A-1-CA-35862 | Omnilex

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Court of Appeals of New Mexico
Filed 5/13/2019 10:20 AM

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IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

ANITA JEAN RUDOLPH, Deceased, by
the Personal Representative of the
WRONGFUL DEATH ESTATE,

PAUL RUDOLPH,

Plaintiff-Appellee,
v.

MANOR ESTATES, INC. d/b/a
PRINCETON PLACE; PRINCE &
LUFFEY, LLC d/b/a PARAMOUNT
HEALTHCARE CONSULTANTS;
DANNY PRINCE; WW HEALTHCARE,
LLC; HORACE WINCHESTER; and
JERRY WILLIAMSON,

Defendants-Appellants,

and

WW HEALTHCARE, LLC; HORACE
WINCHESTER; and JERRY
WILLIAMSON,

Third-Party Plaintiffs,

IRONSHORE SPECIALTY INSURANCE
COMPANY, a foreign insurance company;
and VAN GILDER INSURANCE
CORPORATION, a foreign insurance
company,

Third-Party Defendants,

Court of Appeals of New Mexico
Filed 5/13/2019 10:20 AM

A. HL
Mark Reynolds

No. A-1-CA-35862

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and
IRONSHORE SPECIALITY INSURANCY COMPANY,
Counterclaimant and Fourth-Party Plaintiff,

Vv.

WW HEALTHCARE, LLC; HORACE
WINCHESTER; JERRY WILLIAMSON; and
MANOR ESTATES, INC.,

Counterdefendants and Fourth-Party Defendants.

APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY
Carl J. Butkus, District Judge

Harvey and Foote Law Firm
Jennifer J. Foote
Albuquerque, NM

for Appellee

Modrall, Sperling, Roehl, Harris & Sisk, P.A.
Michelle A. Hernandez

Tomas J. Garcia

Elizabeth A. Martinez

Albuquerque, NM

Quintairos, Prieto, Wood & Boyer, P.A.
Frank Alvarez
Dallas, TX

for Appellants

MEMORANDUM OPINION
BOGARDUWS, Judge.
{1} Defendant Princeton Place, a nursing home facility, along with Defendant
owners and operators of Princeton Place (collectively Defendants) appeal the district
court’s order denying their motion to compel arbitration. The district court rejected
Defendants’ request to have the arbitrator decide the threshold issue of arbitrability
and determined that the American Health Lawyers Association (AHLA) was
unavailable to serve as arbitrator. The district court concluded that, because the
designation of AHLA as arbitrator was integral to the agreement, the arbitration
agreement was unenforceable. The district court also determined that Plaintiff's
claims for injuries arising from rape were not within the scope of the parties’
arbitration agreement. We affirm the district court’s order denying Defendants’
motion to compel arbitration. Because we conclude the arbitration agreement is
unenforceable, we do not reach the issue of the arbitration agreement’s scope.
BACKGROUND
I. Procedural Background
(23 This is the second appeal in this case. The first followed the district court’s
original denial of Defendants’ motion to compel, which was based in part on the
court’s conclusion that the arbitration agreement was not binding on Plaintiff as the

personal representative of the estate. While the appeal was pending, this Court

decided Estate of Krahmer ex rel. Peck v. Laurel Healthcare Providers, LLC, which
held that a valid arbitration agreement binds the wrongful death estate and
beneficiaries. 2014-NMCA-001, J 1, 315 P.3d 298. As a result, we reversed the
district court’s denial and remanded for further consideration of the remaining
issues. This appeal followed the district court’s subsequent denial of Defendants’
motion to compel arbitration on remand.

II. Factual Background

33} Anita Jean Rudolph, a resident of Princeton Place nursing home, was
allegedly raped and seriously injured by another resident. Ms. Rudolph died
approximately one month after the alleged rape. Plaintiff is the personal
representative of the wrongful death estate of Ms. Rudolph. Plaintiff alleges that the
injuries Ms. Rudolph suffered arising from rape were a cause of her death.

