Abaya v. Spanish Ranch I, L.P.Abaya v. Spanish Ranch I, L.P.
Numerous residents of a mobilehome park sued the current and former owners of the facility where they live alleging substandard conditions. Defendants moved to compel arbitration or, in the alternative, judicial reference under an alternative dispute resolution (ADR) provision contained in the leases of many, but not all, residents. In separate orders, the court denied arbitration and judicial reference. The denial was based on several grounds. Pertinent here, the court found that enforcement of the ADR provision risked conflicting rulings on common issues of law and fact by sending the claims of some residents to arbitration or reference, while others remained in the civil court for resolution.
Defendants challenged the denial of judicial reference in petitions for writs of mandate, and challenged the denial of arbitration in this appeal. The petitions for writs of mandate reached us first, and presented the question of whether a trial court has discretion to deny a motion under Code of Civil Procedure section 638 to refer a dispute to a referee under a predispute agreement of the parties where there is the possibility of conflicting rulings on a common issue of law or fact. We answered in the affirmative, and our determination of that issue is now under review. (Tarrant Bell Property, LLC v. Superior Court (2009)
We are now presented with a related issue. Unlike the dispute over the scope of a trial court’s power to deny judicial reference, the parties are agreed that the trial court is vested with discretion to deny arbitration where there is the possibility of conflicting rulings on a common issue of law or fact. (
I. FACTS
Spanish Ranch I Mobile Home Park (the Park) is a 50-acre Hayward facility with 462 sites or spaces. In October 2008, 120 current and former
In December 2008, defendants moved to compel arbitration or, in the alternative, judicial reference. (
There were several standard form leases used over the years at the Park, with slight variation in the ADR provisions, but those differences are not material to this appeal. In substance, the leases state that it is agreed that any tenancy dispute (with major exceptions for actions by the Park owner) shall be submitted to arbitration conducted under the provisions of Code of Civil Procedure section 1280 et seq. “ ‘Dispute’ ” is defined to include claims regarding “maintenance, condition, nature, or extent of the facilities, improvements, services, and utilities provided to the space, park, or common areas of the park.”
Plaintiffs opposed the motion to compel arbitration or reference on a number of grounds. Plaintiffs argued that the ADR provision is unenforceable as an invalid waiver of rights protected under the Mobilehome Residency Law and landlord-tenant law. (
In March 2009, the court denied defendants’ motion to compel arbitration on two grounds: (1) the Mobilehome Residency Law precludes waiver of a resident’s right to bring a civil action for a park’s improper maintenance of the common facilities (
The court received supplemental briefing on defendants’ alternative request for reference and, in May 2009, denied that request as well. The court found that sending some of the plaintiffs to a referee while others remained in the superior court risked inconsistent rulings. The court also found that splitting the action would defeat the purposes of the reference statute by duplicating efforts and increasing costs.
Defendants appealed the trial court’s March 2009 order denying their motion to compel arbitration, and that appeal is now before us. (
We now confront a related issue in this appeal of the order denying arbitration. Unlike the dispute over the scope of a trial court’s power to deny
II. DISCUSSION
As noted above, many of the plaintiff Park residents agreed to submit tenant disputes to arbitration but some did not. The court concluded that sending the claims of some residents to arbitration, while others remained in the civil court for resolution, risked inconsistent rulings on common issues (such as liability). We review an order denying arbitration pursuant to Code of Civil Procedure
A. The arbitration statute
“If the court determines that a party to the arbitration is also a party to litigation in a pending court action or special proceeding with a third party as
B. A trial court may refuse to compel arbitration where a controversy affects claims by other parties not bound by the arbitration agreement and arbitration risks conflicting rulings on common issues of law or fact
“While there is a strong public policy in favor of arbitration, there is an ‘equally compelling argument that the Legislature has also authorized trial courts to refuse enforcement of an arbitration agreement [or stay the arbitration] when, as here, there is a possibility of conflicting rulings.’ ” (Fitzhugh v. Granada Healthcare & Rehabilitation Center, LLC, supra,
The legislative history of
The trial court here properly concluded that the action involved common issues of law and fact. Defendant Park owners were parties to arbitration agreements with 89 to 100 residents that covered claims relating to defendants’ alleged failure to maintain the Park’s common facilities, as well as parties to a lawsuit by 20 to 31 residents that alleged the same claims. All plaintiff residents alleged that various common facilities at the Park were inadequately maintained, in violation of statutory provisions and the common law. In support of their multiple legal theories for nuisance, breach of the warranty of habitability and related claims, plaintiffs alleged in their complaint that defendants failed to “maintain the Park’s common areas, facilities, services, and physical improvements in good working order and condition,” including the sewer system, water system, drainage system, electrical system, and street system, and that they refused to fix these problems. Whether the common areas, facilities, services and improvements were adequately maintained, and whether any maintenance deficiencies violated any of the alleged statutory or common law rights of plaintiffs, presented common questions of law and fact. Plaintiffs’ requested declaratory and injunctive relief likewise presented common questions. Resolution of those common questions in different forums presented the possibility of inconsistent rulings on those issues. For example, in an arbitration the arbitrator might determine that defendants did not fail to maintain the common facilities and deny relief to plaintiffs, while a trial court might reach a contrary finding and permit recovery by those plaintiffs not subject to an arbitration agreement. Because plaintiffs in court might recover for their alleged injuries based on the same conditions of the Park for which arbitrating plaintiffs might be denied relief—or vice versa—the possibility of conflicting rulings on issues of law or fact plainly existed.
Defendants argue that the trial court erred in relying upon plaintiffs’ complaint to find the possibility of conflicting rulings. Defendants insist that plaintiffs were required to make an evidentiary showing and that, having failed to do so, could not avoid enforcement of the arbitration provisions. Defendants rely upon Segal v. Silberstein (2007)
The trial court properly concluded that the action involved common issues of law and fact. “The existence of this possibility of conflicting rulings on a common issue of fact is sufficient grounds . . .” to deny a motion to compel pursuant to
The order is affirmed.
Ruvolo, P. J., and Rivera, J., concurred.
Notes
The statement of facts is, in substantial part, a repetition of facts previously summarized in our writ review of a related order. (Tarrant Bell Property, LLC v. Superior Court, supra,
In calculating the number of plaintiffs subject to ADR provisions, plaintiffs rely upon party dismissals and a first amended complaint filed after the order to compel arbitration was denied, and ask us to take judicial notice of these documents. We deny the request for judicial notice because the documents are irrelevant to this appeal.
The lease arbitration and reference clauses are typed in all capital letters. We do not follow that capitalization scheme when quoting those clauses here.
All further statutory references are to this code.
Defendants argue that the proper standard is not abuse of discretion but de novo in the absence of any evidentiary conflict. We conclude that the trial court’s decision is correct under either standard.