ADR Case Updates
Nonsignatory to Arbitration Agreement May Compel Arbitration, 07/04/05
In case you have not seen it, attached is a recent ADR case, Westra v. Marcus & Millichap Real Estate Investment Brokerage Co., (First Appellate District, Division Five), filed May 19, 2005. The Westras filed suit against Marcus and others in connection with their purchase of a gas station. Marcus sought to compel arbitration. The trial court denied the petition to compel because Marcus was not a party to the underlying purchase contract between buyer and seller that contained the arbitration clause. In reversing the order denying the petition, the appellate court noted the exceptions to the general rule that a nonsignatory to an agreement cannot compel arbitration of a dispute under the agreement. Here, the court concluded that a nonsignatory may invoke arbitration where it had a preexisting confidential relationship, such as an agency relationship, with one of the parties to the arbitration agreement. Since Marcus was a dual agent representing both parties, with fiduciary duties to both, it was equitable to impose the duty to arbitrate on both Marcus and the other parties.
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