194 Cal. App. 4th 423
Cal. Ct. App.2011Background
- MFAA arbitration between Goffs and Firm; arbitrators awarded Firm $654,658.28 plus interest; Goffs sought to vacate nonbinding/validation of binding award; trial court confirmed award.
- Arbitration was initially set as nonbinding under MFAA; later arbitrators ruled arbitration binding after Firm and Goffs disputed bindingness.
- Goffs argued arbitrators exceeded powers by ruling binding; Firm argued bindingness was within arbitrators’ authority and waived by conduct.
- trial court conducted evidentiary hearings; Green (Firm attorney) testified that arbitrators offered nonbinding arbitration in exchange for continuance which Goffs rejected; Goffs disputed this.
- court held the arbitration was not binding due to lack of written agreement to be bound; independently reviewed the issue per Trabuco Highlands and vacated/declared nonbinding; remanded to allow 30-day window for trial after arbitration.
- Goffs appealed; outcome reversed; judgment vacated; award nonbinding; Goffs awarded 30 days to request trial after arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether arbitrators’ bindingness is reviewable independently | Goffs: bindingness reviewable; lack of agreement to bind | Firm: arbitration binding; authority to decide bindingness | Yes, bindingness is independently reviewable |
| Whether the parties actually agreed to binding arbitration | Goffs never agreed to binding arbitration | Firm initially sought binding arbitration and accepted later; conduct created binding | Arbitration was not binding; arbitrators exceeded powers by purporting to bind |
| Whether the Goffs waived or forfeited nonbinding arbitration rights | Goffs did not waive rights; conduct not showing waiver | Goffs’ conduct could be seen as waiver | Waiver/forfeiture arguments lack merit |
Key Cases Cited
- Trabuco Highlands Community Assn. v. Head, 96 Cal.App.4th 1183 (Cal. Ct. App. 2002) (independent review needed to determine binding nature of arbitration)
- Moncharsh v. Heily & Blase, 3 Cal.4th 1 (Cal. 1992) (limits on judicial review of arbitration awards)
- Greenspan v. LADT, LLC, 185 Cal.App.4th 1413 (Cal. Ct. App. 2010) (scope of arbitrator’s power and Greenspan framework)
- Bruni v. Didion, 160 Cal.App.4th 1272 (Cal. Ct. App. 2008) (arbitrator authority to rule on jurisdictional issues must be clear)
- Advanced Micro Devices, Inc. v. Intel Corp., 9 Cal.4th 362 (Cal. 1994) (deference to arbitrator’s contractual authority; limited review)
- Cable Connection, Inc. v. DIRECTV, Inc., 44 Cal.4th 1334 (Cal. 2008) (arbiter may decide questions within contract; limits of review)