Evidence Of A Policy Is Not Evidence Of Adherence To The Policy.
Plaintiff Juen engaged Alain Pinel Realtors, Inc. (Pinel) to sell his house. Later, Juen sued Pinel, Pinel unsuccessfully moved to compel arbitration, and Pinel appealed. Juen v. Alain Pinel Realtors, Inc., H043230 (6th Dist. 2/6/19) (Grover, Greenwood, Bamattre-Manoukian).
The listing agreement was signed by Pinel and its listing agent Smith. A required Code of Civil Procedure notice showed Juen's initials, but the space for Pinel's initials was blank. Now Code of Civ. Proc., section 1298, provides that it is by initialing the arbitration provision that one indicates assent or nonassent to the arbitration provision, and that one agrees to give up rights to a jury trial. Both parties agreed that the arbitration clause was "a bilateral agreement requiring the assent of both parties to be enforceable."
To get around the problem of its missing initials, Pinel argued that its custom and practice was (1) to destroy client files after five years, which it had done here (it obtained a copy from its listing agent to make its motion to compel arbitration); and (2) to review client listing agreements submitted by a listing agent, and if the client initialed the arbitration provision, then the managing broker, rather than the listing agent, would adopt the election of the client and initial the arbitration provision.
The evidence of custom and practice here was not enough to convince the Court of Appeal. There were missing links in the chain of reasoning. A declaration submitted by the realtor did not establish that it had ever received or reviewed plaintiff's listing agreement in particular. The declaration stated a policy existed, "but the existence of a policy is not evidence of adherence to the policy," and evidence was lacking that Pinel's listing had actually been submitted by the listing agent to the managing broker here.
AFFIRMED.
COMMENTS. Ordinarily, contracts can be enforced against the party who signed the contract. The twist here is that the Code of Civil Procedure provides that the assent or nonassent of a party to arbitration in the listing agreement is evidenced by initialing the arbitration provision, and that is why Pinel sought to establish through custom and practice that it had initialed the arbitration provision. There are other cases in which the absence of a signature has not prevented the nonsignatory from enforcing a bilateral arbitration agreement, but the Court factually distinguishes those cases as ones in which there was additional evidence of assent.
Regarding burden of proof, the Court of Appeal points out that where, as was the case here, the trier of fact concludes "the party with the burden of proof did not carry the burden and that party appeals, it is misleading to characterize the failure-of-proof issue as whether substantial evidence supports the judgment." Instead, "the question becomes whether the appellant's evidence was (1) 'uncontradicted and unimpeached' and (2) 'of such a character and weight as to leave no room for a judicial determination that it was insufficient to support a finding.'"
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