July 23, 2019- Frank L. Trambley Construction v. Franken Construction Company, No. A-1-CA-37636

1 	IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
2 	FRANKL. TRAMBLEY
3 	CONSTRUCTION, INC.,
4 	Other-Appellant,
5 V. 	NO. A-1-CA-37636
6 FRANKEN CONSTRUCTION
7 	COMPANY, INC.,
8 	Defendant-Appellee.
9 APPEAL FROM THE DISTRICT COURT OF MORA COUNTY
10 	Matthew J. Sandoval, District Judge
11 	McCoy Leavitt Laskey LLC
12 	H. Brook Laskey
13 	Stephanie K. Demers
14 Brandon M. Meyers
15 	Albuquerque, NM
16 	Leverick & Musselman, LLC
17 Richard M. Leverick
18 	Albuquerque, NM
19 	for Appellant
20 Riley, Shane & Keller, P .A
21 	Daniel A. Alderete
22 Albuquerque, NM
23 	for Appellee
Court of Appeals of New Mexico
Filed 7/23/2019 8:37 AM

1 	MEMORANDUM OPINION
2 VARGAS, Judge.
3 	{1} 	Third-party Defendant Frank L. 	Trambley Construction, Inc. 	(Trambley)
4 appeals from a district court oder denying its motion to compel arbitration. We issued
5 a calendar notice proposing to affirm. Trambley has timely filed a memorandum in
6 opposition.
7 {2} 	In the underlying lawsuit, Plaintiff Mora County sued Franken Construction
8 (Franken), the general contractor of the initial phase of construction of the Mora
9 County Complex. Trambley was one of the subcontractors. Franken impleaded
10 	Trambley into the lawsuit and filed a third-party complaint against it. Trambley filed
11 	a motion to compel arbitration. [RP 216] The contract between Franken and Trambley
12 	contains an arbitration clause that is triggered "[i ]f at any time a controversy should
13 	arise between [Franken and Trambley.]" [DS 3] The district court denied Trambley' s
14 	motion to compel arbitration.
15 	{3} 	Our Supreme Court has 	held 	that "arbitration agreements 	are 	contracts
16 enforceable by the rules of contract law." Horne v. Los Alamos Nat '! Sec., L.L.C.,
17 	2013-NMSC-004, ,r 16,296 P.3d 478. We therefore apply the principles of contract
18 	law to the interpretation of an arbitration agreement. See L.D. Miller Cons tr. , Inc. v.
19 Kirschenbaum, 2017-NMCA-030, ,r 18, 392 P.3d 194. If the contract language is
2

1 unambiguous, we enforce its clear terms. See Montoya v. 	Villa Linda Mall, Ltd.,
2 	1990-NMSC-053, ,r 8,110 N.M. 128, 793 P.2d 258 ("It is black letter law that, absent
3 an ambiguity, a court is bound to interpret and enforce a contract's clear language and
4 cannot create a new agreement for the parties."). The existence of ambiguity is a
5 matter of law that is detennined de novo. See Handmaker v. Henney, 1999-NMSC-
6 043, i119, 128 N.M. 328, 992 P.2d 879.
7 {4} 	Although it would appear that the arbitration language is unambiguous and that
8 the third-party complaint raises a "controversy" that triggers arbitration, we do not
9 interpret the district court's ruling to foreclose arbitration in this case. Instead, we
10 	believe that the court's ruling reflects the fact that Trambley's potential liability is
11 	predicated on Franken's liability to Mora County-an issue that has yet to be decided.
12 	In short, the "controversy" is theoretical at this point, a situation similar to an
13 	indemnification claim. Cf Tunis v. Country Club Estates Homeowners Ass 'n, In c.,
14 	2014-NMCA-025, ,r,r 60-61, 318 P.3d 713 (Su tin, J. , dissenting)(noting general rule
15 	that indemnification claim is not ripe until liability ofindemnitee is established). This
16 	is reflected in Franken' s third amended third-party complaint, which seeks to impose
17 	liability on the subcontractors "[i]nsofar as the alleged construction defects are
18 	proven." [RP 612, ,r 20] Indeed, Franken separately raises an indemnification claim
19 against Trambley. [RP 612, ,r 23] Trambley's memorandum in opposition suggests
3

1 that the district court ruling could be interpret to foreclose any arbitration between it
2 and Franken. However, in the event that Franken is found liable to Mora County for
3 defects relating to Trambley, the district court may revisit the issue at that time.
4 	{S} 	Becau se we believe that the arbitration issue is premature at this point , we
5 affirm the denial of the motion to compel arbitration.
6 	{6}
7
8
IT IS SO ORDERED.
9 	WE CONCUR:
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11 	r;~ANZI, Judge
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13 	KRISINA BOG~, Judge
4