Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
APPEAL from an order of the Superior Court of San Diego County No. GIC880927, Ronald S. Prager, Judge. Affirmed.
BENKE, J.
In this family dispute over control of a business and its assets, the trial court granted a motion to arbitrate. The trial court found appellant herein, a limited partnership controlled by family members, was subject to the arbitration agreement. Appellant challenged that order by way of a petition for a writ of mandate, which we denied. That order is not appealable.
After the trial court granted the motion to compel arbitration, it denied appellant's motion for a preliminary injunction. Appellant filed a notice of appeal from that order. We affirm.
A party subject to a pending arbitration may seek a provisional remedy, such as a preliminary injunction, "but only upon the ground that the award to which the applicant may be entitled may be rendered ineffectual without provisional relief." (Code Civ. Proc., § 1281.8, sub. (b).) Nothing in the record suggests the relief to which appellant would be entitled in the arbitration would be rendered ineffectual without a preliminary injunction. In particular, we note appellant's claims for trespass, interference with contract and conversion of personal property may be remedied by the arbitrator with an award of damages or by way of an offset against any award in favor of respondent.
All further statutory references are to the Code of Civil Procedure unless otherwise specified.
We recognize appellant contends the trial court erred in determining it was subject to the arbitration agreement. That determination is not reviewable on appeal from the order denying its motion for a preliminary injunction.
FACTUAL AND PROCEDURAL BACKGROUND
Leonard Friedman was the founder of a boat building business, which was incorporated as Swath Ocean Systems, LLC (Swath). At all pertinent times Swath's business was limited to building custom aluminum boats for the United States Navy, and appellant LTRT, a Limited Partnership (LTRT), had an ownership interest in Swath.
In 2005 Leonard Friedman (Leonard), his wife Ann Friedman (Ann) and Leonard's daughters Jane, Joan and Patricia Friedman executed a Family Agreement (Family Agreement) with respect to their rights to assets which were held by a family trust. The Family Agreement contained an arbitration agreement which required arbitration of all disputes related to the trust and trust assets. The Family Agreement further identified Swath and LTRT as trust assets.
In 2007 a dispute arose between Ann and Leonard's daughters, who controlled LTRT and Swath, with respect to Ann's use of Swath assets and employees to support operation of a yacht owned by Leonard and Ann. According to Swath and LTRT, Ann interfered with management and operation of the boat building business, had unlawfully entered the business, taken personal property and changed locks on the business premises. Swath and LTRT filed a complaint against Ann and sought a preliminary injunction.
In response Ann filed a motion to compel arbitration under the Family Agreement. The trial court decided to hear the motion to compel arbitration before it considered the motion for a preliminary injunction. Swath and LTRT opposed the motion to compel arbitration on the grounds they were not parties to the arbitration agreement. The trial court found Swath and LTRT were subjects of the arbitration agreement and granted Ann's motion to compel. The trial court denied, as moot, Swath and LTRT's motion for a preliminary injunction. Later, the trial court modified its ruling to point out Swath and LTRT failed to meet the requirements of section 1281.8, subdivision (b).
Swath and LTRT filed a notice of appeal from that portion of the trial court's order denying their motion for a preliminary injunction.
As we indicated at the outset, Swath and LTRT also challenged the order compelling arbitration and denying its motion for a preliminary injunction by way of a petition for a writ of mandate, which we denied. Swath voluntarily dismissed its appeal. LTRT filed an opening brief. No brief has been filed on behalf of Ann.
We asked LTRT to report on the status of the arbitration ordered by the trial court, and according to LTRT its claims against Ann have not been arbitrated.
DISCUSSION
I
An order denying a preliminary injunction is appealable. (§ 904.1, subd. (a)(6); Socialist Workers etc. Committee v. Brown (1975) 53 Cal.App.3d 879, 885, fn. 4.) On appeal "with respect to questions of construction of statutes and contracts not involving assessment of extrinsic evidence, our standard of review is de novo. [Citations.] [¶] . . . [¶]
"[¶] ' " . . . . Generally, the ruling on an application for a preliminary injunction rests in the sound discretion of the trial court. The exercise of that discretion will not be disturbed on appeal absent a showing that it has been abused. [Citations.]" [Citation.] . . . .' " (Davenport v. Blue Cross of California (1997) 52 Cal.App.4th 435, 445-446.) Importantly, we are required to affirm a judgment on any grounds which appear in the record. (See Schabarum v. California Legislature (1998) 60 Cal.App.4th 1205, 1216.)
