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Southwest Barricades, L.L.C. v. Traffic Management, Inc.

Court of Appeals of Arizona, First Division

June 9, 2016

SOUTHWEST BARRICADES, L.L.C., an Arizona LLC, Plaintiff/Appellant,
v.
TRAFFIC MANAGEMENT, INC., a California corporation, Defendant/Appellee.

         Appeal from the Superior Court in Maricopa County No. CV2010-054957 The Honorable Michael D. Gordon, Judge

          The Law Office of Scott J. McWilliams, LLC, Phoenix By Scott J. McWilliams, Lisa C. Boddington, Drew P. Buffington Counsel for Plaintiff/Appellant.

          Burke Panzarella Rich, Phoenix By David T. Panzarella, Elizabeth L. Fleming Counsel for Defendant/Appellee.

          Judge John C. Gemmill delivered the opinion of the Court, in which Presiding Judge Andrew W. Gould and Judge Margaret H. Downie joined.

          OPINION

          GEMMILL, JUDGE.

         ¶1 Southwest Barricades, L.L.C. ("Southwest") appeals from the final judgment entered after the superior court set aside an arbitration award pursuant to Arizona Rule of Civil Procedure ("Rule") 60(c). For the following reasons, we conclude that Rule 60(c) cannot be used to set aside a compulsory arbitration award. We therefore vacate that portion of the superior court's minute entry filed January 13, 2012 setting aside the arbitration award and all rulings thereafter, including the final judgment against Southwest. We remand for further proceedings consistent with this decision.

         BACKGROUND

         ¶2 Southwest filed a complaint against Traffic Management, Inc. ("TMI") for breach of contract, breach of the implied covenant of good faith and fair dealing, and loss of goodwill involving the rental of, and damage to, an attenuator truck. Given the amount in controversy, the case was subject to compulsory arbitration. After an arbitration hearing, the arbitrator filed his notice of decision in favor of Southwest.

         ¶3 Southwest then asked the arbitrator to award attorney fees, and TMI filed an objection. On June 10, 2011, the arbitrator filed the arbitration award granting Southwest $10, 156 in relief and $4000 in attorney fees. TMI had until June 30, 2011 to appeal the arbitration award. Ariz. R. Civ. P. 77(a) (providing that a party must file an appeal with the superior court within 20 days after filing of an award).

         ¶4 On June 30, 2011, the appeal deadline, TMI's attorney requested a ruling from the arbitrator on its objection to the attorney fees. TMI requested a response before July 5, 2011, believing that was the deadline to appeal the arbitration award. On July 1, 2011, the arbitrator advised that he reviewed and considered the objection before signing and filing the arbitration award. He notified the parties that, if they believed the arbitrator had to "file a written ruling with the court separate and apart from the arbitration award, " in order to "pass upon the objection" as required by the Rules, he would "file an order overruling the objection nunc pro tunc effective June 10, 2011." Neither party requested the filing of an amended order. TMI filed its notice of appeal on July 5, 2011 - 25 days after entry of the arbitration award.

         ¶5 Southwest moved to dismiss the appeal as untimely, and after full briefing, the superior court granted the motion to dismiss the appeal.

         ¶6 TMI then moved for relief from judgment pursuant to Rule 60(c). TMI argued that any mistake in construing the tolling rules to apply to the arbitration appeal deadline constituted excusable neglect. See Rule 60(c)(1). TMI also argued that, after the arbitration hearing, Southwest disclosed new evidence demonstrating it had not suffered any damages, see Rule 60(c)(2), and that Southwest engaged in misconduct by withholding important documents before the arbitration hearing, see Rule 60(c)(3). The superior court granted TMI's motion pursuant to Rule 60(c)(2) and 60(c)(3) and set aside the arbitration award.

         ¶7 Southwest appealed, but we dismissed the appeal because the minute entry granting the motion for relief from judgment was unsigned and there was no judgment entered in the superior court pursuant to Rule 76(c).[1] Southwest then moved to enter judgment on the arbitration award. The superior court denied the motion to enter the award and Southwest's subsequent motion for reconsideration.

         ¶8 The case ultimately proceeded to a second arbitration hearing and then a jury trial. The jury found in favor of TMI and the ...


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