Erin Turoff v. Itachi Capital, Inc.
Date Filed2022-12-29
Docket21CA0825
Cited0 times
StatusPublished
Full Opinion (html_with_citations)
The summaries of the Colorado Court of Appeals published opinions
constitute no part of the opinion of the division but have been prepared by
the division for the convenience of the reader. The summaries may not be
cited or relied upon as they are not the official language of the division.
Any discrepancy between the language in the summary and in the opinion
should be resolved in favor of the language in the opinion.
SUMMARY
December 29, 2022
2022COA147
No. 21CA0825, Turoff v. Itachi Capital â Courts and Court
Procedure â Colorado Uniform Arbitration Act â Appeals
A division of the court of appeals concludes that an order
vacating an arbitration award and directing a rehearing under
section 13-22-228(1)(e), C.R.S. 2022, of the Colorado Revised
Uniform Arbitration Act (the Act) is not appealable as an implicit
order denying confirmation of the arbitration award under section
13-22-228(1)(c) of the Act.
COLORADO COURT OF APPEALS 2022COA147
Court of Appeals No. 21CA0825
City and County of Denver District Court No. 21CV30586
Honorable J. Eric Elliff, Judge
Erin Turoff,
Plaintiff-Appellee,
v.
Itachi Capital, Inc.,
Defendant-Appellant.
APPEAL DISMISSED
Division IV
Opinion by JUDGE DUNN
Grove and Schutz, JJ., concur
Announced December 29, 2022
Fortis Law Partners, LLC, David F. Olsky, Denver, Colorado, for Plaintiff-
Appellee
McAllister Law Office, PC, Sean T. McAllister, Denver, Colorado; The Law Office
of Eric J. Moutz, LLC, Eric J. Moutz, Boulder, Colorado, for Defendant-
Appellant
¶1 The Colorado Revised Uniform Arbitration Act (the Act) limits
appeals from arbitration-related orders. § 13-22-228(1), C.R.S.
2022. Defendant, Itachi Capital, Inc. (Itachi), appeals the district
courtâs order vacating an arbitration award entered against plaintiff,
Erin Turoff, and ordering a new hearing.
¶2 Because we donât agree with Itachi that the Act confers
jurisdiction under these circumstances, we dismiss the appeal.
I. Background
¶3 Itachi and Ms. Turoff jointly owned a limited liability company.
Under the companyâs operating agreement, Itachi, as the majority
owner, had the right to âdrag alongâ the minority owner â Ms.
Turoff â and compel her to sell her interest in the company if
certain conditions were met. Having found a buyer, Itachi sought to
enforce the so-called drag-along provision and compel Ms. Turoff to
sell her share of the business. Ms. Turoff refused to sell her
interest.
¶4 Itachi filed an arbitration demand with the Judicial Arbiter
Group (JAG). At a status conference a couple weeks before the
scheduled arbitration, Ms. Turoff â who was self-represented at the
time â expressed, among other concerns, that she was missing
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important documents. Itachi responded that it âshould get [certain
documents] to Ms. Turoff as soon as possible.â When Ms. Turoff
asked generally about Itachiâs theory of the case, the arbitrator
suggested that Ms. Turoff âconsult with counsel.â
¶5 About one week later, Ms. Turoff sent a written request to JAG
asking the arbitrator to postpone the hearing to allow her to retain
counsel.
¶6 The arbitrator held another status conference two days before
the scheduled arbitration to consider the requested continuance.
At that conference, Ms. Turoffâs newly retained counsel requested a
postponement, explaining, in particular, the need to get up to speed
on the dispute and for âsome limited discoveryâ relating to the
proposed sale of the business and the drag-along provision.
¶7 The arbitrator denied the request. After the arbitration
concluded, the arbitrator entered an award in Itachiâs favor and
later awarded Itachi its attorney fees and costs.
¶8 Ms. Turoff then filed a motion to vacate the arbitration award,
arguing that the refusal to postpone the hearing and permit
discovery was fundamentally unfair and substantially prejudiced
her rights. See § 13-22-223(1)(c), C.R.S. 2022 (noting a court shall
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vacate an arbitration award for the refusal to postpone an
arbitration hearing under certain identified circumstances).
¶9 Itachi filed a response opposing the motion, arguing that there
was no legal basis to vacate the award, and that the arbitratorâs
decision was entitled to deference. In the first and final few
paragraphs of its response, Itachi asked the court to confirm the
arbitration award. But Itachi didnât identify its response as a cross-
motion, nor did it file a separate motion requesting confirmation of
the award. See § 13-22-222(1), C.R.S. 2022 (After a party âreceives
notice of an award, the party may make a motion to the court for an
order confirming the award.â).
