Guerra v. Aurora Loan Services CA6

California Court of Appeal Sep 19, 2014 No. H038331Unpublished

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Holding. The court held that the trial court erred in compelling arbitration because the appellant, a nonsignatory to the underlying lease agreement, never agreed in writing to arbitrate and no exception to the general rule against compelling nonsignatories applied.

Issues

Whether the trial court erred in granting a motion to compel arbitration against a nonsignatory to the arbitration agreement.
Whether a party can waive the right to challenge subject matter jurisdiction regarding an order to compel arbitration.

Disposition. reversed

Quotations verified verbatim against the opinion

“The right to arbitration depends on a contract, and a party can be compelled to submit a dispute to arbitration only if the party has agreed in writing to do so.”

“Aurora was not a party to the agreement. Guerra does not identify any other writing in which Aurora agreed to submit any dispute with Guerra to arbitration.”

“Since Aurora did not agree in writing to submit its unlawful detainer action to arbitration and the present case does not involve circumstances in which the arbitration provision was enforceable as to Aurora, the trial court erred”

Filed 9/19/14 Guerra v. Aurora Loan Services CA6 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

JOE GUERRA, H038331 (Santa Clara County Plaintiff and Respondent, Super. Ct. No. 1-11-CV215595)

AURORA LOAN SERVICES, LLC,

Defendant and Appellant.

Aurora Loan Servicing, LLC (Aurora) appeals from a judgment confirming an arbitration award in favor of Joe Guerra. Aurora contends that the trial court erred in granting the motion to compel arbitration. We agree and reverse the judgment.

I. Procedural and Factual Background On April 1, 2006, Raul Chairez and Guerra entered into an agreement entitled “LEASE AGREEMENT with OPTION TO PURCHASE & EXTEND” (agreement). Pursuant to the agreement, Chairez rented the property at 15439 National Avenue in Los Gatos to Guerra. Both parties lived at the property and Guerra was required to pay

$1,000 per month “in the form of cash or construction services” to Chairez. The agreement, which was in effect until April 1, 2014, contained an arbitration provision.1 In July or August 2007, Chairez obtained a loan of approximately $1.1 million by signing a note and a deed of trust. On July 30, 2007, Chairez notified Homecomings Financial, LLC of the agreement. The note and deed of trust encumbering the property were recorded on August, 15, 2007. After Chairez defaulted on the loan in 2009, Aurora commenced nonjudicial foreclosure proceedings. Aurora was the winning bidder at the trustee’s sale and took title to the property as the grantee of the trustee’s deed of sale. When Aurora discovered that Guerra occupied the property, it brought an unlawful detainer action to recover possession. In defending that action, Guerra presented Aurora with the agreement. Aurora then dismissed its unlawful detainer action and served Guerra the 90-day notice as required by the Protecting Tenants at Foreclosure Act of 2009 (Pub.L. No. 111-22, div. A, tit. VII, §§ 702-704 (May 20, 2009) 123 Stat. 1660). On January 19, 2010, Aurora filed a second complaint for unlawful detainer against Guerra. Guerra then brought a motion to compel arbitration, and Aurora opposed the motion.

Guerra v. Aurora Loan Services CA6

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

AURORA LOAN SERVICES, LLC,

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