¶1 Doctors Lisa Pasquarello, Tyler Stiens, and John Artz owned and operated a veterinary clinic in Park City. Together they formed a limited liability company for their clinic and adopted an operating agreement that contained an arbitration clause. After a few years, Dr. Pasquarello sought to sell her portion of the practice to Dr. Artz through an oral agreement. When the sale failed, she brought suit against Dr. Artz for various claims, including breach of contract and breach of the covenant of good faith and fair dealing. She also sought dissolution of the practice. Based on its interpretation of the arbitration clause in the operating agreement, the district court compelled arbitration, concluding that the claims fell under the scope of the clause. Dr. Pasquarello appealed, arguing that the arbitration clause covers only disputes regarding the enforcement or interpretation of the operating agreement and that her claims concern only the oral contract and the statutory remedy of dissolution. The court of appeals affirmed the district court. Because each of Dr. Pasquarello's claims relates to enforcement or interpretation of the operating agreement, we also affirm.
¶2 Doctors Pasquarello, Stiens, and Artz adopted an operating agreement when they formed a limited liability company for their veterinary clinic. The agreement included an arbitration provision stating that "[a]ny Member involved in a dispute regarding the enforcement or interpretation of this Agreement may elect to have such dispute referred to non-binding mediation or binding arbitration." The parties also formed a real estate company to own the building in which the clinic operated. The real estate company's operating agreement did not include an arbitration provision.
¶3 Each veterinarian is separately the sole owner of a limited liability company or a corporation. Through these separate entities, each veterinarian holds a membership interest in both the clinic's practice and the real estate company. Specifically, Dr. Pasquarello is the sole member of HITORQ, LLC. HITORQ owns a 25% interest in the clinic's practice and in the real estate company. Dr. Artz is the sole member of Vetmed Services, PLLC. Vetmed owns 25% of both companies. Dr. Stiens is the sole owner of TCC Veterinary Services, Inc. TCC holds the remaining 50% interest in the practice and real estate company.
¶4 In September 2015, Dr. Artz agreed to purchase Dr. Pasquarello's membership interests in the clinic and the real estate company. Their oral agreement did not incorporate an arbitration provision. Dr. Pasquarello contends she told Dr. Artz she planned on working at the clinic until the sale closed and, further, planned on continuing to work at the clinic if the sale did not close. Drs. Pasquarello and Artz scheduled the sale's closing date for November 14, 2015, shortly before Dr. Pasquarello would move to North Carolina. But the sale failed in negotiations.
¶5 Around this time, according to Dr. Pasquarello, Drs. Artz and Stiens prevented her from continuing to work at the clinic. In contrast, Drs. Artz and Stiens claim that Dr. Pasquarello had announced that her last day of work would be November 13, 2015.
¶6 Eventually, Dr. Pasquarello moved to North Carolina and the veterinarians stopped negotiations regarding the sale of her ownership interests. In June 2016, Drs. Artz and Stiens voted to expel Dr. Pasquarello from membership in the clinic for lack of economic production because she had not worked there since November the year before.
¶7 Unhappy with this outcome, Dr. Pasquarello filed a lawsuit on behalf of herself and HITORQ (hereinafter Dr. Pasquarello) against Dr. Artz and Vetmed Services (hereinafter Dr. Artz), and Dr. Stiens and TCC Veterinary Services (hereinafter Dr. Steins) in November 2016. In her complaint, she relied on the terms of the oral purchase agreement and language from Utah Code section 48-3a-701(5)(b), which allows for judicial dissolution of a limited liability company when a member or members have acted in an oppressive or harmful manner to another member. She also referenced the operating agreement to support aspects of her claims. Dr. Pasquarello presented three claims relevant to this appeal.
¶8 First, she alleged that Dr. Artz breached the terms of the oral agreement to buy her membership interests in the clinic and the real estate company. She claimed he did so by failing to prepare and execute the purchase agreement, failing to pay her share of profits and accounts receivable up to the planned closing date, and preventing her from working at the clinic when the sale did not go through.
