Court Opinion

ID: 4176585
Source: CourtListenerOpinion
Date Created: 2017-06-09 22:06:57.761844+00
Date Added: 2024-06-11T14:38:48.486137
License: Public Domain

Filed 5/23/17; pub. order 6/9/17 (see end of opn.)

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     FIRST APPELLATE DISTRICT

                                                DIVISION ONE

THEODORE LAYMON et al.,
         Plaintiffs and Respondents,                    A147464

v.                                                      (Contra Costa County
J. ROCKCLIFF, INC., et al.,                             Super. Ct. No. MSC 15-00186)
         Defendants and Appellants.

GEORGE HERNANDEZ et al.,
         Plaintiffs and Appellants,                     A147469
v.
                                                        (Contra Costa County
MASON-MCDUFFIE REAL ESTATE,                              Super. Ct. No. MSC 15-01148)
INC., et al.,
         Defendants and Appellants.

         The plaintiffs in these consolidated appeals filed suit against the brokers who
represented them in the sale of their homes and a group of companies that provided
services in connection with those sales. Plaintiffs contend defendants violated their
fiduciary duties by failing to disclose alleged kickbacks paid by the service providers to
the brokers in connection with the sales.
         Defendants filed motions to compel arbitration of these claims on the basis of
three separate agreements, at least one of which was executed by each plaintiff. The trial
court found the arbitration clauses in two of the agreements inapplicable, but it compelled
the signatories of the third agreement to arbitrate with their brokers. Invoking the
doctrine of equitable estoppel, the court also required the signatories of the third
agreement to arbitrate their claims against the service providers, who were not parties to
the arbitration agreements. Defendants have appealed the court’s refusal to compel
arbitration with the remaining plaintiffs, while the plaintiffs who were ordered to
arbitration have cross-appealed that order.
       We reverse the trial court’s ruling on the two arbitration clauses it found
inapplicable. Because each of the plaintiffs executed one or the other of these two
agreements, we remand for entry of an order compelling arbitration by all plaintiffs. We
dismiss the cross-appeal of the plaintiffs who were required to arbitrate under the
arbitration clause contained in the third agreement because an order compelling
arbitration is not appealable.
                                    I. BACKGROUND
       In 2015, two sets of plaintiffs filed two materially identical class action lawsuits
against several real estate brokers (broker defendants) and a group of title companies and
other service providers (service provider defendants).1 Each of the broker defendants
represented one or more of the plaintiffs in connection with the sale of his or her home.
       Plaintiffs’ claims are premised on the broker defendants’ use of a software
program known as “TransactionPoint,” alleging TransactionPoint was used to facilitate
improper payments from the service provider defendants to the broker defendants in the
course of the sales. As one of the complaints explained the gravamen of the claims, the
brokers used TransactionPoint to “prepare transaction documents and order related real
estate settlement services (such as title insurance, escrow, natural hazard disclosure

       1
        In Laymon v. J. Rockcliff, Inc., case No. A147464 (Laymon), the broker
defendants are J. Rockcliff, Inc. and Jeffrey W. Sposito, while the service provider
defendants are Ticor Title Company of California, Fidelity National Home Warranty
Company, Chicago Title Company, and Fidelity National Title Company. In Hernandez
v. Mason-McDuffie Real Estate, Inc., case No. A147469 (Hernandez), the broker
defendants are Mason-McDuffie Real Estate, Inc., Mason-McDuffie of Marin County,
L.P., Avelino David Cobo, Melody B. Royal, Darren C. Hall, and Edmond L. Krafchow,
while the service provider defendants are the same as those in Laymon.