{43 When Ms. Rudolph was admitted to Princeton Place, her son signed a resident
admission agreement on her behalf. The resident admission agreement makes two
references to binding arbitration. The first, entitled “Resolution of Disputes,” is in
Section 31 of the agreement. In relevant part it reads, “Any legal dispute,
controversy, demand or claim . . . that arises out of or relates to the Resident
Admission Agreement or any service or health care provided by the Facility to the
Resident, shall be resolved exclusively by binding arbitration[.]” Section 31 also

states that binding arbitration shall be conducted “in accordance with the [AHLA]

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Alternative Dispute Resolution Services Rules of Procedure for Arbitration which

are hereby incorporated into this agreement.”

{5} The resident admission agreement’s second reference to arbitration is in a

two-page section entitled “Mutual Agreement to Arbitrate Claims.” The first

paragraph of that section states:
It is understood and agreed . . . that any legal dispute, controversy,
demand or claim . . . that arises out of or relates to the Resident
Admission Agreement or any service or health care provided by the
Facility to the Resident, shall be resolved exclusively by binding
arbitration to be conducted at a place agreed upon by the parties, ... in
accordance with the [AHLA] Alternative Dispute Resolution Services

Rules of Procedure for Arbitration which are hereby incorporated into
this agreement|[.]

Sometime after Ms. Rudolph’s death, Plaintiff filed a complaint for wrongful death,
as well as various other claims, in the Second Judicial District Court.
DISCUSSION

I. Standard of Review

{6} “We apply a de novo standard of review to a district court’s denial of a motion
to compel arbitration.” Cordova v. World Fin. Corp. of N.M., 2009-NMSC-021,
q 11, 146 N.M. 256, 208 P.3d 901. “Similarly, whether the parties have agreed to
arbitrate presents a question of law, and we review the applicability and construction
of a contractual provision requiring arbitration de novo.” Jd. (internal quotation

marks and citation omitted).

II. The Issue of Arbitrability Was Properly Decided by the District Court
{ | Before turning to the issue of arbitrability in this instance, we first address
Plaintiff's contention that this issue was not properly preserved by Defendants. “To
preserve an issue for review on appeal, it must appear that appellant fairly invoked
a ruling of the trial court on the same grounds argued in the appellate court.” Benz
v. Town Ctr. Land, LLC, 2013-NMCA-111, J 24, 314 P.3d 688 (internal quotation
marks and citation omitted). During a post-remand status conference, the parties to
this case were instructed to submit briefs on the remaining issues pertaining to
Defendants’ motion to compel arbitration. At the hearing conducted after the briefs
were submitted, Defendants asked the district court to delay any ruling on the scope
of the arbitration agreement and related issues until AHLA had a chance to determine
whether the arbitration contract complied with the AHLA rules, which had been
revised sometime after the arbitration contract at issue was signed. Plaintiff did not
object to Defendants’ request at the hearing.

{83} Defendants contend that their statements were sufficient to put the court on
notice of their arguments, and they note that Plaintiff did not object when Defendants
made their request. Plaintiff concedes that Defendants asked the court to let AHLA
decide the question of whether the arbitration contract complied with the AHLA
rules, but argues, without citing authority, that merely raising the issue at the hearing

was not enough to preserve the issue. See Curry v. Great Nw. Ins. Co.,2014-NMCA-

031, ¥ 28, 320 P.3d 482 (“Where a party cites no authority to support an argument,
we may assume no such authority exists.”). We determine that raising the issue at
the hearing and specifically asking the court to delay its rulings until AHLA had an
opportunity to review the arbitration agreement for compliance with AHLA
requirements was sufficient in this instance to put the court on notice of the issue
and to preserve this issue for appeal. Cf City of Albuquerque v. Sanchez, 1992-
NMCA-038, § 10, 113 N.M. 721, 832 P.2d 412 (noting that issue preserved for
appellate review when trial judge was alerted to claimed error and had an opportunity
to correct the error). Therefore, we next consider the question of who, under the
terms of the arbitration agreement, decides the question of arbitrability: the court or
the arbitrator?

