Grinham v. Fielder

California Court of Appeal Jun 24, 2002 No. No. B151600Published

Before: Gilbert

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Holding. Third parties who participate in an arbitration to contest their liability may assert the doctrine of collateral estoppel against a party to that arbitration in a subsequent action.

Issues

Whether third parties who participate in an arbitration to contest their liability can assert collateral estoppel against a party to the arbitration in a later action.
Whether an arbitrator's findings regarding agency and liability preclude a subsequent claim for comparative indemnity.

Disposition. affirmed

Quotations verified verbatim against the opinion

“Here we hold that in a later action, the third parties may assert the doctrine of collateral estoppel against a party to the contract and the arbitration.”

“The trial court properly granted summary judgment because the issues of Grinham’s actual or ostensible agency and the Fielders’ liability for his actions were determined in the arbitration proceeding.”

Opinion

GILBERT, P. J. Parties to a contract which calls for mandatory arbitration, arbitrate an action for breach of contract. One of the parties moves to join third parties to the arbitration. The third parties participate in the arbitration to contest that they are bound by the contract. They prevail. Here we hold that in a later action, the third parties may assert the doctrine of collateral estoppel against a party to the contract and the arbitration. We affirm the summary judgment in favor of Philip and Judy Fielder.

Facts

On September 7, 1999, Triple A Machine Shop (Triple A) obtained a judgment in Contra Costa County for $14,822, plus costs and interest, against Ronald J. Grinham. The judgment was unsatisfied and on August 4, 2000, Triple A brought an action in Ventura County against appellant Grinham and others to set aside allegedly fraudulent property transfers by Grinham.

Grinham cross-complained against respondents Philip and Judy Fielder, alleging causes of action for declaratory relief and contribution. The Fielders answered the cross-complaint and pleaded the defenses of res judicata and collateral estoppel. They also sought summary judgment based upon those defenses.

Documents and declarations offered in support of and in opposition to the summary judgment motion established this:

[1052]On October 14, 1997, Triple A entered into a written agreement with “Hydrex Termite Pest Control Co. San Jose” for repair of stress fractures in a concrete floor, sealing of the concrete floor with epoxy coating, and treatment of the base of interior walls in its machine shop premises in San Pablo. Grinham executed the agreement as “Contractor.”

Triple A was dissatisfied with the work performed and brought an action for breach of contract against Grinham and “Hydrex Termite Pest Control Co. San Jose.” Triple A joined the Fielders and “Hydrex Pest Control of Santa Clara County,” as Grinham’s employers, after it learned that “Hydrex Termite Pest Control Co. San Jose” did not exist.

The written construction agreement provided for mandatory arbitration. On June 16, 1999, Triple A, Grinham, and the Fielders appeared before an arbitrator. The Fielders objected that they were not parties to the contract with Triple A, and therefore were not obligated to arbitrate the construction dispute. Nevertheless, they participated in the arbitration and presented testimony regarding their non-liability. Grinham, although hospitalized, offered his declaration and appeared through his attorney.

Grinham v. Fielder

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