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Johnson-Linzy v. Conifer Care Communities A, LLC.

2020 COA 88. No. 18CA2405. Arbitration Agreements—Subject Matter Jurisdiction—Impossibility of Performance.

June 4, 2020

Defendants manage Amberwood Court Rehabilitation and Care Community (Amberwood Court). Plaintiff signed an arbitration agreement when her husband was admitted to Amberwood Court. Plaintiff’s husband stayed at Amberwood Court for several weeks and passed away shortly after he was discharged. Plaintiff then sued defendants for negligence and wrongful death, and defendants moved to stay the lawsuit and compel arbitration. The district court denied defendants’ motion, finding that compliance with the arbitration agreement was impossible because the agreement specifically referred to using the National Arbitration Forum (NAF) arbitration code, and NAF had left the consumer arbitration business years before.

On appeal, defendants contended that the district court lacked subject matter jurisdiction to determine the enforceability of the arbitration agreement because the parties agreed that an arbitrator would have the power to rule on issues relating to the agreement’s validity, including objections concerning its enforceability. The district court had jurisdiction to determine enforceability of the arbitration agreement because the parties did not plainly and unambiguously empower an arbitrator to decide that issue.

Defendants also argued that the trial court erred by denying the motion to enforce arbitration because despite NAF’s unavailability, another arbitrator could use the NAF Code to preside over the arbitration. A court may deny a motion to compel arbitration where there is no valid agreement to arbitrate, or the issue sought to be arbitrated is clearly beyond the scope of the arbitration provision. Here, the arbitration agreement memorializes the parties’ intention to arbitrate and the rules to govern that arbitration, but it leaves open the possibility that someone other than NAF could conduct the proceedings. Thus, the trial court erred.

The order was reversed and the case was remanded to the district court to compel arbitration.

Official Colorado Court of Appeals proceedings can be found at the Colorado Court of Appeals website.

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