Opinion
G060232
12-09-2022
LINDA M. BARRONS et al., Plaintiffs and Appellants, v. SMITH, LINDEN &BASSO, LLP et al., Defendants and Respondents.
Catanzarite Law Corporation, Kenneth J. Catanzarite, Nicole M. Catanzarite-Woodward and Eric V. Anderton for Plaintiffs and Appellants. Cadden &Fuller, Thomas H. Cadden and John B. Taylor for Defendants and Respondents.
NOT TO BE PUBLISHED
Appeal from a judgment of the Superior Court of Orange County, Super. Ct. No. 30-2013-00648240 William D. Claster, Judge. Reversed.
Catanzarite Law Corporation, Kenneth J. Catanzarite, Nicole M. Catanzarite-Woodward and Eric V. Anderton for Plaintiffs and Appellants.
Cadden &Fuller, Thomas H. Cadden and John B. Taylor for Defendants and Respondents.
OPINION
MARKS, J. [*]
This appeal from an order confirming an arbitration award arises from a series of real estate transactions that cratered during the Great Recession of 2008 and spawned myriad litigation. As we stated in a previous opinion-just one of numerous appeals related to these transactions-the "hearings and appeals spawned by these investments are legion." (Asset Management Consultants, Inc. v. Barrons (Jan. 5, 2021, G058398 [nonpub. opn.]) (previous opinion).) There are several different transactions that are threads in the tapestry of litigation, but the picture that emerges from the various investments follows the same basic pattern: the investors purchased tenant-in-common interests in an office building from investment promoters who, in turn, had recently purchased the building from a seller. Nominally, the promoters' brokerage fees, which ran into the millions, were paid by the original sellers of the office buildings. But according to plaintiffs, the promoters and sellers conspired to fraudulently mark up the price of the building above market value so that, in effect, the investors were unknowingly paying the promoters' fees.
The present appeal concerns not the promoters themselves, but accountants who allegedly were complicit in the fraudulent scheme. These defendants successfully moved to compel arbitration. At the arbitration, defendants prevailed on the ground that plaintiffs' claims are barred by the statute of limitations. The trial court confirmed the arbitration award in defendants' favor. Plaintiffs appealed.
During the pendency of this appeal, the Second Appellate District published Ahern v. Asset Management Consultants, Inc. (2022) 74 Cal.App.5th 675 (Ahern), which is part of the cohort of litigation relating to the same investments playing out in Los Angeles courts, and which emerged from the exact same arbitration proceeding as the present appeal. In Ahern, Justice Perluss authored an opinion holding that the principal arbitration provision upon which arbitration was ordered there-and here-did not cover the claims at issue and thus it was error to compel the parties to arbitration. Both because we find that opinion persuasive, and due to the importance of maintaining consistent judicial opinions relating to the sprawling litigation, we will follow Justice Perluss's opinion.
Defendants also assert a few arguments not discussed in Ahern, relying on arbitration provisions in other documents connected to the investments. However, we find none of those provisions applicable and thus reverse the judgment.
FACTS
Because this appeal arises from an arbitration award, we will not provide an exhaustive set of underlying facts, but instead will focus on the overall structure of the transaction viewed through the lens of the specific documents the parties executed that bear on the issue of arbitrability. Before discussing the documents, however, we begin with a brief introduction of the parties.
A more complete description of the investment schemes may be found in Ahern, supra, 74 Cal.App.5th 675. The specific investment at issue here was detailed in Aerovault Kornievsky, LLC v. Cushman & Wakefield, Inc. (Aug. 5, 2016, G051702) [nonpub. Opn.].
Plaintiffs are Linda M. Barrons, in her individual capacity and as trustee of the Barrons Family Trust Dated August 16, 1988, as well two single-purpose entities that were created to facilitate the various investments at issue in this litigation (Aerovault Barrons, LLC and Eaton Barrons, LLC). The defendants are Smith, Linden, &Basso LLP, an accounting firm as well as Allan L. Basso, a partner in the accounting firm. The defendants are alleged to have encouraged plaintiffs to invest with knowledge of the alleged fraud. Although not parties to this appeal, BH &Sons, LLC and Asset Management Consultants, Inc. were the underlying promoters and managers of the investments and, according to plaintiffs, are the masterminds behind the allegedly fraudulent scheme.
The important documents in these transactions are the following.
