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An oral agreement to arbitrate made in open court creates a contractual agreement to arbitrate that the parties are bound to, and ex parte communications between an arbitrating party’s attorney and the arbitrator do not necessarily show arbitrator bias, a state court in California held.
In Giacomazza v. Coldwell Banker, No. B173551, 2006 WL 2743593 (Cal. App. Sept. 27, 2006), Giacomazza brought an action against Coldwell Banker after Coldwell Banker cancelled an escrow on a contract to purchase a hotel. Coldwell Banker claimed that Giacomazza never deposited a check for $50,000 into the escrow.
During one of the hearings, the parties agreed to submit the dispute to binding arbitration. The arbitrators issued an award in favor of Coldwell Banker, and Giacomazza petitioned the court to vacate the award.
Giacomazza argued that his motion to vacate the arbitration award should be granted because participation in binding arbitration denied him the right to a jury trial. However, the Court disagreed because both parties orally consented to binding arbitration in open court, which created a valid contract to arbitrate under the California Code of Procedure and constituted a waiver of the right to a jury trial.
Next, Giacomazza argued that the award should be vacated due to ex parte communications between the arbitrator and Coldwell Banker’s attorney. However, the Court declined to vacate the award on this ground because Giacomazza failed to establish that there was a preexisting business or social relationship between the arbitrator and Coldwell Banker’s attorney, and the conversations between the consisted of no more than “small talk.”
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