An Order Denying Defendants’ Cross-Petition To Compel An Arbitration They Already Initiated Does Not Adversely Affect Them – And Therefore They Can’t Appeal It
O’Malley v. Avenatti, Case No. G045806 (4th Dist. Div. 3 June 13, 2012) (Ikola, J., author) (not for publication) is the kind of lawsuit only lawyers can love – a lawsuit among former law partners fueled by high-octane gamesmanship. The opinion also provided Justice Ikola, trained in electrical engineering at the University of Michigan, with an opportunity to display his mathematical skill and astringent wit.
O’Malley sued defendants in Orange County, then moved to compel arbitration in Orange County. Defendants opposed – sort of – stating “there is no disagreement that this dispute should proceed to arbitration,” while disputing the scope of the arbitration, who was to make the determination of scope, and where the arbitration was to proceed. Alternatively, defendants cross-petitioned to compel arbitration in San Francisco.
The superior court granted O’Malley’s petition to arbitrate in Orange County. Defendants appealed, but an order granting a petition to arbitrate is not appealable. The Court of Appeal solved this problem by pointing out that defendants’ notice of appeal identified the order as the “order denying [their cross-] Petition to Compel Arbitration . . . “ – an appealable order. But defendants had a further and higher hurdle to surmount.
Because defendants had already initiated an arbitration in San Francisco, and O’Malley had apparently appeared in that arbitration, the denial of defendants’ motion to compel arbitration in San Francisco meant that they were not “aggrieved.” Only a party aggrieved may appeal. Code Civ. Proc., section 902.
The kludgy result is two overlapping arbitrations in two different JAMS offices. And this is the part that triggered Justice Ikola’s merciless display of mathematical reasoning:
“Having two overlapping arbitrations in two different JAMS offices is hardly ideal, but it is the entirely foreseeable consequence of defendants’ tactics. Defendants responded to O’Malley’s petition to compel arbitration by initiating their own arbitration the very next day. Faced with the prospect of one arbitration being compelled by a nonappealable order, defendants chose to initiate another one. One plus one equals two.” (our italics).