Brinker v. Superior Court

Opinion

ASHBY, J.

—The respondent court granted real party’s petition to vacate an arbitration award in petitioners’ favor. Petitioners seek a writ of mandate directing the respondent court to vacate its order.

Facts and Procedural History

Petitioners (the Brinkers), New Jersey residents, filed an action in the New Jersey Superior Court, Chancery Division, for specific performance and damages in connection with a real estate purchase contract. The Brinkers allege that they entered into a contract to purchase commercial real property in Lyndhurst, New Jersey for $3 million from real party Page Realty Corporation (Page). The sale was conditioned upon the Brinkers obtaining final approval from the New Jersey Economic Development Authority (EDA) making the transaction eligible for tax exempt bond financing. This in turn was contingent upon the premises being operated as a manufacturing

[1298]

facility. Page agreed to pay the lessee, a trucking company, $65,000 to terminate its lease early.

At the closing on December 26, 1986, Page’s agent assured the Drinkers that the payment and departure of the lessee had all been arranged, and the Drinkers closed the deal based upon that representation. However, Page subsequently refused to pay the $65,000, and because the lessee could not afford to move without that money, it did not vacate the premises. The Drinkers were thus prevented from obtaining EDA financing and satisfying the conditions of the sale agreement.

The Drinkers sought specific performance by Page of all the terms and conditions of the agreement, including the payment of the $65,000, and damages for breach of the agreement. In its answer, Page asserted that the Drinkers had not met the EDA deadline, and sought reconveyance of the property.

The sale agreement contained an arbitration clause, which provided: “Any dispute arising hereunder shall be settled by arbitration in Los Angeles, California in accordance with the rules and regulations of the American Arbitration Association.” (Los Angeles was selected as the locale for the arbitration because David Drody, Page’s principal shareholder, is 86 years old, in ill health, and lives in Los Angeles.) Page filed a motion, pursuant to New Jersey Statutes Annotated section 2A:24-4 (comparable to Code Civ. Proc., § 1281.4) to stay the Drinkers’ lawsuit pending arbitration. The superior court in New Jersey granted the motion.