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Procedural Posture

Procedural Posture

Plaintiff subcontractor sued defendant mechanical corporation for, inter alia, breach of contract. The subcontractor filed a petition to compel arbitration, but the trial court denied the petition. The California Court of Appeal, Second District, Division Five, affirmed the order, concluding that the subcontractor’s right to arbitrate was waived by its failure to seek arbitration in a timely manner. The subcontractor petitioned for review.

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No statute or contractual provision specified a time limit within which the subcontractor was required to demand arbitration. The instant court concluded that the lower courts erred in denying the subcontractor’s petition to compel arbitration under Code Civ. Proc., § 1281.2, on the ground the statute of limitations had run on the claims the parties had agreed to arbitrate. Because the parties had agreed to arbitrate any dispute arising out of their contract, the affirmative defense that the statute of limitations had run was for the arbitrator rather than the court to decide. Although the subcontractor may have delayed unreasonably in seeking to compel arbitration, the trial court expressly declined to reach the issue because it erroneously concluded the statutes of limitations on the subcontractor’s contractual and statutory claims barred the petition to compel. The trial court did not undertake the factual inquiry necessary to determine whether the subcontractor waived its right to compel arbitration. The instant court could not infer a finding of waiver because the trial court expressly declined to make such a finding in its statement of decision.


The judgment of the intermediate appellate court was reversed, and the case was remanded to that court for further proceedings.