Fries to bind [Highlands] 2 to arbitration. . . . So the question actually is . . . whether Dr. Fries had 3 the authority to bind [Highlands] to arbitration, not whether he had the 4 authority to sign the contract. 5 The problem with Highlands’ argument is th at it ignores well-established law that an 6 agreement to arbitrate is nothing more th an a right for which parties may bargain 7 under a contract, i.e., that the authority to contract includes the authority to agree to 8 arbitration as the method of dispute resolution. See Castillo v. Arrieta , 2016-NMCA9 040, ¶ 15, 368 P.3d 1249, cert. denied, ___-NMCERT-___ (No. S-1-SC-35772, 10 March 23, 2016) (“Arbitration agreements are contracts enforceable by the rules of 11 contract law.” (alteration, internal quotation marks, and citation omitted)); see also 12 Christmas v. Cimarron Realty Co. , 1982-NMSC-079, ¶ 7, 98 N.M. 330, 648 P.2d 788 13 (“Arbitration is a contractual remedy for the settlement of disputes by extrajudicial 14 means.”). 15
{17} Highlands incorrectly equates what it de scribes as the “right to choose the 16 method or forum for the resolution of legal disputes arising under the [c]ontract” with 17 what it argues is the Board’s exclusive (i .e., non-delegable) “power to sue or be 18 sued[.]” But here, the very act of entering into a written contractwith Makwa is what 19 waived Highlands’ immunity (i.e., allowed it to “be sued”), see§ 37-1-23(A) 20 (providing that “[g]overnmental entities are granted immunity from actions based on 2113 contract, except actions based on a valid written contract”), and Highlands fails to 1 explain how the selection of arbitration as the agreed-to dispute resolution method in 2 any way implicates or unlawfully usurps th e Board’s assertedly exclusive “power to 3 sue or be sued.” Moreover, Highlands point s to no authority to support its suggestion 4 that only the Board itself—not Dr. Fries—h ad the authority to bind Highlands to 5 arbitration, or that the Board would have had to separately and specifically grant Dr. 6 Fries the authority to bind Highlands to arbitr ation. This Court has, in fact, previously 7 rejected a similar argument. See Barron v. Evangelical Lutheran Good Samaritan 8 Soc. , 2011-NMCA-094, ¶¶ 26-28, 49, 150 N.M. 669, 265 P.3d 720 (discussing 9 California cases that “support the view that an agent’s authority to bind a principal to 10 arbitration does not have to be specificallyor separately granted” and holding, in 11 keeping with that view, that the district court erred in denying the defendant’s motion 12 to compel arbitration where the person who signed the agreement containing the 13 arbitration clause had the authority to do so). 14
{18} Given that it is undisputed that Dr. Fries was authorized to sign the contract, 15 that Dr. Fries indeed signed the contract , and that the contract Dr. Fries signed 16 contained an unambiguous requirement that the parties resolve their disputes by 17 arbitration—i.e., that an agreement to arbitrate was formed—there are no genuine 18 issues of fact to resolve in order to determine the validity and enforceability of the 1914 contract. Cf. DeArmond v. Halliburton Energy Servs., Inc. , 2003-NMCA-148, ¶¶ 4, 1 8-10, 23, 134 N.M. 630 (holding that where oneparty challenged the very existence 2 of an arbitration agreement and established an absence of proof th at an agreement was 3 ever formed for lack of acceptance and mutual assent, the district court erred by 4 compelling arbitration without first resolving the factual dispute regarding formation). 5 We thus hold that the district court properly granted Makwa’s motion to compel 6 arbitration. 7 CONCLUSION 8
{19} For the foregoing reasons, we quash Highl ands’ interlocutory appeal and affirm 9 the district court’s order granting Makwa’s motion to compel arbitration. 10
{20} IT IS SO ORDERED. 11

_________________________________ 12 J. MILES HANISEE, Judge 13 WE CONCUR: 14

_________________________________ 15 MICHAEL E. VIGIL, Judge 16

_________________________________ 17 STEPHEN G. FRENCH, Judge 18