{93 | Defendants contend that the district court erred by deciding that the question
of arbitrability was for the court, not the arbitrator, to decide. Defendants note that
the specific agreement signed by Plaintiff required arbitration “in accordance with

AHLA Rules,” and argue that the rules contain a specific delegation provision.' That

' Because AHLA provides that a claim will be arbitrated in accordance with
the version of the rules posted on its website on the date a demand for arbitration is
received and no such demand had been made, the district court noted that
determining which rules to apply presented a “moving target.” Ultimately, the
district court decided to apply the 2014 rules and specifically analyzed whether the
arbitration agreement satisfied Rule 11.5. We note that AHLA has amended its rules
twice since issuing the 2014 rules. However, we restrict our analysis to the 2014
rules based on the district court’s ruling and the arguments made by the parties on
appeal.

provision, found in AHLA Rule 11.6, states that “[if] a [c]onsumer claims the
agreement to arbitrate fails to comply with the requirements listed in Rule 11.5, the
arbitrator will promptly schedule a preliminary hearing on this issue.” Thus,
Defendants argue, because the parties to this agreement incorporated the AHLA
rules, which they contend include a specific delegation of the gateway issue of
arbitrability to the arbitrator, there is clear and unmistakable evidence that the parties
delegated the issue of arbitrability.

10} Plaintiff argues that the district court properly decided the threshold issue of
arbitrability because there was not clear and unmistakable evidence that the parties
delegated the issue. Plaintiff points out that the arbitration agreement itself does not
contain a delegation clause; thus, Plaintiff argues there is no evidence to support a
finding of delegation. Next, Plaintiff contends that the delegation provision on which
Defendants rely is not a true delegation provision because it does not grant the
arbitrator sole authority to determine the validity of the clause. Rather, Plaintiff
contends this provision is simply a description of a procedural method by which
AHLA determines whether the arbitration agreement complies with its terms. In
sum, Plaintiff argues, there is no clear, unmistakable evidence that the parties
intended to delegate arbitrability to an arbitrator.

11} Arbitration is a “highly favored” form of dispute resolution because it

promotes judicial efficiency and conservation of the parties’ resources. Santa Fe

Techs., Inc. v. Argus Networks, Inc., 2002-NMCA-030, 9 51, 131 N.M. 772, 42 P.3d
1221. There is a “strong public policy in this state . . . in favor of resolution of
disputes through arbitration.” Lisanti v. Alamo Title Ins. of Tex., 2002-NMSC-032,
417, 132 N.M. 750, 55 P.3d 962 (internal quotation marks and citation omitted).
‘“‘When a party agrees to a non-judicial forum for dispute resolution, the party should
be held to that agreement.” Jd.

{123 We look to the arbitration agreement to determine if arbitrability should have
been within the arbitrator’s purview in the first instance. Our Court has previously
held that “[t]he general rule is that the arbitrability of a particular dispute is a
threshold issue to be decided by the district court unless there is clear and
unmistakable evidence that the parties decided otherwise under the terms of their
arbitration agreement.” Felts v. CLK Mgmt., Inc., 2011-NMCA-062, J 17, 149 N.M.
681, 254 P.3d 123 (emphasis added). Threshold issues of arbitration “typically
involve matters of a kind that contracting parties would likely have expected a court
to decide,” including an arbitration provision’s validity, scope, or applicability to a
particular controversy. Jd. (alteration, internal quotation marks, and citation
omitted). However, consistent with the principles of contract law, parties can agree
to have threshold issues decided by an arbitrator in addition to the underlying claims.
Id. | 18. This agreement to delegate the issues creates an exception to the general

rule that issues of arbitrability are for courts to decide. Jd. The delegation provision

must be supported by clear, unmistakable evidence that the parties delegated
arbitrability to the arbitrator. Jd. Clear and unmistakable evidence exists when the
arbitration agreement contains specific language delegating all disputes arising out
of the agreement to the arbitrator or when an arbitration agreement specifically
incorporates an arbitral forum’s rules that contain such a delegation. /d. {{ 23-24. In
order to determine whether there is clear, unmistakable evidence of the intent to
delegate in this case, we examine the factors considered by the Felts Court and
contrast those factors with the arbitration agreement at issue here.

