Best Interiors, Inc. v. Millie and Severson, Inc

In Best Interiors, Inc. v. Millie and Severson, Inc. (2008) 161 Cal.App.4th 1320, the plaintiff subcontractor (Best) sued the general contractor, the owner, and two inspectors. (Id. at p. 1323.) Best asserted that the general contractor's "failure to manage, coordinate, and schedule the work properly interfered with, hindered, and delayed Best's work on the project." (Ibid.) It further "alleged that improper and unnecessary inspections by the building inspectors . . . disrupted and hindered its work." (Ibid.) The general contractor petitioned to compel arbitration, which the plaintiff opposed on the grounds that the inspectors "could not be compelled to arbitrate; that arbitration would subject Best to a risk of inconsistent results; and that the court had authority under Code of Civil Procedure section 1281.2 to refuse to enforce the arbitration clause." (Ibid.) Affirming the order denying arbitration, the court stated: "Separating the claims subject to arbitration from those that cannot be arbitrated could lead to inconsistent results. An arbitrator might find the inspectors acted as agents, thereby exposing the owner to liability. The inspectors' interests would not be represented adequately in an arbitration to which they are not parties. The court also would have to decide the issue of agency, and might find that there was none, but the owner still would be bound by the inconsistent arbitration decision. Whether the inspectors were at fault would have to be determined in both forums." (Id. at pp. 1329-1330.) Under these circumstances, the court concluded, the trial court did not "exceed the bounds of reason" in denying the petition to compel arbitration under section 1281.2, subdivision (c). (Id. at p. 1330.)