Party Wishing To Enforce Right To Have Settlement Agreement Interpreted By Arbitrator Ought To Have Sought Enforcement Before Same Issues Were Submitted To Court For Adjudication On The Merits.
The underlying dispute in Kurtin v. Elieff, G049556 (4/3 Sept. 2, 2015) (Rylaarsdam, Aronson, Fybel) (unpublished) was a messy partnership buyout and accounting. After a bifurcated trial, grant of a partial new trial, appeal, and remand, Elieff petitioned for arbitration, “seeking the arbitrator’s ‘interpretation or clarification’ of aspects of the settlement agreement, prior to the partial retrial.” The trial court denied the petition, concluding the right to arbitrate had been waived, a ruling now affirmed on appeal: “Elieff has, in effect, petitioned for arbitration in the middle of trial. Such a petition is untimely as a matter of law.”
The arbitration clause was unusual, because it expressly gave the arbitrator – the famed Tony Piazza -- the power to add or rewrite provisions in the parties’ settlement agreement if needed to save the contract from unenforceability. However, the unusual nature of the arbitration agreement did not mean that the right to arbitrate could not be waived by deeply engaging in litigation. Furthermore, the issue invoked by the petition to arbitrate was the power to interpret the agreement, not the arbitrator’s ability to amend it – and interpretive issues had already been presented to the trial court.
“Given the undisputed evidence that Elieff waited until after this case was tried, a judgment was entered, an appeal was decided and the case was remanded for a partial retrial before filing his petition,” wrote the Court, “we have no trouble concluding there was no error.”
NOTE: On June 28, 2012, I posted about an earlier phase of the Kurtin/Elieff dispute. This is a long-running dispute. Kurtin filed suit against Elieff in 2007, in connection with Elieff’s performance under an earlier settlement agreement.