(133. The Felts Court began by looking at the plain language of the arbitration
agreement. /d. § 23. The Court noted that the title of the agreement and the first
sentence of the agreement “unambiguously provide that all disputes were to be
submitted to an arbitrator.” /d. The agreement was entitled “Agreement to Arbitrate
All Disputes,” and the first sentence of the agreement was equally broad: “stating
that the parties submit to arbitration ‘any and all claims disputes, or controversies
...aris[ing] out of .. . this Agreement to Arbitrate All Disputes ... including
disputes as to the matters subject to arbitration. ” Id. This language, including the
italicized clause, was determined to be the requisite “clear and unmistakable
evidence” that “the parties agreed to arbitrate all issues, including issues of

arbitrability.” Jd.

{14} Here, in contrast, the two arbitration agreement clauses at issue in the parties’
arbitration agreement are entitled “Resolution of Disputes,” and “Mutual Agreement
to Arbitrate Claims.” These titles do not contain the same broad language relied on
in Felts, which evidenced the parties’ intent to arbitrate a// matters. More
importantly, the arbitration agreement clauses in this case lack the specific language
that was persuasive in Felts, that all disputes “including disputes as to the matters
subject to arbitration” be decided by an arbitrator. Without such broad language, we
cannot conclude that there is clear and unmistakable evidence that the parties agreed
to let an arbitrator decide all issues, including arbitrability.

{15} The Fe/ts Court also relied on the fact that the arbitration agreement referred
to and incorporated the Code of Procedure of the National Arbitration Forum (NAF
Code of Procedure) into the arbitration agreement. Jd. § 24. The Court noted that the
NAF Code of Procedure Rule 20 “expressly provides that an arbitrator has the
authority to decide jurisdiction issues, including arbitrability questions regarding the
existence, validity, and scope of an arbitration provision” and concluded that the
incorporation of the NAF Code of Procedure “constitute[d] clear and unmistakable
evidence of the parties’ intent to delegate arbitrability issues.” Jd. FF 21, 24.

{16} Although the arbitration agreement signed by the parties in this case
specifically incorporated the AHLA rules by reference, the provision Defendants

rely upon—Rule 11.6—does not delegate arbitrability to an arbitrator. AHLA Rule

11.6 authorizes an arbitrator to conduct a preliminary hearing “[i]f a [c]onsumer
claims the agreement to arbitrate fails to comply with the requirements listed in Rule
11.5[.]” Rule 11.5 lists specific language requirements that must be found in an
arbitration agreement in order for AHLA to administer the consumer’s dispute. The
arbitrator has authority under Rule 11.6 only to determine whether a particular
arbitration agreement complies with Rule 11.5. If the arbitrator determines that the
arbitration agreement does not, the arbitrator will terminate the arbitration. Rule 11.6
specifically limits the arbitrator’s authority by stating that “[a]ny determination
under [Rule 11.6] not to administer the arbitration shall not be considered a
determination on the validity of the arbitration agreement[.]” (Emphasis added.)
Thus, the AHLA rules Defendants reference do not expressly confer power on the
arbitrator to decide arbitrability questions regarding the existence, validity, and
scope of an arbitration provision. The arbitrator’s authority is limited to determining,
as an initial matter, whether the arbitration agreement complies with the AHLA
rules. If it does not, the AHLA arbitrator does not continue. The scope of the AHLA
arbitrator’s review under Rule 11.6 is far more limited than the broad delegation of
authority found in Rule 20 of the NAF Code of Procedure referenced in Felts, and
does not include power to determine the validity of the arbitration agreement. Given
the foregoing, we find no clear and unmistakable evidence that the parties agreed to

delegate issues of arbitrability to the arbitrator based on the incorporation of AHLA

Rule 11.6, nor do we find such evidence in the plain language of the arbitration
agreement. We therefore affirm the district court’s decision to decide the issues of
arbitrability.

