Court Of Appeal Rejects Waiver, Estoppel And Forfeiture Arguments Made By Lessor Who Failed To Timely Exercise Right To “Baseball Arbitration” In Rental Dispute.
Miss Myrtle Rowe holding a baseball bat. March 14, 2010. Library of Congress.
“Baseball arbitration” takes its name from salary arbitration in Major League Baseball, in which the arbitrator must choose which of two positions is the more reasonable position. Baseball arbitration is sometimes employed in lease disputes, as it was in Zawtocki v. Black Angus Steakhouses, LLC, No. E062969 (4/2 8/11/16) (Ramirez, Hollenhorst, Miller) (unpublished).
Zawtocki leased to Black Angus Steakhouse. The lessee exercised an offer to extend the lease, the lessor offered to do so for $220,000/year, and the lessee countered with $140,000.
However, instead of timely exercising a right to require baseball arbitration under the lease, the lessor went sideways by failing to make a timely demand. As a consequence, the trial court denied the lessor’s petition to compel arbitration. The lessor appealed, contending, among other things, that he was entitled to relief from forfeiture, and that the forfeiture should be excused by waiver or estoppel.
The Court of Appeal rejected waiver, estoppel, and forfeiture arguments, analogizing the failure to timely exercise the right to arbitrate to a failure to timely exercise an option – something that is not a forfeiture. Affirmed.
Presumably the lessor is now stuck with the $140,000 rental amount. Or, as the Court of Appeal put it: “The arbitration petition is, so to speak, the whole ball game.”