Court Opinion

ID: 4538993
Source: CourtListenerOpinion
Date Created: 2020-06-04 18:02:58.01011+00
Date Added: 2024-06-11T07:58:41.792972
License: Public Domain

The summaries of the Colorado Court of Appeals published opinions
  constitute no part of the opinion of the division but have been prepared by
  the division for the convenience of the reader. The summaries may not be
    cited or relied upon as they are not the official language of the division.
  Any discrepancy between the language in the summary and in the opinion
           should be resolved in favor of the language in the opinion.

                                                                   SUMMARY
                                                                 June 4, 2020

                                2020COA88

No. 18CA2405, Johnson-Linzy v. Conifer Care Communities —
Courts and Court Procedure — Arbitration — Colorado Uniform
Arbitration Act; Contracts — Impossibility of Performance

     A division of the court of appeals considers a question of first

impression in Colorado — whether an arbitration agreement’s

incorporation of an arbitral forum’s rules that require a now

defunct arbitrator to administer them renders the agreement

impossible to perform. Based on the plain language of the

arbitration agreement, the majority concludes that the parties

agreed to arbitrate any disputes that arose between them, without

regard to who was named as arbitrator. Accordingly, the majority

reverses the district court’s order invalidating the agreement on the

grounds of impossibility.
COLORADO COURT OF APPEALS                                        2020COA88

Court of Appeals No. 18CA2405
City and County of Denver District Court No. 18CV32187
Honorable Kenneth M. Plotz, Judge

Shalandra M. Johnson-Linzy, individually and as Personal Representative of
the Estate of Damien R. Linzy,

Plaintiff-Appellee,

v.

Conifer Care Communities A, LLC, d/b/a Amberwood Court Rehabilitation and
Care Community; Pinon Management, LLC; and QP Health Care Services, LLC,
d/b/a Vivage,

Defendants-Appellants.

                         ORDER REVERSED AND CASE
                         REMANDED WITH DIRECTIONS

                                  Division III
                          Opinion by JUDGE GROVE
                              Vogt*, J., concurs
                             Berger, J., dissents

                           Announced June 4, 2020

Reddick Moss, PLLC, Brian D. Reddick, Brent L. Moss, Robert W. Francis,
Little Rock, Arkansas, for Plaintiff-Appellee

Messner Reeves, LLP, Doug C. Wolanske, Kendra N. Beckwith, Mary Byrne
Fletcher, Dara N. Keller, Denver, Colorado, for Defendants-Appellants

*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art.
VI, § 5(3), and § 24-51-1105, C.R.S. 2019.
¶1    Plaintiff, Shalandra M. Johnson-Linzy, signed an arbitration

 agreement when her husband, Damien R. Linzy, was admitted to

 Amberwood Court Rehabilitation and Care Community (Amberwood

 Court), a skilled nursing facility owned and managed by

 defendants.1 Linzy stayed at Amberwood Court for several weeks

 and passed away shortly after he was discharged. Johnson-Linzy

 then sued defendants for negligence and wrongful death, but

 defendants moved to stay her lawsuit and compel arbitration. The

 district court denied the motion because it found that compliance

 with the arbitration agreement was impossible. Defendants now

 appeal that order under section 13-22-228(1)(a), C.R.S. 2019. We

 reverse.

¶2    The parties’ dispute hinges on the validity of the arbitration

 agreement that Johnson-Linzy signed when she admitted her

 husband to Amberwood Court. As relevant here, the agreement

 provides that any legal claim arising from care provided by

 1The defendants are Conifer Care Communities A, LLC, d/b/a
 Amberwood Court Rehabilitation and Care Community, Pinon
 Management, LLC, and QP Health Care Services, LLC, d/b/a
 Vivage.

                                   1
 Amberwood Court “shall be resolved exclusively by binding

 arbitration,” to be conducted

           in accordance with the Colorado Uniform
           Arbitration Act and the Code of Procedure of
           the National Arbitration Forum, and not by a
           lawsuit or resort to court process, except to the
           extent that applicable state or federal law
           provides for judicial review of arbitration
           proceeding or the judicial enforcement of
           arbitration agreements and awards.

