A California appellate court held that where an arbitrator orders specific performance of an option to purchase land, neither public policy nor statutory rights exceptions allow a court to review or vacate the award.

In Van Dyke v. ConAgra Grocery Products, No. F053235, 2008 WL 2764874 (Cal. Ct. App. July 17, 2008), Van Dyke and ConAgra entered into a lease agreement, and the lease contained an option for ConAgra to purchase the leased-land for $8,000 an acre. ConAgra had wanted to purchase the land, but Van Dyke did not want to sell, so Van Dyke set the option price at double the price of irrigated farmland in the area.

The lease contained an arbitration clause, and expressly permitted ConAgra to seek specific performance in the event Van Dyke breached the agreement. The lease also provided that its terms and conditions would be binding upon and enforceable by any successors and assigns of the parties to the lease. ConAgra subsequently assigned the option to purchase to Brichetto.

After the assignment, Brichetto gave notice to Van Dyke that he would exercise the option to purchase the land. Van Dyke refused to convey the land and sued both ConAgra and Brichetto, and Brichetto counterclaimed for specific performance of the option to purchase. The dispute was submitted to arbitration pursuant to the arbitration agreement in the lease.

The arbitrator issued an award in favor of Brichetto that held that Brichetto was entitled to specific performance under the option to purchase. Brichetto moved to confirm the award and Van Dyke moved to vacate. The trial court confirmed the arbitrator's award and ordered Van Dyke to convey the property to Brichetto. Van Dyke appealed.

On appeal, Van Dyke argued that the arbitrator exceeded her powers in three ways: (1) the award violated public policy; (2) the award violated a party's statutory rights; and (3) the award conferred a remedy not authorized by law.

The Court rejected Van Dyke's arguments and confirmed the award. The Court held that the general rule is that arbitration awards are final and not subject to judicial review, and "[b]oth the public-policy and the statutory-rights exceptions address not the rights of the parties adjudicated within the arbitration but, instead, focus on the policies and rights that make arbitral finality itself inappropriate."

The Court held that the arbitration award was not in conflict with any statutory rights conferred by § 726 of the California Statutes, nor was it in conflict with any public policy reflected in § 726. Section 726 sets forth rights surrounding notes and mortgages upon real property, and the Court held that the arbitrator was fully capable of affording the type of relief set forth in § 726, but the arbitrator determined that specific performance was the appropriate type of relief under her interpretation of the contract, and the Court did not have power to review that finding because it was a remedy authorized by law.