Arbitration, Powers, Public Policy, Vacatur: Arbitrator Who Found HOA Failed To Follow Pre-Litigation Requirements In CC&Rs Did Not Exceed His Powers

Arbitrator Did Not Exceed Powers By Abridging An Unwaivable Statutory Right Or Policy.

    One of the grounds for a court to vacate an arbitrator's award is that the arbitrator exceeded his or her powers.  See Code of Civ. Proc. section 1286.2(a)(4). And arbitrators may exceed their powers by issuing an award that violates a party's unwaivable statutory rights or that contravenes an explicit legislative expression of public policy. Richey v. AutoNation, Inc., 60 Cal.4th 909, 916 (2015). 

    In Branches Neighborhood Corporation v. CalAtlantic Group, Inc., G055201 (4/3  8/24/18) (Moore, O'Leary, Fybel), the defendant/respondent developer obtained summary judgment in arbitration, because the HOA filed its arbitration demand without first following a requirement in the HOA's CC&Rs requiring it to obtain the vote or written consent of 51% of its members prior to initiating a construction defect claim. The HOA tried to correct the problem by ratifying its decision to arbitrate after the fact, but the arbitrator wasn't having it.

    You could say this is a case that depends upon the plain language of the CC&Rs. That, by the way, is what the Court of Appeal said. The Court could not find an unwaivable statutory right to ratify after the fact what the CC&Rs required the HOA to do prior to filing its arbitration claim, nor could the Court find any express public policy that prevented enforcement of the CC&Rs. "[A]ccordingly, the plain language of the CC&Rs controls." Affirmed.