Appellant sought review of the order from the Superior Court

Procedural Posture

Appellant sought review of the order from the Superior Court, Los Angeles (California) denying appellant’s motion to compel arbitration directed against respondent.

 

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Overview

Respondent sued appellant alleging breach of contract and breach of warranty. Appellant then sued in federal district court in New York to compel arbitration in New York. The federal court dismissed the petition with prejudice pursuant to the parties’ stipulation and its own deliberations. Appellant then answered respondent’s complaint and filed a cross suit. Appellant filed a motion to compel arbitration, which the lower court denied because appellant’s right to arbitration was adversely adjudicated in federal court, and appellant’s right to compel arbitration had been waived. On review, appellant contended that its agreement with respondent provided for arbitration, res judicata did not apply, and its right to arbitration was not waived. The court disagreed and affirmed the judgment. Pursuant to U.C.C. § 2-207(2), the arbitration clause in appellant’s acknowledgements did not become a part of parties’ contracts. Thus, the court did not accept appellant’s assertions that the parties’ agreements provided for arbitration. However, even assuming there had been an agreement to arbitrate, appellant’s subsequent conduct barred the enforcement of that agreement.

 

Outcome

The court affirmed the order denying appellant’s motion to compel arbitration after the court found that the arbitration clause in appellant’s acknowledgements did not become a part of the contracts between the parties, and appellant’s subsequent conduct barred the enforcement of any agreement to arbitrate, if one existed.




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