1. The Property Information Package
Plaintiffs' claims revolve in part around the property information package, which was a document distributed to would-be investors interested in purchasing a tenant-in-common share. The property information package described the nature of the investment and the costs involved. The basic gist of plaintiffs' claims is that the property information package, among other documents, misled the would-be investors about the costs involved in the transaction, and in particular the real estate commission paid to Asset Management Consultants. The property information package is not itself a contract and does not contain an arbitration provision.
2. The Purchase and Sale Agreement
The investment begins with the promoters of the investment-BH &Sons-purchasing an office building from the prior owner. This transaction was memorialized in a purchase and sale agreement. There are multiple transactions at issue in the present appeal. As both the parties and the lower court have done, we will refer to the iStar purchase and sale agreement (iStar PSA) as the exemplar (so named because iStar CTL I, L.P. (iStar) was the seller).
Plaintiffs' claims revolve in part around the allegation that the iStar PSA states that iStar was paying Asset Management Consultants' commission, but in fact iStar and Asset Management Consultants had secretly negotiated the sale price above market value so that, in effect, the ultimate buyers (plaintiffs) would foot the bill for the commission. The iStar PSA does contain an arbitration agreement, which states the following: "Any dispute among Seller and Purchaser as to the interpretation of any provision of this Agreement or the rights and obligations of any party hereunder shall be resolved through binding arbitration as hereinafter provided in Los Angeles, California." The iStar PSA is signed by James R. Hopper as President of Asset Management Consultants, which, in turn, is the managing member of BH &Sons. The defendants in this proceeding are not parties to the iStar PSA, nor are the plaintiffs. As will be seen below, however, the plaintiffs assumed the rights and obligations of BH &Sons under the iStar PSA.
3. The Tenant In Common Purchase and Sale Agreement (TIC PSA)
After BH &Sons acquired the investment property, it would then sell tenant in common shares of the property to the investors, which was memorialized in a purchase and sale agreement (the TIC PSA). The TIC PSA required the cotenants to assume BH &Sons' obligations under the iStar PSA so that the cotenants, in effect, became the buyers under that agreement. The terms of the iStar PSA were incorporated into the TIC PSA by reference. The TIC PSA does not contain an arbitration provision. The defendants in this case (the accountants) are not parties to the TIC PSA.
4. The Cotenancy Agreement
The Cotenancy Agreement is the principal document upon which defendants claim the present lawsuit is subject to arbitration. Because the owners of the property would ultimately be several investors who owned undivided tenant in common shares of the building, the Cotenancy Agreement sets forth the legal relations between the investors, including how the property would be managed, the maintenance of the building, the use of funds required to maintain the building, and various restrictions on the resale of tenant in common shares. The Cotenancy Agreement also designates BH &Sons (one of the investment promoters) as the manager of the property for the first year. The Cotenancy Agreement, which is dated November 2006, is signed by each of the cotenants as well as BH &Sons. The Cotenancy Agreement contains the following arbitration provision: "Unless the relief sought requires the exercise of the equity powers of a court of competent jurisdiction, any dispute arising in connection with the interpretation or enforcement of the provisions of this Agreement, or the application or validity thereof, shall be submitted to arbitration." The defendants in this appeal (the accountants) are not parties to the Cotenancy Agreement.
5. The Property Management Agreement
The Property Management Agreement was between the cotenants and the company hired to manage the property on a day-to-day basis, Property Management Associates, Inc. That agreement contains the following arbitration provision: "Any disputes or claims in law or in equity between Owner and Agent arising out of this Agreement or any transaction arising under this Agreement, which is not resolved between the parties through mediation by the parties, shall be submitted to and decided by neutral binding arbitration and not by court action, except as provided by California law for judicial review of arbitration proceedings." The term "Agent" refers to Property Management Associates. The parties to this agreement are the single-purpose entities that owned the TIC shares and Property Management Associates. Defendants are not parties to this agreement.
6. The Accountant Retainer Agreement
The final relevant document is an accountant retainer agreement entitled "Authorization to Prepare 2012 Partnership Returns." In January 2013, James Hopper, in his individual capacity, entered into this agreement with defendant Smith, Linden &Basso, LLP. The agreement was primarily for the preparation of year 2012 taxes, though it also included "any bookkeeping we find necessary for preparation of the income tax returns." The agreement contains an arbitration provision as follows: "In the event of a dispute over fees for our engagement, we mutually agree to try in good faith to resolve the dispute through mediation by selecting a third party to help us reach an agreement. If we are unable to resolve the fee dispute through mediation, client and accountant agree to submit to a resolution by arbitration in accordance with the rules of the American Arbitration Association." This is the only document relevant to this appeal in which defendants are signatories. However, plaintiffs are not.
