Recent Developments in Dispute Resolution 7/07/97

ADR wins in Colorado

City & County of Denver v. District Court (Colorado Supreme Court, Jun 30, 1997)

The Colorado Supreme Court has given a sweeping endorsement of ADR clauses in contracts.  In a dispute involving construction of the new Denver airport, a contractor brought a court action against the city, even though the contract called for dispute resolution by using the procedures in a municipal ordinance.  The court relied heavily upon court precedents dealing with arbitration agreements, saying that an ADR provision serves the same public policy interests (privacy, practicality, speed, minimum expense, freedom of contract) as an arbitration provision.  In the court's words:

"Summarizing, we hold that the district court, when faced with a party seeking to by-pass an ADR provision of its agreement, must adhere to the following guidelines. First, the court must determine whether the ADR agreement valid and binding. Second, the court must determine whether the agreement provides for the court or the ADR decision-maker to decide whether the dispute falls within the scope of the ADR clause. If the agreement is silent or ambiguous on this issue, then the court, rather than the ADR decision-maker, must determine the scope and applicability of the ADR clause. Third, the court must determine whether the parties intended for the dispute to fall within the scope of the ADR clause. This third question requires the court to review the wording of the ADR clause to determine if it encompasses the factual basis of the dispute. In analyzing the factual nature of the claim, the district courguided by the underlying factual claims and not the legal causes of action pled. The court must also accord a presumption in favor of the ADR mechanism and resolve doubts regarding the scope of an ADR clause in favor of the ADR procedures."

Full Text --     
Willamette University Dispute Resolution Information Service     
http://www.willamette.edu/dis-res/      Click on "Recent Developments"

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"Recent Developments in Dispute Resolution"       
Willamette University Center for Dispute Resolution       
Willamette University College of Law, Salem, Oregon       
Ross Runkel, Editor         rrunkel@willamette.edu
Richard Birke, Director      rbirke@willamette.edu       
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