 Toward the end of the two-page agreement, in bold type and in all

 capital letters, the agreement states, “NOTE: BY SIGNING THIS

 AGREEMENT YOU ARE AGREEING TO HAVE ANY ISSUE OF

 MEDICAL MALPRACTICE DECIDED BY NEUTRAL BINDING

 ARBITRATION RATHER THAN BY A JURY OR COURT TRIAL.”

¶3    These provisions are unremarkable; similar language regularly

 appears in various consumer arbitration agreements. However, the

 organization whose code of procedure the agreement identifies —

 the National Arbitration Forum (NAF) — exited the consumer

 arbitration business in 2009, nearly eight years before Linzy was

 admitted to Amberwood Court. See In re Nat’l Arbitration Forum

 Trade Practices Litig., 704 F. Supp. 2d 832, 835 (D. Minn. 2010)

 (“On July 14, 2009, the Minnesota Attorney General brought a

                                  2
 complaint . . . against NAF alleging consumer fraud act and

 deceptive trade practices act violations and false advertising. NAF

 settled that litigation less than a week later, agreeing to cease

 performing consumer arbitrations and entering into a consent

 judgment to that effect.”).

¶4    The demise of NAF’s consumer arbitration business affected a

 wide variety of contracts and has spawned a substantial amount of

 litigation over the enforceability of arbitration agreements that

 identify NAF as arbiter or otherwise rely on its procedures. See

 Frazier v. W. Union Co., 377 F. Supp. 3d 1248, 1265-67 (D. Colo.

 2019) (collecting cases). Analyzing similar arbitration provisions,

 some courts have, like the district court here, held that NAF’s

 unavailability makes it impossible to fulfill the parties’ contractual

 expectations. See, e.g., Miller v. GGNSC Atlanta, LLC, 746 S.E.2d
680, 688 (Ga. Ct. App. 2013). Others have found NAF’s status

 inconsequential because the language in question “does not

 mandate that the NAF actually conduct the arbitration — it requires

 only that the NAF Code be applied by the arbitrator.” Meskill v.

 GGNSC Stillwater Greeley LLC, 862 F. Supp. 2d 966, 972 (D. Minn.

 2012).

                                    3
¶5    The arguments in this case follow similar contours. As she did

 in the district court, Johnson-Linzy contends that the parties

 agreed to have NAF arbitrate any disputes between them and that

 its retreat from the consumer arbitration business renders the

 agreement invalid due to impossibility.2 Defendants argue that the

 heart of the agreement is the desire to arbitrate disputes rather

 than litigate them and that the arbitration agreement’s designation

 of the Code of Procedure of the National Arbitration Forum (NAF

 Code) is only a means to that end.3

¶6    In a brief written order, the district court agreed with

 Johnson-Linzy’s argument that the arbitration agreement is

 unenforceable under the doctrine of impossibility and denied

 defendants’ motion to compel arbitration:

           The Court specifically finds that the motion to
           compel arbitration and the motion for a stay in
           these proceedings are both denied. The Court
           finds that the agreement to arbitrate is
           impossible to comply with. The Court also

 2 Because the district court has not yet ruled on them, we do not
 consider any additional issues, such as unconscionability, that
 Johnson-Linzy has also argued make the arbitration agreement
 unenforceable.
 3 References to the NAF Code throughout this opinion are to its last

 revision, issued August 1, 2008.

                                   4
           finds impossibility with regard [to] the use of
           the rules of NAF[.]

 Defendants now appeal that order.

                            I.    Analysis

¶7    At the threshold, defendants contend the district court did not

 have subject matter jurisdiction to determine the enforceability of

 the arbitration agreement because “[t]he parties agreed that solely

 an arbitrator would have the power to rule on issues relating to the

 Arbitration Agreement’s validity, including objections concerning

 the Arbitration Agreement’s enforceability.”