7. Procedural History
The present lawsuit was filed in March 2013. The operative second amended complaint was filed in September 2013. It asserted 15 causes of action against numerous defendants generally sounding in fraud, breach of fiduciary duty, and malpractice. In November 2013, defendants moved to compel arbitration. In January 2014, the court granted the motion. The court found that the arbitration provisions in the cotenancy agreement, property management agreement, and the iStar PSA all encompassed the claims against the present defendants.
The arbitration lasted approximately five years, at the end of which, in 2019, the arbitrator essentially sustained a demurrer on behalf of the defendants. (Asset Management Consultants, Inc. v. Barrons (Jan. 5, 2021, G058398 [nonpub. opn.].) The arbitrator subsequently awarded attorney fees to defendants. Plaintiffs petitioned to vacate the arbitration award and defendants petitioned to confirm it. The court confirmed the award, entered judgment, and plaintiffs appealed from the judgment.
DISCUSSION
The trial court compelled the parties to arbitration based on arbitration provisions in the Cotenancy Agreement, the iStar PSA, and the Property Management Agreement. On appeal, plaintiffs contend it was error to compel arbitration. "[T]he threshold questions presented by every motion or petition to compel arbitration are whether an agreement to arbitrate exists [citations] and, if so, whether the parties' dispute falls within the scope of that agreement." (Ahern, supra, 74 Cal.App.5th at p. 687.) The principal focus of the briefs is the Cotenancy Agreement, which is where we begin. "We review the trial court's interpretation of an arbitration agreement de novo when, as here, that interpretation does not depend on conflicting extrinsic evidence." (Ibid.)
1. Cotenancy Agreement
The Cotenancy Agreement contains the following arbitration provision: "Unless the relief sought requires the exercise of the equity powers of a court of competent jurisdiction, any dispute arising in connection with the interpretation or enforcement of the provisions of this Agreement, or the application or validity thereof, shall be submitted to arbitration.." During the pendency of this appeal, after briefing was complete, the Second Appellate District decided Ahern, a case that arose from the same arbitration that the parties here participated in. Ahern directly addressed whether the arbitration provision in the Cotenancy Agreement covers the identical claims that plaintiffs make here. Ahern's conclusion: "Those claims did not 'aris[e] in connection with the interpretation or enforcement of the provisions of [the cotenancy agreement], or the application or validity thereof' and should not have been ordered to arbitration." (Ahern, supra, 74 Cal.App.5th at p. 688.)
The Ahern court's conclusion followed from two premises. First, "The arbitration provision in the cotenancy agreement is particularly narrow, both omitting any general reference to disputes 'related to' the agreement and specifically providing for arbitration only of those disputes arising in connection with 'the interpretation and enforcement of the provisions of the agreement. '" (Ahern, supra, 74 Cal.App.5th at p. 690.) Second, plaintiffs' claims arise from the marketing and acquisition of the tenant in common shares, which relate to the property information package and the TIC PSA, neither of which contain arbitration provisions. The cotenancy agreement, by contrast, concerns the ongoing management of the property as well as the legal relations among the investors. "[T]he [plaintiffs'] claim [that] they were fraudulently induced by the [defendants] to invest in the . . . property has its roots in the contractual relationship between the [plaintiffs] and [the promoters] created by the tenant in common purchase and sale agreement, not the cotenancy agreement." (Id. at p. 693.)
We find this reasoning persuasive. We find it particularly noteworthy that the TIC PSA, which was drafted by the investment promoters, does not contain an arbitration provision. That tells us that the parties intended for disputes arising from the acquisition of the TIC shares to be resolved in a court of law. And that is precisely what we have here: tort claims arising from the acquisition of the TIC interests, and in particular claims of fraud and malpractice arising from the design and marketing of those investments. That is not the concern of the Cotenancy Agreement, which contains only a narrow arbitration provision to begin with.
Because Ahern was decided after briefing was completed in this appeal, we asked the parties to provide supplemental briefs addressing the applicability of Ahern to this case. The defendants made little effort to distinguish Ahern, but they did raise two issues that had not previously been raised and that, in theory, could prevent the application of Ahern here: law of the case, and harmless error. We turn to law of the case next, and we will address harmless error at the end of this opinion.
