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Hyundai Amco America, Inc. v. S3H, Inc.

California Court of Appeals, Fourth District, Third Division

December 17, 2014

HYUNDAI AMCO AMERICA, INC., Plaintiff and Respondent,
v.
S3H, INC., Defendant and Appellant.

Appeal from an order of the Superior Court of Orange County, No. 30-2013-00660039 James Di Cesare, Judge.

Page 573

COUNSEL

Friedman Stroffe & Gerard, James D. Stroffe, Eoin L. Kreditor and Andrew R. Nelson for Defendant and Appellant.

Gordon & Rees, William M. Rathbone, David J. Aveni and Michael P. Campbell for Plaintiff and Respondent.

Page 574

OPINION

FYBEL, J.

INTRODUCTION

Hyundai Amco America, Inc. (Hyundai Amco), and S3H, Inc. (S3H), entered into a subcontractor services agreement. Their agreement provided that disputes would be subject to arbitration. Hyundai Amco sued S3H for breaching the agreement, as well as for other related causes of action. S3H filed a motion to compel arbitration; the trial court denied the motion on the ground that S3H had failed to allege (1) it demanded arbitration and (2) Hyundai Amco refused.

We reverse. Under Code of Civil Procedure section 1281.2, a party requesting a court order for arbitration must prove the existence of a written agreement to arbitrate, and that the other party refuses to arbitrate their controversy. (All further statutory references are to the Code of Civil Procedure.) S3H unquestionably established the existence of the parties’ written agreement containing an arbitration provision; Hyundai Amco does not dispute this fact. We hold that S3H was not required to make a formal demand for arbitration because Hyundai Amco’s filing of a complaint invoked the protections and procedures of the court system, and thus was an effective refusal of arbitration. S3H met its burden under section 1281.2. We publish our opinion to clarify that the opinion of the Court of Appeal, Third Appellate District, in Mansouri v. Superior Court (2010) 181 Cal.App.4th 633 [104 Cal.Rptr.3d 824] (Mansouri) does not apply under the facts and circumstances of this case.

STATEMENT OF FACTS AND PROCEDURAL HISTORY

Hyundai Amco is the general building contractor for the construction of the United States headquarters of Hyundai Motor America, Inc. In January 2013, S3H entered a subcontractor services agreement with Hyundai Amco to provide mechanical system design and construction services for the mechanical systems to be installed in the headquarters building (the agreement). The

Page 575

agreement included an arbitration provision, [1] and a California choice of-law provision.[2] The ...


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