¶8    In the alternative, defendants argue that NAF’s unavailability

 is immaterial because the arbitration agreement does not require

 NAF to serve as the arbitral forum or arbiter, and instead only

 directs the parties to conduct arbitration “in accordance with” the

 NAF Code.4

 4Because we conclude that this issue is dispositive, we do not
 address defendants’ remaining contention, that section 13-22-
 211(1), C.R.S. 2019, of the Colorado Uniform Arbitration Act (CUAA)
 provides for appointment of a substitute arbitrator when the
 appointed arbitrator is unable to act.

                                   5
         A.    The District Court Had Jurisdiction to Determine
                 Enforceability of the Arbitration Agreement

¶9     We first address defendants’ argument that the order denying

  the motion to compel should be vacated because, by incorporating

  the NAF Code into their arbitration agreement, the parties agreed

  that only an arbitrator could resolve disputes concerning its

  enforceability. We conclude that the district court had jurisdiction

  to determine enforceability of the arbitration agreement because the

  parties did not plainly and unambiguously empower an arbitrator to

  decide that issue.

                             1.    Preservation

¶ 10   Johnson-Linzy contends that defendants waived their

  argument that the validity of the arbitration agreement is a question

  for the arbitrator by failing to raise it in the district court, and that

  we should therefore decline to consider it. Defendants respond that

  “[t]he enforceability issue is non-waivable because it concerns

  subject matter jurisdiction.” We agree with defendants.

¶ 11   Arbitration is “a matter of contract between the parties; it is a

  way to resolve those disputes — but only those disputes — that the

  parties have agreed to submit to arbitration.” First Options of Chi.,

                                      6
  Inc. v. Kaplan, 514 U.S. 938, 943 (1995). A court must defer to an

  arbitrator’s arbitrability decision — i.e., whether a particular

  dispute should be arbitrated — when the parties submit that matter

  to arbitration. Id. However, when the arbitrability decision is

  originally submitted to the court, rather than the arbitrator, the

  court’s initial task “is to determine whether the agreement contains

  a valid and binding [arbitration] clause using traditional principles

  of contract interpretation.” City & Cty. of Denver v. Dist. Court, 939
P.2d 1353, 1363 (Colo. 1997). The court must determine the

  threshold arbitrability issue because “[a] valid and enforceable

  arbitration provision divests the courts of jurisdiction over all

  disputes that are to be arbitrated pending the conclusion of

  arbitration.” Mountain Plains Constructors, Inc. v. Torrez, 785 P.2d
928, 930 (Colo. 1990).

¶ 12   Thus, because objections to the enforceability of an arbitration

  agreement implicate the court’s subject matter jurisdiction, they

  may be raised for the first time on appeal. Kaplan, 514 U.S. at 943;

  Colo. Dep’t of Pub. Health & Env’t v. Caulk, 969 P.2d 804, 807 (Colo.

  App. 1998) (“[C]hallenges to subject matter jurisdiction cannot be

  waived and may be asserted at any time . . . .”).

                                     7
           2.    Enforceability Determination is for the Court

¶ 13   We turn next to defendants’ argument that the NAF Code,

  which, by its terms “shall be deemed incorporated by reference in

  every Arbitration Agreement[] which refers to the National

  Arbitration Forum . . . or this Code of Procedure unless the Parties

  agree otherwise,” requires that an arbitrator, not a court, determine

  issues of enforceability. NAF Code, Rule 1.A.

¶ 14   Johnson-Linzy responds that the arbitration agreement is

  ambiguous because it incorporates the CUAA — which provides for

  judicial resolution of arbitrability, see § 13-22-206(2), C.R.S. 2019

  — along with the NAF Code, which states that “[a]n Arbitrator shall

  have the power to rule on . . . the existence, scope, and validity of

  the Arbitration Agreement including all objections relating to

  jurisdiction, unconscionability, contract law, and enforceability of

  the Arbitration Agreement.” NAF Code, Rule 20.F.

