Real Estate and Construction Law Blog

Greenbriar Homes Communities, Inc. v. Superior Court(Couris)
117 Cal. App. 4th 337 (3d Dist. Mar. 8, 2004)

Homeowners brought claims against petitioner to recover for damages allegedly caused by petitioner's defective construction. Homeowners included original purchasers (those who had bought their homes from petitioner) and non-original purchasers who were not in privity of contract with petitioner. The sale agreements between petitioner and the original purchasers required all disputes to be determined by a judicial referee.

As to the non-original purchasers, the Court of Appeal upheld the trial court's denial of petitioner's motion to compel judicial reference, finding that the non-original purchasers, "[h]aving never consented to judicial reference, [ ] cannot now be forced to participate in a general reference by the court." As to the original purchasers, the Court of Appeal vacated the trial court's ruling denying petitioner's motion to compel judicial reference, finding that the reference provision in the sales agreement was not unconscionable.

The Court of Appeal also rejected homeowners' argument that the potential for multiple actions invalidated the parties' reference agreement, holding that a court may not invalidate a valid contractual agreement, such as the sales agreement at issue, without statutory authorization therefor.

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