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A California state court vacated an arbitration award erroneously issued against a party that was not a party to the arbitration.
In Harper v. Business Advisors, Inc., No. D045817, 2006 WL 2303186 (Cal. App. Aug. 10, 2006), an arbitration award stated that Business Advisors (“BAI”) owed Harper $26,000. BAI sought to have the award vacated because it claimed that it was not a party to the arbitration.
Via letter, Business Advisors Employees Retirement Trust (“BAERT”) and Harper had agreed to arbitrate a dispute over whether a lease existed on certain property. As a result of various clerical errors, BAI became listed as a party to the arbitration and an award was issued against BAI.
Noting the BAI never agreed to arbitrate the dispute, the Court held that the award against BAI must be vacated because “[n]either the arbitrator nor the trial court can impose an arbitration award on a nonparty to the arbitration.” Southern Cal. Pipe Trades Dist. Council No. 16 v. Merritt, 126 Cal.App.3d 530, 536 (1981).
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