Friday, April 17, 2026
Page 3
Judge Should Have Decided Standing Issue Before Sending Case to Arbitration—C.A.
By a MetNews Staff Writer
Div. Three of the Fourth District Court of Appeal held, in an opinion certified for publication yesterday, that where a defendant contends that the plaintiffs, purporting to be liquidating trustees of a fund, were never elected to that position by the members nor appointed by a judge and therefore lack standing, the court must resolve the factual dispute before shunting the case to arbitration.
Justice Maurice Sanchez authored the opinion, initially filed March 20. He was joined by Acting Presiding Justice Eileen C. Moore.
Orange Superior Court Judge Julianne Bancroft, sitting on assignment, dissented, arguing that “the arbitrator had the jurisdiction to consider the issue of standing,” found that it was established, and none of the limited grounds for vacating an award is present.
Sanchez declared:
“If the purported representatives did not have standing, the court and arbitrator lacked jurisdiction over the case, and it should have been dismissed at the outset and not sent to arbitration.”
He noted:
“An appellant can raise the lack of standing for the first time on appeal. A plaintiffs lack of standing is treated as a ‘jurisdictional’ defect….”
The $21 million arbitration award by retired San Diego Superior Court Judge Victor E. Bianchini in favor of the plaintiffs in a fraud/breach-of-fiduciary-duties case, was confirmed by Orange Superior Court Judge David J. Hesseltine and judgment was entered. The majority reversed the judgment and order the trial court to vacate the orders sending the case to arbitration and confirming the award, and to decide the matter of standing.
If standing is established, Sanchez said, the judgment is to be reinstated.
Bancroft argued in her dissent:
“The majority’s opinion would vacate a judgment after a final, binding arbitration award based on the aggrieved party’s contention that the other party did not have standing. The practical result of the majority’s decision will be to require the trial court to conduct an evidentiary hearing on the plaintiffs standing in every case before ordering the matter to arbitration on the defendant’s request. This is neither practical nor legally required. When a jury or court sitting as a finder of fact determines after trial that one party to the proceeding lacked standing, the court’s interim orders are not subject to be vacated because it did not determine the parties’ standing at the outset of the case. The result should be no different when the matter has been sent to contractual arbitration at the request of the party who now seeks a second bite at the apple.
“Taken to its logical conclusion, the rule announced by the majority today would permit an unhappy party to challenge any judgment (whether the result of a jury trial, a bench trial, or a dispositive motion) based on a bare contention of lack of standing, on the ground that the court never had jurisdiction over the matter in the first place. No authority supports this attack on the finality of judgments, or of binding arbitration awards to which the parties agreed.”
While not disputing the proposition that lack of jurisdiction may be raised for the first time on appeal, she said that “jurisdiction was not raised for the first time on appeal,” pointing out:
“To the contrary, the issue was raised, argued, and decided in the arbitration by the duly appointed arbitrator.”
Bianchini “had the jurisdiction to consider the issue of standing,” she wrote.
The case is NNN Capital Find I v. Mikles, 2026 S.O.S. 1049.
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