Articles Posted in arbitration

In a recent case a husband and wife sold property to plaintiffs, who sued for misrepresentation. (There was no indication in the court’s opinion whether they had used a C.A.R. contract and initialed the arbitration provision.) Both parties attorneys and the judge signed a stipulation and order for arbitration and appointment of a private arbitrator. No clients signed the stipulation.

Plaintiffs won, and brought the standard petition in court for confirmation of the arbitration award. Meanwhile, the defendant husband “Valere” fired his attorney and was representing himself; the wife was still represented by the attorney. Valere opposed the petition, claiming that he had never agreed to arbitrate the matter.

The trial court confirmed the award, and Valere appealed. The court of appeal reversed the judgment.

I have noted in two prior blogs that Arbitrators have nearly unlimited discretion to make mistakes and not follow the law, and their mistakes are protected by the courts.  In a recent California case, buyers bought a house and learned that the pool and fence encroached on neighboring property.  Claiming that the seller knew of the encroachment but failed to disclose, buyers pursued arbitration.

After the sale but before the arbitration the title insurance company paid the neighbor in exchange for a lot line adjustment, giving the buyer clear title.  The buyers convinced the arbitrator to exclude evidence of the lot line adjustment, claiming that their damages were fixed on close of escrow.

The arbitrator excluded the evidence, and found that the buyers were damaged in the amount of $552,750, even though the problem was fixed before the arbitration.