                         a.   Standard of Review

¶ 15   We review de novo the question whether arbitrability is for the

  court or for the arbitrator to decide. See Taubman Cherry Creek

  Shopping Ctr., LLC v. Neiman-Marcus Grp., Inc., 251 P.3d 1091,

  1093 (Colo. App. 2010).

                                     8
                          b.        Applicable Law

¶ 16   Colorado’s preference for the resolution of disputes through

  arbitration is embedded in both the Colorado Constitution and the

  CUAA. Colo. Const. art. 18, § 3; see also J.A. Walker Co. v. Cambria

  Corp., 159 P.3d 126, 128 (Colo. 2007). Under the CUAA, “[t]he

  court shall decide whether an agreement to arbitrate exists or a

  controversy is subject to an agreement to arbitrate.” § 13-22-

  206(2). Parties may waive or vary the effect of the CUAA “to the

  extent permitted by law.” § 13-22-204(1), C.R.S. 2019. To deviate

  from the CUAA, however, “the law requires that parties must plainly

  and unambiguously empower an arbiter to decide arbitrability and

  that they must clearly and knowingly assent to terms incorporated

  by reference.” Taubman, 251 P.3d at 1095.

                               c.    Discussion

¶ 17   Parties may incorporate specific arbitration rules, such as the

  NAF Code, by expressly providing that those rules will govern any

  dispute within the scope of their arbitration agreement. Taubman,
251 P.3d at 1094. And courts generally accept that if parties to an

  arbitration agreement have explicitly incorporated a rule that

  empowers the arbitrator to determine arbitrability, that

                                        9
  incorporation amounts to clear and unmistakable evidence of the

  parties’ intent to delegate that issue to the arbitrator. See, e.g.,

  Ahluwalia v. QFA Royalties, LLC, 226 P.3d 1093, 1098 (Colo. App.

  2009) (collecting cases).

¶ 18   Although the arbitration agreement here incorporates the NAF

  Code, it also incorporates the CUAA. In our view, the incorporation

  of both authorities creates an ambiguity as to which entity is

  empowered to decide whether the underlying agreement is valid.

  Compare § 13-22-206(2) (“The court shall decide whether an

  agreement to arbitrate exists or a controversy is subject to an

  agreement to arbitrate.”), with NAF Code, Rule 20.F (“An Arbitrator

  shall have the power to rule on all issues, Claims, Responses,

  questions of arbitrability, and objections regarding the existence,

  scope, and validity of the Arbitration Agreement including all

  objections relating to jurisdiction, unconscionability, contract law,

  and enforceability of the Arbitration Agreement.”). The

  incorporation of both sets of rules cannot “plainly and

  unambiguously empower an arbiter to decide arbitrability.”

  Taubman, 251 P.3d at 1095.

                                     10
¶ 19   We are not persuaded otherwise by defendants’ argument that

  “the express reference to both the CUAA and [the NAF] Code does

  not create ambiguity, but instead clarifies the applicable procedural

  rules.” To the contrary, determining arbitrability is presumptively

  the court’s job, unless the parties “clearly and knowingly assent to

  terms incorporated by reference.” Taubman, 251 P.3d at 1095.

