Harris v. University Village Thousand Oaks, CCRC, LLC
Facts: Tenants living in a continuing care retirement community enter into a tenant care agreement, which is governed by state law. The agreement contains an arbitration provision for resolving claims and disputes arising from the agreement for their tenancy, care and services. The tenants sue the landlord for money losses arising out of the agreement to provide building and ground security, the monthly fees and the cost to charge electric vehicles.
Claim: The tenants claim they have the legal right to litigate in a court of law to resolve the landlord’s breach of the continuing care agreement.
Counterclaim: The landlord claims the tenants cannot sustain a court action and need to have their claims arbitrated since they agreed to binding arbitration in the tenancy provision of the continuing care agreement.
Holding: A California appeals court holds the arbitration clause is invalid and the tenants may litigate in a court of law since public policy prohibits arbitration agreements in tenancy provisions of continuing care agreements. [Harris v. University Village Thousand Oaks, CCRC, LLC (June 1, 2020)_CA6th_]
Editor’s Note – first tuesday has for 40 years advocated against arbitration provisions, as any decision reached by an arbitrator is final and binding. The arbitrator can ignore legal precedent, making the outcome of any arbitration impossible to predict. As a matter of policy, first tuesday does not include any arbitration provisions in our library of real estate forms. first tuesday forms encourage mediation as the preferred alternative dispute resolution.
On 9/6/20, the California Supreme Court denied Defendants’ petition for review and the multiple requests for depublication.