Monday, November 09, 2009

Toal v. Tardif (Cal. Ct. App. - Oct. 30, 2009)

I thought I'd have a problem with this one. But in the end, I probably don't. At least with the end result.

The Toals buy a house from the Tardifs and have a beef with them, and end up suing. Two months after the Tardifs answer, attorneys for both parties say in court that they hope to arbitrate, and the next month the attorneys sign a stipulation to arbitrate. The clients don't personally sign, but the attorneys' signatures say they're "for" the clients.

Then the arbitration proceeds, with no one objecting. As you'd expect, at the arbitration, one of the parties (the Toals) prevails. They then attempt to confirm the award. At which point the Tardifs say: "Hey, we never agreed to arbitrate. Our attorney did that without our knowledge, and then during the arbitration called us a crybaby when we complained [not publicly, of course] about it."

Which, in my opinion, is utter crap, and not at all credible. So the trial court confirms the award. At which point Justice Ikola reverses.

Which, again, I thought I'd be irate about. Since (1) I think the Tardifs did indeed consent, (2) clients are generally bound to what their attorneys do, and (3) I'm sure the Tardifs would not have complained if they had won the arbitration. To me, (3) seems a pretty easy way to affirm. Your "secret" reservations aren't good enough. Call it waiver. Call it forfeiture. When you are willing to obtain the advantages of arbitration by remaining silent, you can't thereafter object if the proceeding doesn't come out your way.

I still think that's right, and would have liked to see someone make that point (and for Justice Ikola to respond to it if he thinks it's wrong). But while Justice Ikola reverses the confirmation, in the end, I think it'll be fine. Since rather than denying confirmation, he just holds that the trial court is required to hold an evidentiary hearing to see whether or not the Tardifs indeed granted their consent. And since I know (or at least think I know) how that one's coming out, I guess I'm okay with the end result. Even if I think a better -- and quicker -- resolution of the appeal might have been to hold that you're not allowed to sandbag your opponent and objecting to arbitration (on the grounds of alleged lack of consent) only after you lose.