  Here, the parties incorporated by reference two sets of rules into the

  arbitration agreement. Expecting a consumer in Johnson-Linzy’s

  position to read and reconcile both sources, and, based on that

  evaluation, definitively conclude that she is consenting to forgo

  judicial review of the agreement’s enforceability, simply does not

  meet that threshold. As another court aptly put it, the

  incorporation of forty-two pages of arbitration rules, not to mention

  the entire CUAA, into an arbitration clause “is tantamount to

  inserting boilerplate inside of boilerplate, and to conclude that a

  single provision contained in those rules amounts to clear and

  unmistakable evidence of an unsophisticated party’s intent would

  be to take ‘a good joke too far.’” Allstate Ins. Co. v. Toll Bros., Inc.,

  171 F. Supp. 3d. 417, 429 (E.D. Pa. 2016) (citation omitted).

                                      11
             B.   The Arbitration Agreement Is Enforceable

¶ 20   Having determined that the district court had jurisdiction to

  determine whether the arbitration agreement is enforceable, we

  turn next to defendants’ contention that NAF’s unavailability is

  “irrelevant to the agreement’s enforcement.” In defendants’ view,

  the arbitration agreement does not explicitly or implicitly require

  NAF to serve as the arbitral forum or arbitrator — meaning that,

  notwithstanding the termination of NAF’s consumer arbitration

  business, another arbitrator could use the NAF Code to preside over

  the arbitration. Johnson-Linzy responds that, by invoking the NAF

  Code, the parties agreed to employ NAF to arbitrate any dispute,

  and that NAF’s unavailability thus renders their agreement

  impossible to perform.

                        1.    Standard of Review

¶ 21   We review “de novo the district court’s decision on a motion to

  compel arbitration, employing the same legal standards that the

  district court employed.” Lujan v. Life Care Ctrs. of Am., 222 P.3d
970, 972 (Colo. App. 2009).

                                    12
                           2.    Applicable Law

¶ 22   The CUAA requires the court to decide whether an agreement

  to arbitrate exists and whether a controversy is subject to an

  agreement to arbitrate — that is, whether the dispute is within the

  “scope” of the arbitration clause. City & Cty. of Denver, 939 P.2d at

  1363. Thus, there are only two grounds upon which a court may

  deny a motion to compel arbitration: (1) there is no valid agreement

  to arbitrate; or (2) the issue sought to be arbitrated is clearly

  beyond the scope of the arbitration provision. If the court

  determines that there is no enforceable agreement, it may not order

  the parties to arbitrate. § 13-22-207(3), C.R.S. 2019.

¶ 23   “The party seeking to stay proceedings in a judicial forum and

  to compel arbitration has the burden of establishing that the matter

  is subject to arbitration.” Smith v. Multi-Fin. Sec. Corp., 171 P.3d
1267, 1270 (Colo. App. 2007). “As a general rule, courts should

  follow state law principles governing contract formation to

  determine whether the parties agreed to submit an issue to

  alternative dispute resolution.” City & Cty. of Denver, 939 P.2d at

  1361. “The right of parties to contract freely is well developed in

  our jurisprudence.” Id. That right “encompasses the correlative

                                     13
  power to agree to a specific [alternative dispute resolution]

  procedure for resolving disputes.” Id. We construe an arbitration

  agreement’s terms “in a manner that best effectuates the intent of

  the parties and allows each party to receive the benefit of the

  bargain.” Id.

¶ 24   In determining the parties’ intent at the time they agreed to

  the contract, we “must construe the [c]ontract as a whole and effect

  must be given to every provision, if possible.” Id. at 1365. And,

  under Colorado law, arbitration agreements are “valid, enforceable,

  and irrevocable” except where a ground exists under law or equity

  for the contract’s revocation. § 13-22-206(1).

¶ 25   As the Missouri Supreme Court put it, for our purposes, “there

  are two types of arbitration agreements: (1) agreements in which the

  parties agree to arbitrate regardless of the availability of a named

  arbitrator, and (2) agreements in which the parties agree to

  arbitrate before — but only before — a specified arbitrator.” A-1

  Premium Acceptance, Inc. v. Hunter, 557 S.W.3d 923, 926 (Mo.

  2018). We conclude that the parties here agreed to arbitrate

  without regard to who was named as arbitrator.