                                              2
reports, and home-warranty contracts) for Plaintiffs and other members of the Class. In
doing so, [the brokers] entered into sublicensing agreements with providers of real estate
settlement services, including [the service provider defendants] . . . . Pursuant to these
agreements, [the broker defendants] received undisclosed payments from the [service
provider defendants] for the real estate settlement services ordered through
TransactionPoint.” Plaintiffs allege that payments under the sublicense agreements
operated in the nature of kickbacks; when a broker ordered settlement services from a
service provider through TransactionPoint, the service provider paid the broker a
“sublicense fee,” purportedly for the service provider’s use of the software.
       The complaints allege claims for breach of fiduciary duty, fraud, unfair
competition, and unjust enrichment.2 Plaintiffs seek declaratory relief, damages, punitive
damages, and an accounting and disgorgement of the compensation received by
defendants from plaintiffs in connection with the home sales.
       Defendants filed motions to compel arbitration of plaintiffs’ claims, based on
arbitration clauses contained in printed form agreements executed by plaintiffs in
connection with the home sales. Because plaintiffs did not all execute the same
agreements, three different arbitration clauses in three separate agreements were
involved. In their motion, defendants contended that all three arbitration clauses require
arbitration of the claims in plaintiffs’ complaints.
       First, a form “Residential Listing Agreement” (hereafter RLA) contained the
following arbitration clause: “Seller and Broker agree that any dispute or claim in law or
equity arising between them regarding the obligation to pay compensation under this
Agreement, . . . shall be decided by neutral, binding arbitration.” The only compensation
mentioned in the RLA is the commission payable by a seller to the broker, generally upon
a sale of property.

       2
        For the most part, these claims are alleged against all defendants, but some of the
claims exclude defendant Fidelity National Home Warranty Company.

                                              3
       Second, the 2007 version of a form “Residential Purchase Agreement” (hereafter
the 2007 RPA) required arbitration of certain disputes between buyers or sellers and their
brokers, even though the brokers were not parties to the agreement. Specifically,
paragraph 17A of the 2007 RPA required mediation of any dispute between the parties to
the agreement, the home buyer and seller. In the event the mediation was unsuccessful,
paragraph 17B(1) required arbitration of such disputes, stating: “Buyer and Seller agree
that any dispute or claim in Law or equity arising between them out of this Agreement or
any resulting transaction, . . . shall be decided by neutral, binding arbitration, including
and subject to paragraph[ 17B(3)] below.” Paragraph 17B(3) required arbitration of
disputes involving brokers, stating: “Buyer and Seller agree to . . . arbitrate disputes or
claims involving either or both Brokers, consistent with 17A and B, provided either or
both Brokers shall have agreed to such mediation or arbitration prior to, or within a
reasonable time after, the dispute or claim is presented to Brokers.”3

       3
           As relevant here, the full text of paragraph 17 of the 2007 RPA reads:
       “17. DISPUTE RESOLUTION:
        “A. MEDIATION: Buyer and Seller agree to mediate any dispute or claim
arising between them out of this Agreement, or any resulting transaction, before resorting
to arbitration or court action. Paragraphs 17B(2) and (3) below apply to mediation
whether or not the Arbitration provision is initialed. Mediation fees, if any, shall be
divided equally among the parties involved. If, for any dispute or claim to which this
paragraph applies, any party commences an action without first attempting to resolve the
matter through mediation, or refuses to mediate after a request has been made, then that
party shall not be entitled to recover attorney fees, even if they would otherwise be
available to that party in any such action. THIS MEDIATION PROVISION APPLIES
WHETHER OR NOT THE ARBITRATION PROVISION IS INITIALED.
       “B. ARBITRATION OF DISPUTES: (1) Buyer and Seller agree that any
dispute or claim in Law or equity arising between them out of this Agreement or
any resulting transaction, which is not settled through mediation, shall be decided
by neutral, binding arbitration, including and subject to paragraphs 17B(2) and (3)
below. The arbitrator shall be a retired judge or justice, or an attorney with at least
5 years of residential real estate Law experience, unless the parties mutually agree
to a different arbitrator, who shall render an award in accordance with substantive
California Law. The parties shall have the right to discovery in accordance with
California Code of Civil Procedure §1283.06. In all other respects, the arbitration

