In Raczynski v. Daland Nissan, Inc. 2017 WL 603869, at *4–5 (Cal.App. 1 Dist., 2017), the Dealer got hit for $358,000 by a JAMS arbitrator. The customer would not agree to a second arbitration under the RISC’s clause allowing one if an award exceeded $100,000, and the trial court refused to order a second arbitration. The Court of Appeal, in an unpublished decision, reversed.
We agree with Defendants that the plain language of the arbitration clause is unambiguous and that no evidence in the record supports the trial court’s finding. To the contrary, ADR has expressed its ability to perform a second arbitration before a three-arbitrator panel, if the trial court so orders. The challenged portion of the arbitration agreement provides: “The arbitrator’s award shall be final and binding on all parties, except that in the event the arbitrator’s award for a party is $0 or against a party is in excess of $100,000, or includes an award of injunctive relief against a party, that party may request a new arbitration under the rules of the arbitration organization by a three-arbitrator panel. The appealing party requesting new arbitration shall be responsible for the filing fee and other arbitration costs subject to a final determination by the arbitrators of a fair apportionment of costs.” (Italics added.)Raczynski asks us to affirm because, in her view, the trial court correctly found the conditions precedent to a second arbitration have not been satisfied.5 More specifically, she asserts ADR has no rules or procedures for an “appeal” and thus, by selecting ADR instead of JAMS, Defendants waived a “new arbitration.” It may be undisputed that ADR has no “appellate” rules or procedures. But, as we demonstrate below, that fact is not determinative. Raczynski’s position is that, without an “appellate” procedure, no second arbitration can be held as provided for by the parties’ contract because the arbitration clause specifies a “party may request a new arbitration under the rules of the arbitration organization by a three-arbitrator panel.” (Italics added.) She insists the term “new arbitration” is ambiguous and should be construed against the drafter of the arbitration clause—Defendants. (See Civ. Code, § 1654 [“[i]n cases of uncertainty not removed by the preceding rules, the language of a contract should be interpreted most strongly against the party who caused the uncertainty to exist”]; Badie v. Bank of America (1998) 67 Cal.App.4th 779, 801.) To bolster her argument that “a new arbitration” really means “an appeal,” Raczynski points out the arbitration clause also specifies the “appealing party requesting new arbitration shall be responsible for the filing fee and other arbitration costs subject to” further consideration by the panel. (Italics added.) In the alternative, she asserts the permissive language of the “new arbitration” clause does not guarantee anything, rather, such a request can be denied in the discretion of the court or arbitration forum.Our colleagues in Division One, in Condon, supra, 6 Cal.App.5th 263, recently rejected the same arguments in a case involving precisely the same “ ‘new arbitration’ ” clause. (Id. at pp. 265, 267–268.) Because the plain language of the arbitration provision authorized “ ‘a new arbitration … by a three-arbitrator panel,” rather than “an appeal as that term is used in our judicial system,” the Condon court recognized, “the arbitration agreement permits a ‘do-over’—governed by the same rules that applied to the first arbitration.” (Id. at p. 268.) The clause’s single reference to an “ ‘appealing party’ ” did not change the fact that what that party will receive is a “ ‘new arbitration.’ ” (Ibid.) The Condon court determined ADR was “ready and able to provide a new arbitration before a three-member panel and declined to do so only because it perceived it lacked the authority to impose the new arbitration on [an objecting party] absent a court order.” (Ibid.) The absence of “appellate” rules was irrelevant. (Ibid.) *5 Condon also dismissed the notion that the use of the phrase “ ‘may request,’ ” in the “ ‘new arbitration’ ” clause, means a court or arbitration forum has discretion to deny the request, even if a triggering condition is met. (Condon, supra, 6 Cal.App.5th at p. 268.) The court explained: “This is not a reasonable reading of this provision. On the contrary, the provision imbues the aggrieved party with a choice, to accept the award or ask for a new arbitration. If the party chooses an arbitration re-do, it is, by the plain language of the arbitration agreement, entitled to that recourse.” (Ibid.) The judgment confirming the arbitration award and the order denying a new arbitration were reversed, and the trial court was directed to order the parties to proceed with a new arbitration before a three-arbitrator panel at ADR. (Id. at p. 269.)We agree with the Condon court that the arbitration agreement unambiguously provides for “a new arbitration under the rules of the arbitration organization by a three-arbitrator panel,” rather than an appeal. We are not persuaded that this interpretation renders superfluous the phrases “appealing party” and “under the rules of the arbitration organization.” No showing has been made that the “rules of the arbitration organization” are in any manner violated by a new arbitration before a three-arbitrator panel. ADR has expressed its capability and willingness “to provide a new arbitration before a three-member panel and declined to do so only because it perceived it lacked the authority to impose the new arbitration on [an objecting party] absent a court order.” (Condon, supra, 6 Cal.App.5th at p. 268.) And the phrase “appealing party” is merely a shorthand, that is unambiguously defined by both the preceding sentence and the very words appearing after “appealing party”—“requesting new arbitration.” We likewise agree that the permissive language of the “new arbitration” clause can only reasonably be read as granting the losing party the choice to request a second arbitration.