Defendants contend that plaintiffs cannot dispute the applicability of the arbitration provision in the Cotenancy Agreement because we upheld an arbitration award based on the Cotenancy Agreement in our previous opinion, and as a result, law of the case establishes its applicability. In our previous opinion, we affirmed a judgment confirming an arbitration award against plaintiffs in favor of, among others, Asset Management Consultants and BH &Sons, the promoters of the underlying investment and the parties who were the alleged masterminds behind the fraudulent scheme claimed by the plaintiffs. (Asset Management Consultants, Inc. v. Barrons (Jan. 5, 2021, G058398 [nonpub. opn.].) The present defendants were not parties to that appeal. In that appeal, the only challenge that plaintiffs levied against the Cotenancy Agreement was that it was void for illegality. We agreed with plaintiffs in part: we found the agreement did contain provisions that required BH &Sons to perform tasks that only a licensed real estate broker is authorized to perform, which BH &Sons was not. However, we concluded that the illegal provisions were severable from the remainder of the Cotenancy Agreement and thus we upheld the legality of the arbitration provision. Defendants in the present appeal now contend that holding is determinative of the present appeal under law of the case. We disagree.
"'The doctrine of "law of the case" deals with the effect of the first appellate decision on the subsequent retrial or appeal: The decision of an appellate court, stating a rule of law necessary to the decision of the case, conclusively establishes that rule and makes it determinative of the rights of the same parties in any subsequent retrial or appeal in the same case. [¶] . . . [¶] . . . The doctrine applies only to a decision of an appellate court in the same case. Final decisions or rulings of a trial court in a separate case, or in various independent stages of a proceeding, are governed by the distinct principle of res judicata.'" (Daar &Newman v. VRL International (2005) 129 Cal.App.4th 482, 488-489.)
Law of the case does not apply for two reasons.
First, the present appeal does not involve the same parties as our prior opinion. (Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2021) ¶ 14:186.2. p. 14-75 ["the doctrine only applies as to the same parties in the same case"].) Here, the defendants are the attorneys. In Asset Management Consultants, Inc. v. Barrons (Jan. 5, 2021, G058398 [nonpub. opn.]), the defendants were the promoters of the investment.
Second, and more importantly, law of the case requires that the issue be actually determined in a prior appeal. (See Bovard v. American Horse Enterprises, Inc. (1988) 201 Cal.App.3d 832, 841 ["The general rule is that the [law of the case] doctrine applies only to issues which were both presented and determined in a prior appeal.") While it is true that the arbitration at issue in our prior opinion was based on the Cotenancy Agreement, plaintiffs never raised the issue of whether the scope of the arbitration provision in the Cotenancy Agreement encompassed plaintiffs' claims. This is likely because, in that case, plaintiffs voluntarily went to arbitration with the promoters, and thus there was no order compelling arbitration. Plaintiffs could only attack the validity of the award itself. Plaintiffs attempted to do so by arguing that the Cotenancy Agreement was illegal. However, we had no occasion to discuss the scope of the arbitration provision in the Cotenancy Agreement, nor whether plaintiffs could be compelled involuntarily to arbitration in the first instance, particularly against a nonsignatory to the agreement.
Even if we did not explicitly address that issue, defendants contend we implicitly decided it by affirming an arbitration award based on the Cotenancy Agreement. Although the general rule is that law of the case only applies to points explicitly decided in a prior appeal, "'As an exception to the general rule, the doctrine is . . . held applicable to questions not expressly decided but implicitly decided because they were essential to the decision on the prior appeal.'" (Leider v. Lewis (2017) 2 Cal.5th 1121, 1127.) For example: the appealability of a declaratory judgment was implicitly decided in a prior appeal and could not be challenged in a second appeal (Olson v. Cory (1983) 35 Cal.3d 390, 399 (Leider)); a prior appeal reversing a summary judgment necessarily implied that plaintiffs had stated a cause of action (Yu v. Signet Bank/Virginia (2002) 103 Cal.App.4th 298, 309 (disapproved on other grounds in Newport Harbor Ventures, LLC v. Morris Cerullo World Evangelism (2018) 4 Cal.5th 637, 646); and the jurisdiction of the court of appeal was implicitly decided in a first appeal and was thus law of the case in a second appeal (Ponce-Bran v. Trustees of Cal. State University (1996) 48 Cal.App.4th 1656, 1660, fn. 2.) As these examples show, the implicit finding must be truly essential to the prior appeal to satisfy this exception. Otherwise, the general rule is that "'the doctrine of law of the case does not extend to points of law which might have been but were not presented and determined in the prior appeal.'" (Leider, supra, 2 Cal.5th at p. 1127.)