                                               4
       Third, the 2010 version of a Residential Purchase Agreement (hereafter the
2010 RPA) contains a simplified version of the clause in the 2007 RPA. Paragraph 26B
of the 2010 RPA states: “Buyer and Seller agree that any dispute or claim in Law or
equity arising between them out of this Agreement or any resulting transaction, . . . shall
be decided by neutral, binding arbitration. Buyer and Seller also agree to arbitrate any
disputes or claims with Broker(s), who, in writing, agree to such arbitration prior to, or
within a reasonable time after, the dispute or claim is presented to the Broker. . . .”
       The arbitration clauses in each of these agreements required the parties
affirmatively to manifest their assent to arbitration by initialing the clause. For purposes
of the motions to compel, the plaintiffs fall into four groups, based on the particular
arbitration clause or clauses to which they agreed. The two plaintiffs in Laymon,
Theodore and Amy Laymon (Laymons) are bound only by the 2007 RPA arbitration
clause, while Christine Himpler, a Hernandez plaintiff, is bound only by the RLA
arbitration clause.4 Four of the other plaintiffs in Hernandez, Rocky McCants, Fernando

shall be conducted in accordance with Title 9 of Part III of the California Code of
Civil Procedure. Judgment upon the award of the arbitrator(s) may be entered into
any court having jurisdiction. Interpretation of this agreement to arbitrate shall be
governed by the Federal Arbitration Act.
       “(2) EXCLUSIONS FROM MEDIATION AND ARBITRATION: . . . [This
subparagraph lists a variety of “matters” that are excluded from arbitration, such as
foreclosure and unlawful detainer proceedings. We do not quote the text because none of
the exclusions are relevant here.]
       “(3) BROKERS: Buyer and Seller agree to mediate and arbitrate disputes or
claims involving either or both Brokers, consistent with 17A and B, provided either or
both Brokers shall have agreed to such mediation or arbitration prior to, or within a
reasonable time after, the dispute or claim is presented to Brokers. Any election by either
or both Brokers to participate in mediation or arbitration shall not result in Brokers being
deemed parties to the Agreement.”
       As required by Code of Civil Procedure section 1298, subdivision (c), the
foregoing is followed by a “notice” informing the parties that agreeing to the arbitration
provision is voluntary and will result in forfeiture of the right to judicial action.
       4
       Himpler signed the 2010 RPA but did not initial the arbitration provision. We
assume Himpler is not bound by that provision, and defendants do not contend otherwise.

                                              5
Medina, Sixto Santiago, and James York (hereafter the McCants group), initialed clauses
in both the RLA and the 2007 RPA. Finally, the three remaining plaintiffs in Hernandez,
George and Donna Hernandez and Falesia Ragland (hereafter the Hernandez group),
initialed clauses in both the RLA and the 2010 RPA.
       The trial court heard the motions to compel arbitration in the two matters jointly.
In a detailed written decision, the court concluded the arbitration clauses in the RLA and
the 2007 RPA do not cover the claims in the complaints, but the clause in the 2010 RPA
does cover them. It therefore denied arbitration with respect to the claims of the
Laymons, Himpler, and the McCants group, but it granted the motion with respect to the
Hernandez group. The court reasoned that the RLA’s arbitration clause does not apply
because the clause applies only to disputes over “the obligation to pay compensation
under this Agreement,” which runs from seller to broker. Because the basis of the claims
is defendants’ alleged failure to disclose the sublicense fees, the court held, it does not
concern the sellers’ obligation to pay their brokers. The court concluded the 2007 RPA
arbitration clause does not cover the plaintiffs’ claims because the clause requires
arbitration of broker/client disputes “consistent with” paragraph 17B. Since the
remainder of paragraph 17B applies only to disputes between sellers and buyers, the court
reasoned, the requirement of consistency with paragraph 17B limits client/broker
arbitration to “disputes between the buyer and seller which somehow entangle a broker.”
The court did, however, find the 2010 RPA arbitration clause applicable to these claims,
since the clause applies to all disputes between clients and brokers. Finally, the court
permitted the service provider defendants, who are not parties to or otherwise mentioned
by the 2010 RPA, to take advantage of its terms under the doctrine of equitable estoppel.

