Court Opinion

ID: 5135541
Source: CourtListenerOpinion
Date Created: 2021-12-16 16:31:24.143134+00
Date Added: 2024-06-11T08:23:49.770528
License: Public Domain

2021 UT 69

                               IN THE

       SUPREME COURT OF THE STATE OF UTAH

             HITORQ, LLC and DR. LISA PASQUARELLO,
                          Petitioners,
                                  v.
 TCC VETERINARY SERVICES, INC., DR. TYLER S. STIENS, ARTZ VETMED
             SERVICES, PLLC, and DR. JOHN ARTZ,
                          Respondents.

                           No. 20200704
                     Heard September 16, 2021
                     Filed December 16, 2021

             On Certiorari to the Utah Court of Appeals

                      Third District, Summit
                    The Honorable Kara Pettit
                 The Honorable Kent R. Holmberg
                          No. 160500473

                             Attorneys:
    Stephen K. Christiansen, Heidi K. Gordon, Salt Lake City, for
                             appellants
      Joseph E. Wrona, Brian A. Flach, Park City, for appellees

CHIEF JUSTICE DURRANT authored the opinion of the Court, in which
ASSOCIATE CHIEF JUSTICE LEE, JUSTICE HIMONAS, JUSTICE PEARCE and
                    JUSTICE PETERSEN joined.

   CHIEF JUSTICE DURRANT, opinion of the Court:
                            Introduction
   ¶1 Doctors Lisa Pasquarello, Tyler Stiens, and John Artz owned
and operated a veterinary clinic in Park City. Together they formed a
limited liability company for their clinic and adopted an operating
agreement that contained an arbitration clause. After a few years, Dr.
Pasquarello sought to sell her portion of the practice to Dr. Artz
through an oral agreement. When the sale failed, she brought suit
against Dr. Artz for various claims, including breach of contract and
           HITORQ, LLC v. TCC VETERINARY SERVS., INC.
                        Opinion of the Court

breach of the covenant of good faith and fair dealing. She also sought
dissolution of the practice. Based on its interpretation of the
arbitration clause in the operating agreement, the district court
compelled arbitration, concluding that the claims fell under the
scope of the clause. Dr. Pasquarello appealed, arguing that the
arbitration clause covers only disputes regarding the enforcement or
interpretation of the operating agreement and that her claims
concern only the oral contract and the statutory remedy of
dissolution. The court of appeals affirmed the district court. Because
each of Dr. Pasquarello’s claims relates to enforcement or
interpretation of the operating agreement, we also affirm.
                            Background
    ¶2 Doctors Pasquarello, Stiens, and Artz adopted an operating
agreement when they formed a limited liability company for their
veterinary clinic. The agreement included an arbitration provision
stating that ―[a]ny Member involved in a dispute regarding the
enforcement or interpretation of this Agreement may elect to have
such dispute referred to non-binding mediation or binding
arbitration.‖ The parties also formed a real estate company to own
the building in which the clinic operated. The real estate company’s
operating agreement did not include an arbitration provision.
    ¶3 Each veterinarian is separately the sole owner of a limited
liability company or a corporation. Through these separate entities,
each veterinarian holds a membership interest in both the clinic’s
practice and the real estate company. Specifically, Dr. Pasquarello is
the sole member of HITORQ, LLC. HITORQ owns a 25% interest in
the clinic’s practice and in the real estate company. Dr. Artz is the
sole member of Vetmed Services, PLLC. Vetmed owns 25% of both
companies. Dr. Stiens is the sole owner of TCC Veterinary Services,
Inc. TCC holds the remaining 50% interest in the practice and real
estate company.
   ¶4 In September 2015, Dr. Artz agreed to purchase Dr.
Pasquarello’s membership interests in the clinic and the real estate
company. Their oral agreement did not incorporate an arbitration
provision. Dr. Pasquarello contends she told Dr. Artz she planned on
working at the clinic until the sale closed and, further, planned on
continuing to work at the clinic if the sale did not close. Drs.
Pasquarello and Artz scheduled the sale’s closing date for November
14, 2015, shortly before Dr. Pasquarello would move to North
Carolina. But the sale failed in negotiations.
   ¶5 Around this time, according to Dr. Pasquarello, Drs. Artz
and Stiens prevented her from continuing to work at the clinic. In
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contrast, Drs. Artz and Stiens claim that Dr. Pasquarello had
announced that her last day of work would be November 13, 2015.
   ¶6 Eventually, Dr. Pasquarello moved to North Carolina and
the veterinarians stopped negotiations regarding the sale of her
ownership interests. In June 2016, Drs. Artz and Stiens voted to expel
Dr. Pasquarello from membership in the clinic for lack of economic
production because she had not worked there since November the
year before.
    ¶7 Unhappy with this outcome, Dr. Pasquarello filed a lawsuit
on behalf of herself and HITORQ (hereinafter Dr. Pasquarello)
against Dr. Artz and Vetmed Services (hereinafter Dr. Artz), and Dr.
Stiens and TCC Veterinary Services (hereinafter Dr. Steins) in
November 2016. In her complaint, she relied on the terms of the oral
purchase agreement and language from Utah Code section 48-3a-
701(5)(b), which allows for judicial dissolution of a limited liability
company when a member or members have acted in an oppressive
or harmful manner to another member. She also referenced the
operating agreement to support aspects of her claims. Dr.
Pasquarello presented three claims relevant to this appeal.
    ¶8 First, she alleged that Dr. Artz breached the terms of the oral
agreement to buy her membership interests in the clinic and the real
estate company. She claimed he did so by failing to prepare and
execute the purchase agreement, failing to pay her share of profits
and accounts receivable up to the planned closing date, and
preventing her from working at the clinic when the sale did not go
through.
    ¶9 Second, Dr. Pasquarello alleged that Dr. Artz breached the
implied covenant of good faith and fair dealing of the oral
agreement. She claimed he did so by failing to secure financing and
close on the purchase while still taking her clinic debt payments,
which prevented her from meeting her own financial obligations.
She also claimed that Dr. Artz made false representations to induce
her to believe the purchase would occur, which stopped her from
selling to a third party before she moved to North Carolina. Then,
according to Dr. Pasquarello, Dr. Artz denied her the right to work
prior to voting to expel her from membership in the clinic.
    ¶10 Last, she sought judicial dissolution of the clinic and the real
estate company on the ground that Drs. Artz and Stiens had acted
illegally and oppressively by preventing her from working and then
ousting her from the company on the pretext that she had not been
economically productive. She claimed they denied her ―the rights
and benefits of membership in both‖ the clinic and real estate
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company, ―changed the character, profits and losses‖ of the clinic,
and ―devalued‖ her membership in it.
    ¶11 In response to Dr. Pasquarello’s lawsuit, Dr. Artz, joined
now by Dr. Stiens, filed a motion in district court to compel
arbitration under the operating agreement. They argued that Dr.
Pasquarello’s allegations that they had failed to pay profits and
wrongfully excluded her from the clinic related to duties imposed by
the operating agreement, so the claims required enforcement or
interpretation of the operating agreement and were therefore subject
to its arbitration provision.
    ¶12 Dr. Pasquarello countered that her contract claims were
premised on the oral purchase agreement, not the operating
agreement. She also argued that her dissolution claim was grounded
in statute, not the operating agreement. But the district court
concluded that the case involved a dispute regarding the
enforcement or interpretation of the operating agreement and so
referred the claims to arbitration.
    ¶13 During the arbitration process, Dr. Pasquarello filed a
motion in district court to stay the arbitration, value her membership
interests, and direct their sale, arguing that the valuation and sale of
her membership interests were not subject to the operating
agreement’s arbitration provision. Drs. Artz and Stiens opposed the
motion, contending that once the district court referred the
dissolution claim to arbitration, the purchase of Dr. Pasquarello’s
membership interests became subject to arbitration. The district
court denied Dr. Pasquarello’s motion, so the parties returned to
arbitration.
   ¶14 The arbitrator ruled in favor of Drs. Artz and Stiens on the
contract and good faith claims. He also determined that dissolution
was ―not a viable remedy‖ and instead determined the value of Dr.
Pasquarello’s interests and directed their sale.
   ¶15 Dr. Pasquarello then filed a motion to vacate the arbitration
award, reviving the argument from her motion to stay that the
arbitrator ―exceeded his authority in deciding issues beyond the
scope of the parties’ arbitration agreement.‖ The district court again
disagreed and confirmed the arbitration award.
   ¶16 Dr. Pasquarello appealed the district court’s confirmation,
arguing that the district court erred in granting the motion to compel
arbitration and further erred in refusing to stay the arbitration
proceedings.

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    ¶17 On appeal, the court of appeals assessed whether Dr.
Pasquarello’s claims fell within the scope of the operating
agreement’s arbitration provision, concluding that ―Utah’s strong
policy favoring arbitration‖ weighed against vacating the arbitration
award.1 It concluded that the claims, although somewhat tangential
to the operating agreement, fell within the scope of the arbitration
provision because their resolution required construction of, and
reference to, provisions of the operating agreement.2
    ¶18 Dr. Pasquarello filed a petition for writ of certiorari, arguing
that the court of appeals erred in affirming the district court. We
granted certiorari on a single issue: ―Whether the Court of Appeals
erred in affirming the district court’s referral to arbitration of claims
for breach of contract, breach of the covenant of good faith and fair
dealing, and dissolution.‖ In their briefs, Drs. Artz and Stiens
included a request for appellate costs and attorney fees.
   ¶19 We have appellate jurisdiction under Utah Code section
78A-3-102(3)(a).
                           Standard of Review
    ¶20 Whether a claim falls under an arbitration clause is a matter
of contractual interpretation,3 which is reviewed for correctness.4
                               Analysis
    ¶21 Dr. Pasquarello brought several claims against Drs. Artz
and Stiens, three of which are at issue here: breach of contract,
breach of the covenant of good faith and fair dealing, and a demand
for dissolution. Dr. Pasquarello contends that the court of appeals
erred in affirming the district court’s referral to arbitration of these
claims, arguing that none of the claims falls under the arbitration
clause in the parties’ operating agreement. But because each claim
implicates an issue covered by the arbitration clause, we disagree
with Dr. Pasquarello and affirm the court of appeals.

__________________________________________________________
   1HITORQ LLC v. TCC Veterinary Servs. Inc., 2020 UT App 123,
   ¶ 30, 473 P.3d 1177.
   2   Id. ¶ 51.
   3  See Zions Mgmt. Servs. v. Record, 2013 UT 36, ¶ 31, 305 P.3d 1062
(stating that ―arbitration is a matter of contract‖ (citation omitted)).
   4   Id. ¶ 11.

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                           Opinion of the Court

    ¶22 Drs. Artz and Stiens request that we award them reasonable
attorney fees incurred in defending the appeal. But because they
have not shown they are entitled to fees, we deny the request.
        I. Because the Claims Involve Disputes Regarding the
   Enforcement or Interpretation of the Operating Agreement, the
            Claims Fall Under the Arbitration Clause
   ¶23 Dr. Pasquarello argues the arbitration clause in the
operating agreement does not include an agreement to arbitrate the
three claims at issue here because the claims are not based on
disputes regarding the enforcement or interpretation of the
agreement. We disagree. All three claims require a court to either
enforce or interpret the operating agreement in order to resolve the
underlying disputes. Because each claim involves a dispute
regarding the enforcement or interpretation of the operating
agreement, we affirm the court of appeals.
A. We Determine Whether a Claim Falls Under an Arbitration Clause by
               Referring to the Clause’s Plain Language
   ¶24 When parties agree to arbitration, the district court is bound
to refer the matter to arbitration.5 But if a party challenges the
appropriateness of arbitration, the Utah Uniform Arbitration Act
provides that ―the court shall proceed summarily to decide the issue
and order the parties to arbitrate unless it finds that there is no
enforceable agreement to arbitrate.‖6 An agreement to arbitrate is
enforceable only if it ―binds the party whose submission to
arbitration is sought, and the dispute to be arbitrated . . . fall[s]
within the scope of the agreement.‖7
    ¶25 In this case, Dr. Pasquerello acknowledges that she agreed
to the arbitration provision but argues that her claims fall outside the
scope of that provision. When parties disagree about the scope of an
arbitration clause, we first look to ―the language of the arbitration
clause at issue.‖8 ―[I]f the language within the four corners of the

__________________________________________________________
   5   See UTAH CODE § 78B-11-108(1)(a).
   6   Id. § 78B-11-108(1)(b).
   7 Bybee v. Abdulla, 2008 UT 35, ¶ 26, 189 P.3d 40 (citations
omitted).
   8Peterson & Simpson v. IHC Health Servs, Inc., 2009 UT 54, ¶ 22, 217
   P.3d 716.

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contract is unambiguous, the parties’ intentions are determined from
the plain meaning of the contractual language.‖9 When the language
is ambiguous, ―there is a presumption in favor of arbitration.‖10 But
―state and federal policies favoring arbitration cannot be used to
defeat the plain language of the parties’ contract, nor can they be
used to create ambiguities where there are none.‖11
 B. We Affirm the Court of Appeals Because Each Claim Falls Within the
                     Scope of the Arbitration Clause
    ¶26 Dr. Pasquarello argues the court of appeals erred in
concluding that the three claims—breach of contract, breach of the
covenant of good faith and fair dealing, and dissolution—all fell
under the arbitration clause in the parties’ operating agreement. But
because each claim involves a dispute regarding the enforcement or
interpretation of the operating agreement, we disagree and affirm
the court of appeals.
   ¶27 We ―look[] first to the plain language‖ of the arbitration
clause,12 which in this case provides that ―[a]ny Member involved in
a dispute regarding the enforcement or interpretation of this
Agreement may elect to have such dispute referred to non-binding
mediation or binding arbitration.‖ When we interpret contractual
language, we begin with ―the ordinary and usual meaning of the
words.‖13 So to understand this arbitration clause, we look to the
ordinary and usual meanings of the words ―dispute,‖ ―regarding,‖
―enforcement,‖ and ―interpretation.‖
   ¶28 As a starting point, there must be a ―dispute,‖ meaning ―[a]
conflict or controversy, esp[ecially] one that has given rise to a

__________________________________________________________
   9  Zions Mgmt. Servs. v. Record, 2013 UT 36, ¶ 32, 305 P.3d 1062
(citation omitted).
   10 Bybee, 2008 UT 35, ¶ 27 (citation omitted). We note that
relevant extrinsic evidence may preclude application of the
presumption of arbitrability in some cases. But neither party has
offered extrinsic evidence in this case, and this issue has not been
briefed, so we do not address the issue in this opinion.
   11   Zions Mgmt. Servs., 2013 UT 36, ¶ 36.
   12   Peterson & Simpson, 2009 UT 54, ¶ 13.
   13   Pugh v. Stockdale & Co., 570 P.2d 1027, 1029 (Utah 1977).

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particular lawsuit.‖14 And the ordinary meaning of ―regarding‖ is
―with respect to,‖ ―concerning,‖15 ―in reference or relation to,‖ or
―about.‖16 So we must determine if Dr. Pasquarello’s claims involve
conflicts or controversies concerning, about, or relating to the
enforcement or interpretation of the operating agreement.
     ¶29 Next, we turn to enforcement and interpretation. Black’s
Law Dictionary defines ―enforcement‖ as ―[t]he act or process of
compelling compliance with a law, mandate, command, decree, or
agreement.‖17 Because the arbitration clause specifically refers to the
operating agreement, it logically refers to ―the act or process of
compelling compliance‖ with the operating agreement. And
―interpretation‖ is defined as ―[t]he ascertainment of a text's
meaning; specific[ally], the determination of how a text most
fittingly applies to particular facts.‖18
   ¶30 Applying the ordinary meaning of these terms, Dr.
Pasquarello’s claims are covered by the arbitration clause if they
involve conflicts or controversies relating to the act or process of
compelling compliance with the operating agreement or the
ascertainment of the agreement’s meaning. The language in this
arbitration clause is not ambiguous, so we do not reach the
presumption of arbitrability.
   1.    Breach of Contract and Breach of the Covenant of Good
Faith and Fair Dealing
   ¶31 Dr. Pasquarello first argues that the claims for breach of
contract and breach of the covenant of good faith and fair dealing
involve a dispute about the oral contract between the parties for Dr.
Artz’s purchase of Dr. Pasquarello’s ownership in the business and
in the building—not the enforcement or interpretation of the
__________________________________________________________
   14 Dispute, BLACK’S LAW DICTIONARY (11th ed. 2019); see also
Dispute, MERRIAM-WEBSTER DICTIONARY, https://www.merriam-
webster.com/dictionary/dispute (last visited Nov. 26, 2021)
(defining dispute as a ―verbal controversy‖).
   15       Regarding,   MERRIAM-WEBSTER         DICTIONARY,
https://www.merriam-webster.com/dictionary/regarding    (last
visited Nov. 26, 2021).
   16   Regarding, OXFORD ENGLISH DICTIONARY (3d ed. 2009).
   17   Enforcement, BLACK’S LAW DICTIONARY (11th ed. 2019).
   18   Interpretation, BLACK’S LAW DICTIONARY (11th ed. 2019).

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operating agreement. She contends that this contract is separate from
the operating agreement, so it does not involve the enforcement or
interpretation of the agreement. But Dr. Pasquarello’s argument does
not account for the possibility that a dispute relates to multiple
topics—here, the oral contract and the underlying operating
agreement. Because the breaches alleged by Dr. Pasquarello
encompass disputes about both the oral contract and the
enforcement of the operating agreement, we affirm the court of
appeals.
    ¶32 As discussed, in determining whether a claim is subject to
an arbitration clause, we ―look[] first to the plain language within
the four corners of the document.‖19 Here—where the arbitration
clause covers any dispute ―regarding the enforcement or
interpretation of the operating agreement‖—if the claim relates to
the enforcement or interpretation of the operating agreement, the
claim is subject to arbitration.
    ¶33 Dr. Pasquarello bases the breach of contract claim on several
alleged acts, including that Dr. Artz ―[f]ail[ed] to purchase [her]
membership interests by November 14, 2015,‖ ―[f]ail[ed] to prepare
the purchase agreement in a timely manner,‖ ―[f]ail[ed] to pay
HITORQ profits and accounts receivable by November 14, 2015,‖
and ―[p]revent[ed] Pasquarello from working after November 13,
2015.‖ While some of these allegations relate only to the oral
contract—such as Dr. Artz’s alleged failure to prepare the purchase
agreement—others are directly tied to enforcement of, or compelling
compliance with, the operating agreement.
   ¶34 Dr. Pasquarello alleges that Dr. Artz failed to pay HITORQ
profits and accounts receivable and wrongfully excluded her from
the business. These are essentially allegations that Dr. Artz failed to
abide by the operating agreement. The rules for distribution of
profits and accounts receivable are set out in Article IV of the
operating agreement, and Article VII paragraph 5 outlines the
procedure for expelling members from the LLC. So these allegations
involve disputes about the enforcement of the operating agreement.
   ¶35 Similarly, the claim for breach of the covenant of good faith
and fair dealing included accusations that Dr. Artz ―[w]rongfully

__________________________________________________________
   19   Peterson & Simpson, 2009 UT 54, ¶ 13.

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t[ook] HITORQ’s Clinic Debt Payments,‖20 ―[d]en[ied] Pasquarello
the right to work after November 13, 2015,‖ and voted ―to expel
HITORQ’s Clinic membership.‖ These allegations also point to Dr.
Artz’s alleged failure to abide by Articles IV and VII of the operating
agreement.
    ¶36 Dr. Pasquarello argues that ―[t]he guts of [her] claim was
clearly—as pleaded—an oral agreement with no arbitration clause.‖
But ―we do not think that an agreement to arbitrate should be
interpreted so narrowly that its application may be avoided by
choosing to plead one legal theory instead of another.‖21 And by
incorporating material aspects of the parties’ operating agreement
into the oral contract, such as paying profits and losses, the parties
essentially tied the oral contract to the enforcement of the operating
agreement for these issues.
    ¶37 Dr. Pasquarello acknowledged the materiality of the
operating agreement to the claims when she attached it to the
complaint and referenced it in support of her claims now at issue.
For example, in the good faith and fair dealing portion of Dr.
Pasquarello’s complaint, she referenced the terms of Article IV of the
operating agreement to support her contention that she was owed
distributions that she did not receive. Similarly, in support of the
breach of contract claim, Dr. Pasquarello referenced a provision in
the operating agreement that provides the clinic and real estate
memberships must be sold together.
    ¶38 So even though Dr. Pasquarello contends that these claims
are based on an oral agreement separate from the operating
agreement, the breaches she described and remedies she sought
relate to enforcement of the operating agreement. Both the breach of
contract and breach of the covenant of good faith and fair dealing
claims involve disputes regarding the enforcement of the operating
agreement and, therefore, fall under the arbitration clause.
   2. Dissolution

__________________________________________________________
   20  We note that the parties referred to profit distributions as
―clinic debt payments,‖ so this is the same allegation as in the claim
for breach of contract.
   21 Docutel Olivetti Corp. v. Dick Brady Sys., Inc., 731 P.2d 475, 477
n.3 (Utah 1986).

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   ¶39 Dr. Pasquarello also contends that the court of appeals erred
in affirming the district court’s referral of the dissolution claim to
arbitration because that claim is grounded in Utah Code section 48-
3a-701. But because Dr. Pasquarello’s complaint relies wholly on
breaches of the parties’ operating agreement to satisfy the
dissolution requirements of the statute, we disagree.
   ¶40 Section 48-3a-701 allows for dissolution of a limited liability
company if the managers or members in control of the company
―have acted, are acting, or will act in a manner that is illegal or
fraudulent‖ or ―in a manner that is oppressive and was, is, or will be
directly harmful to the applicant.‖22 Dr. Pasquarello repeats this
language in the complaint, stating that ―[t]he Defendants’ [sic] have
acted and continue to act in a manner that is illegal, oppressive, and
directly harmful to [Dr. Pasquarello].‖
   ¶41 But in support of these statutory grounds for dissolution,
Dr. Pasquarello points solely to violations of the operating
agreement, claiming that ―[t]he Defendants’ [sic] denied [her] the
rights and benefits of membership in both entities, changed the
character, profits and losses of the Clinic and devalued the value of
[her] membership. . . . As a result of the Defendants’ actions
dissolution of the two entities is proper.‖
    ¶42 Because, as framed by Dr. Pasquarello, the determination of
whether dissolution is proper rests on whether Drs. Artz and Stiens
violated the operating agreement, her dissolution claim requires
interpretation, or ascertaining the meaning, of the operating
agreement. This is sufficient to show the claim encompasses a
dispute regarding the interpretation of the operating agreement. We
hold that the dissolution claim is encompassed by the parties’
arbitration clause. We also hold that the breach of contract and
breach of the covenant of good faith and fair dealing fall under the
arbitration clause. Accordingly, we affirm the court of appeals.
   II. We Deny the Request for Attorney Fees Because Drs. Artz and
        Stiens Have Not Shown They Are Entitled to Them
   ¶43 On appeal, Drs. Artz and Stiens request attorney fees under
Utah Code section 78B-11-126(3). In support, they rely primarily on
judicial statements discussing Utah’s ―long-standing‖ policy of
upholding arbitration rulings and discouraging the relitigation of

__________________________________________________________
   22   UTAH CODE § 48-3a-701(5).

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valid awards.23 They also point to what they perceive as improper
conduct by Dr. Pasquarello, asserting that her pursuit of this case has
been at best, unnecessary, and at worst, malicious. They made a
similar request to the court of appeals, which that court denied
because Dr. Pasquarello’s complaint and appeal raised ―close
question[s]‖ of law.24 The court of appeals also noted that Drs. Artz
and Stiens had not sufficiently addressed the policy considerations
in favor of and against an award of fees in their briefs.25
   ¶44 Drs. Artz and Stiens have not filed a cross appeal, so they do
not challenge the court of appeals’ denial of fees. We therefore
understand their current request as one for fees incurred solely in
their appeal to this court. And while we acknowledge that Drs. Artz
and Stiens have tried to fix the deficiencies that the court of appeals
identified in their briefing by addressing relevant policy
considerations, we nevertheless decline to award fees because Dr.
Pasquarello has again raised a ―legitimate concern[] about the legal
validity‖ of the arbitrator’s decision and its subsequent confirmation
by the district court and the court of appeals.26
   ¶45 Utah Code section 78B-11-126(3) states that a court may
award the prevailing party ―reasonable attorney fees and other
reasonable expenses of litigation incurred in a judicial proceeding‖
contesting an arbitration award. Such an award is not automatic but
rather is ―left to the discretion of the court.‖27 In exercising this
discretion in the past, we have considered two competing policies.
The first, which serves as the basis for Drs. Artz and Stiens’s request,
is to disincentivize the unnecessary relitigation of legitimate
arbitration awards.28 But this consideration must be balanced with
the danger of placing an undue burden on a party with ―legitimate
__________________________________________________________
   23 See Buzas Baseball, Inc. v. Salt Lake Trappers, Inc., 925 P.2d 941,
946, 953 (Utah 1996); Eco Box Fabricators LLC v. Zweigle, 2020 UT App
133, ¶ 12, 475 P.3d 146.
   24 HITORQ LLC v. TCC Veterinary Servs. Inc., 2020 UT App 123,
¶ 45, 473 P.3d 1177.
    25   Id. ¶ 58.
    26   Duke v. Graham, 2007 UT 31, ¶ 31, 158 P.3d 540.
    27 Duke, 2007 UT 31, ¶ 31; see also Paul deGroot Bldg.Servs., L.L.C.
v. Gallacher, 2005 UT 20, ¶ 23, 112 P.3d 490.
   28   Buzas Baseball, 925 P.2d at 953.

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concerns about the legal validity of an award.‖29 We addressed this
balancing act in Duke, where we stated that ―[a]n appeal that has
little legal support would likely merit an award of fees . . . while a
close case would not.‖30
    ¶46 In Duke, an issue arose between the four founding members
of a limited liability company.31 Consistent with the company’s
operating agreement, the members submitted the dispute to
arbitration. To resolve the dispute, the arbitrator removed two of the
four founders from the company.32 The two removed founders then
challenged the arbitrator’s ruling in district court, arguing that the
arbitrator did not have authority to remove them from the
company.33 The district court rejected their challenge, so they
appealed to this court.34 Both parties to the dispute requested
attorney fees on appeal.35 We ultimately affirmed the district court
and awarded attorney fees to the defendants.36 In reaching this
outcome, we considered the ―broad‖ grant of authority to arbitrators
in Utah’s Arbitration Act and our own ―clear precedent‖ upholding
arbitration awards in similar instances.37 We therefore concluded
that the plaintiffs’ claim had ―little legal support‖ and granted the
defendants’ request for fees.38
   ¶47 Turning to Drs. Artz and Steins’s request for fees, unlike the
controversy in Duke, the issues Dr. Pasquarello presented in this case
do not fall within clear judicial precedent. To the contrary, the court
of appeals determined that Utah case law on this issue was
―sparse.‖39 And we agree with the court of appeals that the
__________________________________________________________
   29   Duke, 2007 UT 31, ¶ 31.
   30   Id. ¶ 32.
   31   Id. ¶¶ 2–3.
   32   Id. ¶ 3.
   33   Id. ¶ 4.
   34   Id. ¶¶ 4–5.
   35   Id. ¶ 13.
   36   Id. ¶ 32.
   37   Id.
   38   Id.
   39   HITORQ LLC, 2020 UT App 123, ¶ 31.

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applicability of the arbitration clause to Dr. Pasquarello’s claims was
―a close call.‖40
    ¶48 While Drs. Artz and Stiens have presented valid policy
concerns in support of their request for fees, Dr. Pasquarello has
raised ―legitimate concerns about the legal validity of‖ the
arbitrator’s decision.41 Accordingly, we decline to award attorney
fees.
                                  Conclusion
    ¶49 Because each of Dr. Pasquarello’s claims falls within the
arbitration clause, we affirm the court of appeals’ holding that the
district court correctly compelled arbitration.
    ¶50 We also reject Drs. Artz and Stiens’s request for appellate
costs and fees because we conclude that Dr. Pasquarello has raised
valid concerns, and included legal support, regarding the legitimacy
of the arbitration award.

__________________________________________________________
   40   Id. ¶ 40.
   41   Duke, 2007 UT 31, ¶ 31.

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