The California Court of Appeal has held that individual agents acting on behalf of corporate signatories to an arbitration agreement do not fall within the definition of third parties that would allow a trial court to order litigation of otherwise arbitrable claims under the California Code of Civil Procedure.

In RN Solution, Inc. v. Catholic Healthcare West, No. A118077, 2008 WL 3568504, (Cal. Ct. App. Aug. 15, 2008), RN Solution ("RNS") and Catholic Healthcare West ("CHW") entered into a nurse recruitment contract. Woo, as CEO at RNS, and Roberston, as a Vice President at CHW, were signatories to the contract. The contract contained a broadly-worded arbitration agreement.

During the life of the contract, Woo and Robertson had an intimate relationship. Woo ultimately brought domestic battery charges against Robertson. Less than a year after the battery charges were filed, CHW terminated its contract with RNS. Woo and RNS sued Robertson and CHW, alleging various causes of action.

CHW and Robertson moved to compel arbitration. The trial court denied the motion, ostensibly exercising its discretionary power to order all claims litigated based on the presence of a third party underCal. Code Civ. P. § 1281.2(c)(1) (granting such discretion if "a party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact").

On appeal from that ruling, the Court held that § 1281.2(c)(1) did not apply to the parties' claims. According to the Court, the trial court could only exercise its discretion to order the litigation of all claims if there was a third party that was not bound by the arbitration agreement. While CHW and RNS were both parties as signatories, the Court also found that Robertson was a party to it as CHW's agent and that Woo was a party to it as both RNS's agent and as a third-party beneficiary. Without the presence fo a third party, § 1281.2(c)(1) did not apply, which meant the trial court had no discretion to require litigation of arbitrable claims.

The Court next determined that the contractual and business tort claims were arbitrable, but that the personal injury claims were not. The Court stated that "it could not seriously be argued that the parties intended [the agreement] to cover tort claims arising from an alleged violent physical assault… in the context of an intimate domestic relationship…." See also Med. Staff of Doctors Med. Ctr. in Modesto v. Kamil, 132 Cal.App.4th 679, 684 (Cal. Ct. App. 2005) (similarly suggesting that a "punch in the nose" over medical billing would not be contemplated as arbitrable under the broadest agreement). Thus, without such contemplation, even the most broadly-worded agreement could not encompass Woo's personal injury claims.

Therefore, the Court remanded the matter to the trial court for it to compel arbitration of the contractual and business tort claims, deny the motion as to the personal tort claims, and to ascertain the exact nature of Woo's claim for intentional infliction of emotional distress.