Defendants state in their brief the Laymons signed an RLA but did not initial the
arbitration provision, but we have not located a copy of that document in the record.
Regardless, defendants do not contend the Laymons are bound by the RLA arbitration
provision.

                                              6
                                       II. DISCUSSION
       Defendants have appealed the trial court’s rulings with respect to the Laymons, the
McCants group, and Himpler, while the Hernandez group has appealed the court’s rulings
with respect to their claims. They also challenge the trial court’s ruling that the doctrine
of equitable estoppel permits the service provider defendants to demand arbitration under
the 2010 RPA. Defendants have moved to dismiss the Hernandez group’s cross-appeal,
arguing an order compelling arbitration is not appealable.
A. Applicable Law of Arbitration
       The relevant law was recently summarized in Rice v. Downs (2016)
248 Cal. App. 4th 175 at pages 184–186:
       “A party who claims that there is an applicable written arbitration agreement may
petition the superior court for an order compelling the parties to arbitrate. [Citation.] . . .
‘In determining whether an arbitration agreement applies to a specific dispute, the court
may examine only the agreement itself and the complaint filed by the party refusing
arbitration . . . .’ [Citation.] . . . Where, as here, ‘there is no “factual dispute as to the
language of [the] agreement” [citation] or “conflicting extrinsic evidence” regarding the
terms of the contract [citation], our standard of review of a trial court order granting or
denying a motion to compel arbitration under [Code of Civil Procedure] section 1281.2 is
de novo.’ [Citation.] ‘We are not bound by the trial court’s construction or
interpretation.’ [Citation.]
       “ ‘California has a strong public policy in favor of arbitration and any doubts
regarding the arbitrability of a dispute are resolved in favor of arbitration. . . . This strong
policy has resulted in the general rule that arbitration should be upheld “unless it can be
said with assurance that an arbitration clause is not susceptible to an interpretation
covering the asserted dispute.” ’ [Citation.] The party opposing arbitration has the
burden of demonstrating that an arbitration clause cannot be interpreted to require
arbitration of the dispute. [Citation.] Nonetheless, this policy does not override ordinary
principles of contract interpretation. ‘[T]he contractual terms themselves must be
carefully examined before the parties to the contract can be ordered to arbitration:

                                                 7
“Although ‘[t]he law favors contracts for arbitration of disputes between parties’
[citation], ‘ “there is no policy compelling persons to accept arbitration of controversies
which they have not agreed to arbitrate . . . .” ’ [Citations.] In determining the scope of
an arbitration clause, ‘[t]he court should attempt to give effect to the parties’ intentions,
in light of the usual and ordinary meaning of the contractual language and the
circumstances under which the agreement was made [citation].’ ” ’ [Citation.] ‘[T]he
terms of the specific arbitration clause under consideration must reasonably cover the
dispute as to which arbitration is requested.’ [Citation.] [¶] . . . [¶] . . . ‘The whole of a
contract is to be taken together, so as to give effect to every part, if reasonably
practicable, each clause helping to interpret the other.’ [Citation.] ‘ “A court must view
the language in light of the instrument as a whole and not use a ‘disjointed, single-
paragraph, strict construction approach’ [citation].” ’ [Citation.] An interpretation that
leaves part of a contract as surplusage is to be avoided.”
B. Arbitration Under the RLA
       As noted above, the RLA requires arbitration between a client and broker of
disputes “regarding the obligation to pay compensation under this Agreement.” The trial
court concluded, and plaintiffs argue here, that these claims do not concern plaintiffs’
obligation to pay compensation because “plaintiffs do not dispute this obligation.
Instead, they contend that the brokers breached their fiduciary duty by failing to disclose
that they were also receiving other compensation from third parties.”
       If not for plaintiffs’ claim for an accounting and disgorgement, we would be
inclined to agree with the trial court’s ruling. Compensation under the RLA is computed
as a percentage of a home’s sale or listing price and is payable if (1) a potential buyer
offers to pay the listing price, regardless of whether the property actually sells; (2) the
seller enters into a contract of sale within 30 days after the end of the listing period with a
buyer who was shown the property during the listing period or submitted an offer on the
property through the broker; or (3) the property is withdrawn from sale during the listing
period. Because a seller can become obligated to pay a sizable commission without an
actual sale of his or her home, the compensation provision of the RLA is fertile ground