                                    14
                             3.    Discussion

¶ 26   We reach this conclusion based on the plain language of the

  arbitration agreement. Most importantly, the agreement does not

  state that arbitration will be conducted “by” NAF, or even by an

  arbiter affiliated with or approved by NAF. To the contrary, the

  agreement requires only that “binding arbitration . . . be conducted

  . . . in accordance with the [CUAA] and the [NAF Code], and not by

  a lawsuit or resort to court process . . . .” And the bolded, all-

  capital disclaimer at the close of the agreement (“NOTE: BY

  SIGNING THIS AGREEMENT YOU ARE AGREEING TO HAVE ANY

  ISSUE OF MEDICAL MALPRACTICE DECIDED BY NEUTRAL

  BINDING ARBITRATION RATHER THAN BY A JURY OR COURT

  TRIAL”) similarly emphasizes its core goal — requiring arbitration —

  without suggesting that carrying through with the process is

  contingent on the selection of any particular arbitrator.

¶ 27   To be sure, the NAF Code, which is “deemed incorporated by

  reference” into every arbitration agreement that refers to NAF,

  provides that “[t]his Code shall be administered only by [NAF] or by

  any entity or individual providing administrative services by

  agreement with [NAF].” NAF Code, Rule 1.A. Johnson-Linzy argues

                                     15
  that this provision makes “[t]he availability of the NAF to administer

  the parties’ arbitration an all-or-nothing proposition.” We are

  unpersuaded because “if the parties had contemplated the NAF

  would be their exclusive arbitral forum, they could have easily said

  so — there would be no need for them to do so obliquely by

  ‘specify[ing] that the arbitration must be conducted by [the NAF’s]

  rules.’” Meskill, 862 F. Supp. 2d at 973 (alterations in original)

  (citation omitted). Indeed, we note that in a number of cases,

  courts have relied on just such an explicit designation as grounds

  for invalidating the agreement. See, e.g., Wert v. Manorcare of

  Carlisle PA, LLC, 124 A.3d 1248, 1263 (Pa. 2015) (emphasizing

  arbitration agreement’s provision that any disputes “shall be

  resolved exclusively by binding arbitration to be conducted . . . in

  accordance with the [NAF] Code of Procedure, which is hereby

  incorporated into this Agreement”); see also GGNSC Atlanta, LLC,
746 S.E.2d at 686 (same).

¶ 28   On the other hand, most cases analyzing language similar to

  the arbitration agreement at issue here have concluded that the

  agreement remains enforceable despite NAF’s unavailability. See

  Robinson v. EOR-ARK, LLC, 841 F.3d 781, 784 (8th Cir. 2016)

                                    16
(declining to invalidate arbitration agreement that provided for

arbitration “in accordance with the National Arbitration Forum

Code of Procedure, (‘NAF’) which is hereby incorporated into th[e]

agreement, and not by a lawsuit or resort to court process”); GGNSC

Holdings, LLC v. Lamb, 487 S.W.3d 348, 356 (Ark. 2016) (same);

Wright v. GGNSC Holdings LLC, 808 N.W.2d 114 (S.D. 2011) (same);

see also Paulozzi v. Parkview Custom Homes, L.L.C., 122 N.E.3d
643, 646 (Ohio Ct. App. 2018) (declining to invalidate arbitration

agreement calling for “arbitration [to] be conducted under the

auspices of the [now defunct] Ohio Arbitration and Mediation

Center in accordance with its rules”). We agree with the analysis in

these cases. As with our jurisdictional analysis above, we are

reluctant to examine “boilerplate inside of boilerplate,” Toll Bros.,

Inc., 171 F. Supp. 3d at 429, particularly where the primary

document — the arbitration agreement itself — invokes the NAF

Code without explicitly designating NAF as the arbitrator, thereby

suggesting that “the parties anticipated an entity other than the

NAF might conduct the arbitration.” Meskill, 862 F. Supp. 2d at

973. And the express incorporation of the CUAA in the agreement

                                   17
  that we consider here only bolsters our conclusion that its intent is

  to require arbitration without regard to the identity of the arbitrator.

¶ 29   In sum, we conclude that while the arbitration agreement

  memorializes both the parties’ intention to arbitrate and the rules

  that would govern that arbitration, it leaves open the possibility

  that an individual other than NAF could conduct the proceedings.

