Arbitrator’s Ruling That Seller Did Not Unreasonably Refuse Mediation Was Upheld.
Unless an arbitration agreement has language indicating that the arbitrator’s award is subject to review under a heightened standard for legal error, it will be close to impossible to reverse an arbitrator’s legal, much less factual, determinations. Faro v. Garnero, Case No. C093870 (3d Dist. Mar. 21, 2022) (unpublished) demonstrates that in a fees/costs award context.
There, seller in a real estate disclosure dispute prevailed, later awarded $38,000 in fees and costs after the arbitrator decided that seller did not unreasonably refuse to mediate (“it was open to interpretation”) under a contract which required mediation as a condition precedent to arbitration. Buyer’s appeal did not change the result. The main problem was that the arbitration agreement did not call for anything other than a deferential review of the arbitrator’s legal and factual determinations, which can be based on “justice and equity.” There was no heightened requirement that the arbitrator’s decision could be reviewed for legal errors. So, the arbitrator’s call that Seller did not refuse mediation was the “end game” call.
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