Friday, May 18, 2018

Benaroya v. Willis

Benaroya v. Willis (CA2/4 B281761 5/17/18) Arbitration Ruling/Nonsignatory to Agreement

Benaroya Pictures (Benaroya) contracted with Westside Corporation (Westside) to pay the well-known actor Bruce Willis, the president of Westside, to perform in a movie to be produced by Benaroya.  After a dispute arose regarding Willis’ payment, Willis and Westside (collectively respondents) commenced arbitration proceedings against Benaroya, pursuant to the arbitration clause in the agreement.  While in arbitration, respondents moved to amend their arbitration demand to name appellant Michael Benaroya individually, even though he was not a party to the agreement, on the ground that he was the alter ego of Benaroya.  The arbitrator granted the request, found appellant to be Benaroya’s alter ego, and awarded damages to respondents for which both Benaroya and appellant, as Benaroya’s alter ego, were liable.  The trial court denied appellant and Benaroya’s petition to vacate the award as to appellant, and granted respondents’ petition to confirm the award.  In this appeal from the confirmation of the award, appellant contends the trial court erred because he was a nonsignatory to the arbitration agreement, and only the court, not the arbitrator, had authority to determine whether he was compelled to arbitrate as the alter ego of Benaroya.  We agree and therefore reverse the judgment.  We remand the case to the trial court with directions to:  (1) set aside its rulings denying appellant and Benaroya’s petition to vacate the award and granting respondent’s petition to confirm; and (2) enter new orders granting appellant and Benaroya’s petition to vacate the award as to appellant, and granting respondents’ petition to confirm the award only as to Benaroya.

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