II. The Arbitration Agreement Is Unenforceable Because AHLA Is Not
Available

{17}. The district court determined that the arbitration agreement did not satisfy the
AHLA requirements found in Rule 11.5. The district court, relying on Rivera v.
American General Financial Services, Inc., 2011-NMSC-033, 150 N.M. 398, 259
P.3d 803, then concluded that the designation of AHLA was material and integral to
the arbitration agreement. Because of this, the district court determined that
appointment of a replacement arbitrator was not appropriate. Based on the foregoing,
the district court concluded that the arbitration agreement was unenforceable. We
agree.

A. The Arbitration Agreement Does Not Satisfy AHLA Rule 11.5

18}. Defendants concede that the arbitration agreement does not use the exact
language and formatting required by Rule 11.5, but argue that the language used is
substantially similar and satisfies all subsections of the rule. Plaintiff takes the
opposite position—that the arbitration agreement cannot be enforced because the
arbitration agreement does not comply with any of the subsections of Rule 11.5.
Neither party argues that Section 31 of the resident admission agreement, titled

“Resolution of Disputes,” meets the standards set forth in Rule 11.5. Therefore, we

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limit our analysis to the portion of the resident admission agreement entitled “Mutual
Agreement to Arbitrate Claims” and conclude that the arbitration agreement does
not satisfy Rule 11.5. We explain.

{19} Rule 11.5 sets out specific requirements for arbitration agreements that are
“signed before the events giving rise to the claim occurred[.]” The arbitration
agreement at issue in this case was signed before Ms. Rudolph suffered injury;
therefore, this arbitration agreement must comply with Rule 11.5’s explicit
requirements, which are that the agreement:

(a) beaseparate document conspicuously identified as an agreement
to arbitrate;

(b) include the following notice, or substantially similar language, in
a conspicuous location:

Voluntary Agreement to Arbitrate

THIS AGREEMENT GOVERNS IMPORTANT LEGAL
RIGHTS, PLEASE READ IT CAREFULLY BEFORE
SIGNING.

This is a voluntary agreement to resolve any dispute that may
arise in the future between the parties under the American
Health Lawyers Association’s Rules of Procedure for
Arbitration. In arbitration, a neutral third party chosen by the
parties issues a final, binding decision. When the parties agree
to arbitrate, they waive their right to a trial by jury and the
possibility of an appeal.

same care or treatment without delay, if the agreement is not
signed; and

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(d) state conspicuously that the agreement to arbitrate may be
revoked within 10 days after being signed (unless a state law
applicable to contracts generally grants a longer period for
revocation).

{20} We note that these requirements apply to consumer cases only; consequently,
these requirements seem aimed at providing specific notice and information to
consumers who may be unfamiliar with the concept of arbitration. Rule 11.5’s
requirements draw a person’s attention to certain key points: the voluntary nature of
the agreement, the consequences of signing the agreement, and that the refusal to
sign the agreement or the revocation of the agreement will not affect the resident’s
care or treatment. Additionally, Rule 11.5 specifies that its requirements must be
followed, indicating that it is mandatory that an arbitration agreement comply with
Rule 11.5’s form and language requirements. See, e.g., NMSA 1978, Section 12-2A-
4(A) (1997) (defining “must” as a term that expresses “a duty, obligation,
requirement or condition precedent’).

