When Court Dispute Is Bifurcated By Arbitration Agreement, Pay Careful Attention To Scope Of Arbitration Agreement. . .
Vlahopouliotis v. Vallarta Properties, LLC, Case No. G069832 (5th Dist. Feb. 1, 2016) (unpublished), presents an interesting scenario: Plaintiff and Defendant, owners of different parcels in a shopping center, ended up in a lawsuit concerning their respective obligations. That led to a further discovery dispute. A ray of light appeared when the parties agreed to arbitrate “any and all claims set forth in the pleadings”.
However, darkness descended when the trial court proceeded to hear pending discovery disputes, and to impose sanctions on plaintiff and his attorney. On appeal, plaintiff challenged the denial of a motion to compel arbitration of the discovery dispute, and the amount of sanctions.
The Court of Appeal concluded that the parties had agreed to arbitrate only the claims set forth in the pleadings, and that the arbitration agreement did not include an agreement to arbitrate pending discovery disputes. Of course, the arbitrator would get to decide new discovery disputes that may arise in arbitration. Affirmed.
COMMENT: Whenever a case starts in court, and then moves to arbitration pursuant to agreement, it is important when drafting the agreement to scrutinize the scope of the arbitration. Here, the scope of the arbitration did not include the pending discovery disputes, and that made a material difference.