Pleasant v. Coastal Community Builders CA2/6

Opinion

Filed 9/14/26 Pleasant v. Coastal Community Builders CA2/6 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SIX

JEANNIE PLEASANT et al., 2d Civ. No. B351072 (Super. Ct. No. 25CV-0217) Plaintiffs and Respondents, (San Luis Obispo County)

v. COASTAL COMMUNITY BUILDERS, INC., Defendant and Appellant.

Coastal Community Builders, Inc. (CCB) constructed a home that Jeannie and Matthew Pleasant purchased from Presidio MI SLR 198, LLC (Presidio). Jeannie and Matthew Pleasant, along with their children Joy and John Pleasant (collectively, respondents), filed a superior court action against CCB alleging construction defects and other claims. The trial court denied CCB’s petition to compel arbitration. The court found CCB was not a third-party beneficiary to the arbitration provision in the purchase agreement. We conclude otherwise and will vacate the trial court’s order. Given that Jeannie and Matthew Pleasant signed the purchase agreement, the arbitration provision covers their claims against CCB. We will remand for determination of whether Joy and John Pleasant, as non-signatories, must arbitrate any of their claims against CCB under equitable estoppel principles. After making that determination and allowing the parties to raise any arguments not foreclosed by our opinion, the trial court will resolve CCB’s petition to compel arbitration. FACTUAL AND PROCEDURAL BACKGROUND In July 2021, Jeannie and Matthew Pleasant entered into a purchase agreement with Presidio for a residential home in San Luis Obispo. The purchase agreement incorporates the Master Declaration of Alternative Dispute Resolution (ADR Declaration) and provides that the buyer agrees to use the process set forth in that document. CCB was neither named in nor a signatory to the purchase agreement. The ADR Declaration was recorded in April 2021. Article II provides that “Declarant [i.e., Presidio and MI SAN LUIS RANCH, LLC] and applicable Declarant’s Agents will attempt to resolve any dispute asserted by a Claimant of which it is given notice.” After detailing the mediation procedure, Article II states: “ARBITRATION. SHOULD EITHER PROCEEDINGS GOVERNED BY CALIFORNIA CIVIL CODE § 6000 OR MEDIATION PURSUANT TO ARTICLE II, SECTION I ABOVE NOT BE SUCCESSFUL IN RESOLVING ANY DISPUTE, ANY AND ALL CLAIMS, CONTROVERSIES, BREACHES OR DISPUTES (EACH A “DISPUTE”) BY OR BETWEEN OR AMONG A CLAIMANT, AND/OR DECLARANT AND DECLARANT’S AGENTS ARISING FROM OR RELATED TO 2 THE MASTER DECLARATION, THE MASTER ASSOCIATION PROPERTY, THE MASTER ASSOCIATION MAINTENANCE AREAS, ANY LOT, THE SALE OF ANY LOT, OR ANY TRANSACTION RELATED HERETO, WHETHER SUCH DISPUTE IS BASED ON CONTRACT, TORT, STATUTE, OR EQUITY SHALL BE RESOLVED THROUGH BINDING ARBITRATION IN THE COUNTY WHERE THE PROPERTY IS LOCATED (OR SUCH OTHER LOCATION AS THE PARTIES MAY AGREE UPON) . . . .” Article I of the ADR Declaration contains a definition for Declarant’s Agents: “RIGHT TO REPAIR. If any Owner(s) or the Master Association (collectively, “Claimant”) claim, contend or allege that any portion of the Master Association Property, any portion of the Master Association Maintenance Areas, any Lot, and/or any Improvement in the Project requires repair or that Declarant or its agents, consultants, contractors or subcontractors (collectively, “Declarant’s Agents”) were responsible for the need to make any such repair (collectively, a “Dispute”), Declarant and Declarant’s Agents shall have the right to inspect, repair and/or replace any such Improvement in accordance with the following procedures . . . .” On March 27, 2025, respondents submitted a JAMS arbitration demand against Presidio and CCB. On April 7, 2025, respondents filed a complaint against CCB in the superior court. The complaint alleged various causes of action, including construction defects, negligence, and breach of the implied warranty of workmanship and quality. In July 2025, CCB filed a petition to compel arbitration. In October, the trial court denied it. The court found “CCB is not a signatory to the arbitration agreement, it is not an agent of a 3 signatory, and it is not an intended third-party beneficiary to the arbitration agreement.” The court declined to adopt an interpretation that “expands the ‘Right to Repair’ clause beyond its intended meaning.” In December 2025, respondents withdrew their claims against CCB from the JAMS arbitration proceeding. DISCUSSION We conclude CCB is a third-party beneficiary of the arbitration agreement. “A contract, made expressly for the benefit of a third person, may be enforced by him at any time before the parties thereto rescind it.” (Civ. Code, § 1559.) We examine “the express provisions of the contract at issue, as well as all of the relevant circumstances under which the contract was agreed to, in order to determine not only (1) whether the third party would in fact benefit from the contract, but also (2) whether a motivating purpose of the contracting parties was to provide a benefit to the third party, and (3) whether permitting a third party to bring its own breach of contract action against a contracting party is consistent with the objectives of the contract and the reasonable expectations of the contracting parties.” (Goonewardene v. ADP, LLC (2019) 6 Cal.5th 817, 830.) “The party seeking arbitration bears the burden of proving the existence of an arbitration agreement . . . .” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.) When the evidence is not in conflict, we review the denial of arbitration de novo. (Ibid.) “‘To the extent the denial relies on a pertinent factual finding, we review that finding for the existence of substantial evidence.’” (Bautista v. Fantasy Activewear, Inc. (2020) 52 Cal.App.5th 650, 655.)

