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Templo Calvario Spanish Assembly of God v. Gardner Construction Corporation et al

August 16, 2011

TEMPLO CALVARIO SPANISH ASSEMBLY OF GOD, PLAINTIFF AND APPELLANT,
v.
GARDNER CONSTRUCTION CORPORATION ET AL., DEFENDANTS AND RESPONDENTS.



APPEAL from a judgment of the Superior Court of Kern County. Jose R. Benavides, Judge. (Super. Ct. No. S-1500-CV-268037)

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

CERTIFIED FOR PUBLICATION

OPINION

INTRODUCTION

Appellant Templo Calvario Spanish Assembly of God (Templo) and respondent Gardner Construction Corporation (Gardner) entered into a contract in 2008 for Gardner to construct a church. The parties had a dispute, Templo petitioned for arbitration, but before the petition was ruled upon, the parties agreed to submit the matter to arbitration under the terms of an arbitration provision in the contract. Because Gardner was unlicensed, the arbitrator ruled that Gardner must disgorge the entire $160,213 Templo had paid to Gardner. Templo petitioned the superior court to confirm the arbitration award. Gardner followed with a petition to vacate the arbitration award. Based on the 1949 California Supreme Court holding in Loving & Evans v. Blick (1949) 33 Cal.2d 603 (Loving & Evans), the court granted Gardner's petition to vacate the award. The superior court ruled: "[T]he ... contract was illegal and void because Gardner Corporation was an unlicensed contractor.... Since the contract is illegal and void, so is the arbitration provision in the contract. Since the arbitration provision fails, the arbitrator was without authority to render a decision." (Full capitalization omitted.)

On this appeal, Templo contends the superior court's order vacating the arbitration award was erroneous because under the 2005 California Supreme Court case of MW Erectors, Inc. v. Niederhauser Ornamental & Metal Works Co., Inc. (2005) 36 Cal.4th 412 (MW Erectors), the contract was not automatically illegal and void, and the arbitrator had the authority to render a decision. As we shall explain, we agree with appellant Templo and reverse the superior court's order vacating the arbitration award.

FACTUAL AND PROCEDURAL BACKGROUND

A. The Arbitrator's Award

The arbitrator's findings included the following:

"Contract and Amendment

"1. Templo entered into a written Commercial Construction Contract ("Contract") with Gardner Construction Corporation ..., which included an arbitration provision. The Contract is dated June 1, 2008. The Contract was executed by Dean Gardner, as President of Gardner Construction Corporation, with a handwritten date of July 2, 2008. Templo executed the Contract through Dr. Rogelio Ovalle, Pastor of Templo, with a handwritten date of July 2, 2008.

"2. The parties, namely Templo and Gardner Construction Corporation, also executed an Amendment, dated June 1, 2008, but bearing the handwritten date of July 2, 2008 .... The subject of the Contract and Amendment is construction of a building for Templo by Gardner Construction Corporation.... [¶] ... [¶]

"6. ... The Arbitrator expressly finds that the Contract and Amendment are in fact the operative agreements and reflect that the party serving as the general contractor under the Contract and Amendment was Gardner Construction Corporation....

"Payment

"7. Templo made two separate payments following execution of the Contract and Amendment. Templo issued a check to Gardner Construction dated July 20, 2008, in the sum of $43,000 .... Templo issued a second payment to Gardner Construction dated August 15, 2008 in the sum of $117,213 .... The Arbitrator finds that the total amount ...


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