Moncharsh v. Heily & Blase
832 P.2d 899 | California Supreme Court | 1992
What This Case Means for Subcontractors
An attorney hired by a law firm signed a non-solicitation agreement and later left to work elsewhere. When clients followed him, the firm demanded 80% of his fees from those clients under the contract. The California Supreme Court ruled that arbitrators' decisions on contract disputes are final and cannot be overturned just because they made mistakes on the facts or law. The only exceptions are fraud, corruption, abuse of power, or serious procedural unfairness. This means subcontractors should expect arbitration awards to stick, even if they believe the arbitrator got it wrong.
Key Takeaways
- •Arbitration decisions are nearly final—you cannot appeal just because you think the arbitrator made a legal or factual error, so choose arbitration carefully
- •Non-solicitation and non-compete clauses in employment or service agreements are enforceable and arbitrators will uphold them, so review these clauses before signing
- •To overturn an arbitration award, you must prove fraud, corruption, the arbitrator exceeded their authority, or the process was fundamentally unfair—a high bar to meet
An arbitrator's decision is not generally reviewable for errors of fact or law.
Frequently Asked Question
Can I appeal an arbitrator's decision if I think they made a mistake on the law or facts?
No, not in most cases. California law says arbitration awards are final and binding, even if the arbitrator made errors. You can only overturn an award if you prove fraud, corruption, the arbitrator abused their power, or the process was seriously unfair. This is why it's critical to carefully review any arbitration clause before signing a contract.
Related Cases
Atlantic Marine Constr. Co. v. United States Dist. Court for Western Dist. of Tex.
Forum-selection clauses in federal contracts are enforced through §1404(a) transfer motions, not §1406(a) dismissals, and must be given controlling weight except in exceptional circumstances.
Texas Natural Resource Conservation Commission v. IT-Davy
Sovereign immunity bars a contractor's breach-of-contract suit against a state agency absent express legislative consent; neither the agency's conduct, contract terms, nor general statutes waive immunity from suit.
Martin K. Eby Construction Company, Inc. v. Dallas Area Rapid Transit
A contractor must exhaust administrative remedies established by a regional transportation authority before pursuing breach of contract claims in court, even when the authority lacks governmental immunity from suit.
General Services Commission v. Little-Tex Insulation Co.
The State does not waive sovereign immunity from breach-of-contract suits by accepting contract benefits; Chapter 2260's administrative procedure is the exclusive remedy for such claims.
Rory v. Continental Insurance
Unambiguous contractual limitations periods in insurance policies must be enforced as written unless they violate law or public policy; judicial assessments of reasonableness cannot override clear contract terms.
Italian Cowboy Partners, Ltd. v. Prudential Insurance Co. of America
A standard merger clause without clear and unequivocal language expressly disclaiming reliance does not bar a fraud claim, even in a commercial lease agreement between parties.