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Abaya v. Spanish Ranch I

November 12, 2010

REYNALDO ABAYA ET AL., PLAINTIFFS AND RESPONDENTS,
v.
SPANISH RANCH I, L.P ET AL., DEFENDANTS AND APPELLANTS.



(Alameda County Super. Ct. No. HG0841868). Honorable George Hernandez.

The opinion of the court was delivered by: Sepulveda, J.

CERTIFIED FOR PUBLICATION

Numerous residents of a mobile home park sued the current and former owners of the facility where they live alleging substandard conditions. Defendants moved to compel arbitration or, in the alternative, judicial reference under an alternative dispute resolution (ADR) provision contained in the leases of many, but not all, residents. In separate orders, the court denied arbitration and judicial reference. The denial was based on several grounds. Pertinent here, the court found that enforcement of the ADR provision risked conflicting rulings on common issues of law and fact by sending the claims of some residents to arbitration or reference, while others remained in the civil court for resolution.

Defendants challenged the denial of judicial reference in petitions for writs of mandate, and challenged the denial of arbitration in this appeal. The petitions for writs of mandate reached us first, and presented the question of whether a trial court has discretion to deny a motion under Code of Civil Procedure section 638 to refer a dispute to a referee under a pre-dispute agreement of the parties where there is the possibility of conflicting rulings on a common issue of law or fact. We answered in the affirmative, and our determination of that issue is now under review. (Tarrant Bell Property, LLC v. Superior Court (2009) 179 Cal.App.4th 1283, review granted Feb. 18, 2010, S179378.) Having concluded that a trial court does have discretion to deny judicial reference in an appropriate case, we also evaluated the facts presented in the parties' dispute and concluded that the court did not abuse its discretion in refusing to refer the parties' dispute to a referee. (Ibid.)

We are now presented with a related issue. Unlike the dispute over the scope of a trial court's power to deny judicial reference, the parties are agreed that the trial court is vested with discretion to deny arbitration where there is the possibility of conflicting rulings on a common issue of law or fact. (Code Civ. Proc., § 1281.2, subd. (c).) But defendants argue that the court erred in finding a possibility of conflicting rulings. We conclude, as we did on the issue of judicial reference, that the court did not err in finding the possibility of conflicting rulings. We affirm the court's order denying defendants' motion to compel arbitration.

I. Facts*fn1

Spanish Ranch I Mobile Home Park (the Park) is a 50-acre Hayward facility with 462 sites or spaces. In October 2008, 120 current and former residents of the Park sued the Park owners upon allegations that the owners failed to properly maintain the common areas and facilities within the Park. Defendant Monterey Coast, L.P. is the current owner, and defendants Tarrant Bell Property, LLC and Spanish Ranch I, L.P. are former owners.

In December 2008, defendants moved to compel arbitration or, in the alternative, judicial reference. (Code Civ. Proc., §§ 638, 1281.2.) Many of the plaintiffs had signed Park leases containing an ADR provision. The parties dispute the exact number of plaintiffs subject to an ADR lease provision. Defendants put the number at 99 or 100 while plaintiffs say 89.*fn2 The exact number is not important here. It is sufficient to note that many, but not all, of the plaintiffs agreed to submit tenant disputes to ADR.

There were several standard form leases used over the years at the Park, with slight variation in the ADR provisions, but those differences are not material to this appeal. In substance, the leases state that it is agreed that any tenancy dispute (with major exceptions for actions by the Park owner) shall be submitted to arbitration conducted under the provisions of Code of Civil Procedure section 1280 et seq. " 'Dispute' " is defined to include claims regarding "maintenance, condition, nature, or extent of the facilities, improvements, services, and utilities provided to the space, park, or common areas of the park."*fn3 The leases further state: "If these arbitration[] provisions are held unenforceable for any reason it is agreed that all arbitrable issues in any judicial proceeding will be subject to and referred on motion by any party or the court for hearing and decision by a referee (a retired judge or other person appointed by the court) as provided by California law, including Code of Civil Procedure section 638, et seq." (Underlining omitted.) Costs for the arbitration or reference "shall be advanced equally" between the tenant and Park owner.

Plaintiffs opposed the motion to compel arbitration or reference on a number of grounds. Plaintiffs argued that the ADR provision is unenforceable as an invalid waiver of rights protected under the Mobilehome Residency Law and landlord-tenant law. (Civ. Code, §§ 798.77, 798.87, subd. (a), 1953, subd. (a).) Plaintiffs also asserted that the ADR provision is unconscionable because it exploits the weak bargaining position of mobile home residents and requires ADR of the residents' disputes while exempting unlawful detainer and other Park owner actions from ADR. Finally, plaintiffs urged the court to refuse enforcement of the ADR provision because its enforcement risked conflicting rulings on common issues of law and fact by sending the claims of some Park residents to arbitration or reference while others remained in the civil court for resolution.

In March 2009, the court denied defendants' motion to compel arbitration on two grounds: (1) the Mobilehome Residency Law precludes waiver of a resident's right to bring a civil action for a park's improper maintenance of the common facilities (Civ. Code, §§ 798.77, 798.87, subd. (a)); and (2) there is the risk of inconsistent rulings on common issues (Code Civ. Proc., § 1281.2, subd. (c)). It will be recalled that the lease provided alternative forms of ADR: arbitration preferentially, but reference if the "arbitration[] provisions are held unenforceable for any reason." The court, having held the arbitration provisions unenforceable, was asked by defendants to compel reference.

The court received supplemental briefing on defendants' alternative request for reference and, in May 2009, denied that request as well. The court found that sending some of the plaintiffs to a referee while others remained in the superior court risked inconsistent rulings. The court also found that splitting the action would defeat the purposes of the reference statute by duplicating efforts and increasing costs.

Defendants appealed the trial court's March 2009 order denying their motion to compel arbitration, and that appeal is now before us. (Code Civ. Proc., § 1294, subd. (a).) Defendants also filed petitions for a writ of mandate to vacate the court's May 2009 order denying their alternative motion to compel reference. As noted above, the writ petitions reached us first, and presented the question of whether a trial court has discretion to deny a motion under Code of Civil Procedure section 638 to refer a dispute to a referee under a pre-dispute agreement of the parties. We answered in the affirmative, and found no abuse of discretion in the court's refusal to refer the parties' dispute to a referee given the possibility of conflicting rulings on a common issue of law or fact. (Tarrant Bell Property, LLC v. Superior Court (2009) 179 Cal.App.4th 1283, review granted Feb. 18, 2010, S179378.)

We now confront a related issue in this appeal of the order denying arbitration. Unlike the dispute over the scope of a trial court's power to deny judicial reference, the parties are agreed that the trial court is vested with discretion to deny arbitration where there is the possibility of conflicting rulings on a common issue of law or fact. (Code Civ. Proc., ยง 1281.2, subd. (c).) But defendants claim ...


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