(a) On motion of a person showing an agreement to arbitrate and alleging another person's refusal to arbitrate pursuant to the agreement:
(1) if the refusing party does not appear or does not oppose the motion, the court shall order the parties to arbitrate; and
(2) if the refusing party opposes the motion, the court shall proceed summarily to decide the issue and order the parties to arbitrate unless it finds that there is no enforceable agreement to arbitrate.
(b) On motion of a person alleging that an arbitration proceeding has been initiated or threatened but that there is no agreement to arbitrate, the court shall proceed summarily to decide the issue. If the court finds that there is an enforceable agreement to arbitrate, it shall order the parties to arbitrate.
(c) If the court finds that there is no enforceable agreement, it may not pursuant to Subsection (a) or (b) order the parties to arbitrate.
(d) The court may not refuse to order arbitration because the claim subject to arbitration lacks merit or grounds for the claim have not been established.
(e) If a proceeding involving a claim referable to arbitration under an alleged agreement to arbitrate is pending in court, a motion under this section must be made in that court. Otherwise, a motion under this section may be made in any court as provided in Section 28 [44-7A-28 NMSA 1978].
(f) If a party makes a motion to the court to order arbitration, the court on just terms shall stay any judicial proceeding that involves a claim alleged to be subject to the arbitration until the court renders a final decision under this section.
(g) If the court orders arbitration, the court on just terms shall stay any judicial proceeding that involves a claim subject to the arbitration. If a claim subject to the arbitration is severable, the court may limit the stay to that claim.
History: Laws 2001, ch. 227, § 8.
ANNOTATIONSCompiler's note. — Laws 2002, ch. 227, § 33 repealed the former Uniform Arbitration Act, Sections 44-7-1 to 44-7-22 NMSA 1978, enacted by Laws 1971, ch. 168, §23. The Uniform Arbitration Act compiled as 44-7A-1 to 44-7A-32 NMSA 1978 was enacted effective July 1, 2001.
No right to compel arbitration. — Where defendants offered investment packages to the public that consisted of interests in real property; plaintiff invested in three properties; defendants created the third parties to act as the seller of the real property; the purchase agreements contained arbitration clauses; plaintiff sued defendants for violations of the New Mexico Securities Act of 1986, Section 58-13B-1 NMSA 1978 et seq. [repealed]; plaintiff did not assert any claims against the third parties or allege any interdependent or concerted misconduct between defendants and the third parties; defendants filed complaints against the third parties for indemnity on the ground that the third parties sold the real property interests that comprised the alleged securities that plaintiff bought; defendants asserted the affirmative defense that plaintiff's claims were subject to the arbitration clauses in the purchase agreements; and the third parties filed a motion to compel arbitration on all disputes, defendants did not have an independent right to compel arbitration because the alleged violations of the Securities Act did not hinge on the terms of the purchase agreements and the third parties could not assert the arbitration defense because it could not be independently asserted by defendants. Frederick v. Sun 1031, LLC, 2012-NMCA-118, 293 P.3d 934.
An arbitration agreement contrary to public policy will not be enforced. — Where the state of New Mexico filed suit against ITT Technical Institute (ITT) claiming violations of the New Mexico Unfair Practices Act (UPA) arising out of alleged misrepresentations to students about ITT's nursing program and its financial process, and where ITT filed a motion to compel arbitration in accordance with the arbitration provision, and accompanying confidentiality clause, in the students' enrollment agreements with ITT, which provided that any dispute be resolved by binding arbitration, the district court properly declined to enforce the confidentiality clause and properly denied ITT's motion to compel arbitration, because the state, under the UPA, has been given broad statutory authority to investigate violations and enforce the provisions of the UPA demonstrating New Mexico's fundamental public policy in favor of preventing consumer harm and resolving consumer claims, and it would be contrary to public policy to allow ITT to use the confidentiality clause with its students to shield itself from the state's investigation and litigation authorized under the UPA. State ex rel. Balderas v. ITT Educ. Servs., Inc., 2018-NMCA-044.
Arbitration agreement required. — The district court may not compel arbitration absent an arbitration agreement. Alexander v. Calton & Assocs., Inc., 2005-NMCA-034, 137 N.M. 293, 110 P.3d 509.
Waiver. — A mere request for arbitration filed with the NASD cannot by itself be sufficient to waive the right to contest arbitration and require proof of the existence of an arbitration agreement in court. Alexander v. Calton & Assocs., Inc., 2005-NMCA-034, 137 N.M. 293, 110 P.3d 509.
Valid arbitration defense does not divest the court of jurisdiction and is not properly raised by a motion to dismiss for lack of subject matter jurisdiction. When parties have agreed to arbitrate, however, a court should order arbitration. Daniels Ins. Agency, Inc. v. Jordan, 1982-NMSC-148, 99 N.M. 297, 657 P.2d 624.