¶ 10 The district court entered a detailed written order, finding the
requested discovery was relevant, Ms. Turoff âarticulated sufficient
cause for a continuance,â and the denial of discovery âcaused [Ms.
Turoff] substantial prejudice.â The court concluded that, â[u]nder
these circumstances, the arbitration award cannot stand.â It
vacated the award and ordered the parties âto resubmit their
dispute to JAG for a new hearing.â The order doesnât say anything
about Itachiâs request to confirm the award embedded within its
response (let alone expressly deny confirmation of the award).
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¶ 11 Itachi brought an interlocutory appeal, contending that the
district court erred by vacating the arbitration award and ordering a
new hearing. A motions division of this court ordered the parties to
show cause why the appeal should not be dismissed without
prejudice for lack of a final, appealable judgment.1 After the parties
responded, the division deferred the jurisdictional issue to the
merits division.
II. Discussion
¶ 12 Generally, the entry of a final judgment is a jurisdictional
prerequisite to an appeal; however, we may review interlocutory
orders where specifically authorized by statute or rule. § 13-4-
102(1), C.R.S. 2022; C.A.R. 1(a)(1); see J.P. Meyer Trucking &
Constr., Inc. v. Colo. Sch. Dists. Self Ins. Pool, 18 P.3d 198, 201(Colo. 2001). ¶ 13 The Act is one such statute conferring limited appellate jurisdiction over certain âarbitration-related orders.â Tug Hill Marcellus LLC v. BKV Chelsea LLC,2021 COA 17, ¶ 5
; accord J.P.
1 Ms. Turoff cross-appealed the district courtâs order denying her fee
request for prevailing on the motion to vacate, but she later
dismissed the cross-appeal, agreeing the order was not appealable.
4
Meyer Trucking, 18 P.3d at 201-02. But not all orders relating to âarbitration proceedings are appealable.â Thomas v. Farmers Ins. Exch.,857 P.2d 532, 534
(Colo. App. 1993).
¶ 14 Under the Act, a party may appeal an order
(a) denying a motion to compel arbitration;
(b) granting a motion to stay arbitration;
(c) confirming or denying confirmation of an award;
(d) modifying or correcting an award; or
(e) vacating an award without directing a rehearing.2
§ 13-22-228(1). Beyond these specific enumerated circumstances,
the precise language of section 13-22-228(1) âleaves no room for
permitting appeals.â J.P. Meyer Trucking, 18 P.3d at 202; accord Gergel v. High View Homes, L.L.C.,58 P.3d 1132, 1135
(Colo. App. 2002). Given that, orders not enumerated in section 13-22-228(1) are not appealable. See J.P. Meyer Trucking,18 P.3d at 200, 202
(rejecting the argument that an order denying a motion to dismiss
was âtantamountâ to an order denying a motion to compel
2 A party may also appeal a final judgment entered under the Act.
§ 13-22-228(1)(f), C.R.S. 2022. But Itachi doesnât contend the order
vacating the arbitration award and ordering a new hearing is a final
judgment.
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arbitration, which is one of the specifically enumerated appealable
orders in section 13-22-228); Tug Hill, ¶ 25 (concluding this court
has âno jurisdiction to review an order denying a motion to
consolidate arbitration proceedingsâ); Associated Nat. Gas, Inc. v.
Nordic Petroleums, Inc., 807 P.2d 1195, 1196 (Colo. App. 1990)
(holding that an order compelling arbitration is not appealable).
¶ 15 On its face, the order vacating the award and directing a new
hearing falls into none of the narrow categories enumerated in
section 13-22-228(1). And because we may not extend or modify
our statutory jurisdiction, Tug Hill, ¶ 25, that would ordinarily end
our analysis.
¶ 16 Itachi says, however, that we should review the order under
section 13-22-228(1)(c), which allows us to review an order denying
confirmation of an arbitration award.3 To get there, Itachi
maintains that by vacating the award and ordering a new hearing,
the court âeffectively denied Itachiâs requestâ to confirm the award.
But we see a couple of problems with this argument.
3Itachi doesnât contend the order is reviewable under section 13-
22-228(1)(e). Because the court vacated the award and ordered a
new hearing, we agree.
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¶ 17 First, Itachi never filed a motion asking the court to confirm its
arbitration award. To the extent it sought such an order, it was
required to move for one. See C.R.C.P. 7(b)(1) (A request to a court
for an order âshall be made by motion.â). While itâs true that
Itachiâs response to the motion to vacate also contains an embedded
request that the court confirm the arbitration award, the Colorado
Rules of Civil Procedure donât allow a motion to be âincluded in a
response . . . to the original motion.â C.R.C.P. 121, § 1-15(1)(d); see
Patterson v. James, 2018 COA 173, ¶¶ 9-12. That the Act doesnât
require a party to file a motion to confirm an arbitration award â as
Itachi correctly points out â doesnât change the fact that the
Colorado Rules of Civil Procedure do. Because Itachiâs embedded
request in its responsive pleading was not procedurally proper, we
have no reason to believe the district court considered it, much less
implicitly ruled on it.
