Tutti Mangia Italian Grill, Inc. v. American Textile Maintenance Co.
128 Cal. Rptr. 3d 551
Cal. Ct. App.2011Background
- TMIG and AIC appeal a superior court judgment confirming arbitration awards against them.
- Arbitration clauses in TMIG and AIC agreements required AAA rules unless damages were within small claims; TMIG’s contract signed by Todd Christian as General Manager, AIC’s by Ed Inglese.
- Respondent American Textile Maintenance Company sought to confirm arbitration awards after arbitration hearings where TMIG allegedly did not participate.
- TMIG claimed Christian lacked authority; AIC claimed damages were illegal liquidated damages and that the contract had terminated or expired.
- Trial court held Christian had ostensible authority; arbitration clause was self-executing; TMIG waived rights by participating in arbitration; AIC contract not terminated for purposes of the clause; petitions to confirm were proper.
- Judgment entered confirming the TMIG award and later the AIC award; TMIG and AIC timely appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether section 1281.2 was required before arbitration | TMIG contends 1281.2 required before arbitration. | Respondent argues self-executing clause allows arbitration without 1281.2. | Self-executing clause allows arbitration without 1281.2; no mandatory pre-arbitration order needed. |
| Whether evidentiary rulings left insufficient evidence | Declarations lacking personal knowledge undermined validity. | Declarations showed personal knowledge or substantial evidence otherwise. | Evidentiary rulings were not fatal; sufficient evidence supported arbitration agreements. |
| Whether TMIG participated in arbitration affected validity | Participation could undermine validity arguments. | Non-participation did not defeat validity; issues waived or resolved by self-executing clause. | Harmless error; validity sustained regardless of participation. |
| Whether motions to strike were properly treated as judgments on the pleadings | Motions to strike may indicate lack of basis to confirm. | Motions to strike are harmless where arbitration awards must be confirmed. | Harmless error; confirmation required regardless. |
Key Cases Cited
- Gilbert Street Developers, LLC v. La Quinta Homes, LLC, 174 Cal.App.4th 1185 (Cal. Ct. App. 2009) (arbitration clause cannot import future rules not in existence)
- Kustom Kraft Homes v. Leivenstein, 14 Cal.App.3d 805 (Cal. Ct. App. 1971) (self-executing arbitration clause imports AAA rules existing at execution)
- Mitchum, Jones & Templeton, Inc. v. Chronis, 72 Cal.App.3d 596 (Cal. Ct. App. 1977) (self-executing clauses and arbitration authority framework)
- Doers v. Golden Gate Bridge etc. Dist., 23 Cal.3d 180 (Cal. 1979) (limits on arbitration and related judicial intervention)
- National Marble Co. v. Bricklayers & Allied Craftsmen, 184 Cal.App.3d 1057 (Cal. Ct. App. 1986) (when arbitration proceeds under self-executing agreement, objections must be raised by petition to vacate or oppose confirmation)
- Henry v. Alcove Investment, Inc., 233 Cal.App.3d 94 (Cal. Ct. App. 1991) (availability of staying arbitration and grounds for invalidity)
- Cummings v. Future Nissan, 128 Cal.App.4th 321 (Cal. Ct. App. 2005) (participation in arbitration without disclosure as waiver of invalidity grounds)
- Gulf Insurance Co. v. TIG Insurance Co., 86 Cal.App.4th 422 (Cal. Ct. App. 2001) (ostensible authority and agency principles in contract formation)
- Pac. Concrete Products Corp. v. Dimmick, 136 Cal.App.2d 834 (Cal. Ct. App. 1955) (general manager authority in corporate contracts)