(21; Rule 11.5(a) requires that an arbitration agreement be a separate document
from the resident admission agreement, but does not define what constitutes a
“separate” document. When a contractual term is undefined, the term must be
construed in its usual and ordinary sense, unless the contract states otherwise. Wesco
Ins. Co. v. Velasquez, 1975-NMSC-047, § 12, 88 N.M. 273, 540 P.2d 203. Our courts
often look to dictionary definitions to assess the usual and ordinary meaning of

words. See, e.g., United Nuclear Corp. v. Allstate Ins. Co., 2012-NMSC-032, ff 19-

21, 285 P.3d 644 (citing a number of cases indicating that courts routinely refer to
dictionaries to aid in assessing the meaning of undefined terms and considering the

dictionary definition of “sudden” to construe an insurance contract’s exclusion

clause).
{22} “Separate” as used in Rule 1 1.5(a) is commonly defined as “set or kept apart,”
“not shared with another,” “existing by itself,” and “dissimilar in nature or identity.”

Merriam-Webster’s Collegiate Dictionary 1134 (11th ed. 2005). It is undisputed that
the arbitration agreement is located within, and not outside of, the thirty-page
resident admission agreement. The two-page arbitration agreement is not dissimilar
in nature or identity; it contains the same header found on each page of the resident
admission agreement and is numbered consecutively with all of the other pages of
the resident admission agreement. These elements are not characteristic of a separate
document; instead, these features indicate that the arbitration agreement is but one
of many subsections found within the resident admission agreement.

23}. Defendants contend that the arbitration agreement’s signature requirement is
sufficient to set it off from the rest of the resident admission agreement. Defendants
do not cite any authority indicating that a signature is sufficient to set an arbitration
agreement apart from the document within which it is found. See Curry, 2014-
NMCA-031, J 28. We note that, in contrast to Defendants’ contention, this particular

resident admission agreement requires at least six separate signatures within the

document, including signatures for admission, consent for patient monitoring, thirty-
day notice of discharge, arbitration, patient-code status, and permission for patient
restraint. The arbitration agreement’s signature requirement, one of many signatures
required by the resident admission agreement, is inadequate to set off the arbitration
agreement so that it can be viewed as a separate document as required by Rule
11.5(a).

243 Defendants further argue that the arbitration agreement satisfied all other
subsections of Rule 11.5. However, despite Defendants’ arguments to the contrary,
we note that, contrary to Rule 11.5(b)’s requirements, there is no language in the
arbitration agreement that advises the consumer that he or she is giving up any form
of an appeal, that the document should be read carefully, or that the arbitrator is a
“neutral third party chosen by the parties.” Additionally, our review of the arbitration
agreement revealed that all of the terms that are to be stated conspicuously under
Rule 11.5(b), (c), and (d) are only printed in plain text, with the exception of the
waiver of the right to have the claim decided before a judge or jury. The admission
agreement simply does not comply with Rule 11.5’s mandatory form and language
requirements. Based on the foregoing analysis, which is guided and informed by
Rule 11.5’s purpose to draw a consumer’s attention to the arbitration agreement’s

distinct features that affect legal rights, we conclude that the arbitration agreement

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does not meet Rule 11.5’s requirements, rendering AHLA unavailable to arbitrate
the parties’ dispute.
B. AHLA’s Designation Was Integral to the Arbitration Agreement
{25} Wenow turn to the final issue to consider in this matter—whether AHLA was
integral to the arbitration agreement. We are guided in our analysis by the Supreme
Court’s opinion in Rivera, 2011-NMSC-033, which concerned an arbitration
agreement that identified an arbitration administrator that was unavailable. Jd. 21.
Despite the administrator’s unavailability, the defendant argued that the district court
should have selected a substitute arbitrator under Section 5 of the Federal Arbitration
Act (FAA), 9 U.S.C. Sections 1-16 (2006). Rivera, 2011-NMSC-033, J 21. Section
5 of the FAA provides:
[i]f in the agreement provision be made for a method or naming or
appointing an arbitrator or arbitrators or an umpire, such method shall
be followed; but if no method be provided therein, or if a method be
provided and any party thereto shall fail to avail himself of such
method, or if for any other reason there shall be a lapse in the naming
of an arbitrator or arbitrators or umpire, or in filling a vacancy, then
upon the application of either party to the controversy the court shall
designate and appoint an arbitrator or arbitrators or umpire[.]
Id. § 22 (quoting 9 U.S.C. § 5). The plaintiff argued that Section 5 did not apply
when the sole designated arbitrator was not available. Jd. ¥ 23.
{26} The Court disagreed with the plaintiffs contention that Section 5 would never