  The parties thus did not designate NAF as the exclusive arbiter of

  any future disputes; NAF’s cessation of consumer arbitrations as a

  result of the consent judgment therefore does not stand as a barrier

  to the arbitration of Johnson-Linzy’s claims.

                             II.   Conclusion

¶ 30   The order is reversed and the case is remanded to the district

  court. If the district court denies the remaining challenges to the

  enforceability of the arbitration agreement that it did not resolve

  before this appeal, then it must compel arbitration and stay the

  case while arbitration proceeds.

       JUDGE VOGT concurs.

       JUDGE BERGER dissents.

                                     18
       JUDGE BERGER, dissenting.

¶ 31   Arbitration is a matter of contract. N.A. Rugby Union LLC v.

  U.S. Rugby Football Union, 2019 CO 56, ¶ 20. As with any contract,

  the parties, not judges, prescribe the terms. W. Stone & Metal Corp.

  v. DIG HP1, LLC, 2020 COA 58, ¶ 10. It follows that courts must

  enforce all, not just some, of the terms of an arbitration agreement.

  And when the terms of the parties’ arbitration agreement are

  
    I recognize the reality that in most consumer arbitrations, the
  arbitration agreement is a contract of adhesion. See Lamps Plus,
  Inc. v. Varela, 587 U.S. ___, ___, 139 S. Ct. 1407, 1420-22 (2019)
  (Ginsburg, J., dissenting); DIRECTV v. Imburgia, 577 U.S. ___, 136
S. Ct. 463, 471-78 (2015) (Ginsburg, J., dissenting); Circuit City
  Stores, Inc. v. Adams, 532 U.S. 105, 124-33 (2001) (Stevens, J.,
  dissenting). It is absurd to think that either the plaintiff or the
  plaintiff’s husband in this case actually wanted to arbitrate any
  claims of improper care; they had no choice because admission to
  the nursing home almost certainly was dependent on their agreeing
  to the terms of adhesion, including the arbitration agreement.
  Despite these realities, the United States Supreme Court has
  expanded, beyond recognition, the modest and salutary policies
  enshrined in the Federal Arbitration Act, 9 U.S.C. §§ 1-307 (2018).
  See Lamps Plus, 587 U.S. at ___, 139 S. Ct. at 1420-22 (Ginsburg,
  J., dissenting); DIRECTV, 577 U.S. at ___, 136 S. Ct. at 471-78
  (Ginsburg, J., dissenting); Circuit City, 532 U.S. at 124-33 (Stevens,
  J., dissenting). But nothing in the cases decided by the United
  States Supreme Court or the Colorado Supreme Court (or the
  provisions of the Colorado Uniform Arbitration Act, sections 13-22-
  201 to -230, C.R.S. 2019) require or permit a court to disregard the
  terms of the parties’ agreement and order arbitration when the
  express terms of the arbitration agreement are impossible to
  perform.

                                    19
  impossible to perform, the arbitration agreement, like any other

  contract, fails. City of Littleton v. Emp’rs Fire Ins. Co., 169 Colo.
104, 108-09, 114, 453 P.2d 810, 812, 815 (1969). This, of course,

  does not mean that the parties forfeit any of their substantive

  contractual rights; it means only that their dispute is resolved by a

  court, not an arbitrator.

¶ 32   These contract principles are not diluted or dispensed with

  because public policy favors arbitration. Public policy favors

  arbitration only when the parties have agreed to it. Public policy

  does not authorize judges to substitute provisions they think are

  better or more reasonable, for those prescribed by the parties.

¶ 33   As the majority recognizes, the parties’ arbitration agreement

  expressly requires the arbitration to be governed by the NAF Code.

  The NAF Code, in turn, expressly provides that “[t]his Code shall be

  administered only by [NAF] or by any entity or individual providing

  administrative services by agreement with [NAF].” (Emphasis

  added.) That is impossible because after being accused by the

  Minnesota Attorney General of being partial to businesses and

  merchants, and prejudiced against consumers, NAF ceased

                                     20
  providing consumer arbitration services. Supra ¶ 3 (majority

  opinion).

