Some Orders Denying Petitions to Compel Arbitration Are More Equal than Others
Defendant and Appellant Zani Mansouri spent over $200,000 in a patio improvements dispute with her HOA, Plaintiff and Respondent Fleur Du Lac Estates Association. Naturally, she hoped to recover her fees and costs after the trial court earlier granted the HOA’s motion to compel arbitration, and the Court of Appeal, in a prior writ proceeding, reversed, agreeing with Mansouri that the HOA had failed to establish that it had requested arbitration and that she had refused.
Mansouri sought fees and costs on the theory that she was the prevailing party in a proceeding to compel arbitration. But the trial court concluded her fee motion and costs memoranda were untimely. She moved for reconsideration, or relief due to excusable neglect. The trial court denied that motion too in a May 2011 order. All that law and commotion led to a writ petition, denied on the ground that Mansouri had a remedy by appeal, followed by her present appeal from the May 2011 order. Fleur du Lac Estates Association v. Mansouri, C0968693 (3d Dist. April 23, 2012) (certified for publication) (authored by Justice Robie).
In the opinion now certified for publication, the Court of Appeal holds that the May 11 order appealed from was non-appealable. Why?
First, an order denying reconsideration is typically non-appealable – to hold otherwise would permit, in effect, two appeals from every appealable decision.
Second, the appealability of an order under the California Arbitration Act is governed by Cal. Code of Civ. Proc. section 1294 – and Mansouri was unable to successfully shoehorn her appeal into an appealable situation under section 1294. Mansouri argued that under Otay River Constructors v. San Diego Expressway, 158 Cal.App.4th 796 (2008), an order denying a petition to compel arbitration is a “judgment” in a petition to compel proceeding, and that a subsequent order denying fees is an appealable post-judgment order, expressly appealable under section 1294 (e).
The Court of Appeal drew a distinction between an order in an arbitration proceeding resolving the only issue before the court in that proceeding – essentially a judgment and therefore appealable – and an order in an arbitration proceeding that did not foreclose the HOA here from “making a proper demand for arbitration under the CC&R’s on remand . . . .” And that is what the HOA did here: after its motion to compel arbitration was nixed by the Court of Appeal earlier because the HOA failed to demand arbitration and failed to establish a refusal to arbitrate, the HOA simply retraced its steps, and made the demand required by section 1281.2 as a predicate for bringing a petition to compel. The second time around, Mansouri didn’t oppose arbitration – the HOA had dotted its i’s and crossed its t’s.
There are several lessons to be drawn from this case. First, before seeking to compel arbitration under section 1281.2, establish that you asked for arbitration, and that the opposing party refused. Second, appealing from denial of a motion to reconsider may be futile – you may be appealing from a non-appealable order. Third, not all orders denying a petition to compel arbitration are created equal: some resolve all issues in a case, some do not. Fourth, an order denying a motion to compel arbitration that resolves all issues in a case may be a final and appealable order. Fifth, a special order after final judgment is appealable in a proceeding under the California Arbitration Act – but only if you first have a final judgment.
Is the door shut to Mansouri’s recovery of fees? No: “because it appears that Mansouri still has an adequate remedy by appeal from the final judgment in this matter by which to seek review of the trial court’s denial of her motion for attorney fees and the granting of the Association’s motion to strike her costs memoranda. . . “ In fact, that was the basis for denying her alternative request to treat her premature appeal as a writ petition. It ain’t over. . . .
Above: Kirsten Flagstad
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