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Valley Casework12/6/1999
CERTIFIED FOR PUBLICATION
APPEAL from a judgment of the Superior Court of San Diego County, William J. Howatt, Judge. Reversed with directions.
In this case of first impression, we are called upon to reconcile the equitable considerations that arise in connection with a request for specific performance of a contractual arbitration provision, and those equitable factors pertinent to subrogation in the insurance context. Plaintiff and appellant Valley Casework, Inc. (Valley) appeals a judgment confirming an arbitration award against it and an underlying order denying its application for a preliminary injunction for relief from arbitration. (Code Civ. Proc., ยงยง 1285, 1287.4, 527. ) The judgment is in favor of defendant and respondent Comfort Construction, Inc. (Comfort), which jointly pursued the arbitration together with its insurer and subrogee Scottsdale Insurance Company (Scottsdale), which had paid $45,000 to settle a third party claim against its insured, Comfort. Valley now contends that the judgment and order must be reversed because the trial court erred as a matter of law in its rulings that both Comfort and Scottsdale had standing to pursue the arbitration, and the dispute fell within the scope of the subject arbitration clause. Valley argues (1) Comfort was not a real party in interest, suffering no damage, since Scottsdale paid the claim in full on its behalf; (2) Scottsdale was not a party to the contractual arbitration agreement and hence may not participate in arbitration against Valley's will; and (3) the dispute has evolved into a negligence claim for a defective product and hence does not fall under the terms of the contractual arbitration agreement.
The determination of standing to arbitrate as a party to the contractual arbitration agreement is a question of law for the trial court in the first instance. (Unimart v. Superior Court (1969) 1 Cal.App.3d 1039, 1045-1047.) In this case, under this factual scenario, Valley is correct that the trial court erred, abusing its discretion, in denying Valley's preliminary injunction application to preclude arbitration as pursued by Scottsdale, a nonparty to the arbitration agreement. The judgment and order therefore are reversed with directions to enter a different judgment that sets aside the arbitration award and grants the injunctive relief requested against Comfort/Scottsdale's pursuit of a contractual arbitration forum for resolution of this dispute.
FACTUAL AND PROCEDURAL BACKGROUND
In 1992 Valley entered into a subcontract with Comfort, the general contractor, to assemble from components and to install simulated woodgrain kitchen and bathroom cabinets in a 34-unit apartment complex Comfort was building for the owner, Danube Properties, Inc.
The subcontract included an arbitration clause to the effect that:
"If any question arises regarding the work required under this subcontract, or regarding the rights and obligations of contractor and subcontractor under the terms of this agreement or the plans or specifications, such question shall be subject to arbitration. . . . [ ] . . . Should any party refuse or neglect to appear or participate in arbitration proceedings, the arbitrator is empowered to decide the controversy in accordance with whatever evidence is presented."
The subcontract further provided in pertinent part:
"Responsibility For Other Crafts: Subcontractor shall assume the full responsibility for defective work of others, if it accepts said work, or materials, and proceeds with its phase of the work without written notification to contractor.
". . . . . . . . . . . . . . . . . . . . . .
"Su
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