The Colorado Court of Appeals recently issued a decision in The Pool Company v. MW Golden Constructors and Western Surety Company, 2024 COA 116, clarifying what arbitration-related orders are appealable.

Background of the Dispute

This dispute arose between MW Golden Constructors (“MW Golden”) and The Pool Company (“Pool Company”) over alleged defects in Pool Company’s installation and painting of three pools’ interior lining and the amount that MW Golden owed to Pool Company under the contract.

Following Pool Company filing a complaint in Arapahoe District Court, Pool Company and MW Golden asked for a stay of the district court case so they could arbitrate their dispute, as required by their contract.  The district court stayed the case.

Prior to the arbitration hearing taking place, MW Golden made a complaint against Pool Company’s performance bond issued by Travelers Casualty and Surety Company of America (“Travelers”),  for $1,214,553.24 in claimed remediation costs.  MW Golden and Travelers agreed that Travelers would pay MW Golden $537,000 while reserving its right to contest its liability under the performance bond and MW Golden’s claimed damages.

After completion of arbitration, the arbitrators issued their “Final Award” finding in favor of MW Golden and against Pool Company in the amount of $131,818.92.  Pool Company and MW Golden had different interpretations of the award.

To resolve this disagreement, Pool Company asked the arbitrators to clarify the Final Award under American Arbitration Association’s Construction Industry Arbitration Rule R-51 (2024).  The arbitrators denied Pool Company’s request for clarification, determining that they lacked authority under Rule R-51 to clarify the Final Award.

The day after the arbitrators issued this order, MW Golden filed a motion in the district court to confirm the Final Award and to enter judgment on the confirmed award under C.R.S. §§ 13-22-222 and 13-22-225.

On September 25, 2023, the district court issued an order confirming the arbitration award and entering judgment and denied Pool Company’s request to remand for clarification.

Pool Company did not appeal the district court’s September 25, 2023, order.  Instead, On October 20, 2023, Pool Company filed a motion for clarification under C.R.S. §§ 13-22-220(4)(c) and 13-22-224, once again requesting that the court remand the matter to the arbitrators for clarification.

On December 27, 2023, the court entered an order denying Pool Company’s motion.  In response, Pool Company appealed the district court’s order denying its motion to remand for clarification.

Key Holdings from the Court of Appeals

1. 1. C.R.S. § 13-22-228(1) Strictly Limits What Arbitration-related Orders are Appealable

An integral question in the appeal was whether the December 27, 2023, order denying Pool Company’s motion to remand for clarification was appealable.  The court held that the order was not appealable as C.R.S. §13-22-228(1) specifically enumerates the circumstances when arbitration-related orders are appealable.

C.R.S. § 13-22-228(1) states that an appeal may be taken from:

(a) An order denying a motion to compel arbitration;

(b) An order granting a motion to stay arbitration;

(c) An order confirming or denying confirmation of an award;

(d) An order modifying or correcting an award;

(e) An order vacating an award without directing a rehearing; or

(f) A final judgment entered pursuant to this part 2.

Even though the Colorado Revised Uniform Arbitration Act authorizes parties to file a variety of arbitration-related motions with the district court, that does not mean the court’s ruling on any such motion is appealable.

Takeaways

The Pool Company decision emphasizes an important lesson for parties involved in arbitration:

1. Appealability of Arbitration-related Orders is Limited

Parties involved in arbitration should be aware that while the Colorado Revised Uniform Arbitration Act authorizes parties to file a variety of arbitration-related motions with the district court, that does not mean the court’s ruling on any such motion is appealable.

Conclusion

This decision serves as a stark reminder that the appealability of arbitration-related orders is limited to those enumerated in § 13-22-228(1).  Both parties involved in arbitration and parties who have contracts that require arbitration should be aware of this strict limitation on what arbitration-related court orders are appealable prior to engaging in arbitration or requiring arbitration in their contracts.

As arbitration is often a preferred route to litigation, cases like The Pool Company provide important reminders on the court’s limited jurisdiction in hearing appeals for arbitration-related orders.