1 au 1 w 2 IN ARBITRATION (CCD Black Diamond Partners, LLC (OAKPOINTE), Claimant, ARBITRATION DECISION AND ORDER| ‘ON OBJECTION OF CITY COUNCIL TO| . ARBITRATION ICITY OF BLACK DIAMOND, Respondent. ‘THIS MATTER is before the Honorable Steve Scott (Ret) as arbitrator pursuant generally tothe parties’ April 3, 2017 Arbitration Agreement and specifically on the [Objection ofthe City Council to Arbitration. The arbitrator having considered the written submissions of counsel for Oakpoint, the Mayor ofthe City of Black Diamond and the ity Council ofthe City of Black Diamond, now, therefore, enters the following: DECISION AND ORDER Cakpointe has made a claim against the City for breach of Development Agreements and the Funding Agreement between the City and Oakpointe pursuant to Master Planned Development Permits issued in 2010. Cakpointe and the City through the Mayor, entered into an Arbitration Agreement to address issues related to |Cakpointe's breach of contract claim and the City Council has objected. First, any request by the City Council that the arbitrator recuse himself is denied. The only ex parte contact the arbitrator has had withthe parties was in the context of a confidential mediation in which both parties waived confidentiality to allow the mediator {to have separate discussions with both parties and to communicate the parties’ positions to each other in an attempt to settle Oakpointe’s claims. There was nothing JARoxTRATION DECTSION AND ORDER - 2n as 18 a a 2s Improper regarding communications with each party separately in the context of ‘mediation. Moteover, the arbitrator has no interest, bias, or prejudice which would Interfere with his abifly to adjudicate issues relating to Cakpointe’s claims against the Cty fairy and impartially. ‘The mediation is confidential, but the parties were unable to reach a settiement agreement regarding Oakpointe's claims and ultimately entered into the Arbitration [Agreement which is the subject ofthe City Councit's objection. There is nothing unusual about the Mayor, or any other head of an executive branch of government, managing the government's defense or other response to a party's legal claims. The Mayor clearly has the legal authority to do so and the management of a defense or other response toa legal claim isnot only common but also the only practical, realistic way of handling the government's response to legal claims asserted against i Noris there anything unusual or improper about the executive attempting to address and resolve a claim that has been made prior tothe fling ofthe claim in court. Finally, there| is nothing unusual or improper about two parties agreeing to submit a claim made by Jone against the other to binding arbitration rather than proceed to tigate the claim in | Superior Court. This is both statutorly authorized and commonly done as a way of efficiently addressing and resolving claims by one party against anather. The Mayor, Property in charge of managing the City’s case, certainly may decide to arbitrate rather than insist thatthe claim be litigated in court. ‘The problem here is thatthe partes in their Arbitration Agreement have skipped over issues of liabilty and relief, which are propetly the focus of litigation whether by arbitration or in court, and have proceeded to issues relating to the relationship between) the Mayor and the Council, or the executive and legislative branches, and to the authority of each generaly with regard to the contracts here a issue before fistn 2 u 6 » 23 2 resenting and allowing the arbitrator to resolve issues of lilly and reli. It would be Improper forthe arbitrator to address the issues set forth inthe Arbitration Agreement, atleast now, First, while | have nat begun to consider careful the postions of ]Oakpointe and the Mayor on the issues they submit for arbitration, it appears they are largely itnot entirely in agreement on those issues and, accordingly, there Is a serious question about whether there isa jusiciable controversy being presented by Cakpointe land the Mayor. Second, while the mediation Is confident, to my knowledge the City has not conceded labilty and that issue has not yet been addressed and resolved. The| seues presented in the Arbitration Agreement would go potential to issues to relief and the authority ofthe two branches of government regarding who has responsibilty andlor authority to ensure that the Cty complies with any reli that may be ordered. Finally, even if iabilty were established or conceded and relief was ordered, t would be premature to presume thatthe executve and legislative branches of the City would not cooperate with each other to comply with any Arbitration Award and Order. Oniyifthere| [were a failure onthe City’s pat o comply wth an Arbitration Order could there conceivably be a bass forthe arbitrator to address and resolve issues relating tothe two branches or government, their relationship wth each other, and thelr respective authoriy insofar as these issues related to compliance with any ordered rele Because te issues submited fo arbitration pursuant tothe Abiation [Agreement are premature and not properly subject to arbitration at this point, the objection of the Cty Counellto proceeding with the arbitration is sustained. Leave is granted, however, to Oakpointe andthe Cty, through the Mayor in her proper role of managing the City’s defense and response to Cakpointe's claim, to amend or modify thelr Arbitron Agreement io submit the issues ofthe City's labilty for breach of contract and any appropriate reli to be awarded If lial is established or conceded, ARBITRATION DECTSION AND ORDER ~ 320 18 1 20 2 2s {or resolution by binding arbitration. Nothing in ths decision should be considered as precluding the parties from eventually submitting the issues now presented in the Arbitration Agreement tothe arbitrator for resolution if at some point relief has been. ordered and the City for whatever reason has falled to comply withthe Arbitration Order! Those issues are reserved to the extent it becomes necessary to address them. Based on the above, IT IS HEREBY ORDERED that: 4. The City Council's request thatthe arbitrator recuse himself is DENIED. 2. ‘The City Counci's objection to arbitration insofar as the parties seek the arbitrator to rule on the two issues presented in the Arbitration Agreement is ‘SUSTAINED without prejudice to an amendment to or modification of the Atbitration Agreement, 2, Cakpointe and the City, through the Mayor, ae granted leave to amand oF ‘modify their Arbitration Agreement to seek binding arbitration on the issues of| the City’s fabilty for breach of contract as claimed by Oakpointe and the proper remedy or relief for any breach of contract that may be established or conceded ‘4, Any issues relating tothe relationship between the Mayor and the City Council and their respective authority andlor responsibilty regarding ‘compliance with an Arbitration Order are reserved. DATED this 10" day of May, 2017, Hon. Steve Scott Ret) ANtbitrator