The Party Allowed To Keep A $500,000 Deposit Was The Appellant
SSIC, LLC, the seller of a mobile home park with serious financial problems, received an arbitral award allowing seller to keep a $500,000 deposit from buyer Kleege. Not content with retaining the deposit, the seller appealed, arguing that a contractual provision was unambiguous, and that the arbitrator exceeded his powers by failing to provide additional monetary relief as required. Kleege v. SSIC, LLC, D064077 (4/1 Sept. 30, 2014) (Huffman, McConnell, Aaron) (unpublished).
However, the arbitrator did take into consideration that the real estate deal was “doomed from the start”; that in substance, buyer purchased for $500,000 “the opportunity to negotiate a purchase of the mobile home park”, while working through various problems; that both parties were in breach of obligations; and, that each party overlooked the other’s breaches, hoping against hope the problems with the deal could be straightened out.
In essence, seller was arguing that the arbitrator made an error of fact or law – and that’s not a case where the arbitrator exceeds his powers. Here, the arbitrator’s award passed muster, because it bore “some rational relationship to the contract and the breach.” Advanced Micro Devices, Inc. v. Intel Corp., 9 Cal.4th 362, 381 (1994).