Grubb & Ellis Co. v. Bello

• Decision Date: 05 October 1993
• Docket Number: No. B063118,B063118
• Citation: 19 Cal.App.4th 231,23 Cal.Rptr.2d 281
• Court: California Court of Appeals Court of Appeals
• Parties: GRUBB & ELLIS COMPANY, Plaintiff and Respondent, v. Michael BELLO et al., Defendants and Appellants.

Page 281

23 Cal.Rptr.2d 281

19 Cal.App.4th 231

GRUBB & ELLIS COMPANY, Plaintiff and Respondent, v. Michael BELLO et al., Defendants and Appellants.

No. B063118.

Court of Appeal, Second District, Division 4, California.

Oct. 5, 1993.

Charles K. Golden, Michael Bello, in pro. per.

Marc R. Levine, Orange, for defendants and appellants.

Singer & Carley, and Stephen R. Carley, Los Angeles, for plaintiff and respondent.

RAPPE, Associate Justice, Assigned. ^*

INTRODUCTION

Michael Bello and M.B. Contractors, Inc. (Bello) appeal from a judgment confirming an arbitration award (Code Civ.Proc., § 1294) ¹ in favor of Grubb & Ellis Company (Grubb). We affirm.

FACTS

Bello entered into exclusive listing agreements with Grubb, a real estate broker, to sell real property located at 1041 and 1047 West Gladstone in San Dimas, California. Identical provisions in both listing agreements provided for arbitration of "[a]ny dispute or claim in law or equity arising out of this contract or any resulting transaction." Each agreement contained the statutorily mandated "arbitration of disputes" and "notice" provisions immediately followed by separate spaces "for the parties to indicate their assent or nonassent to the arbitration provision." (§ 1298, subd. (c).) Although Bello initialed each arbitration provision, Grubb failed to do so. Bello later leased the properties in violation of these agreements. Grubb consequently sought its real estate commissions.

Grubb made a demand for arbitration requesting relief of approximately $45,000. On July 8, 1991, Bello appeared, without counsel, before the arbitrator and objected to the hearing on the sole ground there were no agreements to arbitrate because Grubb had not initialed the arbitration provisions. However, the arbitrator proceeded with the hearing. Bello remained and participated in the proceedings. Grubb presented evidence the $45,000 requested in the demand was due to a mistaken mathematical calculation. Based on the agreements, which set forth a specified percentage of the listing price as the commission for each piece of property, Grubb presented the correct figure to the arbitrator, who decided in favor of Grubb and issued an award in the amount of $67,500.

Grubb timely petitioned to confirm the award. (§ 1285.) Requesting the petition be denied, vacated or corrected, Bello responded arguing (1) the lack of arbitration agreements, and (2) the award was in excess of the arbitrator's powers because the amount awarded exceeded that requested in the demand. (§ 1285.2.) The superior court ordered that the award be confirmed and entered judgment accordingly.

ISSUES

The Arbitration Agreement

Bello first contends there were no agreements to arbitrate because (1) the listing agreements lacked mutuality of obligation, and (2) section 1298, subdivision (c) required the assent of all parties to the arbitration provisions. Grubb argues Bello agreed to arbitration but, in any event, waived the right to raise this point by appearing and participating in the arbitration hearing.

a. Waiver.

We conclude, under the circumstances present here, Grubb's waiver argument misses the mark. "Waiver always rests upon intent. Waiver is the intentional relinquishment of a known right after knowledge of the facts. [Citations.] The burden, moreover, is on the party claiming a waiver of a right to prove it by clear and convincing evidence that does not leave the matter to speculation, and doubtful cases will be decided against a waiver." (City of Ukiah v. Fones (1966) 64 Cal.2d 104, 107-108, 48 Cal.Rptr. 865, 410 P.2d 369, internal quotation marks omitted.) Bello appeared and made a proper objection on the ground there were no arbitration agreements without the assent of both parties to the arbitration provisions. A waiver may be founded on a party's "failure to make proper objection, by his conduct, or otherwise" (see Ray Wilson Co. v. Anaheim Memorial Hospital Assn. (1985) 166 Cal.App.3d 1081, 1089, fn. 4, 213 Cal.Rptr. 62, disapproved on an unrelated ground in Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 27-28, 10 Cal.Rptr.2d 183, 832 P.2d 899). Bello's specific objection was sufficient in the absence of later conduct by him inconsistent with this objection or an advisement by the court that participation would constitute a waiver of his objection.

Although Bello participated in the hearing, there is nothing in the record demonstrating the details of this participation. In particular, we have no facts before us demonstrating conduct inconsistent with Bello's initial objection.

