July 22, 2019- Franken Construction Company v. Harris Rebar New Mexico, No. A-1-CA-37647

1 	IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
2 	FRANKEN CONSTRUCTION
3 	COMPANY, INC.,
4 	Third-Party Plaintiff-Appellee,
5 	v. 	NO. A-1-CA-37647
6 HARRIS REBAR NEW MEXICO,
7 	Third-Party Defendant-Appellant.
8 APPEAL FROM THE DISTRICT COURT OF MORA COUNTY
9 	Theodore C. Baca, District Judge Pro Tempore
10 Riley, Shane & Keller, P.A.
11 	D. Chet Alderete
12 Taryn Kaselonis
13 	Spirit Gaines
14 Albuquerque, NM
15 	for Appellee
16 Guebert Bruckner Gentile, P.C.
17 Terry R. Guebert
18 	Alissa N. Berger
19 Albuquerque, NM
20 	for Appellant
21 	MEMORANDUM OPINION
22 	VARGAS, Judge.
23 	{ 1} 	Third-party Defendant Harris Rebar New Mexico , Inc. (Harris) is appealing
24 	from a district court order denying its motion to compel arbitration. We issued a
Court of Appeals of New Mexico
Filed 7/22/2019 9:33 AM

1 calendar 	notice 	proposmg 	to 	affirm. 	Harris 	has 	not 	filed 	a 	memorandum 	in
2 opposition. Third-Party Plaintiff Franken has filed a memorandum in partial support.
3 We affirm.
4 	{2} 	In the underlying lawsuit, Plaintiff Mora County sued Franken Construction
5 Company, Inc. (Franken), the general contractor of the initial phase of construction
6 	of the Mora County Complex. Harris was one of the subcontractors. Franken
7 imp leaded Harris into the lawsuit and filed a third-party complaint against it. [RP 7 4]
8 Harris filed a joint motion to compel arbitration. [RP 216,230] The contract between
9 Franken and Harris contains an arbitration clause that is triggered "[i]f at any time a
10 	controversy should arise between [Franken and Harris.]" [DS 3] The district court
11 	denied Harris 's motion to compel arbitration.
12 	{3} 	Our Supreme Court has 	held that "arbitration agreements 	are 	contracts
13 	enforceable by the rules of contract law." Horne v. Los Alamos Nat'! Sec. , L.L.C.,
14 	2013-NMSC-004, ,i 16,296 P.3d 478. We therefore apply the principles of contract
15 	law to the interpretation of an arbitration agreement. See L.D. Miller Cons tr., Inc. v.
16 Kirschenbaum, 2017-NMCA-030, ,i 18,392 P.3d 194. If the contract language is
17 unambiguous, we enforce its clear terms. See Montoya v. Villa Linda Mall, Ltd. ,
18 	1990-NMSC-053, ,i 8, 110 N.M. 12 8, 793 P.2d 258 ("It is black letter law that, absent
19 	an ambiguity, a court is bound to interpret and enforce a contract's clear language and
2

1 cannot create a new agreement for the parties." ). The existence of ambiguity is a
2 matter oflaw that is determined de novo. See Handmaker v. Henney, 1999-NMSC-
3 043 , if 19, 128 N.M. 328, 992 P.2d 879.
4 	{4} 	Although it would appear that the arbitration language is unambiguous and that
5 the third-party complaint raises a "controversy" that triggers arbitration, we do not
6 interpret the district court ' s ruling to foreclose arbitration in this case. Instead, we
7 believe that the court ' s ruling reflects the fact that Harris' potential liability is
8 predicated on Franken' s liability to Mora County- 	an issue that has yet to be decided.
9 In short, the "controversy" is theoretical at this point, a situation similar to an
10 	indemnification claim. Cf Tunis v. Country Club Estates Homeown ers Ass 'n, Inc.,
11 	2014-NMCA-025, ,r,r 60-61, 318 P.3d 713 (Sutin, J., dissenting) (noting general rule
12 	that indemnification claim is not ripe until liability ofindemnitee is established). This
13 	is reflected in Franken ' s third amended third-party complaint, which seeks to impose
14 liability on the subcontractors "[i]nsofar as the alleged construction defects are
15 	proven." [RP 612, ,r 20] Indeed, Franken separately raises an indemnification claim
16 against Harris. [RP 612, ,r 23] Our calendar notice stated that, in the event that
17 	Franken is found liable to Mora County for defects relating to Harris, the district
18 	court may revisit the issue at that time.
3

1 {S} 	As noted, Harris has not filed a memorandum in opposition and is therefore
2 deemed to have abandoned the issue. See State v. Johnson, 1988-NMCA-029, ~ 8,
3 	107 N.M. 356, 758 P.2d 306 (stating that when a case is decided on the summary
4 calendar, an issue is deemed abandoned when a party fails to respond to the proposed
5 disposition of that issue). Franken's memorandum in partial support argues that the
6 district court intended the arbitration issue to be fully resolved by its ruling. However,
7 because that issue has not become ripe, and may never arise, we construe the court's
8 ruling to only affect the arbitration issue as it stands at this point in time.
9 	{6} 	Because we believe that the arbitration issue is premature at this point, we
10 	affirm.
11 	{7}
12
13
IT IS SO ORDERED.
14 	WE CONCUR:
15 	-/£· ,.s,.,..__ 	~,.c"'4=
l 6STINA B 	ARDUS, Judge
4