Court of Appeal, Second District, Division 1, California.
Kenny GRAVILLIS, Jr., Plaintiff and Respondent,
v.
COLDWELL BANKER RESIDENTIAL BROKERAGE COMPANY et al., Defendants and Appellants.
No. B216373.

Feb. 26, 2010.

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An arbitrator's errors generally do not contravene the “exceeded powers” clause of the CAA. Under section 1286.2, subdivision (a)(4), an arbitrator exceeds his powers by acting without subject matter jurisdiction, deciding an issue that was not submitted to arbitration, arbitrarily remaking the contract, upholding an illegal contract, issuing an award that violates a well-defined public policy or a statutory right, fashioning a remedy that is not rationally related to the contract, or selecting a remedy not authorized by law. (

With respect to the alleged error concerning the Brokers' fiduciary duty, the arbitrator found: “[The Brokers] did not intentionally conceal the home inspection report and the termite report, both of which were faxed directly to Mr. Gravillis and both of which revealed structural damage to the property and termite infestation. Rather the [Brokers] breached their fiduciary duty by failing to follow up with the [Plaintiff] and inquire whether based on the existence of the termite and structural damage, [he] still wanted to proceed with the purchase of the property or whether [he] wanted to further consult the experts who prepared both of the reports, so that [the Brokers] can connect the dots for the [Plaintiff].” On the subject of damages, the arbitrator stated: “[T]here is no [California] Supreme Court decision as to the measure of damages for breach of fiduciary duty by the broker/agent. Since there is a split of authority as to the measure of damages for breach of fiduciary duty among the Courts of Appeal, none of the decisions are binding.” The arbitrator ultimately decided to apply the benefit-of-the-bargain rule based on the analysis in Fragale v. Faulkner (2003) 110 Cal.App.4th 229, 235-238, 1 Cal.Rptr.3d 616, and Salahutdin v. Valley of California, Inc. (1994) 24 Cal.App.4th 555, 563-568, 29 Cal.Rptr.2d 463. Finally, the arbitrator awarded arbitral costs to Gravillis pursuant to the rules promulgated by ADR Services.

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