¶ 18 Second, though it didnât move to confirm the arbitration
award, Itachi contends the order vacating the award and ordering a
rehearing is âeffectivelyâ equivalent to an order denying
confirmation of the award. But an order vacating an award without
directing a rehearing and an order denying confirmation of an
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award both end the proceedings. Thatâs not what happened here.
Instead, the district court vacated the award and also ordered a new
hearing, which didnât end the proceedings. If anything, the order
here is effectively equivalent to an order granting a new trial, which
isnât a final, appealable judgment. Bowman v. Songer, 820 P.2d
1110, 1112(Colo. 1991); see also United States v. Ayres,76 U.S. (9 Wall.) 608, 610
(1869) (order granting a new trial had the effect of vacating the former judgment, rendering it null and void, and leaving the parties in the same situation as if no trial had ever taken place). ¶ 19 Third, were we to follow Itachiâs suggestion and conclude that an order vacating an arbitration award and ordering a new hearing effectively amounts to an appealable denial of a request to confirm an award, it would make every order vacating an arbitration award â whether the court directed a new hearing or not â appealable. Had the legislature intended to make every order vacating an arbitration award appealable, it could have done so. But it instead made only those orders vacating an arbitration award without directing a rehearing appealable. See § 13-22-228(1)(e); see also Lunsford v. W. States Life Ins.,908 P.2d 79, 84
(Colo. 1995)
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(â[W]hen the legislature speaks with exactitude, [courts] must
construe the statute to mean that the inclusion or specification of a
particular set of conditions necessarily excludes others.â). We will
not interpret the Act in a way that renders section 13-22-228(1)(e)
entirely meaningless. See Nieto v. Clarkâs Mkt., Inc., 2021 CO 48, ¶ 32 (rejecting interpretation that would render a statutory provision âcompletely meaninglessâ); accord Tug Hill, ¶ 23. ¶ 20 For that reason, we donât find Itachiâs reliance on Morgan Keegan & Co. v. Smythe,401 S.W.3d 595
(Tenn. 2013), particularly helpful. In Smythe, the district court vacated an arbitration award and ordered a rehearing.Id. at 598
. Although the district court didnât enter an order denying the confirmation of the arbitration award, Smythe concluded that the order ânecessarily deniedâ the confirmation of the arbitration award.Id. at 608
. It then concluded the order was appealable under Tennesseeâs Uniform Arbitration Act,Tenn. Code Ann. § 29-5-319
(a)(3) (2022), which provides for appeals from orders denying confirmation of arbitration awards. Smythe,401 S.W.3d at 612
. In reaching that conclusion, Smythe said little more than â[e]ven if an order is not appealable under one subsection, it may be appealable under another.âId. at 609
.
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Beyond that, Smythe doesnât acknowledge the fact that its
interpretation renders the subsection allowing for the appeal of
orders vacating an arbitration award without directing a rehearing
meaningless. Thus, Smythe is unpersuasive.
¶ 21 Leaving the statutory text aside, Itachi next says we should
review the merits now because itâs more efficient and cost-effective
to do so (rather than after a new hearing). Even if true, thatâs a
legislative call. We may not rewrite section 13-22-228(1) or expand
our jurisdiction because of any perceived judicial efficiencies. See
Tug Hill, ¶ 25.
¶ 22 And, finally, to the extent the parties rely on out-of-state
authority to argue about what should happen in a case where a
court expressly vacates an arbitration award while directing a new
hearing and also denies confirmation of an arbitration award, thatâs
not this case. We therefore save that question for the day when itâs
actually presented. Compare Karcher Firestopping v. Meadow Valley
Contractors, Inc., 204 P.3d 1262, 1264 (Nev. 2009) (joining â[t]he
majority of courts that have considered this jurisdictional issueâ
and concluding the appellate court lacked jurisdiction, under the
Nevada Uniform Arbitration Act, to consider an order that denied
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confirmation of an arbitration award, vacated the award, and
directed a rehearing), with E. Tex. Salt Water Disposal Co. v.
Werline, 307 S.W.3d 267, 270-71 (Tex. 2010) (holding, in a split
decision, that an order denying confirmation of an arbitration
award, vacating an arbitration, and directing a new hearing is
appealable under the Texas General Arbitration Act).
III. Conclusion
¶ 23 To sum it up, we have no jurisdiction to review the district
courtâs order vacating the arbitration award and ordering a new
hearing. We therefore dismiss the appeal.
JUDGE GROVE and JUDGE SCHUTZ concur.
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