Procedural Posture

Appellant, a building contractor, sought review of an order from the Superior Court of Orange County (California), which, pursuant to Code Civ. Proc., § 1281.2, subd. (c), denied the contractor’s petition to compel arbitration of respondent homeowners’ professional negligence claims against it and to stay the proceedings against it in an action brought by the homeowners against the contractor and several insurance companies.

Overview

The homeowners, a married couple, alleged that the contractor Salmon Norway, Inc. negligently performed repairs to their home, resulting in mold contamination. The parties’ contract included a clause providing for arbitration pursuant to the Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq. The court stated that although the FAA’s procedural provisions, 9 U.S.C. §§ 3, 4, generally did not apply to state court proceedings, parties to an arbitration agreement could expressly designate that any arbitration proceeding should move forward under the FAA’s procedural provisions rather than under state procedural law. Because the contract specified that claims were to be arbitrated pursuant to the FAA, there was no ambiguity. The parties expressly designated that the FAA would govern their arbitration. Thus, the FAA controlled, including 9 U.S.C. § 3, which required the trial court to stay the judicial proceeding and compel arbitration. The parties also agreed to have the arbitrator determine the scope of the arbitration clause. The arbitration clause was not inconspicuous. A remaining issue for the trial court was whether the husband was bound by his wife’s execution of the arbitration agreement.

Outcome

The court reversed the order that had denied the motion to compel arbitration and remanded with directions for the trial court to grant the motion to compel arbitration of the wife’s claims, to determine whether the husband was bound by the arbitration agreement, and to grant the motion with regard to the husband if it determined that he was bound by the arbitration agreement.