Jay Nygard v. Patrick Walsh

Minnesota Court of Appeals

Jay Nygard v. Patrick Walsh

Opinion

                         This opinion will be unpublished and
                         may not be cited except as provided by
                         Minn. Stat. § 480A.08, subd. 3 (2014).

                              STATE OF MINNESOTA
                              IN COURT OF APPEALS
                                    A15-0272

                                     Jay Nygard, et al.,
                                        Appellants,

                                             vs.

                                    Patrick Walsh, et al.,
                                        Respondents.

                                Filed November 9, 2015
                                       Affirmed
                                    Schellhas, Judge

                            Hennepin County District Court
                              File No. 27-CV-12-19546

Erick G. Kaardal, Mohrman, Kaardal & Erickson, P.A., Minneapolis, Minnesota (for
appellants)

Louise A. Behrendt, Garth J. Unke, Stich, Angell, Kreidler, Unke & Scattergood, P.A.,
Minneapolis, Minnesota (for respondents)

      Considered and decided by Schellhas, Presiding Judge; Ross, Judge; and

Stoneburner, Judge.*

                        UNPUBLISHED OPINION

SCHELLHAS, Judge

      Appellants challenge district court orders compelling arbitration and confirming

the arbitration award. We affirm.

*
 Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, § 10.
                                           FACTS

         The facts are undisputed. Appellants Jay Nygard and Kendall Nygard sued

respondents Patrick Walsh and Nancy Walsh for trespass, among other things. On

March 5, 2012, in connection with court-affiliated mediation, the parties executed a

mediated settlement agreement through which they agreed to a dismissal of the action.1

Pertinent to this appeal, the settlement agreement contains the following provisions:

                       1. Neither party will intentionally trespass on other
                part[y’]s property.

                      2. Walsh[es] to move mailbox by June 1 and fence—
                per Nygards’ survey to conform with boundary of City of
                Orono.

                       ....

                      6. [Mediator] to arbitrate any dispute interpreting this
                agreement.

                       The Mediator will notify the Court of the fact that this
                case has been settled.

                       This is a binding and enforceable agreement and
                contract. Pursuant to Minnesota Statutes Section 572.35, the
                parties are hereby advised that (a) the mediator has no duty to
                protect their interests or provide them with information about
                their legal rights; (b) signing a settlement agreement may
                adversely affect their legal rights; and (c) they should consult
                with an attorney before signing a mediated settlement
                agreement if they are uncertain of their rights.

         On June 2, 2012, Nygards wrote to the mediator, alleging that Walshes had

violated several terms of the settlement agreement, including the fence-and-mailbox and

trespass terms, and requesting enforcement of the agreement. After visiting the parties’


1
    The record does not indicate who drafted the settlement agreement.

                                               2
properties and meeting with the parties, the mediator sent the parties his “rulings” in a

letter. The mediator “suggest[ed] that the parties retain a new neutral surveyor to

determine the property line and abide by the decision” and determined that Nygards were

not entitled to damages for Walshes’ alleged trespass.

       On August 10, 2012, Nygards commenced the present action, seeking enforcement

of the settlement agreement and damages. Walshes moved to dismiss the action and to

compel arbitration. Nygards opposed the motion by arguing that the settlement agreement

did not require arbitration and, alternatively, that the scope of the arbitration provision in

the settlement agreement was limited to “disputes interpreting [the settlement

agreement].” The district court dismissed Nygards’ action without prejudice and ordered

the parties to arbitrate their disputes, concluding that the settlement agreement required

the parties to arbitrate for the following reasons:

              First, the Arbitration Provision must be construed to require
              arbitration because (1) the use of the phrase “to arbitrate”
              implies that arbitration is mandatory and (2) the Arbitration
              Provision does not use the word “may” or any other language
              implying that arbitration is optional or permissive. Second,
              even if arbitration is permissive rather than mandatory, . . .
              Nygards elected arbitration by submitting their request for
              relief to [the mediator].

