Based On Holding of Pinnacle, Fourth District, Division 1 Reverses Order Of The Superior Court That Had Denied Developer’s Request To Arbitrate
I posted on May 10, 2012 about Verano Condominium Homeowners Association v. La Cima Development, LLC, a 4th District Division 1 case, in which the Court of Appeal held, based on an analysis of contractual privity, that an arbitration provision in recorded covenants, conditions and restrictions (CC&Rs) was not enforceable between the homeowners association and the developer, or between the developer and a class of owners on whose behalf the HOA sued. On August 16, 2012, I posted about Pinnacle Museum Tower Assn. v. Pinnacle Market Development (UASA), LLC, 55 Cal.4th 223 (2012), in which the California Supreme Court held arbitration clauses in CC&Rs are enforceable against an HOA, notwithstanding the fact that the HOA did not come into existence until after the CC&ARs were recorded, and the HOA’s consent to arbitrate occurred by operation of law. I asked: “Will today's Supreme Court opinion in Pinnacle Museum Tower Association dispose of issues in Verano Condominium Homeowners Association?”
The answer to my rhetorical questions is: Yes. On January 25, 2013,the Court of Appeal held in Verano that the arbitration provisions in Verano “constitute a valid agreement to arbitrate within the scope of the FAA [Federal Arbitration Act],” thereby reversing the trial court’s order. Verano Condominium Homeowners Association v. La Cima Development, LLC, Case No. D058217 (4th Dist. Div. 1 January 25, 2013) (unpublished) (Benke, Acting P.J., author).