California Code of Civil Procedure Section 1281.6 to the Rescue
The failure of an arbitration agreement to provide a method for appointing an arbitrator need not be fatal.
Our next case arose from Plaintiffs’ efforts to recover allegedly unpaid progress payments under a construction contract for remodeling Defendants’ home. Plaintiffs sued Defendants for money, and Defendants petitioned to arbitrate under an arbitration provision prepared by Plaintiffs. The trial court denied the petition, reasoning that the arbitration agreement was uncertain because it did not specify “before what agency o[r] person the matter will be arbitrated, [or] how the arbitrator will be selected, but merely sets for[th] alternative options for these terms.” Defendants appealed the order denying their petition. HM DG, Inc. v. Amini, Case No. B242540 (2nd Dist. Div. 3 Sept. 20, 2013) (Heeseman, J., author 3:0).
A “plain reading” of Cal. Code of Civ. Proc., section 1281.6 makes clear the parties needn’t agree upon a specific method for appointing an arbitrator to form a binding arbitration agreement. Here, the arbitration provision evinced an intention to arbitrate, and set forth alternative options. That did not make the arbitration agreement unenforceable, as the court, in the absence of an agreed method, or if the agreed method fails for appointing an arbitrator, shall appoint the arbitrator. Section 1281.6. Consequently, the trial court’s order was reversed.
That does not mean that the trial court is authorized to appoint an arbitrator in a manner inconsistent with the parties’ arbitration agreement. Thus, if the arbitration agreement had provided for arbitration before the AAA, pursuant to the rules of the AAA, and the AAA refused to accept arbitration, the trial court would not be able to send the dispute to JAMS arbitration pursuant to JAMS rules – that would be inconsistent with the agreement of the parties.
Comments