The scope of the arbitration provision in the Cotenancy Agreement was not essential to our decision in the prior appeal. The existence of the arbitration provision was essential to our decision, and the validity of the provision was explicitly considered. But whether that provision applies to the specific claims that plaintiffs raise, and whether a nonsignatory can invoke that provision to compel arbitration, is a question of interpretation of the arbitration provision in light of the allegations of the complaint. That is not an inquiry that was before us in the prior appeal, and it certainly was not implicitly decided in any sense.
Accordingly, we find no hurdles in applying the persuasive reasoning of Ahern to the present case. The arbitration provision in the Cotenancy Agreement did not apply to plaintiffs' claims against the attorney defendants.
In reaching this conclusion, we recognize, as defendants emphasized at oral argument, that the result is awkward. Some defendants in this proceeding will benefit from the arbitration award (i.e. the promoters), while others will not. But no matter how we decide this issue, awkwardness will ensue. If we were to apply law of the case, we would be compelled to enforce an arbitration award despite our conviction that the arbitration provision does not apply, creating an inconsistency with identically situated defendants in the Los Angeles proceeding and effectively creating a split of authority in the Courts of Appeal. Ideally, the disparate pieces of this litigation should have been consolidated into a single proceeding where all issues could have been decided uniformly. Why that never occurred has not been explained to us, but, ultimately, we must decide the issues that come before us in the procedural posture that they appear. Focusing on the merits of the specific issues before our court in this appeal, we are compelled to conclude that the arbitration provision in the Cotenancy Agreement does not apply.
We now consider the remaining documents the court and the defendants relied on to compel arbitration.
2. iStar PSA
The iStar PSA contains the following provision: "Any dispute among Seller and Purchaser as to the interpretation of any provision of this Agreement or the rights and obligations of any party hereunder shall be resolved through binding arbitration as hereinafter provided in Los Angeles, California." "Seller" and "Purchaser" are defined terms in that agreement, referring to iStar CTL I, L.P., and BH &Sons, LLC, respectively. While it is true that, pursuant to the TIC PSA, the cotenants assumed the rights and obligations of the buyer under the iStar PSA, at no point did the term "Seller" refer to anyone other than iStar itself. Certainly, BH &Sons has no plausible claim to filling the role of "Seller" under that agreement, much less the defendants in this appeal. Moreover, the arbitration provision in the iStar PSA is, once again, a narrow provision, applying only "to the interpretation of any provision of this Agreement or the rights and obligations of any party hereunder ...." The present dispute is not with iStar, nor does it concern the interpretation of the iStar PSA or the rights and obligations created by that agreement. Accordingly, it was error to compel arbitration of the present lawsuit under that agreement.
Notably, the Ahern court previously had reversed an order compelling arbitration based on the iStar PSA. (Ahern, supra, 74 Cal.App.5th 675 [referencing Ahern v. Asset Management Consultants, Inc. (Aug. 11, 2015, B253974 &B257684) [nonpub. opn.].)
3. The Property Management Agreement
The Property Management Agreement does not apply for similar reasons. That agreement contains the following arbitration provision: "Any disputes or claims in law or in equity between Owner and Agent arising out of this Agreement or any transaction arising under this Agreement, which is not resolved between the parties through mediation by the parties, shall be submitted to and decided by neutral binding arbitration and not by court action, except as provided by California law for judicial review of arbitration proceedings." The term "Agent" refers to Property Management Associates. While this arbitration provision is somewhat broader in scope than the others, it similarly only applies to a single party: Property Management Associates, who is not a party to this appeal. Moreover, like the Cotenancy Agreement, the Property Management Agreement concerns the ongoing, day-to-day operation of the property and has nothing to do with the marketing or acquisition of the TIC shares, which forms the basis for plaintiffs' claims in this lawsuit. Accordingly, the Property Management Agreement did not furnish a basis for compelling arbitration in this case.
4. The Accountant Retainer Agreement
Defendants have one last gasp. They contend that plaintiffs should be bound to an arbitration provision in an accountant retainer agreement between James Hopper, the president of Asset Management Consulting, and defendant Smith, Linden &Basso. The trial court never addressed this contention, but defendants assert we can reach it on the theory that even if the court's reasoning was erroneous, we may affirm the judgment on any correct legal theory. (See In re Marriage of Burgess (1996) 13 Cal.4th 25, 32 ["We are required to uphold the ruling if it is correct on any basis, regardless of whether such basis was actually invoked"].) Even assuming that doctrine could apply here, we conclude plaintiffs were not bound by the retainer agreement.
