Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Fresno County No. 09CECG00333 Adolfo M. Corona, Judge.
McCormick, Barstow, Sheppard, Wayte & Carruth, Kurt F. Vote, Todd W. Baxter and Scott M. Reddie for Defendant and Appellant.
Law Offices of Danil Monteleone, Danil Monteleone, Jeffrey T. Belton and Mark A. Abell for Plaintiffs and Respondents.
OPINION
DETJEN, J.
This is an appeal from an order denying a petition to compel arbitration. We conclude the trial court did not abuse its discretion. Accordingly, we affirm the order.
FACTS AND PROCEDURAL HISTORY
In February 2009, 25 homeowners filed a complaint against defendant Granville Homes, Inc., (appellant) and Does 1 through 300. The complaint, in eight causes of action, alleged the homes were defectively constructed. The complaint alleged 15 of the plaintiffs purchased new homes from appellant, while 10 plaintiffs purchased their homes from intervening sellers. The complaint alleged the Doe defendants were other developers and general contractors who, “along with” appellant, built the homes (Does 1-100), planned, designed, and “prepared specifications” for the homes (Does 101-200), and provided labor and materials for the homes (Does 201-300).
In lieu of an answer to the complaint (see Code Civ. Proc., § 1281.7), appellant filed a petition to compel arbitration. (See Code Civ. Proc., § 1281.2.) Plaintiffs opposed the petition.
While the petition was pending, plaintiffs filed a first amended complaint. That complaint omitted class action allegations and consolidated the construction defect claims into four causes of action—violation of Civil Code sections 896 and 897 (building standards for housing construction), strict products liability, negligence per se, and negligence. The first two causes of action were alleged against appellant and Does 1 through 100; the last two causes of action were alleged against appellant and all of the Doe defendants.
After a hearing on the petition to compel arbitration, the court denied the petition. The court concluded there were procedural and substantive unconscionability with respect to the contractual arbitration agreement in both the escrow instruction for the purchase and sale of the homes and in the home warranty agreement. The court concluded the substantive unconscionability rose to a higher level than the procedural unconscionability, but that both were present. The court also determined that arbitration would be wasteful and inefficient because only the original homebuyers had signed the arbitration agreements; the plaintiffs who were subsequent buyers—i.e., who did not have contracts with appellant—would not be required to arbitrate their claims. Accordingly, the court concluded, there was a possibility of conflicting rulings on common issues of law or fact, “since the plaintiffs’ claims involve similar claims of construction defects.” The denial of the petition was without prejudice “particularly given the ongoing issues with Plaintiffs in this case.” (Appellant had directly (i.e., not through counsel for the parties) contacted the various plaintiffs and had entered into settlements with many of them. A motion to confirm the settlements and dismiss those plaintiffs’ cases was pending at the time of the hearing on the petition to compel arbitration.)
The court dismissed the case as to the settling plaintiffs, including all of the plaintiffs who were subsequent buyers. Four of the original plaintiffs remained; all of them had purchased their homes from appellant. We refer to those remaining plaintiffs as “respondents.”
Thereafter, appellant filed a new petition to compel arbitration. It contended the only original plaintiff who did not speak English (a factor the court had included in its procedural unconscionability determination) had settled her case and was no longer a plaintiff. In addition, all of the subsequent buyers had been dismissed from the case, so there was no longer a possibility that determination of their claims in court might conflict with determinations made in arbitration on the other plaintiffs’ claims. Respondents opposed the renewed motion; they contended the settlement of some plaintiffs’ claims did not cure the unconscionability of the arbitration provisions. They also contended that dismissal of the subsequent buyers did not obviate the possibility of inconsistent adjudications because the amended complaint alleged causes of action against subcontractors and others (all named as Doe parties pending discovery of their identity) who were not party to the arbitration provisions.
After a hearing on the renewed petition, the court, by order of August 7, 2009, again declined to compel arbitration. The court concluded the renewed motion “is essentially the same as [the] previous motion to compel arbitration, which the court has already denied, and defendants have not shown that there are any new facts or law that would justify reconsideration of its decision.” The court concluded that the changes asserted by appellant did not affect the underlying unconscionability of the arbitration provisions. In addition, the court concluded, because respondents contended they were going to name subcontractors as Doe defendants once the subcontractors were identified by appellant, “the subcontractors would not be obligated to participate in arbitration, and it would be inefficient to force plaintiffs to try their claims in separate forums.”