4 The ADR Declaration, which governs under the purchase agreement for the home, defines “‘Declarant’s Agents’” to include Presidio’s “agents, consultants, contractors or subcontractors . . . .” (Bold omitted.) As a contractor for Presidio, CCB meets this definition. The ADR Declaration further provides that otherwise unresolved disputes “BY OR BETWEEN OR AMONG A CLAIMANT, AND/OR DECLARANT AND DECLARANT’S AGENTS ARISING FROM OR RELATED TO THE MASTER DECLARATION . . . [or] ANY LOT . . . SHALL BE RESOLVED THROUGH BINDING ARBITRATION . . . .” This broad provision encompasses a homeowner’s claims against CCB. No sound basis exists for limiting the term “Declarant’s Agents” to the Right to Repair section of the ADR Declaration. The Right to Repair section is simply the first place the term “Declarant’s Agents” is used and, therefore, defined. “[A] word used multiple times in a contract is generally given the same meaning, unless the contract indicates otherwise.” (Hom v. Petrou (2021) 67 Cal.App.5th 459, 473; see also Civ. Code, § 1641 [“The whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other.”].) There is no indication “Declarant’s Agents” was intended to carry separate meaning in Articles I and II. Indeed, the term “Claimant” is similarly defined in the Right to Repair section and then employed in the arbitration clause. Viewing the ADR Declaration as a whole, Article I is designed to give Declarant and its agents the rights to repair and inspect, while also reserving statutory rights. Article II details the mediation and arbitration procedures when other dispute resolution attempts fail. Article II begins: “ALTERNATIVE DISPUTE RESOLUTION AND WAIVER OF JURY TRIAL.

5 Declarant and applicable Declarant’s Agents will attempt to resolve any dispute asserted by a Claimant of which it is given notice. If the dispute cannot be resolved between the parties pursuant to the procedures set forth in Article I above, any procedure set forth under a Warranty, and/or any applicable statutory dispute resolution procedures, it will be decided through the alternative resolution procedure as set forth below.” This paragraph bridges Articles I and II and further demonstrates the meaning and application of “Declarant’s Agents” was intended to remain consistent throughout. Respondents’ focus on the construction services agreement is misplaced. That agreement between Presidio and CCB explicitly precludes binding arbitration. But Presidio could establish a different procedure for disputes involving a “Claimant” (e.g., a homeowner). The construction services agreement does not conflict with the ADR Declaration, even considering Civil Code section 1642. (Civ. Code, § 1642 [“Several contracts relating to the same matters, between the same parties, and made as parts of substantially one transaction, are to be taken together.”].) Given that Jeannie and Matthew Pleasant are signatories to the purchase agreement, the arbitration provision encompasses their claims against CCB. However, neither Joy nor John Pleasant signed the purchase agreement. Generally, “‘a party cannot be compelled to arbitrate a dispute that he or she has not agreed to resolve by arbitration.’” (Benaroya v. Willis (2018) 23 Cal.App.5th 462, 469.) But, based on equitable estoppel principles, even a non-signatory plaintiff can be compelled to arbitrate in certain circumstances. (See JSM Tuscany, LLC v. Superior Court (2011) 193 Cal.App.4th 1222, 1241.)

6 Here, the trial court found CCB did not allege an equitable estoppel theory. Although CCB briefly raises equitable estoppel generally in its appellate briefing, we believe that doctrine’s specific application to Joy and John is more appropriately resolved by the trial court in the first instance. (Cf. Dua v. Stillwater Ins. Co. (2023) 91 Cal.App.5th 127, 139 [declining to address issue for first time on appeal and remanding].) Thus, we will vacate the trial court’s order and remand for its determination of this question. Finally, we reject CCB’s argument that respondents’ initiation of arbitration equitably estops the superior court action. Unlike in Lovret v. Seyfarth (1972) 22 Cal.App.3d 841, upon which CCB relies, the record here does not show that significant progress occurred in the arbitration action. This is not a situation in which a party voluntarily submitted a claim to arbitration, “‘await[ed] the outcome,’” and, after an unfavorable decision, “‘then challenge[d] the authority of the arbitrator[] to act.’” (Id. at p. 860.) DISPOSITION The October 30, 2025 order denying CCB’s motion to compel arbitration is vacated. The matter is remanded to the trial court with directions for it to determine whether Joy and John Pleasant must arbitrate any of their claims against CCB under equitable estoppel principles. After making that determination, the trial court will enter an order resolving CCB’s petition to compel arbitration. On remand, the parties (including Jeannie and Matthew Pleasant) may raise any arguments not foreclosed by our opinion, including respondents’ waiver argument that the trial court expressly declined to address.

7 The parties shall bear their own costs on appeal. NOT TO BE PUBLISHED.

CODY, P. J.

We concur:

YEGAN, J.

BALTODANO, J.

8 Tana L. Coates, Judge Superior Court County of San Luis Obispo _________________________________ Newmeyer & Dillion, J. Brian Morrow and Jeffrey R. Brower for Defendant and Appellant. Engstrom, Lipscomb & Lack, Walter J. