Court Opinion

ID: 9351173
Source: CourtListenerOpinion
Date Created: 2022-12-29 17:01:34.410548+00
Date Added: 2024-06-11T16:58:18.263859
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
                                                          December 29, 2022

                               2022COA147

No. 21CA0825, Turoff v. Itachi Capital — Courts and Court

Procedure — Colorado Uniform Arbitration Act — Appeals

     A division of the court of appeals concludes that an order

vacating an arbitration award and directing a rehearing under

section 13-22-228(1)(e), C.R.S. 2022, of the Colorado Revised

Uniform Arbitration Act (the Act) is not appealable as an implicit

order denying confirmation of the arbitration award under section

13-22-228(1)(c) of the Act.
COLORADO COURT OF APPEALS                                       2022COA147

Court of Appeals No. 21CA0825
City and County of Denver District Court No. 21CV30586
Honorable J. Eric Elliff, Judge

Erin Turoff,

Plaintiff-Appellee,

v.

Itachi Capital, Inc.,

Defendant-Appellant.

                              APPEAL DISMISSED

                                  Division IV
                           Opinion by JUDGE DUNN
                         Grove and Schutz, JJ., concur

                        Announced December 29, 2022

Fortis Law Partners, LLC, David F. Olsky, Denver, Colorado, for Plaintiff-
Appellee

McAllister Law Office, PC, Sean T. McAllister, Denver, Colorado; The Law Office
of Eric J. Moutz, LLC, Eric J. Moutz, Boulder, Colorado, for Defendant-
Appellant
¶1    The Colorado Revised Uniform Arbitration Act (the Act) limits

 appeals from arbitration-related orders. § 13-22-228(1), C.R.S.

 2022. Defendant, Itachi Capital, Inc. (Itachi), appeals the district

 court’s order vacating an arbitration award entered against plaintiff,

 Erin Turoff, and ordering a new hearing.

¶2    Because we don’t agree with Itachi that the Act confers

 jurisdiction under these circumstances, we dismiss the appeal.

                           I.   Background

¶3    Itachi and Ms. Turoff jointly owned a limited liability company.

 Under the company’s operating agreement, Itachi, as the majority

 owner, had the right to “drag along” the minority owner — Ms.

 Turoff — and compel her to sell her interest in the company if

 certain conditions were met. Having found a buyer, Itachi sought to

 enforce the so-called drag-along provision and compel Ms. Turoff to

 sell her share of the business. Ms. Turoff refused to sell her

 interest.

¶4    Itachi filed an arbitration demand with the Judicial Arbiter

 Group (JAG). At a status conference a couple weeks before the

 scheduled arbitration, Ms. Turoff — who was self-represented at the

 time — expressed, among other concerns, that she was missing

                                   1
 important documents. Itachi responded that it “should get [certain

 documents] to Ms. Turoff as soon as possible.” When Ms. Turoff

 asked generally about Itachi’s theory of the case, the arbitrator

 suggested that Ms. Turoff “consult with counsel.”

¶5    About one week later, Ms. Turoff sent a written request to JAG

 asking the arbitrator to postpone the hearing to allow her to retain

 counsel.

¶6    The arbitrator held another status conference two days before

 the scheduled arbitration to consider the requested continuance.

 At that conference, Ms. Turoff’s newly retained counsel requested a

 postponement, explaining, in particular, the need to get up to speed

 on the dispute and for “some limited discovery” relating to the

 proposed sale of the business and the drag-along provision.

¶7    The arbitrator denied the request. After the arbitration

 concluded, the arbitrator entered an award in Itachi’s favor and

 later awarded Itachi its attorney fees and costs.

¶8    Ms. Turoff then filed a motion to vacate the arbitration award,

 arguing that the refusal to postpone the hearing and permit

 discovery was fundamentally unfair and substantially prejudiced

 her rights. See § 13-22-223(1)(c), C.R.S. 2022 (noting a court shall

                                   2
  vacate an arbitration award for the refusal to postpone an

  arbitration hearing under certain identified circumstances).

¶9     Itachi filed a response opposing the motion, arguing that there

  was no legal basis to vacate the award, and that the arbitrator’s

  decision was entitled to deference. In the first and final few

  paragraphs of its response, Itachi asked the court to confirm the

  arbitration award. But Itachi didn’t identify its response as a cross-

  motion, nor did it file a separate motion requesting confirmation of

  the award. See § 13-22-222(1), C.R.S. 2022 (After a party “receives

  notice of an award, the party may make a motion to the court for an

  order confirming the award.”).

¶ 10   The district court entered a detailed written order, finding the

  requested discovery was relevant, Ms. Turoff “articulated sufficient

  cause for a continuance,” and the denial of discovery “caused [Ms.

  Turoff] substantial prejudice.” The court concluded that, “[u]nder

  these circumstances, the arbitration award cannot stand.” It

  vacated the award and ordered the parties “to resubmit their

  dispute to JAG for a new hearing.” The order doesn’t say anything

  about Itachi’s request to confirm the award embedded within its

  response (let alone expressly deny confirmation of the award).

                                    3
¶ 11   Itachi brought an interlocutory appeal, contending that the

  district court erred by vacating the arbitration award and ordering a

  new hearing. A motions division of this court ordered the parties to

  show cause why the appeal should not be dismissed without

  prejudice for lack of a final, appealable judgment.1 After the parties

  responded, the division deferred the jurisdictional issue to the

  merits division.

                             II.   Discussion

¶ 12   Generally, the entry of a final judgment is a jurisdictional

  prerequisite to an appeal; however, we may review interlocutory

  orders where specifically authorized by statute or rule. § 13-4-

  102(1), C.R.S. 2022; C.A.R. 1(a)(1); see J.P. Meyer Trucking &

  Constr., Inc. v. Colo. Sch. Dists. Self Ins. Pool, 18 P.3d 198, 201

  (Colo. 2001).

¶ 13   The Act is one such statute conferring limited appellate

  jurisdiction over certain “arbitration-related orders.” Tug Hill

  Marcellus LLC v. BKV Chelsea LLC, 2021 COA 17, ¶ 5; accord J.P.

  1 Ms. Turoff cross-appealed the district court’s order denying her fee
  request for prevailing on the motion to vacate, but she later
  dismissed the cross-appeal, agreeing the order was not appealable.

                                      4
  Meyer Trucking, 18 P.3d at 201-02. But not all orders relating to

  “arbitration proceedings are appealable.” Thomas v. Farmers Ins.

  Exch., 857 P.2d 532, 534 (Colo. App. 1993).

¶ 14   Under the Act, a party may appeal an order

         (a) denying a motion to compel arbitration;

         (b) granting a motion to stay arbitration;

         (c) confirming or denying confirmation of an award;

         (d) modifying or correcting an award; or

         (e) vacating an award without directing a rehearing.2

  § 13-22-228(1). Beyond these specific enumerated circumstances,

  the precise language of section 13-22-228(1) “leaves no room for

  permitting appeals.” J.P. Meyer Trucking, 18 P.3d at 202; accord

  Gergel v. High View Homes, L.L.C., 58 P.3d 1132, 1135 (Colo. App.

  2002). Given that, orders not enumerated in section 13-22-228(1)

  are not appealable. See J.P. Meyer Trucking, 18 P.3d at 200, 202

  (rejecting the argument that an order denying a motion to dismiss

  was “tantamount” to an order denying a motion to compel

  2 A party may also appeal a final judgment entered under the Act.
  § 13-22-228(1)(f), C.R.S. 2022. But Itachi doesn’t contend the order
  vacating the arbitration award and ordering a new hearing is a final
  judgment.

                                   5
  arbitration, which is one of the specifically enumerated appealable

  orders in section 13-22-228); Tug Hill, ¶ 25 (concluding this court

  has “no jurisdiction to review an order denying a motion to

  consolidate arbitration proceedings”); Associated Nat. Gas, Inc. v.

  Nordic Petroleums, Inc., 807 P.2d 1195, 1196 (Colo. App. 1990)

  (holding that an order compelling arbitration is not appealable).

¶ 15   On its face, the order vacating the award and directing a new

  hearing falls into none of the narrow categories enumerated in

  section 13-22-228(1). And because we may not extend or modify

  our statutory jurisdiction, Tug Hill, ¶ 25, that would ordinarily end

  our analysis.

¶ 16   Itachi says, however, that we should review the order under

  section 13-22-228(1)(c), which allows us to review an order denying

  confirmation of an arbitration award.3 To get there, Itachi

  maintains that by vacating the award and ordering a new hearing,

  the court “effectively denied Itachi’s request” to confirm the award.

  But we see a couple of problems with this argument.

  3Itachi doesn’t contend the order is reviewable under section 13-
  22-228(1)(e). Because the court vacated the award and ordered a
  new hearing, we agree.

                                    6
¶ 17   First, Itachi never filed a motion asking the court to confirm its

  arbitration award. To the extent it sought such an order, it was

  required to move for one. See C.R.C.P. 7(b)(1) (A request to a court

  for an order “shall be made by motion.”). While it’s true that

  Itachi’s response to the motion to vacate also contains an embedded

  request that the court confirm the arbitration award, the Colorado

  Rules of Civil Procedure don’t allow a motion to be “included in a

  response . . . to the original motion.” C.R.C.P. 121, § 1-15(1)(d); see

  Patterson v. James, 2018 COA 173, ¶¶ 9-12. That the Act doesn’t

  require a party to file a motion to confirm an arbitration award — as

  Itachi correctly points out — doesn’t change the fact that the

  Colorado Rules of Civil Procedure do. Because Itachi’s embedded

  request in its responsive pleading was not procedurally proper, we

  have no reason to believe the district court considered it, much less

  implicitly ruled on it.

¶ 18   Second, though it didn’t move to confirm the arbitration

  award, Itachi contends the order vacating the award and ordering a

  rehearing is “effectively” equivalent to an order denying

  confirmation of the award. But an order vacating an award without

  directing a rehearing and an order denying confirmation of an

                                     7
  award both end the proceedings. That’s not what happened here.

  Instead, the district court vacated the award and also ordered a new

  hearing, which didn’t end the proceedings. If anything, the order

  here is effectively equivalent to an order granting a new trial, which

  isn’t a final, appealable judgment. Bowman v. Songer, 820 P.2d

  1110, 1112 (Colo. 1991); see also United States v. Ayres, 76 U.S. (9

  Wall.) 608, 610 (1869) (order granting a new trial had the effect of

  vacating the former judgment, rendering it null and void, and

  leaving the parties in the same situation as if no trial had ever

  taken place).

¶ 19   Third, were we to follow Itachi’s suggestion and conclude that

  an order vacating an arbitration award and ordering a new hearing

  effectively amounts to an appealable denial of a request to confirm

  an award, it would make every order vacating an arbitration award

  — whether the court directed a new hearing or not — appealable.

  Had the legislature intended to make every order vacating an

  arbitration award appealable, it could have done so. But it instead

  made only those orders vacating an arbitration award without

  directing a rehearing appealable. See § 13-22-228(1)(e); see also

  Lunsford v. W. States Life Ins., 908 P.2d 79, 84 (Colo. 1995)

                                     8
  (“[W]hen the legislature speaks with exactitude, [courts] must

  construe the statute to mean that the inclusion or specification of a

  particular set of conditions necessarily excludes others.”). We will

  not interpret the Act in a way that renders section 13-22-228(1)(e)

  entirely meaningless. See Nieto v. Clark’s Mkt., Inc., 2021 CO 48,

  ¶ 32 (rejecting interpretation that would render a statutory

  provision “completely meaningless”); accord Tug Hill, ¶ 23.

¶ 20   For that reason, we don’t find Itachi’s reliance on Morgan

  Keegan & Co. v. Smythe, 401 S.W.3d 595 (Tenn. 2013), particularly

  helpful. In Smythe, the district court vacated an arbitration award

  and ordered a rehearing. Id. at 598. Although the district court

  didn’t enter an order denying the confirmation of the arbitration

  award, Smythe concluded that the order “necessarily denied” the

  confirmation of the arbitration award. Id. at 608. It then concluded

  the order was appealable under Tennessee’s Uniform Arbitration

  Act, Tenn. Code Ann. § 29-5-319(a)(3) (2022), which provides for

  appeals from orders denying confirmation of arbitration awards.

  Smythe, 401 S.W.3d at 612. In reaching that conclusion, Smythe

  said little more than “[e]ven if an order is not appealable under one

  subsection, it may be appealable under another.” Id. at 609.

                                    9
  Beyond that, Smythe doesn’t acknowledge the fact that its

  interpretation renders the subsection allowing for the appeal of

  orders vacating an arbitration award without directing a rehearing

  meaningless. Thus, Smythe is unpersuasive.

¶ 21   Leaving the statutory text aside, Itachi next says we should

  review the merits now because it’s more efficient and cost-effective

  to do so (rather than after a new hearing). Even if true, that’s a

  legislative call. We may not rewrite section 13-22-228(1) or expand

  our jurisdiction because of any perceived judicial efficiencies. See

  Tug Hill, ¶ 25.

¶ 22   And, finally, to the extent the parties rely on out-of-state

  authority to argue about what should happen in a case where a

  court expressly vacates an arbitration award while directing a new

  hearing and also denies confirmation of an arbitration award, that’s

  not this case. We therefore save that question for the day when it’s

  actually presented. Compare Karcher Firestopping v. Meadow Valley

  Contractors, Inc., 204 P.3d 1262, 1264 (Nev. 2009) (joining “[t]he

  majority of courts that have considered this jurisdictional issue”

  and concluding the appellate court lacked jurisdiction, under the

  Nevada Uniform Arbitration Act, to consider an order that denied

                                    10
  confirmation of an arbitration award, vacated the award, and

  directed a rehearing), with E. Tex. Salt Water Disposal Co. v.

  Werline, 307 S.W.3d 267, 270-71 (Tex. 2010) (holding, in a split

  decision, that an order denying confirmation of an arbitration

  award, vacating an arbitration, and directing a new hearing is

  appealable under the Texas General Arbitration Act).

                            III.   Conclusion

¶ 23   To sum it up, we have no jurisdiction to review the district

  court’s order vacating the arbitration award and ordering a new

  hearing. We therefore dismiss the appeal.

       JUDGE GROVE and JUDGE SCHUTZ concur.

                                    11