CALIFORNIA APPELLATE COURT AFFIRMS DENIAL OF ADR WHERE THERE WAS A POSSIBILITY OF CONFLICTING RULINGS WITH CONCURRENT LITIGATION
In a suit by residents of a mobile home park, of whom only some had signed leases that permitted arbitration or other ADR, against the owners of the facility, a California Appellate Court recently affirmed the lower court’s denial of the owners’ motion to compel arbitration. Under California law, the trial court has discretion to deny arbitration where there is a possibility of conflicting rulings on a common issue of law or fact. The lower court found, and the appellate court agreed, that all the plaintiffs had alleged that the mobile home park was inadequately maintained, and to permit arbitration for only some of the residents, while the others continued to litigate in court, would create the possibility of conflicting rulings on issues of law or fact. The appellate court further held that while an evidentiary showing is required under California law to show the existence of an agreement to arbitrate, no such showing is required for the court to find the “possibility” of conflicting rulings. Abaya v. Spanish Ranch I, L.P., No. A125298 (Cal. Ct. App. Nov. 11, 2010).
This post written by Michael Wolgin.
