La Pietra v. Freed

California Court of Appeal Dec 4, 1978 No. Civ. 16822Published

Before: Harelson

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Holding. An order compelling arbitration is interlocutory and not a final judgment; therefore, a party who obtains such an order is not a 'prevailing party' entitled to attorney's fees under Civil Code section 1717.

Issues

Whether an order compelling arbitration constitutes a final judgment for the purpose of awarding attorney's fees.
Whether a party who obtains an order to compel arbitration is a 'prevailing party' under Civil Code section 1717 before the underlying dispute is resolved.

Disposition. reversed

Quotations verified verbatim against the opinion

“We conclude that the trial court’s ruling on Freed’s motion to compel arbitration was interlocutory in nature and as such not appealable as a final judgment.”

“There could be no final determination of the rights of the parties to this action at the time of the motion.”

“An award of attorney fees would be proper only if the order compelling arbitration were upheld when reviewed on appeal from the confirmation of an arbitration award.”

Opinion

HARELSON, J.

On May 21, 1976, plaintiffs Frank M. La Pietra and Wanda J. La Pietra entered into a building construction contract with the defendant, Eric Freed, dba Creative Environments. Under the agreement Freed was to construct a single family residence for the La Pietras.

In late February or early March of 1977 a dispute arose between the parties.

Paragraph 16 of the agreement provides: “Any controversy, or claim arising out of or relating to this contract, or the breach thereof shall be settled by arbitration in accordance with the Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.”

Paragraph 17 of the agreement provides that if a party is required to bring an action to enforce any of the terms thereof, the successful party shall be awarded attorney’s fees.

[1028]

On March 7, 1977, Freed demanded arbitration of that dispute. The demand was made again on March 23, 1977. On May 10, 1977, Freed filed formal demand with the American Arbitration Association and mailed a copy to the La Pietras. On May 16, 1977, the La Pietras acknowledged receipt of the demand.

On May 16, 1977, the La Pietras filed a complaint for damages for breach of building contract in the superior court.

On May 18, 1977, two days after the La Pietras had received formal demand for arbitration, they filed an amended complaint in the superior court and set a hearing in court for prejudgment attachment.

On May 19, 1977, American Arbitration Association acknowledged receipt of Freed’s demand for arbitration by a letter to the La Pietras; the La Pietras received the letter on May 20, 1977.

Receipt of La Pietras’ answer to demand for arbitration and counterclaim dated May 25, 1977, was acknowledged by American Arbitration Association on May 27, 1977.

On May 26, 1977, Freed mailed to the La Pietras his notice of motion to compel arbitration, to dismiss complaint, and to stay further proceedings. The notice of motion along with Freed’s answer and cross-complaint were filed June 1, 1977.

La Pietra v. Freed

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HARELSON, J.

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