In Westra v. Marcus & Millichap Real Estate Investment Brokerage Co., Inc. (2005) 129 Cal.App.4th 759, the plaintiffs sued a real estate agent for fraud in connection with their purchase of a gas station. The purchase agreement identified the plaintiffs as the buyers, and named the seller as well as the agent.
It included an arbitration provision that stated "Buyer, Seller and Agent" agreed to arbitrate controversies "arising with respect to the subject matter of this Purchase Agreement or the transaction contemplated . . . ." (Westra, supra, 129 Cal.App.4th at p. 762.)
The plaintiffs and the seller signed the agreement and initialed the arbitration provision; the agent did not. The agent's petition to compel arbitration was denied by the trial court.
On appeal, the agent contended it was entitled to enforce the arbitration provision because it had an agency relationship with both of the signatories.
The appellate court ruled the agent was acting as the agent of both parties in a preexisting agency relationship, and the language of the arbitration provision indicated all three parties agreed to arbitration. (Id. at p. 766.)
Additionally, the complaint alleged that the agent was acting as the agent of the seller and the plaintiffs in the transaction. (Id. at pp. 766-767.)
The court concluded (1) the language of the arbitration provision was binding on the agent, (2) the plaintiffs were bound by their judicial admission, and (3) the agent was entitled to enforce the arbitration agreement. (Id. at p. 766.)