Greenbriar Homes Communities, Inc. v. Superior Court

In Greenbriar Homes Communities, Inc. v. Superior Court (2004) 117 Cal.App.4th 337, the Third District Court of Appeal granted a petition for writ of mandate against a trial court's order denying a real estate developer's motion to compel judicial reference under predispute agreements with 43 of 69 plaintiff homeowners alleging defective construction of their homes. (Greenbriar, supra, 117 Cal.App.4th at pp. 337, 340-341, 348.) The trial court had denied reference because " 'it would cause multiplicity of lawsuits.' " (Id. at pp. 341-342.) In defending the ruling in the appellate court, the plaintiff homeowners apparently did not rely upon the discretionary language of section 638 and its legislative objectives to show that multiplicity of lawsuits is a proper basis for denying reference. Instead, the Greenbriar plaintiffs argued that court discretion to deny enforcement of the reference agreements "is derived from analogous statutory authority given courts under Code of Civil Procedure section 1281.2 to refuse to enforce arbitration agreements pending a court action between a party to the arbitration agreement and a third party." (117 Cal.App.4th at p. 346.) The Third District promptly, and rightly, rejected that argument noting that "Code of Civil Procedure section 1281.2 is a specific statute that creates a special rule, which invalidates only arbitration agreements." (Id. at p. 347.) The appellate court reasoned: "Had the Legislature intended to allow judicial reference agreements to be invalidated on the basis of other pending or multiple actions, it could have adopted a statute so stating. Without such statutory authorization, however, both the trial court and we lack authority to invalidate an otherwise valid contractual agreement." (Id. at p. 348.)