¶9 Second, Dr. Pasquarello alleged that Dr. Artz breached the implied covenant of good faith and fair dealing of the oral agreement. She claimed he did so by failing to secure financing and close on the purchase while still taking her clinic debt payments, which prevented her from meeting her own financial obligations. She also claimed that Dr. Artz made false representations to induce her to believe the purchase would occur, which stopped her from selling to a third party before she moved to North Carolina. Then, according to Dr. Pasquarello, Dr. Artz denied her the right to work prior to voting to expel her from membership in the clinic.
¶10 Last, she sought judicial dissolution of the clinic and the real estate company on the ground that Drs. Artz and Stiens had acted illegally and oppressively by preventing her from working and then ousting her from the company on the pretext that she had not been economically productive. She claimed they denied her "the rights and benefits of membership in both" the clinic and real estate company, "changed the character, profits and losses" of the clinic, and "devalued" her membership in it.
¶11 In response to Dr. Pasquarello's lawsuit, Dr. Artz, joined now by Dr. Stiens, filed a motion in district court to compel arbitration under the operating agreement. They argued that Dr. Pasquarello's allegations that they had failed to pay profits and wrongfully excluded her from the clinic related to duties imposed by the operating agreement, so the claims required enforcement or interpretation of the operating agreement and were therefore subject to its arbitration provision.
¶12 Dr. Pasquarello countered that her contract claims were premised on the oral purchase agreement, not the operating agreement. She also argued that her dissolution claim was grounded in statute, not the operating agreement. But the district court concluded that the case involved a dispute regarding the enforcement or interpretation of the operating agreement and so referred the claims to arbitration.
¶13 During the arbitration process, Dr. Pasquarello filed a motion in district court to stay the arbitration, value her membership interests, and direct their sale, arguing that the valuation and sale of her membership interests were not subject to the operating agreement's arbitration provision. Drs. Artz and Stiens opposed the motion, contending that once the district court referred the dissolution claim to arbitration, the purchase of Dr. Pasquarello's membership interests became subject to arbitration. The district court denied Dr. Pasquarello's motion, so the parties returned to arbitration.
¶14 The arbitrator ruled in favor of Drs. Artz and Stiens on the contract and good faith claims. He also determined that dissolution was "not a viable remedy" and instead determined the value of Dr. Pasquarello's interests and directed their sale.
¶15 Dr. Pasquarello then filed a motion to vacate the arbitration award, reviving the argument from her motion to stay that the arbitrator "exceeded his authority in deciding issues beyond the scope of the parties' arbitration agreement." The district court again disagreed and confirmed the arbitration award.
¶16 Dr. Pasquarello appealed the district court's confirmation, arguing that the district court erred in granting the motion to compel arbitration and further erred in refusing to stay the arbitration proceedings.
¶17 On appeal, the court of appeals assessed whether Dr. Pasquarello's claims fell within the scope of the operating agreement's arbitration provision, concluding that "Utah's strong policy favoring arbitration" weighed against vacating the arbitration award.1 It concluded that the claims, although somewhat tangential to the operating agreement, fell within the scope of the arbitration provision because their resolution required construction of, and reference to, provisions of the operating agreement.2
¶18 Dr. Pasquarello filed a petition for writ of certiorari, arguing that the court of appeals erred in affirming the district court. We granted certiorari on a single issue: "Whether the Court of Appeals erred in affirming the district court's referral to arbitration of claims for breach of contract, breach of the covenant of good faith and fair dealing, and dissolution." In their briefs, Drs. Artz and Stiens included a request for appellate costs and attorney fees.
¶19 We have appellate jurisdiction under Utah Code section 78A-3-102(3)(a).
¶20 Whether a claim falls under an arbitration clause is a matter of contractual interpretation,3 which is reviewed for correctness.4
¶21 Dr. Pasquarello brought several claims against Drs. Artz and Stiens, three of which...