Role of court. — Under this section, it is the court's duty to order arbitration where provision for it is clear. Where provision for arbitration is disputed, the court's function is to determine whether there is an agreement to arbitrate and to order arbitration where an agreement to arbitrate is found. Bernalillo Cnty. Med. Ctr. Employees' Ass'n Local 2370 v. Cancelosi, 1978-NMSC-086, 92 N.M. 307, 587 P.2d 960.
Standard for granting motion. — As with a summary judgment motion, a motion to compel arbitration may only be granted as a matter of law when there is no genuine issue of material fact as to the existence of an agreement; only then should the court decide the existence of the agreement as a matter of law. DeArmond v. Halliburton Energy Servs., Inc., 2003-NMCA-148, 134 N.M. 630, 81 P.3d 573, cert. denied, 2003-NMCERT-003, 135 N.M. 51, 84 P.3d 668.
Equitable estoppel is applicable. — A nonparty to a contract may be equitably estopped from refusing to comply with a reasonable arbitration provision contained in the contract where the nonparty attempts to enforce some aspect of the contract. Damon v. StrucSure Home Warranty, LLC, 2014-NMCA-116.
Nonparties to an arbitration agreement. — Plaintiffs, as subsequent purchasers of a home and nonparties to a home warranty agreement, are bound by an arbitration provision contained in the warranty agreement if they directly seek the benefits of the warranty agreement. Damon v. StrucSure Home Warranty, LLC, 2014-NMCA-116.
Uninsured motorist claim. — New Mexico law does not require arbitration of an uninsured motorist claim upon the unilateral demand of either the insurer or the insured where the insurance policy states that disputes regarding whether the insured is entitled to receive payment under the policy, or the amount of payment due, will be submitted to arbitration only if both the insurer and insured consent. McMillian v. Allstate Indem. Co., 2004-NMSC-002, 135 N.M. 17, 84 P.3d 65.
No judicial power to compel consolidated arbitration. — Absent express statutory authorization or agreement of all concerned parties, district court had no power to compel consolidated arbitration. Pueblo of Laguna v. Cillessen & Son, 1984-NMSC-060, 101 N.M. 341, 682 P.2d 197.
When trial court determines force of disputed contract. — When a petition is filed to compel arbitration pursuant to a contract's arbitration clause and the responding party denies the existence or validity of the contract, the trial court must determine whether the contract is still in force to compel the requested arbitration. Gonzales v. United S.W. Nat'l Bank, 1979-NMSC-086, 93 N.M. 522, 602 P.2d 619.
Right to arbitration not waived. — Where between the date a complaint was filed and the date a motion for arbitration was filed, the only pleadings filed were: (1) a complaint; (2) a motion to dismiss; (3) a first amended complaint; and (4) a motion requesting the trial court to submit the issues to arbitration, the case was not at issue and the right to arbitration had not been waived. Bernalillo Cnty. Med. Ctr. Employees' Ass'n Local 2370 v. Cancelosi, 1978-NMSC-086, 92 N.M. 307, 587 P.2d 960.
Right to arbitration not waived by mere filing of complaint. — When the demand for arbitration follows initiation of proceedings in court, going to the merits of the dispute, a question of waiver is sometimes raised, but the mere filing of a complaint does not constitute a waiver of a right to arbitration. Bernalillo Cnty. Med. Ctr. Employees' Ass'n Local 2370 v. Cancelosi, 1978-NMSC-086, 92 N.M. 307, 587 P.2d 960.
Unlicensed business cannot compel arbitration. — Texas corporations unauthorized to do business in New Mexico were unable to compel two dentists to arbitrate a dispute arising from an alleged breach of architectural and construction contracts for the construction of dental offices because a suit to compel arbitration is essentially a suit for specific performance and the corporations, not licensed to do business in New Mexico, cannot perform. Shaw v. Kuhnel & Assocs., 1985-NMSC-008, 102 N.M. 607, 698 P.2d 880.
Fraud in the inducement not issue for arbitrator. — It is for a court to determine issues of fraud in the inducement of a contract, not an arbitrator; if no fraud is found, the remaining issues can proceed to arbitration. Shaw v. Kuhnel & Assocs., 1985-NMSC-008, 102 N.M. 607, 698 P.2d 880.
Am. Jur. 2d, A.L.R. and C.J.S. references. — 4 Am. Jur. 2d Alternative Dispute Resolution § 126 et seq.
Disqualification of arbitrator by court or stay of arbitration proceedings prior to award, on ground of interest, bias, prejudice, collusion or fraud of arbitrators, 65 A.L.R.2d 755.
Statute of limitations as bar to arbitration under agreement, 94 A.L.R.3d 533.
Defendant's participation in action as waiver of right to arbitration of dispute involved therein, 98 A.L.R.3d 767.
Which statute of limitations applies to efforts to compel arbitration of a dispute, 77 A.L.R.4th 1071.
What statute of limitations applies to action to compel arbitration pursuant to § 301 of Labor Management Relations Act (29 USCS § 185), 96 A.L.R. Fed. 378.
6 C.J.S. Arbitration §§ 30 to 32, 39, 45, 46.