Thereafter, the court ordered appellant to file an answer to the amended complaint. Appellant did so, while preserving its objection to the denial of the petition for arbitration. Appellant, again asserting the preservation of its right to arbitrate respondents’ claims, filed a cross-complaint against “Roes 1 through 200.”
The Roe defendants were alleged to be suppliers of labor and materials who had contracted with appellant. In that sense, the identity of the defendants was not unknown to appellant. A party generally is permitted to file a complaint against fictitious defendants not only when the true name of the defendant is unknown, but also when the name of the defendant, but not the nature of any claimed liability, is known. (See 4 Witkin, Cal. Procedure (5th ed. 2008) Pleading, §§ 484-485, pp. 616-623.) Nevertheless, in the present case, appellant’s action has the further effect of delaying disclosure of the identity of subcontractors who may have been involved with construction of respondents’ homes. Respondents complain that appellant has refused to identify the subcontractors during discovery, and appellant complains that respondents have not sought to amend their complaint to actually allege claims against such subcontractors, as further discussed below.
Appellant also filed a notice of appeal from the order. (See Code Civ. Proc., § 1294, subd. (a) (order denying petition to compel arbitration appealable).)
DISCUSSION
Respondents contend the notice of appeal was not timely. They contend appellant was required to appeal from the original order denying the motion to compel arbitration, that the renewed motion did not assert sufficient new facts or law to constitute the order on that motion as separately appealable, and that the notice of appeal was untimely with respect to the original motion.
The order on the renewed motion was separately appealable and the notice of appeal was timely. Code of Civil Procedure section 1008 permits a party to file a renewed motion seeking the same relief when based upon “new or different facts, circumstances, or law.” (Code Civ. Proc., § 1008, subd. (b); all future code references are to the Code of Civil Procedure unless otherwise noted.) In the present case, the relevant “new fact” was the fact that all of the remaining plaintiffs were original buyers and had signed the documents containing the arbitration agreements. In the posture of the case presented to the trial court in the original petition to compel arbitration, the presence of many subsequent buyers as plaintiffs constituted a clear and independent reason to deny the petition under section 1281.2, subdivision (c). While it is true that the court was presented with the additional consideration of potential claims against subcontractors in the initial motion, a consideration we discuss below, it is nevertheless true that the presence of the subsequent buyers as additional plaintiffs was an independent basis—and a substantial one—for denying the motion. Accordingly, the renewed motion did not present the same circumstances governing disposition of the motion, and the present appeal does not present the same issues—for example, the potential subcontractor actions as a separate basis for denying the petition—that could have been presented in a previous appeal.
To the extent Tate v. Wilburn (2010) 184 Cal.App.4th 150, holding that section 1008, subdivision (b), orders are not appealable orders, is applicable, we deem the appeal to be a petition for writ of mandate. As stated in Tate: “[T]here may be circumstances in which a party is unable to obtain appellate review of a ruling in a significant proceeding in which newly discovered evidence was presented [pursuant to section 1008, subdivision (b).] In those circumstances, a party may file a petition for writ of mandate seeking extraordinary relief. [Citation.] In this case, we provide such writ review on the merits ….” (Tate v. Wilburn, supra, 184 Cal.App.4th at pp. 160-161, fn. 10.)
Appellant contends the trial court erred in its unconscionability determination and in denying arbitration under section 1281.2, subdivision (b). Because these are two independent grounds for denying arbitration, and because the trial court did not err in applying the statutory ground for denying arbitration, it is not necessary to address at any length the trial court’s unconscionability analysis.
It is conceivable that the section 1281.2 bar to effective arbitration might be resolved at some point in this litigation. If so, and in the event appellant renews its petition to compel arbitration, it may become necessary for the trial court to address the unconscionability issue again. For the guidance of the trial court, we note that the order denying the petition notes, but does not resolve, the factual dispute that exists concerning the circumstances in which the respondents signed the contracts containing the arbitration provisions. Treating the matter somewhat in the manner of a motion for summary judgment or other proceeding in which the court is required to credit any substantial evidence presented by the party opposing the motion (see, e.g., Yanowitz v. L’Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1061-1062), the trial court here concluded the respondents’ evidence, “if believed, ” showed procedural unconscionability. The court was required to resolve the conflict in the evidence, and would be required to do so on any renewal of the motion to compel arbitration.
We review a trial court’s decision denying a motion to compel arbitration under section 1281.2 for “abuse of discretion [citations], which looks to see ‘whether the trial court exceeded the bounds of reason’ [citation].” (Mercury Ins. Group v. Superior Court (1998) 19 Cal.4th 332, 349.)
