Condon v. Daland Nissan, Inc.

Filed 11/4/16 Certified for publication 11/29/16 (order attached)

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION ONE

GENE CONDON, Plaintiff and Respondent, A145613 v. DALAND NISSAN, INC., et al., (San Mateo County Super. Ct. No. CIV 517001) Defendants and Appellants.

Plaintiff Gene Condon prevailed in an arbitration against defendants Daland Nissan, Inc., Federated Mutual Insurance Company, and Wells Fargo Dealer Services. Facing a total award in excess of $100,000, defendants sought a new arbitration in accordance with the terms of the arbitration provision in the parties’ contract. Because Condon objected, the arbitral forum would not proceed with a new arbitration without a court order. The trial court refused to order a new arbitration and, instead, confirmed the award. In the court’s view, because the arbitral forum lacked separate “appellate” rules, it could not conduct a second arbitration. It also was of the view defendants were improperly asking for a new arbitral forum. We reverse. The arbitral forum, ADR Services, Inc., did not refuse to conduct a second arbitration because of the lack of “appellate” rules; it declined to conduct a de novo arbitration solely because Condon objected. Defendants, in turn, specifically told the trial court they would be “perfectly happy” to return to that arbitral forum.

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BACKGROUND Condon purchased a car from Daland. Believing the dealership knowingly failed to disclose prior damage to the car, Condon sued it, its insurer, and the entity that acquired the sales contract. The sales contract required arbitration of disputes: “Any claim or dispute . . . (including the interpretation and scope of this Arbitration Clause, and the arbitrability of the claim or dispute), between you and us . . . shall, at your or our election, be resolved by neutral, binding arbitration.” The purchaser was entitled to choose the arbitration provider, either the National Arbitration Forum, the American Arbitration Association, or any other provider subject to approval. The arbitration provision further stated an arbitration award would be final, unless “the arbitrator’s award for a party is $0 or against a party is in excess of $100,000, or includes an award of injunctive relief against a party.” In such case, “that party may request a new arbitration under the rules of the arbitration organization by a three- arbitrator panel. The appealing party requesting new arbitration shall be responsible for the filing fee and other arbitration costs subject to” further consideration by the panel. After Condon refused a request to arbitrate, defendants petitioned to compel arbitration. Condon maintained the arbitration provision was unconscionable, in part because of the possibility of a second arbitration, a provision he claimed unfairly favored the car dealer. The trial court rejected his unconscionability argument and ordered arbitration. The parties chose ADR as their arbitral forum. The ADR arbitrator found for Condon and issued a corrected interim award that ordered him reimbursed “for all amounts paid in connection with the purchase” of the overvalued vehicle, “less an offset of $13,516, which will be deemed the proper purchase price.” The award also excused Condon from making any further payments. The arbitrator then invited a motion for costs and fees. Condon duly filed a motion, which defendants did not oppose. The arbitrator’s final monetary award was solely for costs and fees of $180,175.34