Metropolitan News-Enterprise


Monday, August 14, 2023


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Assent to Arbitration Inferred From Writings Other Than Unsigned Retainer Agreement


By a MetNews Staff Writer


Div. Three of the Fourth District Court of Appeal held Friday, in a case in which a lawyer and his firm are seeking about $1.38 million in fees, that a judge erred in denying a motion to compel arbitration based on the client not having signed the retainer agreement containing an arbitration clause.

There, was Justice Thomas A. Delaney said in an unpublished opinion, an agreement to arbitrate is inferable from other writings.

The case is one marked by see-sawing positions and procedural bumpiness, including a removal to federal court, which bounced the case back to state court.

Initially, Newport Beach real estate attorney Michael F. Sitzer and Sitzer Law Group (“SLG”) sued ex-client Elizabeth Wong in Los Angeles Superior Court for fees; they dismissed that action without prejudice and instituted arbitration proceedings, to which Wong assented; Wong cross-complained in the arbitration; she sued them in Orange Superior Court to enjoin any effort to seize her assets based on a purported security interest or lien.

Sitzer and his firm then decided the arbitration they had sought was inappropriate because Wong had not signed the retainer agreement and announced they were withdrawing from it. Orange Superior Court Judge Fred W. Slaughter denied Wong’s motion to order the case into arbitration—where it had been for about 10 months.

Delaney’s Opinion

Delaney declared that “the written arbitration demand and plaintiff’s written assent thereto, along with the parties’ actions in the arbitral forum and in court during the roughly 10 months following filing of the demand, evidence an agreement to arbitrate as a matter of law.”

He explained:

“Because mutual assent to a contract may be express or implied, parties may  accept an agreement to arbitrate through conduct….Here, SLG’s arbitration demand and plaintiff’s assent to the AAA’s jurisdiction formed the written basis of an agreement to arbitrate…, and. as a matter of law, the parties’ subsequent  actions confirmed the existence of such an agreement.”

Additional Parties

When Sitzer and his firm demanded arbitration, they identified 12 other parties to the fee dispute. Those parties did not assent to arbitration.

Inasmuch as the dispute involves parties other than Wong, Sitzer and SLG argued, arbitration should be denied. They pointed to Code of Civil Procedure §1281.2(c) which provides that where “[a] party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact,” the court has four alternatives, one of which is denying the motion to arbitrate.

Delaney said it will be up to the trial court to decide the issue in the first instance, specifying:

“Our decision today goes no further than concluding, as a matter of law, plaintiff proved the existence of a written agreement to arbitrate. We express no opinion regarding the full scope of the parties’ agreement to arbitrate. And, assuming Sitzer and SLG continue to raise the argument, we leave it to the trial court on remand to determine whether section 1281.2, subdivision (c), applies, and, if so, how to exercise the discretion afforded thereby.”

Estoppel Not Addressed

He said in a footnote:

“Because we conclude a written agreement to arbitrate exists, we do not address plaintiff’s alternative arguments that Sitzer and SLG waived their right to a judicial forum and they should be judicially estopped from denying the existence of such an agreement.”

The case is Wong v. Sitzer, G061291.


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