As we explained in more detail in the statement of facts above, the retainer agreement contains the following arbitration provision: "In the event of a dispute over fees for our engagement, we mutually agree to try in good faith to resolve the dispute through mediation by selecting a third party to help us reach an agreement. If we are unable to resolve the fee dispute through mediation, client and accountant agree to submit to a resolution by arbitration in accordance with the rules of the American Arbitration Association."
Plaintiffs are not a party to this agreement. Nevertheless, defendants contend that because plaintiffs assert accounting malpractice in their complaint and claim to have been a client of Smith, Linden &Basso, they should be equitably estopped from denying the applicability of the arbitration provision in the retainer agreement.
"The doctrine of equitable estoppel is founded on notions of equity and fair dealing and provides that a person may not deny the existence of a state of facts if that person has intentionally led others to believe a particular circumstance to be true and to rely upon such belief to their detriment. [Citation.] '"Generally speaking, four elements must be present in order to apply the doctrine of equitable estoppel: (1) the party to be estopped must be apprised of the facts; (2) he must intend that his conduct shall be acted upon, or must so act that the party asserting the estoppel had a right to believe it was so intended; (3) the other party must be ignorant of the true state of facts; and (4) he must rely upon the conduct to his injury."'" (City of Oakland v. Oakland Police &Fire Retirement System (2014) 224 Cal.App.4th 210, 239.)
The fatal flaw in defendants' argument is that plaintiffs never claimed that the retainer agreement created an accountant-client relationship between plaintiffs and Smith, Linden &Basso. To the contrary, they claim it was a breach of duty for Smith, Linden &Basso to have been purporting to work on behalf of plaintiffs without any written agreement or disclosures. Accordingly, plaintiffs did not lead anyone to believe that the retainer agreement created a client relationship, and thus they are not equitably estopped from denying its applicability.
Moreover, even if the plaintiffs could be bound to the retainer agreement, the arbitration provision itself only applies to "a dispute over fees for our engagement." The present litigation can in no way be characterized as such. Accordingly, the retainer agreement cannot furnish a basis for compelling arbitration in this case.
Because none of the agreements relied on by the trial court required the parties to arbitrate the claims at issue in the present lawsuit, the court erred by compelling arbitration. The only remaining question is whether that error was harmless.
5. Harmless Error
Defendants' final argument, raised in the first instance in supplemental briefing, is that any error in compelling plaintiffs to arbitration was harmless because two Courts of Appeal have already determined that plaintiffs' claims were barred by the statute of limitations. (See Stella v. Asset Management Consultants, Inc. (2017) 8 Cal.App.5th 18 (Stella); WA Southwest 2, LLC v. First American Title Ins. Co. (2015) 240 Cal.App.4th 148 (WA Southwest).) However, as plaintiffs helpfully reminded us, their record on appeal has been decidedly mixed. Although WA Southwest and Stella went against them, in subsequent appeals, plaintiffs prevailed on the statute of limitations issue. Specifically, in Barrons v. Lee &Associates Commercial Real Estate Services, Inc.-EI Toro (Feb. 9, 2016, G050326 [nonpub. opn.]), Justice Ikola, who was the author of WA Southwest, wrote an opinion finding plaintiffs were not on inquiry notice because the offering documents had important differences from the documents in WA Southwest. And in Ahern v. Chicago Title Company (May 20, 2021, B304119 [nonpub. opn.]), Justice Perluss, who was the author of Stella, likewise distinguished the documents involved and found plaintiffs were not on inquiry notice sufficient to trigger the statute of limitations.
In the present case, we cannot ascertain whether the offering documents are similar to those involved in WA Southwest and Stella, or the subsequent unpublished opinions. The parties have not briefed this issue, nor has the trial court addressed it. Accordingly, it is not ripe for resolution in this appeal. However, given the significant possibility that plaintiffs may prevail on the statute of limitations issue, we cannot say that the error in compelling arbitration in the present case was harmless.
DISPOSITION
The judgment confirming the arbitration award is reversed. The matter is remanded with directions to deny the petition to confirm the arbitration award, to grant the petition to vacate the award, and to vacate the January 29, 2014 order compelling arbitration. Appellants shall recover their costs incurred on appeal.
WE CONCUR: MOORE, ACTING P. J. SANCHEZ, J.
[*]Judge of the Orange County Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.