                                               8
for disputes over the obligation to pay. We do not doubt that the arbitration provision
was intended primarily to deal with this type of dispute.
       Putting aside the claim for disgorgement, this action seeks damages for the broker
defendants’ acceptance of kickbacks and the service provider defendants’ payment of
those kickbacks, in violation of the defendants’ contractual and tort duties to disclose
their dealings. On its surface, this would not appear to implicate the “obligation to pay
compensation,” since it is largely independent of the brokers’ primary function under the
RLA of finding a buyer.
       Nonetheless, we cannot ignore the plain language of the arbitration clause (Rice v.
Downs, supra, 248 Cal.App.4th at pp. 185–186), which requires arbitration of any dispute
regarding the obligation to pay compensation. The claim for disgorgement necessarily
implicates this obligation. Although the complaints do not specify their theory of
disgorgement, the remedy is ordinarily in the nature of restitution—that is, a return of
money obtained through wrongful means. (E.g., Korea Supply Co. v. Lockheed Martin
Corp. (2003) 29 Cal. 4th 1134, 1144–1145; Davis v. Fresno Unified School Dist. (2015)
237 Cal. App. 4th 261, 294.) Alternatively, disgorgement can be granted as a form of
penalty for “ ‘misconduct, breach of conduct [sic] or wilful disregard, in a material
respect, of an obligation imposed upon [a broker] by the law of agency.’ ” (Sierra
Pacific Industries v. Carter (1980) 104 Cal. App. 3d 579, 583.) Either way, in seeking the
remedy of disgorgement plaintiffs are contending the broker defendants were not entitled
to retain the compensation paid to them under the RLA, a claim that self-evidently
implicates plaintiffs’ “obligation to pay” the commissions.
       Notwithstanding their claim to return of the commissions, plaintiffs contend the
RLA arbitration clause does not apply because they do not dispute their obligation to pay
them—in other words, they concede the broker defendants earned their commissions by
selling the homes. As plaintiffs argue, “this is a dispute about the broker’s right to keep
compensation already received, not about Plaintiffs’ ‘obligation to pay compensation.’ ”
The distinction is unavailing. In making the argument, plaintiffs are attempting to
separate the broker defendants’ performance of services under the RLA from the

                                             9
allegedly wrongful conduct justifying disgorgement. In effect, plaintiffs contend, the
broker defendants became entitled to receive the commissions when they sold the homes,
but their wrongful conduct in the course of the sales means they are not entitled to retain
them. The broker defendants, however, cannot be both entitled to the commissions and
not entitled to them. The wrongful conduct occurred simultaneously with the
performance of services under the RLA. That wrongful conduct either excused plaintiffs
from their obligation to pay the commissions, or it did not. Because plaintiffs’ claims
seek disgorgement, they constitute a dispute over plaintiffs’ obligation to pay
compensation under the RLA and are subject to arbitration.5 We therefore conclude the
plaintiffs who executed the RLA—Himpler, the McCants group, and the Hernandez
group—are required to arbitrate their claims.
C. The 2007 RPA
       Paragraph 17B(3) of the 2007 RPA states that “Buyer and Seller agree to mediate
and arbitrate disputes or claims involving either or both Brokers, consistent with
[paragraphs] 17A and B,” provided the broker agrees to arbitrate the dispute. (Italics
added.) In interpreting the clause, the trial court focused on the italicized language,
concluding that because paragraphs 17A and 17B(1) require mediation and arbitration of
disputes between seller and buyer, the requirement of consistency limits the duty to
arbitrate disputes with brokers to those disputes that also involve a dispute between both
parties to the sale. We find that interpretation untenable because it fails to take into
account the full scope of paragraphs 17A and 17B.
       Paragraph 17A of the 2007 RPA does not merely require mediation of disputes
between a buyer and seller. It also (1) specifies that mediation is required regardless of
whether the parties have initialed the arbitration clause, (2) requires the parties to split
mediation costs, and (3) states that a party forfeits the right to attorney fees if the party

