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A California Appellate Court affirmed a lower court award confirmation in a real estate contract dispute because there was no evidence of substantial prejudice.
In Niblack v. Le, No. G037849, 2007 WL 2800289 (Cal. Ct. App. Sept. 27, 2007), Niblack and Le entered into a lease agreement with an option for Niblack to purchase the property. When Niblack decided the purchase the property, the parties executed a standard Residential Purchase Agreement, and agreed that Niblack would obtain financing.
Niblack began making substantial improvements to the property, including adding on additional rooms. Niblack attempted to obtain financing but was unsuccessful. Following, Le revoked her offer.
Niblack filed a complaint seeking specific performance of the agreement. Niblack and Le then agreed to submit their dispute to arbitration. The arbitrator denied Niblack’s request for specific performance, finding that Le validly revoked her offer before Niblack obtained financing.
The arbitrator awarded Niblack money for the improvements he made to the home, property taxes he paid, and attorney’s fees. Le filed a motion to confirm the award and Niblack opposed with a motion to vacate the award. The lower court confirmed the award.
On appeal, Niblack contended the lower court erred in denying his motion because the arbitrator failed to completely resolve the issues that were submitted to arbitration, mainly because the arbitrator failed to ascertain and include in his award all the improvements and property tax payments that Niblack made on the property.
In affirming the lower court’s decision, the Court noted that its focus on appeal is the trial court’s decision, not the arbitrator’s. Niblack presented no evidence to the lower court that he was substantially prejudiced by the arbitrator’s award, which is a necessary precondition for vacating an award for alleged arbitrator misconduct under California arbitration law. See Cal. Code Civ. Proc. § 1286.2, subd. (a)(3) & (5).
Absent the requisite evidence supporting prejudice, the Court concluded that the lower court did not err in declining to vacate the award. The lower court correctly presumed that the arbitrator resolved all the issues submitted for decision, and the record amply supported the lower court’s conclusion.
The Court determined that because Niblack had failed to show that he was substantially prejudiced, the lower court’s ruling must be confirmed and the award must stand.
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