AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

• The case involves a dispute between New Mexico Highlands University (Highlands) and Makwa Builders, LLC (Makwa) regarding a construction contract for a new student union building on the Highlands campus, valued at $16,006,000. The contract, signed by Highlands' then-president on June 15, 2010, included an arbitration clause for dispute resolution and a clause allowing Highlands to terminate the contract "for convenience and without cause." Highlands exercised this termination right on February 27, 2012, leading to a series of claims and counterclaims between the parties related to the contract's termination and the subsequent rejection of Makwa's payment statement by Highlands (paras 2-4).

Procedural History

• District Court of San Miguel County, February 11, 2014: The bankruptcy court remanded the declaratory judgment action to the district court, finding that the Bankruptcy Court was required to abstain from hearing the matter under 28 U.S.C. § 1334(c)(2) (para 6).
• District Court of San Miguel County, April 2, 2014: Makwa filed a motion to compel arbitration in the district court under NMSA 1978, Section 44-7A-8(a) (2001), of New Mexico’s Uniform Arbitration Act (para 7).
• District Court of San Miguel County, Date (N/A): The district court denied Highlands’ motion to dismiss based on its conclusion that Katz and 11 U.S.C. § 108 tolled the two-year statute of limitations, thus making Makwa’s counterclaims timely (para 9).

Parties' Submissions

• Plaintiff-Appellant (Highlands): Argued that the arbitration provision in the contract was void and unenforceable and sought a declaratory judgment to that effect. Highlands also opposed Makwa's motion to compel arbitration on the grounds that it sought to prematurely conclude that there is a valid and enforceable arbitration provision, which was the core of the dispute (paras 4, 7).
• Defendant-Appellee (Makwa): Filed a motion to compel arbitration under New Mexico’s Uniform Arbitration Act and later filed a demand for arbitration with the American Arbitration Association, asserting claims for breach of contract, violation of the Prompt Payment Act, unjust enrichment, and breach of the duty of good faith and fair dealing. Makwa argued that its counterclaims were timely filed based on either the tolling provision of 11 U.S.C. § 108 or the fact that Makwa’s claims did not accrue until Highlands refused to pay Makwa’s statement for payment, making the filing of counterclaims timely (paras 7-8).

Legal Issues

• Whether the district court erred by granting Makwa Builders, LLC’s motion to compel arbitration.
• Whether the district court erred by denying New Mexico Highlands University’s Rule 1-012(B)(6) NMRA motion to dismiss Makwa’s counterclaims.

Disposition

• The Court of Appeals affirmed the district court’s order granting Makwa’s motion to compel arbitration.
• The Court of Appeals quashed Highlands’ interlocutory appeal of the district court’s denial of its motion to dismiss as improvidently granted (para 1).

Reasons

• The Court of Appeals, led by Judge J. Miles Hanisee, with Judges Michael E. Vigil and Stephen G. French concurring, found that there exists a valid and enforceable arbitration agreement between the parties, thus affirming the district court’s decision to grant Makwa’s motion to compel arbitration. The court reasoned that the undisputed facts established that the contract, signed by Dr. Fries on behalf of Highlands, contained a provision requiring the parties to arbitrate their disputes. The court rejected Highlands' argument that Dr. Fries lacked the authority to bind Highlands to arbitration, stating that the authority to contract includes the authority to agree to arbitration as the method of dispute resolution. The court also exercised its discretion to quash Highlands’ interlocutory appeal as improvidently granted, concluding that the question of whether Katz and § 108 compel the tolling of the limitations period under Section 37-1-23 does not control the disposition of this case and should not have been reached by the district court in the first instance (paras 13-18).