Parties Have To Go Back To Court, Says Appellate Court.
In Ahern v. Asset Management Consultants Inc., Case Nos. B253974/B257684 (2d Dist., Div. 7 Aug. 11, 2015) (unpublished), defendants successfully moved to compel arbitration against plaintiffs based on the theory they were bound by an arbitration clause in a real estate purchase/sale agreement even as non-signatories. The defense convinced the superior court to grant a motion to compel arbitration, obtained a favorable result in the arbitration, and obtained $26,435 in attorney’s fees and $9,403.76 in costs for confirming the arbitration award as a judgment as well as resisting efforts to vacate the arbitration award.
All of that went away on appeal—POOF!
The appellate court found that the losing parties were nonsignatories not bound by the arbitration clause, resulting in a reversal of the superior court’s order compelling arbitration—meaning everyone went back to court. Based upon the reversal of the arbitration award-based judgment, the postjudgment fees/costs award also was reversed. (Creative Ventures, LLC v. Jim Ward & Associates, 195 Cal.App.4th 1430, 1452 (2011).)
Ouch for some, relief for others – though complete relief may be temporary, as the underlying merits remain to be decided.
We also refer you to Marc’s discussion of the nonsignatory merits ruling on the enforceability of the arbitration provision in his August 11, 2015 post on the case.