HM DG, Inc. v. Amini and Beizai
219 Cal. App. 4th 1100
| Cal. Ct. App. | 2013Background
- HM DG, Inc. sued Farzad Amini and Pouneh Beizai for unpaid progress payments on a high-end home remodel under a written contract containing an arbitration clause.
- Arbitration clause offered three alternative methods for appointing an arbitrator, with arbitration to be conducted under the US Arbitration and Mediation Rules.
- Defendants demanded arbitration on February 21, 2012, proposing use of Option No. 2 for selecting an arbitrator; HMDG refused and trial court denied the petition to compel arbitration.
- Trial court held the arbitration clause was invalid for lack of a definite method and awarded attorney fees to HMDG for opposing arbitration.
- Court of Appeal held that Section 1281.6 enables arbitration despite multiple appointment methods, reversed the denial, and remanded for other 1281.2 defenses to be considered.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether multiple appointment options render the arbitration clause invalid | HMDG argues clause is uncertain | Amini/Beizai argue clause lacks mutual consent | Clause valid despite multiple options |
| Whether the clause shows mutual consent to arbitrate | Clause and signatures show consent | Options negate mutual assent | Mutual consent established by clause and signatures |
| Whether Defendants' arbitration demand complied with 1281.2 | Demand complied with arbitration provisions | Demand deviated from exact terms | Demand sufficient under Mansouri and 1281.2 |
| Whether the court properly can appoint an arbitrator under 1281.6 | Court may appoint when method not agreed | Appointment must follow a defined method | Court may appoint consistent with the clause's Option No. 2 upon lack of agreement |
Key Cases Cited
- Mansouri v. Superior Court, 181 Cal.App.4th 633 (Cal.App.4th 2010) (necessity of proper arbitration demand and existence of a written agreement to arbitrate)
- Alan v. Superior Court, 111 Cal.App.4th 217 (Cal.App.4th 2003) (forum or rules designations may affect appointment under 1281.6)
- Martinez v. Master Protection Corp., 118 Cal.App.4th 107 (Cal.App.4th 2004) (arbitration agreement procedures; court cannot force forum inconsistent with agreement)
- Estate of Griswold, 25 Cal.4th 904 (Cal. 2001) (statutory construction guiding arbitration policy)
- Bustamante v. Intuit, Inc., 141 Cal.App.4th 199 (Cal.App.4th 2006) (mutual assent and contract formation in arbitration context)