Relying on Lovret v. Seyfarth (1972) 22 Cal.App.3d 841, 101 Cal.Rptr. 143, Grubb argues Bello waived his objection by participating in the hearing without seeking a writ of prohibition or a restraining order. Lovret is distinguishable on a number of grounds. First, in Lovret, the waiving party raised no objection to her inclusion in the arbitration hearing. Second, in Lovret, the waiving party did not seek to vacate the award. Instead, she not only participated in the arbitration hearing, but she also joined in the confirmation proceedings by filing cross-demands and causing workmen's and materialmen's liens on the property to be removed as a part of the judgment confirming the award. The court held: "One submitting a counterclaim without resorting to an extraordinary remedy, available to him, may not claim after an adverse ruling in arbitration that the counterclaim was not an issue in the arbitration proceedings. [Citation.]" (Lovret v. Seyfarth, supra, 22 Cal.App.3d at p. 859, 101 Cal.Rptr. 143.) Here, Grubb failed to demonstrate specific conduct by Bello inconsistent with his objection. Third, Lovret involved arbitration previously ordered by the court, and therefore a writ of prohibition or a restraining order would have been appropriate. However, Bello was not ordered to arbitrate and therefore could not have obtained such relief. (Sauter v. Superior Court (1969) 2 Cal.App.3d 25, 28-29, 82 Cal.Rptr. 395 ["Petitioner contends that since [§ 1281.2] provides procedures to compel arbitration in proper cases, it follows that the court may enjoin threatened arbitration. We cannot agree."].) Bello's remedy would have been to "decline or refuse to participate in the arbitration proceedings," and Grubb would have been "compelled to rely upon the procedures set forth in section 1281.2 of the Code of Civil Procedure to enforce the right of arbitration." (Id. at p. 29, 82 Cal.Rptr. 395.) Since Bello, unlike the waiving party in Lovret, represented himself at the arbitration hearing, we refuse to read a waiver into his failure to "decline or refuse to participate in the arbitration proceedings." "[A] mistake of law may be excusable when made by a layman but not when made by an attorney." (American Home Assurance Co. v. Benowitz (1991) 234 Cal.App.3d 192, 203, 285 Cal.Rptr. 626, quoting Tammen v. County of San Diego (1967) 66 Cal.2d 468, 479, 58 Cal.Rptr. 249, 426 P.2d 753, internal quotation marks omitted.) Bello's mistake was excusable. We therefore proceed to examine the merits of his objections.

b. Enforceability of the Arbitration Provisions.

1. Mutuality of Obligation

Bello mistakenly claims mutuality of obligation was lacking because both parties to the agreement did not initial the arbitration provisions. "In brief, the doctrine [of mutuality of obligation] is that the promises on each side must be binding obligations in order to be consideration for each other. [Citations.]" (1 Witkin, Summary of Cal.Law (9th ed. 1987) Contracts, § 228, pp. 236-237.) Mutuality of obligation does not require that both parties to the agreement be subject to arbitration. This is illustrated by Rogers v. Bailey (1944) 66 Cal.App.2d 668, 152 P.2d 468. There, appellants argued "a lack of mutuality in the contract by reason of the fact that there [was] a forfeiture on the part of the buyer for his breach but none on the part of the seller for his failure to perform." (Id. at p. 671, 152 P.2d 468.) Noting that the buyer had other remedies, the court explained: "Mutuality of contract does not require that there should be mutuality of remedies under it. [Citations.]" (Id. at pp. 671-672, 152 P.2d 468.)

2. Section 1298, Subdivision (c)

Appellant argues the Legislature, in enacting section 1298, subdivision (c), "intended that all the parties initial the arbitration provision in the place required in order for it to be a part of the underlying agreement." ² In essence, Bello would have us read into the statute the requirement of mutuality of remedy, namely arbitration, in order for such an arbitration provision to be valid. We conclude there is no basis for adopting the mutuality of arbitration limitation advanced by Bello.

Our starting point must be the language of section 1298, and, in particular subdivision (c). "As a rule, there can be no intent in a statute not expressed in its words; the intention of the Legislature must be determined from the language of the statute. [Citation.]" (Woodland Joint Unified School Dist. v. Commission on Professional Competence (1992) 2 Cal.App.4th 1429, 1451, 4 Cal.Rptr.2d 227.) "Words used in a statute ... should be given the meaning they bear in ordinary use. [Citations.] If the language is clear and unambiguous there is no need for construction, nor is it necessary to resort to indicia of the intent of the Legislature (in the case of a statute).... [Citations.]" (Lungren v. Deukmejian (1988) 45 Cal.3d 727, 735, 248 Cal.Rptr. 115, 755 P.2d 299.) On its face, the statute does not contain a mutuality of arbitration requirement. At best, the statute requires "the parties to indicate their assent or nonassent to the arbitration provision." Here, Bello indicated his assent, but Grubb indicated neither its assent or nonassent. Although Grubb's failure to assent in writing might have had some effect on whether it could have been required to arbitrate, the statute does not purport to vitiate Bello's...