       5
         In reaching this conclusion, we do not intend to suggest any view with respect to
the availability of disgorgement of commissions as a remedy under these circumstances.
The significant issue under the RLA is the existence of a dispute, not the proper
resolution of the dispute.

                                               10
fails to mediate. A reasonable reading of the requirement in paragraph 17B(3) of
consistency with paragraph 17A is that the mediation conditions established in paragraph
17A apply to party/broker arbitrations as well as to party/party arbitrations. Such a
reading does not require, or even suggest, that party/broker arbitration must be restricted
to disputes involving both parties.
       Similarly, paragraph 17B of the 2007 RPA (1) requires buyers and sellers to
arbitrate any dispute, (2) specifies the qualifications of the arbitrator, (3) establishes the
applicable substantive and procedural law, (4) authorizes discovery, (5) specifies a series
of matters excluded from the requirement of arbitration, and (6) requires arbitration of
broker/party disputes upon agreement of the broker. Even more than paragraph 17A,
paragraph 17B goes well beyond merely requiring the arbitration of party/party disputes.
Again, a reasonable reading of the requirement in paragraph 17B(3) of consistency with
paragraph 17B is that the various conditions established in paragraph 17B, particularly
the constraints imposed on arbitration and the exclusions from arbitration, apply to
party/broker arbitration as well as to arbitration between the parties. The trial court’s
narrow focus on the fact of party/party arbitration in paragraph 17B(1), to the exclusion
of the other provisions of paragraph 17B, fails to give effect to the full scope of the
RPA’s language. In short, while the drafting of the clause is far from clear, the most
sensible reading of the consistency requirement is not that party/broker arbitration is
limited to disputes involving both parties, but that party/broker arbitration is subject to
the same conditions imposed on party/party arbitration by paragraphs 17A and 17B.
       In making their argument, plaintiffs mischaracterize the 2007 RPA arbitration
clause as containing a “clear limitation . . . that any arbitration between ‘Buyer and
Seller’ and ‘either or both Brokers’ be ‘consistent with 17A and B.’ ” This is not a fair
reading of the language of the clause. Instead, it states both buyer and seller agree to
arbitrate disputes or claims involving their brokers. In doing so, the language does not
expressly limit buyers’ and sellers’ obligation to arbitrate with their brokers to disputes
involving both of the parties, as plaintiffs’ paraphrase suggests. The only language
supporting such a limitation is the “consistent with” phrase, which, as discussed above,