In addition, the court determined that the agreement to arbitrate extended to disputes over

enforcement of the settlement agreement because “an agreement to arbitrate ‘any dispute

interpreting’ the Settlement Agreement naturally entails an agreement to arbitrate any

dispute over enforcement of the Settlement Agreement.” The court resolved any

ambiguity in the scope of the arbitration provision in favor of arbitration, relying on state



                                              3
and federal policies favoring arbitration, Nygards’ conduct in initially asking the

mediator to enforce the settlement agreement, and the authority of the mediator (as

arbitrator) to decide questions of arbitrability.

       Nygards appealed from the order dismissing their action and compelling

arbitration, and this court dismissed the appeal as taken from a nonappealable order.

Nygard v. Walsh, No. A13-0632 (Minn. App. May 7, 2013) (order). The parties thereafter

participated in an arbitration hearing before the mediator (hereafter referred to as

arbitrator), who issued a written ruling that Nygards failed to meet their burden of proof

regarding their trespass and other allegations. Nygards then moved the district court to

vacate the arbitration award under Minn. Stat. § 572B.23(a)(2)(A) (2014), due to the

“evident partiality” of the arbitrator. In opposition, Walshes sought confirmation of the

award under Minn. Stat. § 572B.23(d) (2014). The district court denied Nygards’ motion

to vacate, confirmed the arbitration award, and entered judgment for Walshes.

       This appeal follows.

                                       DECISION

       Nygards solely argue on appeal that, because the settlement agreement arose out

of court-affiliated mediation and does not provide for binding arbitration, it is governed

by Minn. R. Gen. Prac. 114.02. That rule provides:

              If the parties stipulate in writing that the arbitration will be
              binding, then the proceeding will be conducted pursuant to
              the [Minnesota] Uniform Arbitration Act . . . . If the parties
              do not stipulate that the arbitration will be binding, then the




                                               4
              award is non-binding and will be conducted pursuant to Rule
              114.09.

Minn. R. Gen. Prac. 114.02(a)(1).

       Nygards argue that, because the settlement agreement lacks an express stipulation

to submit to binding arbitration, the arbitration was non-binding and this court therefore

must reverse the district court’s order confirming the arbitration award. We disagree.

       “A reviewing court must generally consider only those issues that the record

shows were presented and considered by the trial court in deciding the matter before it.”

Thiele v. Stich, 
425 N.W.2d 580, 582
 (Minn. 1988) (quotation omitted). In addition, a

party may not “obtain review by raising the same general issue litigated below but under

a different theory.” 
Id.
 “The modern caselaw makes it abundantly clear that, as a general

rule, if an appellant fails to preserve an argument or issue in district court proceedings,

the issue or argument is forfeited and may not be asserted in an appellate court.” Doe ex

rel. Doe v. Columbia Heights Sch. Dist., 
842 N.W.2d 38
, 43 & n.1 (Minn. App. 2014)

(collecting cases).

       The record reflects that Nygards did not raise their rule-114 argument concerning

binding arbitration before the district court. Nygards’ complaint, amended complaint, and

answer to Walshes’ counterclaim do not assert that the settlement agreement was

governed by rule 114 and required only non-binding arbitration. Moreover, in their

response to Walshes’ motion to dismiss and compel arbitration, Nygards did not mention

rule 114. Nygards instead argued that the arbitration provision in the settlement

agreement included no mandatory language and therefore no agreement requiring



                                            5
arbitration existed; alternatively, they argued that the scope of the arbitration provision

was limited to disputes over interpretation and did not include enforcement of the

settlement agreement. And in their motion to vacate the arbitration award, Nygards did

not argue that rule 114 required an express stipulation to submit to binding arbitration.

Rather, Nygards argued that the district court should vacate the award because of the

arbitrator’s evident partiality. The district court rejected all of Nygards’ arguments, which

Nygards have not raised on appeal.

       Nygards failed to raise before the district court the argument that an arbitration

provision of a mediated settlement agreement under rule 114 requires an express

stipulation to submit to binding arbitration. Their argument therefore is forfeited on

appeal.

       Affirmed.




                                             6


Reference

Status
Unpublished