Laymon v. J. Rockcliff, Inc.

219 Cal. Rptr. 3d 185, 12 Cal. App. 5th 812
CourtCalifornia Court of Appeal, 5th District
DecidedMay 23, 2017
DocketA147464; A147469
StatusPublished
Cited by11 cases

This text of 219 Cal. Rptr. 3d 185 (Laymon v. J. Rockcliff, Inc.) is published on Counsel Stack Legal Research, covering California Court of Appeal, 5th District primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Laymon v. J. Rockcliff, Inc., 219 Cal. Rptr. 3d 185, 12 Cal. App. 5th 812 (Cal. Ct. App. 2017).

Opinion

Margulies, Acting P.J.

*815The plaintiffs in these consolidated appeals filed suit against the brokers who represented them in the sale of their homes and a group of companies that provided services in connection with those sales. Plaintiffs contend defendants violated their fiduciary duties by failing to disclose alleged kickbacks paid by the service providers to the brokers in connection with the sales.

Defendants filed motions to compel arbitration of these claims on the basis of three separate agreements, at least one of which was executed by each plaintiff. The trial court found the arbitration clauses in two of the agreements inapplicable, but it compelled the signatories of the third agreement to arbitrate with their brokers. Invoking the doctrine of equitable estoppel, the court also required the signatories of the third agreement to arbitrate their claims against the service providers, who were not parties to the arbitration agreements. Defendants have appealed the court's refusal to compel arbitration with the remaining plaintiffs, while the plaintiffs who were ordered to arbitration have cross-appealed that order.

We reverse the trial court's ruling on the two arbitration clauses it found inapplicable. Because each of the plaintiffs executed one or the other of these two agreements, we remand for entry of an order compelling arbitration by all plaintiffs. We dismiss the cross-appeal of the plaintiffs who were required to arbitrate under the arbitration clause contained in the third agreement because an order compelling arbitration is not appealable.

I. BACKGROUND

In 2015, two sets of plaintiffs filed two materially identical class action lawsuits against several real estate brokers (broker defendants) and a group of *816title companies and other service providers (service provider *189defendants).1 Each of the broker defendants represented one or more of the plaintiffs in connection with the sale of his or her home.

Plaintiffs' claims are premised on the broker defendants' use of a software program known as "TransactionPoint," alleging TransactionPoint was used to facilitate improper payments from the service provider defendants to the broker defendants in the course of the sales. As one of the complaints explained the gravamen of the claims, the brokers used TransactionPoint to "prepare transaction documents and order related real estate settlement services (such as title insurance, escrow, natural hazard disclosure reports, and home-warranty contracts) for Plaintiffs and other members of the Class. In doing so, [the brokers] entered into sublicensing agreements with providers of real estate settlement services, including [the service provider defendants].... Pursuant to these agreements, [the broker defendants] received undisclosed payments from the [service provider defendants] for the real estate settlement services ordered through TransactionPoint." Plaintiffs allege that payments under the sublicense agreements operated in the nature of kickbacks; when a broker ordered settlement services from a service provider through TransactionPoint, the service provider paid the broker a "sublicense fee," purportedly for the service provider's use of the software.

The complaints allege claims for breach of fiduciary duty, fraud, unfair competition, and unjust enrichment.2 Plaintiffs seek declaratory relief, damages, punitive damages, and an accounting and disgorgement of the compensation received by defendants from plaintiffs in connection with the home sales.

Defendants filed motions to compel arbitration of plaintiffs' claims, based on arbitration clauses contained in printed form agreements executed by plaintiffs in connection with the home sales. Because plaintiffs did not all execute the same agreements, three different arbitration clauses in three separate agreements were involved. In their motion, defendants contended that all three arbitration clauses require arbitration of the claims in plaintiffs' complaints.

*817First, a form "Residential Listing Agreement" (hereafter RLA) contained the following arbitration clause: "Seller and Broker agree that any dispute or claim in law or equity arising between them regarding the obligation to pay compensation under this Agreement, ... shall be decided by neutral, binding arbitration." The only compensation mentioned in the RLA is the commission payable by a seller to the broker, generally upon a sale of property.

Second, the 2007 version of a form "Residential Purchase Agreement" (hereafter the 2007 RPA) required arbitration of certain disputes between buyers or sellers and their brokers, even though the brokers were not parties to the agreement. Specifically, *190paragraph 17A of the 2007 RPA required mediation of any dispute between the parties to the agreement, the home buyer and seller. In the event the mediation was unsuccessful, paragraph 17B(1) required arbitration of such disputes, stating: "Buyer and Seller agree that any dispute or claim in Law or equity arising between them out of this Agreement or any resulting transaction, ... shall be decided by neutral, binding arbitration, including and subject to paragraph[ 17B(3) ] below." Paragraph 17B(3) required arbitration of disputes involving brokers, stating: "Buyer and Seller agree to ... arbitrate disputes or claims involving either or both Brokers, consistent with 17A and B, provided either or both Brokers shall have agreed to such mediation or arbitration prior to, or within a reasonable time after, the dispute or claim is presented to Brokers."3 *818Third, the 2010 version of a Residential Purchase Agreement (hereafter the 2010 RPA) contains a simplified version of the clause in the 2007 RPA. Paragraph 26B of the 2010 RPA states: "Buyer and Seller agree that any dispute or claim in Law or equity arising between them out of this Agreement or any resulting transaction, ... shall be decided by neutral, binding arbitration. Buyer and Seller also agree to arbitrate any disputes or claims with Broker(s), who, in writing, agree to such arbitration prior to, or within a reasonable *191time after, the dispute or claim is presented to the Broker...."

The arbitration clauses in each of these agreements required the parties affirmatively to manifest their assent to arbitration by initialing the clause. For purposes of the motions to compel, the plaintiffs fall into four groups, based on the particular arbitration clause or clauses to which they agreed. The two plaintiffs in Laymon , Theodore and Amy Laymon (Laymons) are bound only by the 2007 RPA arbitration clause, while Christine Himpler, a Hernandez plaintiff, is bound only by the RLA arbitration clause.4 Four of the other plaintiffs in Hernandez , Rocky McCants, Fernando Medina, Sixto Santiago, and James York (hereafter the McCants group), initialed clauses in both the RLA and the 2007 RPA. Finally, the three remaining plaintiffs in Hernandez

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Cite This Page — Counsel Stack

Bluebook (online)
219 Cal. Rptr. 3d 185, 12 Cal. App. 5th 812, Counsel Stack Legal Research, https://law.counselstack.com/opinion/laymon-v-j-rockcliff-inc-calctapp5d-2017.