II
The trial court acted properly in denying LTRT's motion for a preliminary injunction. As we indicated at the outset, where an arbitration is pending, a preliminary injunction may issue, but only if the applicant can demonstrate injunctive relief is needed to preserve the applicant's ability to receive an effective arbitration award. (§ 1281.8, subd. (b); Davenport v. Blue Cross of California, supra, 52 Cal.App.4th at pp. 445-446.) In Davenport v. Blue Cross of California the court reversed an order granting preliminary injunction to a plaintiff who disputed the benefits available under the terms of a health care policy. The court stated: "[A] court may grant provisional relief pending arbitration . . . if the party seeking the relief establishes the necessity of the injunction to preserve the status quo pending arbitration in order to avoid nullification of the arbitration process. Where such a showing is made, the court may step in and freeze the situation so the arbitration can have effect. [¶] . . . [¶]
"Thus . . . the trial court has authority to grant injunctive relief pending contractual arbitration, but only if it is necessary to preserve the effectiveness of arbitration." (Davenport v. Blue Cross of California, supra, at pp. 452-453.) Because the plaintiff in Davenport failed to make any timely demand for arbitration or make any showing she would be unable to obtain a timely arbitral award of benefits, the court found the trial court had abused its discretion in granting plaintiff's motion for an injunction requiring the health care insurer to pay benefits pending outcome of the arbitration. (Davenport v. Blue Cross of California, supra, at pp. 455-456.)
Here, nothing in the record demonstrates Ann's alleged conduct in entering the business, taking personal property, interfering with operation of the business and changing locks would have prevented the arbitrator from giving LTRT an entirely effective remedy by way of a prompt award of damages. Indeed, in deciding to hear the motion to compel before hearing the motion for a preliminary injunction, the trial court implicitly determined nothing in the conduct alleged by LTRT posed any threat to an arbitrator's ability to provide effective relief. In this regard we also note the important principle that an injunction will not issue where, as here, an applicant has an adequate remedy by way of damages. (See Voorhies v. Greene (1983) 139 Cal.App.3d 989, 997.)
We express no opinion as to whether the arbitrator may provide injunctive relief. (See Broughton v. Cigna Healthplans (1999) 21 Cal.4th 1066, 1079.)
In short, LTRT did not meet the requirement of section 1281.8, subdivision (b), that it establish an injunction was needed to preserve the arbitrator's ability to provide effective relief. Accordingly, because we are required to affirm an order or judgment on any grounds which appear in the record, we must affirm the trial court's order denying the motion for a preliminary injunction. (See Schabarum v. California Legislature, supra, 60 Cal.App.4th at p. 1216.)
Like the trial court, we also recognize that LTRT did not preserve its right to arbitrate under the safe-harbor provisions of section 1281.8, subdivision (d).)
III
A great deal of LTRT's brief is devoted to its contention the trial court erred in granting Ann's motion to compel arbitration. We cannot reach the merits of that issue on this appeal.
" 'While an order denying a petition to compel arbitration is expressly made appealable by section 1294, subdivision (a), the statute fails to make an order compelling arbitration appealable. Accordingly, an order compelling arbitration is nonappealable.' [Citation.] 'The rationale behind the rule making an order compelling arbitration nonappealable is that inasmuch as the order does not resolve all of the issues in controversy, to permit an appeal would delay and defeat the purposes of the arbitration statute.' [Citation.] An 'order compelling arbitration is interlocutory in nature and works no hardship on the litigant because the party who objects to arbitration may win at the arbitration hearing, and if he does not, the issue is reviewable on appeal from the judgment of confirmation.' [Citation]." (Westra v. Marcus & Millichap Real Estate Investment Brokerage Co., Inc. (2005) 129 Cal.App.4th 759, 768.)
Following entry of any arbitration award, LTRT can fully assert its contention the trial court erred in compelling arbitration. However, we cannot reach that issue on this appeal without improperly interfering in the arbitration process.
DISPOSITION
Order affirmed.
WE CONCUR: McCONNELL, P. J. McINTYRE, J.