On May 29, 2012, the California Supreme Court heard oral argument on a case that is critical for the building industry, Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US) LLC. The case concerns whether CC&Rs can require arbitration of construction defect claims. Both the trial and appellate courts had refused to enforce arbitration, at which point Hecht Solberg was retained to persuade the Supreme Court to take the case. (Supreme Courts do not have to accept most cases that are brought to them, and in fact decline to consider the vast majority.) The case is vitally important for builders because arbitration is a faster, less expensive and less risky process than litigation in court. The case has attracted quite a bit of attention in the legal media. Members of the court focused their questions on what types of matters could properly be included in CC&Rs.
Once the Supreme Court accepted the case, a Hecht Solberg team handled it through the Supreme Court hearing. Jerry Goldberg, as lead counsel, argued the matter before the Supreme Court. Susan Daly provided valuable input on CC&Rs and common interest development issues, while Amanda Allen and Richard Schulman assisted in the preparation of the oral argument. Mr. Schulman drafted the briefs in collaboration with Mr. Goldberg, Ms. Daly and Ms. Allen. Other firms filed amicus briefs addressing related matters. One of Hecht Solberg’s briefs addressed a recent U.S. Supreme Court case, Concepcion, which reaffirmed the strong public policy in favor of arbitration. The Court should issue its decision by August 27, 2012, which will bring welcome certainty regarding the choice of a forum in which construction defect disputes can be resolved.
The issues in the Pinnacle case affect several important areas of concern. For those concerning CC&Rs and common interest developments, we encourage you to contact Susan Daly of our Common Interest Practice Group. For those involving risk management and dispute resolution, we encourage you to contact Jerry Goldberg, Amanda Allen or Richard Schulman of our Litigation / Risk Management Practice Group. All of them can be reached at 619.239.3444.