Opinion
NOT TO BE PUBLISHED
Alameda County Super. Ct. No. RG07315227
RIVERA, J.
Celeste Olivarez (Olivarez) appeals a judgment in favor of plaintiffs Cherrie Patinio and Maria Larlin Asino (collectively “Patinio”) following the denial of a motion for a new trial. Olivarez contends the trial court erred in finding in favor of Patinio and awarding damages in the amount of $104,500.00. We affirm the judgment.
I. PROCEDURAL AND FACTUAL BACKGROUND
In 2006, Patinio purchased Olivarez’s business, a residential care facility for the elderly, and the real property upon which it was operated, located at 140 Lucot Street in Hayward, California. The real estate transaction was completed using a standard Residential Purchase Agreement (RPA) containing a mediation and arbitration clause initialed by both parties. The purchase of the business was memorialized by a form Business Purchase Agreement (BPA) which the parties did not sign, and by a separate typed document titled “Addendum, ” (Addendum) which was prepared by Olivarez and signed by the parties. Patinio paid $100,000.00 for the business.
It appears that Patinio left the BPA unsigned at the direction of her realtor, who advised that Olivarez wanted cash for the business and did not want a combined loan for the two purchases.
Escrow closed on the real property transaction in September 2006, but communications between the parties broke down concerning the sale of the business. Patinio thereafter filed suit against Olivarez for breach of contract, fraud, and negligent misrepresentation, and sought to rescind the agreement to purchase the business. Olivarez cross-complained, alleging that Patinio breached the RPA by failing to arbitrate the matter. The case proceeded to a bench trial and the trial court found that Olivarez’s failure to assist the buyers in taking over the residential care business constituted a breach of contract. The trial court ordered Olivarez to return the $100,000.00 purchase price of the business, and to pay $4,500.00 in rent to Patinio. The court also awarded prejudgment interest. Olivarez moved for a new trial, which the trial court denied.
After ownership of the real property transferred to Patinio, Olivarez continued to operate the residential care business there and collect the revenue it generated. Patinio attempted, unsuccessfully, to enter into a lease agreement with Olivarez in order to collect rent from her for her continued use of the property.
II. DISCUSSION
Olivarez contends the trial court erred in entering a judgment in favor of Patinio. She claims Patinio breached the RPA by filing suit against Olivarez instead of resolving the matter through arbitration. Olivarez made the same argument at the hearing on the motion for a new trial, urging the trial court either to grant a new trial or to make a finding on her cross-complaint, in which Olivarez had alleged that Patinio breached the RPA when she failed to arbitrate the dispute. The trial court denied Olivarez’s motion for a new trial saying, “[i]t is certainly implicit [in the judgment] that [Olivarez’s] cross complaint was denied... [e]ven if there were a valid clause between the parties to arbitrate. Even if we were talking about the subject matter of the real estate, it would be incumbent upon the person who answered arbitration to put that before the Court early. I am not even sure it is proper as a defense. If you wanted arbitration, then you bring a motion to compel arbitration.... It was never brought before me that I can recall that I should compel arbitration.” The trial court’s ruling was correct.
The issue of arbitrability is a matter of contract interpretation, which is a question of law subject to de novo review in the absence of conflicting extrinsic evidence. (County of Contra Costa v. Kaiser Foundation Health Plan, Inc. (1996) 47 Cal.App.4th 237, 241 (County of Contra Costa); Balandran v. Labor Ready, Inc. (2004) 124 Cal.App.4th 1522, 1527 (Balandran).) Generally, there is a “strong public policy in favor of arbitration under both federal and California law.” (Crowley Maritime Corp. v. Boston Old Colony Ins. Co., 158 Cal.App.4th 1061, 1069.) However, “[a]rbitration is consensual in nature” and “assumes that the parties have elected to use it as an alternative to the judicial process.” (County of Contra Costa, supra, at p. 244.) The public policy favoring arbitration does not extend to disputes the parties have not agreed to arbitrate. (Balandran, supra, at p. 1528.) This is because “[t]he right to arbitration depends on a contract” (Rhodes v. California Hospital Medical Center (1978) 76 Cal.App.3d 606, 609; Code Civ. Proc., § 1281), and a party can be compelled to arbitration only when he or she has agreed in writing to do so. (Marsch v. Williams (1994) 23 Cal.App.4th 250, 255.)
Olivarez maintains on appeal, as she asserted below, that Patinio breached the RPA by filing a complaint instead of submitting the dispute to arbitration. While it is true that the RPA contains a dispute resolution clause that both parties initialed, Patinio’s lawsuit arose only out of her purchase of Olivarez’s business, and not out of the purchase of the real property. The two documents pertaining to the purchase of the business are the BPA and the Addendum. The BPA contains a standard dispute resolution clause addressing mediation and arbitration, but unlike the RPA, the parties did not affix their initials underneath this clause in the BPA. In fact, the parties did not sign the BPA at all. The Addendum was signed by the parties on various dates, but it does not address alternative dispute resolution, nor does it incorporate by reference any part of either the RPA or the BPA. Likewise, the RPA does not mention the purchase of the business. Thus, while the parties agreed to arbitrate disputes arising from the purchase of the 140 Lucot Street property, they did not reach a similar agreement regarding the purchase of Olivarez’s business. As there was no valid arbitration clause with respect to the BPA, the trial court did not err in entering judgment in favor of Patinio.
III. DISPOSITION
The judgment is affirmed. Olivarez shall pay Patinio’s costs on this appeal.
We concur: REARDON, Acting P.J.SEPULVEDA, J.