Legal Question in Real Estate Law in California
Mandatory Arbitration and Lawsuit
I was a broker in a purchase transaction. A former client of mine initialed the ''binding arbitration clause'' in the real estate purchase agreement. The former client (the plaintiff) is now naming me, my company, my agent who represented plaintiff in the purchase, & a ton of other pple as defendants in a lawsuit. What do i need to file in court or do to force plaintiff to adhere to the mandatory arbitration clause?
I've already filed a ''general denial'' in response to the plaintiff's lawsuit. Can i still file or do something that makes the plaintiff adhere to the mandatory arbitration clause?
Thanks in advance for your response.
3 Answers from Attorneys
Re: Mandatory Arbitration and Lawsuit
Obtain and read Code of Civil Procedure section 1281.2, which governs petitions to compel arbitration.
Note in particular that the right to demand arbitration can be waived. Your filing an answer in the lawsuit probably isn't enough to constitute a waiver, but be careful not to initiate discovery, file c cross-complaint, etc. which more likely would be a waiver.
Also note the provisions relating to multi-party suits.
As another attorney mentioned, if this matter is potentially covered by E&O or similar insurance, refer it to your carrier at once.
Re: Mandatory Arbitration and Lawsuit
Yes. You would file a motion to compel arbitration, attach a copy of the agreement to the motion, etc. If granted, that would abate the lawsuit as to you, at least. It's not a motion that comes on a form. You'd best retain a lawyer or hit the books and find a sample that suits your purposes and that you can adapt. Good luck!
Re: Mandatory Arbitration and Lawsuit
You would file a motion with the court; it is called "Motion to Compel Arbitration Pursuant to Mandatory Binding Arbitration Agreement".
The only problem is that the Plaintiff has named parties to the lawsuit that are not parties to the arbitration provision - and this can sometimes defeat the ability of the persons attempting to compel arbitration, to succeed. This is a complicated area of the law.
More fundamentally, why isn't your E&O carrier handling your defense? Were you named in a negligence action or a claim alleging that you failed to adequately perform your duties? If so, you likely have coverage under your E&O policy.
We are litigators whose practice emphasizes real estate related disputes. And this is an area of litigation that we handle regularly. If you would like us to provide a no charge consult, please email or call. Do it quickly, as a motion to compel arbitration needs to be filed asap, if you are entitled to compel. It should have been filed instead of your Answer to the Complaint.
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