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An arbitrator did not exceed his powers by issuing an award despite questions of fraud in procuring the agreement; and a final decision issued by the arbitrator is not reviewable by the court for errors in application of substantive law, an appellate court in California held.
In Hernandez v. Villasenor, No. D047800, 2007 WL 316415 (Cal. Ct. App.4d Feb. 5, 2007), Claudia Hernandez procured a loan by allegedly fraudulent means to purchase real property from Marisol Villasenor. Upon discovery of Hernandez's allegedly fraudulent activity, Villasenor attempted to renege on the purchase. Hernandez filed for arbitration. An award was issued in favor of Hernandez.
The Court disregarded Villasenor's argument that the arbitrator exceeded his power by granting Hernandez anything at all based on the premise that the purchase agreement was not valid. Although there was some evidence that Hernandez forged signatures on the purchase agreement, raising issues under the statute of frauds, the Court held that the remedy afforded Hernandez against Villasenor "as the vendor of real property" would not be affected because the agreement was being enforced against Villasenor. Villasenor had signed the agreement.
The Court further disregarded Villasenor's argument that the arbitrator exceeded his power by not issuing a proper award under California substantive law. Villasenor could not submit an issue to the arbitrator and then claim the arbitrator exceeded his power by issuing a decision on that issue. Final decisions of the arbitrator are not reviewable by the court for errors in application of substantive law. See Moore v. First Bank of San Luis Obispo, 22 Cal.4th 782, 786-787 (Cal. 2000).
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