¶ 34   To avoid invalidation of the arbitration agreement, the majority

  relies on the fact that the provision designating NAF as the

  administrator is contained in the NAF Code, rather than in the body

  of the agreement. This, the majority reasons, signals that the

  parties did not actually intend to be bound by that provision, even

  though the agreement clearly states that the NAF Code controls.

¶ 35   It is black letter law that when a contract is clear and

  unambiguous, we apply its terms without regard to the parties’

  subjective intent. Travelers Indem. Co. v. Bailey, 557 U.S. 137, 150

  (2009) (citing 11 R. Lord, Williston on Contracts § 30:4 (4th ed.

  1999)). This objective analysis requires that we interpret the

  arbitration agreement as written and hold that it fails.

  
    The majority wisely does not rely on the “integral part” test
  adopted by some courts to justify ignoring disfavored provisions of
  an arbitration agreement. As agreed by both the majority and
  dissent in Green v. U.S. Cash Advance Illinois, LLC, 724 F.3d 787
  (7th Cir. 2013) (Easterbook, C.J., writing for the majority and
  Hamilton, J., dissenting), the integral part test finds no support in
  the Federal Arbitration Act or other law. It simply was made up by
  judges and, as Judge Hamilton explains, is plainly at odds with
  basic concepts of contract law. Id.

                                    21
¶ 36   To disregard the clear language in the NAF Code, the majority

  relies on Allstate Insurance Co. v. Toll Brothers, Inc., 171 F. Supp.
3d 417 (E.D. Pa. 2016). But that Pennsylvania case, which in any

  event is not binding on this court, is inapposite. There, the court

  declined to enforce a provision of the separate arbitration rules

  referenced in a sale agreement against an individual homebuyer

  because the homebuyer was “unsophisticated” and it would be a

  “joke” to think the homebuyer signed the agreement having read the

  entirety of the rules cross-referenced in the agreement. Id. at 429.

¶ 37   We have the exact opposite situation here. The defendants —

  sophisticated, corporate entities presumably acting on the advice of

  counsel — drafted the agreement. They selected the NAF Code to

  govern arbitration — despite the fact that NAF had been defunct for

  a number of years and the NAF Code clearly provides that only NAF

  or an affiliated entity may administer it. The defendants must live

  with that decision.

¶ 38   As the Allstate court recognized, its decision represented an

  exception — based on the sophistication of one of the parties —

  from the holdings of almost every other circuit court that had

  addressed the issue. Id. at 427. Irrespective of whether that

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  exception is consistent with the United States Supreme Court’s

  expansive reading of the Federal Arbitration Act, see supra note 1,

  at 19-20, the exception has no application here. To hold otherwise

  would be to render meaningless references to governing rules in all

  agreements, a result that finds no support in the law.

¶ 39   The fact that the parties “could” have included an express

  designation of NAF as the sole administrator elsewhere in their

  agreement is irrelevant. Supra ¶ 27 (majority opinion). The parties

  could have done a lot of things. The plaintiff and her husband,

  assuming they even knew what rights they were forgoing by

  agreeing to arbitration, could have attempted to search for a

  nursing home that did not require arbitration. Or they could have

  delayed the husband’s admission to the nursing home for the two

  years it would have taken to resolve a declaratory judgment action

  against the nursing home, asserting that the arbitration agreement

  was a contract of adhesion and was, therefore, unenforceable. But

  the fact that the plaintiff and her husband did none of these things

  simply has no bearing on whether a court should or must enforce a

  clear provision of the contract.

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¶ 40   The choices made by contracting parties have consequences

  and demand respect by courts. That respect compels the

  conclusion that the parties’ arbitration agreement failed.

¶ 41   For these reasons, I would affirm the district court order

  denying arbitration, and I respectfully dissent from the majority’s

  contrary disposition.

  
   I agree with the majority’s analysis that the court, rather than an
  arbitrator, decides the question of the validity of the arbitration
  agreement.

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