                                               11
should be read to refer to the manner of arbitration, rather than any limit on its subject
matter.6 Plaintiffs also contend that the present reading renders superfluous the phrase,
“any resulting transaction” from paragraph 17B(1), which requires the parties to arbitrate
“any dispute or claim in Law or equity arising between them out of this Agreement or
any resulting transaction.” Assuming the limitation applies to party/broker disputes, the
present reading does not render it superfluous. Plaintiffs’ claims plainly arise from the
defendants’ conduct in connection with the real estate transactions that were the subject
of the 2007 RPA’s.7
       Plaintiffs contend defendants failed their initial “ ‘ “burden of proving the
existence of a valid agreement to arbitrate.” ’ ” (Hernandez v. Ross Stores, Inc. (2016)
7 Cal.App.5th 171, 176.) As phrased, their argument conflates the issue of demonstrating
a valid agreement with the issue of the agreement’s interpretation. Because defendants
produced 2007 RPA’s containing arbitration clauses initialed by the Laymons and the
members of the McCants group, and because those plaintiffs did not dispute the
genuineness of those agreements, defendants carried their burden of demonstrating a
valid agreement to arbitrate by these plaintiffs. Whether that agreement to arbitrate
covers the present dispute is a separate issue that, for the reasons discussed above, we
resolve against plaintiffs.
       Plaintiffs also contend the 2007 RPA arbitration clause should be interpreted
against the broker defendants because it is adhesive. An arbitration clause is a contract of
adhesion if “it lies within a standardized form drafted and imposed by a party with
superior bargaining strength, leaving plaintiffs with only the option of adhering to the
       6
         In making their argument, plaintiffs include a lengthy discussion of Shaw v.
People ex rel. Chiang (2009) 175 Cal. App. 4th 577, which considers the interpretation of
the language of a statewide proposition containing the phrase “consistent with.” (Id. at
pp. 589–590.) We find the context and structure of the proposition’s language to be
sufficiently different from the present clause as to provide no useful guidance here.
       7
        Plaintiffs also contend the parties would reasonably have expected the
party/broker obligation to apply only to disputes involving both parties. We fail to
understand why the parties’ expectations would differ from the most sensible reading of
the language.

                                             12
contract or rejecting it.” (Magno v. The College Network, Inc. (2016) 1 Cal.App.5th 277,
286.) Because it was voluntary, the 2007 RPA arbitration clause was not adhesive. The
arbitration clause required each party to indicate his or her acceptance by initialing the
provision. In the absence of such an acceptance, the arbitration clause did not become a
part of the agreement. Because the parties were not presented only with the option of
adhering to the entire RPA or rejecting it, the clause was not adhesive. For a similar
reason, we find unpersuasive plaintiffs’ argument the arbitration clauses lacked
mutuality. As recognized in Marcus & Millichap Real Estate Investment Brokerage Co.
v. Hock Investment Co. (1998) 68 Cal. App. 4th 83 (Hock Investment), the provision in the
2007 RPA relating to arbitration with the nonparty brokers is in the nature of an offer; if
buyers or sellers initialed the provision, they were effectively offering to arbitrate with
their brokers. (Id. at p. 89.) Pursuant to the text of the provision, the broker accepted the
offer by agreeing in writing to arbitrate. Because this agreement was required prior to the
formation of a binding agreement to arbitrate, the provisions did not lack mutuality.8
       Because every plaintiff initialed an arbitration clause either in the RLA or the
2007 RPA, our holdings have the effect of requiring every plaintiff to arbitrate.
Plaintiffs’ argument with respect to Code of Civil Procedure section 1281.2,
subdivision (c), which permits the court to stay or decline to order an arbitration if there
is a parallel civil action, is therefore inapplicable.
D. The Hernandez Group’s Cross-appeal
       The Hernandez group has appealed the portion of the trial court’s decision
requiring them to arbitrate their claims against both the broker defendants and the service
provider defendants under the 2010 RPA. We agree with defendants that the court’s

       8
        Hock Investment, which considered the issue of mutuality, is readily
distinguishable. In Hock Investment, one of the parties initialed the arbitration provision,
while the other did not. The initialing party argued it could not be compelled to arbitrate
because, in the absence of the other party’s initials, the provision lacked mutuality. The
court concluded it was unnecessary to address the argument because, it sensibly held, no
agreement to arbitrate was formed when one party declined to initial the provision.
(Hock Investment, supra, 68 Cal.App.4th at pp. 91–92.)