apply when the designated arbitrator is unavailable. /d. J] 26-27. Instead, the Court

focused on whether the designation of the arbitration provider was integral to the

agreement to arbitrate, id, and noted this issue was a matter of contract
interpretation. /d. § 27. “The purpose, meaning and intent of the parties to a contract
is to be deduced from the language employed by them; and where such language is
not ambiguous, it is conclusive.” /d. (internal quotation marks and citation omitted).
If the plain language of the arbitration agreement establishes the parties’ intent that
disputes arising from the agreement be resolved “solely through a specific arbitration
provider, the parties’ intent would be frustrated if a court appointed a different
arbitration provider.” Jd. The Court adopted an integral versus ancillary test for
resolving the issue by examining whether the designation of the arbitration provider
was integral to the agreement to arbitrate. Id. J§ 26-27.

(273 In order to determine whether the designation was integral, the Court
considered, among other questions, whether there is an express designation of a
single arbitration provider, whether the parties have designated the rules of a specific
arbitration provider, and whether the arbitration agreement used mandatory
contractual language for terms tied to the arbitration provider. Jd. [J 28-31.
Reasoning that the arbitration contract specifically and exclusively named the
unavailable arbitration provider, mandated that the arbitration be conducted under
the unavailable provider’s rules and procedures, and used mandatory rather than
permissive language, our Supreme Court concluded that the selection of the

unavailable arbitration provider was integral to the arbitration agreement and that

Section 5 did not allow for a substitute arbitrator to be selected and imposed on the
parties. Id. JJ 32-34, 38.

28} Analyzing the arbitration agreement here, we note that it does not expressly
designate AHLA as the arbitrator; rather, the arbitration agreement provides that the
arbitration be “in accordance with” the AHLA’s rules. The arbitration agreement
specifically and exclusively references AHLA throughout the arbitration agreement
and incorporates the AHLA’s rules into the same. Among other things, the
incorporated AHLA rules dictate: (1) how to file a claim for arbitration; (2) that
AHLA controls the selection and appointment of a single, neutral arbitrator; (3) that
an alternative selection process is only available when the parties have agreed to the
alternative in writing and the validity and interpretation of that agreement are not in
dispute; and (4) the powers available to the arbitrator. Furthermore, the language
concerning arbitration is mandatory rather than permissive. For example, the
arbitration agreement indicates that claims “shall be resolved exclusively by binding
arbitration” and that all claims “shall be arbitrated in one proceeding.”

(293 Given the specific and exclusive references to the AHLA, incorporation of the
AHLA rules, the breadth of the AHLA rules, and mandatory language of the
agreement, we conclude that the selection of the AHLA was integral to the

arbitration agreement. Therefore, we agree with the district court that Section 5 of

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the FAA does not allow the appointment of a substitute arbitrator in this case and
affirm the district court’s denial of Defendants’ motion to compel arbitration.

30} Based on the foregoing, we need not reach Defendants’ final claim that the
arbitration agreement’s scope included Plaintiffs claims of personal injuries arising
from Ms. Rudolph’s alleged rape.

CONCLUSION

{31} We affirm the district court’s order denying Defendants’ motion to compel
arbitration and remand for further proceedings.

32} ITIS SO ORDERED.

fiastoo- Boge class

KRISTINA BOGARDUS, Judge

WE CONCUR:
= L. ATTREP, Judge

QUELINE R. MEDINA, Judge

May 13, 2019- Anita Jean Rudolph v. Manor Estates, Inc., No. A-1-CA-35862

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