Section 1281.2 provides, in relevant part: “On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that: [¶] … [¶] (c) A party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact.” The section applies to a motion to compel arbitration filed in a pending legal action, in addition to the circumstance in which a party files an original petition to compel arbitration. (Mercury Ins. Group v. Superior Court, supra, 19 Cal.4th at p. 349.)
In Abaya v. Spanish Ranch I, L.P. (2010) 189 Cal.App.4th 1490, residents of a mobile home park sued the park owner for failure to maintain common areas. Some tenants had signed contracts agreeing to arbitrate such disputes and some had not. (Id. at p. 1496.) Because the plaintiffs’ complaint showed the possibility that conflicting rulings might be issued (by the court for those tenants who had not agreed to arbitrate, and by the arbitrator for those who had agreed to do so), the appellate court concluded that the trial court did not abuse its discretion in denying the owner’s motion to compel arbitration (id. at pp. 1498-1499). While the Abaya case is instructive on the issue of trial court discretion in denying arbitration, the facts before the court more closely reflect the facts in the present case at the time of the original order denying arbitration.
Best Interiors, Inc. v. Millie & Severson, Inc. (2008) 161 Cal.App.4th 1320, however, presents facts more analogous to those now before us. There, the plaintiff was a subcontractor for the construction of a hospital. Claiming it was owed additional payment caused by change orders and interference with its performance of the contract, the plaintiff sued the general contractor, the property owner, and two building inspectors. (Id. at p. 1323.) The plaintiff’s contract with the general contractor provided for arbitration of disputes, as did the contract between the general contractor and the property owner. The general contractor petitioned to compel arbitration under the contract. (Ibid.) The plaintiff opposed the petition because arbitration would subject it to a risk of inconsistent results since the inspectors were not party to an arbitration contract and did not stipulate to resolution of the dispute through arbitration. Further, the inspectors had filed cross-complaints for indemnity and declaratory relief. (Id. at p. 1324.) The trial court declined to order any of the claims to arbitration. It concluded arbitration would not serve judicial economy and might lead to inconsistent results since many of the issues of agency and indemnification would have to be litigated both in court and in any arbitration. (Ibid.) The general contractor appealed.
The Court of Appeal concluded the trial court did not abuse its discretion. The court concluded that, because of the agency and indemnification claims in the plaintiff’s complaint, the general contractor’s position that the claims against it could be arbitrated independently without prejudice to the other parties “does not survive analysis. Nor can we say that the trial court exceeded the bounds of reason when it decided, on that basis, to deny [the general contractor’s] petition to compel arbitration.” (Best Interiors, Inc. v. Millie & Severson, Inc., supra, 161 Cal.App.4th at p. 1330.)
Similarly, in the present case, respondents have asserted claims of negligence against appellant’s subcontractors, asserting both that the subcontractors are directly liable and that appellant is liable on an agency theory. Appellant, in addition, has filed a cross-complaint contending, inter alia, that it is entitled to indemnification from the subcontractors if appellant is found liable for construction defects in respondents’ houses. Because respondents’ claims against the subcontractors are not subject to arbitration, both appellant and respondents are at risk of obtaining court-proceeding results that are inconsistent with partial-arbitration results.
Appellant contends that, even if all the foregoing is a correct analysis in a case in which the plaintiff has stated causes of action against subcontractors, in the present case the respondents have not done so. Appellant contends respondents merely speculate that they “intend” to add subcontractor-defendants. Appellants misconceive the legal nature of a “Doe” complaint. Such a complaint names “real” defendants; it merely assigns them fictitious names until their actual names are known. (See 4 Witkin, Cal. Procedure, supra, Pleading, § 478 et seq., p. 606 et seq.) Accordingly, the trial court was entitled to rely on the allegations of the first amended complaint in denying the petition to compel arbitration. (Abaya v. Spanish Ranch I, L.P., supra, 189 Cal.App.4th at p. 1499.) Any failures by respondents to timely pursue discovery and to further amend the complaint upon discovery of the true names of the Doe defendants can be addressed by the trial court and the parties in the normal course of the litigation.
DISPOSITION
The order of August 7, 2009, denying the motion to compel arbitration, is affirmed. Respondents are awarded costs on appeal.
WE CONCUR: GOMES, Acting P.J., VORTMAN, J.
Judge of the Tulare Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.