                                               13
order is nonappealable and grant their motion to dismiss the Hernandez group’s cross-
appeal.
       Under California law, the right of appeal is statutory. (Gastelum v. Remax
Internat., Inc. (2016) 244 Cal. App. 4th 1016, 1021.) Although Code of Civil Procedure
section 1294, subdivision (a) authorizes the appeal of an order denying a petition to
compel arbitration, there is no similar authorization for the appeal of an order granting
such a petition. Accordingly, it is generally accepted that an order compelling arbitration
is not appealable. (Nguyen v. Applied Medical Resources Corp. (2016) 4 Cal.App.5th
232, 242.)
       The Hernandez group contends the trial court’s order compelling them to arbitrate
is nonetheless appealable under Code of Civil Procedure section 1294.2, which states that
in any appeal under the title of the Code of Civil Procedure governing arbitration, “the
court may review the decision and any intermediate ruling, proceeding, order or decision
which involves the merits or necessarily affects the order or judgment appealed from, or
which substantially affects the rights of a party.” This section, which “simply ensures
that the appellate court can effectuate its ruling on an arbitration order, by permitting
review of any other trial court decision affecting that specific order,” does not, however,
make an order granting arbitration appealable merely because it was rendered at the same
time as an appealable order denying arbitration. (Westra v. Marcus & Millichap Real
Estate Investment Brokerage Co., Inc. (2005) 129 Cal. App. 4th 759, 768–769.)
                                     III. DISPOSITION
       The portion of the trial court’s order denying arbitration pursuant to the RLA and
the 2007 RPA is vacated, and those rulings are reversed. The matter is remanded to the
trial court with instructions to enter an order compelling all plaintiffs to arbitrate their
claims with the broker defendants. The cross-appeal of the trial court’s order compelling
the Hernandez group to arbitrate their claims against the broker defendants and the
service provider defendants under the 2010 RPA is dismissed. The defendants may
recover their costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1), (2).)

                                               14
                                 _________________________
                                 Margulies, J.

We concur:

_________________________
Humes, P.J.

_________________________
Dondero, J.

                            15
Filed 6/9/17
                            CERTIFIED FOR PUBLICATION

               IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                              FIRST APPELLATE DISTRICT

                                       DIVISION ONE

THEODORE LAYMON et al.,
         Plaintiffs and Respondents,              A147464

v.                                                (Contra Costa County
J. ROCKCLIFF, INC., et al.,                       Super. Ct. No. MSC 15-00186)
         Defendants and Appellants.

GEORGE HERNANDEZ et al.,
         Plaintiffs and Appellants,               A147469
v.
                                                  (Contra Costa County
MASON-MCDUFFIE REAL ESTATE,                        Super. Ct. No. MSC 15-01148)
INC., et al.,
         Defendants and Appellants.

THE COURT:
         The opinion in the above-entitled matter filed on May 23, 2017, was not certified
for publication in the Official Reports. After the court’s review of requests under
California Rules of Court, rule 8.1120, and good cause established under rule 8.1105, it is
hereby ordered that the opinion should be published in the Official Reports.
Dated:

                                                  ___________________________
                                                  Margulies, Acting P.J.

                                             16
Trial Court: Contra Costa County Superior Court

Trial Judge: Hon. Barry P. Goode

Counsel:

Cooley LLP, William P. Donovan, Jr., Whitty Somvichian, Heather C. Meservy, and
Nathaniel R. Cooper for Defendants and Appellants J. Rockcliff, Inc., Jeffrey W. Sposito,
Ticor Title Company of California, Fidelity National Home Warranty Company, Chicago
Title Company, and Fidelity National Title Company.

Donahue Fitzgerald, LLP, John C. Kirke and Megan S. Shaked for Defendants and
Appellants Mason-McDuffie Real Estate, Inc., Mason-McDuffie of Marin County, L.P.,
Avelino David Cobo, Melody B. Royal, Darren C. Hall, and Edmond L. Krafchow

Bottini & Bottini, Inc., Francis A. Bottini, Jr., Albert Y. Chang, and Yury A. Kolesnikov
for Plaintiffs and Appellants Theodore Laymon, Amy Laymon, George Hernandez,
Donna Hernandez, Christine Himpler, Rocky McCants, Fernando Medina, Falesia
Ragland, Sixto Santiago, and James York

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