Hi Art, it's because your curve is not planar, if you look at it in the 3D view:



If you flatten it to be planar then you should get the behavior you were expecting. A quick way to do that is to go to the Top view and use an edit frame sizing grip to squish it down with "flat" snap (http://moi3d.com/forum/index.php?webtag=MOI&msg=3378.4)

- Michael