Titan Enterprises, Inc. v. Armo Construction, Inc.
| Citation | 108 Cal.Rptr. 456,32 Cal.App.3d 828 |
| Court | California Court of Appeals |
| Decision Date | 06 June 1973 |
| Parties | TITAN ENTERPRISES, INC., Petitioner and Respondent, v. ARMO CONSTRUCTION, INC., Respondent and Appellant. Civ. 40624. |
Acret & Perrochet and Harry N. Zavos, Los Angeles, for respondent and appellant.
Earl D. Reese, for petitioner and respondent.
This action involves a dispute between a subcontractor (Titan Enterprises, hereinafter referred to as 'petitioner') and a general contractor (Armo Construction, hereinafter referred to as 'respondent'), over alleged nonpayment for work done on a hospital building pursuant to a written contract. The dispute before us involves only a procedural issue--namely was that dispute properly submitted to and determined by arbitration? 1 The trial court held that it was; we disagree.
The construction contracts between the parties contained an arbitration clause. That clause was of the so-called self-executing type--I.e., its provisions permitted and provided for arbitration under rules therein incorporated without the necessity of securing a prior court order under section 1281.2 of the Code of Civil Procedure.
After the basic dispute had arisen, petitioner filed a mechanic's lien on the real property involved, followed by the filing of an action in the Municipal Court of the Los Angeles Judicial District. That action named as defendants the owner of the property, the present respondent and other persons alleged to have been involved in the underlying transaction. It sought both enforcement of the lien and a personal judgment against respondent. Respondent duly appeared, answered that complaint and set forth a counterclaim. Neither pleading referred to the arbitration clause in the basic contracts.
After the municipal court action was thus at issue, petitioner filed a demand with the arbitrator named in the contracts, seeking arbitration of the same dispute as that involved in the municipal court action. Although respondent objected that the filing of the municipal court action amounted to a waiver of the right to arbitrate, the arbitrator held otherwise. The arbitration proceeded, resulting in an award in favor of petitioner (although for a slightly lesser amount); on petition, and over objection by respondent, the superior court confirmed the award.
Preliminarily, we consider whether the fact that respondent participated in the arbitration proceeding after its objection to arbitration had been twice overruled 2 bars it from raising the issue of arbitrability in the confirmation hearings and in this court. On that issue we find no direct authority; counsel, although specifically asked by us for such direct authority, have cited none.
The case at bench is not like Fidelity & Cas. Co. v. Dennis (1964) 229 Cal.App.2d 541, 40 Cal.Rptr. 418, and Interinsurance Exchange v. Bailes (1963) 219 Cal.App.2d 830, 33 Cal.Rptr. 533. In those cases, the party seeking to object in the courts to an arbitration not only had participated in the arbitration proceedings but had briefed, argued and submitted to the arbitrator, as an arbitrable issue, the question of the arbitrability of the underlying issues. In those cases we held that the would-be objector, having once litigated the question of arbitrability before a tribunal of its own selection, was barred from relitigation of the same issue in the courts. No such prior adjudication exists in the case at bench.
Petitioner contends, and the trial court agreed, that waiver was 'a question of fact or a mixed question of fact and law which was duly and properly decided by the arbitrator.' Petitioner, and the trial court, relied for that proposition on language in Palm Springs Homes, Inc. v. Western Desert, Inc. (1963) 215 Cal.App.2d 270, 30 Cal.Rptr. 34. But in that case, the issue before the arbitrators was not whether arbitration had been waived, but whether the filing of mechanics' liens was, under the terms of the contracts there involved, a breach of the contract. The language relates to that situation and is not directly applicable to the issue before us.
We note that the Legislature, in enacting a comprehensive statute on arbitration, has dealt with a situation comparable to the one at bench. While an order of the superior court denying a petition to compel arbitration is expressly appealable (Code Civ.Proc. § 1294, subd. (a)), an order directing arbitration is not appealable (Bertero v. Superior Court (1963) 216 Cal.App.2d 213, 30 Cal.Rptr. 719; Laufman v. Hall-Mack Co. (1963) 215 Cal.App.2d 87, 29 Cal.Rptr. 829), although it may, in extreme cases, be reviewed by writ (Lesser Towers, Inc. v. Roscoe-Ajax Constr. Co. (1969) 271 Cal.App.2d 675, 77 Cal.Rptr. 100). As this court pointed out in Laufman, that policy works no substantial hardship on the litigants--the objector may win at the arbitration hearing; if he does not the issue is reviewable on appeal from an order of confirmation (Code Civ.Proc. § 1294, subd. (d)), and, in the extreme cases envisaged by Lesser Towers, an intermediate review is available. We think that the same policy applies where an arbitration proceeds, under a 'self-executing' agreement, without a preliminary court order. While an objector may, on a sufficient showing, stay the arbitration, the general policy is to require him to proceed with arbitration and then raise his objections either by opposition to a petition to confirm (as here) or by a petition under subdivision (d) of section 1286.2 of the Code of Civil Procedure to vacate the award.
It follows that respondent properly raised, at the confirmation hearing, and properly raises here, the underlying issue: Did the filing of the municipal court action constitute a waiver of the petitioner's contract right to arbitrate the issue of respondent's liability?
On that issue, also, neither counsel nor our own research have discovered any direct...
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...716, 130 Cal.Rptr. 160; Gunderson v. Superior Court (1975) 46 Cal.App.3d 138, 120 Cal.Rptr. 35; Titan Enterprises, Inc. v. Armo Construction, Inc. (1973) 32 Cal.App.3d 828, 108 Cal.Rptr. 456; Schwartz v. Leibel (1967) 249 Cal.App.2d 761, 57 Cal.Rptr. 831.) However, an examination of the cas......
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...Lesser Towers v. Roscoe-Ajax Construction Co., 271 Cal.App.2d 675, 692, 77 Cal.Rptr. 100, Cf. Titan Enterprises, Inc. v. Armo Construction Co., Inc., 32 Cal.App.3d 828, 831, 108 Cal.Rptr. 456.) In exceptional situations, a party aggrieved by an order compelling arbitration may seek appellat......
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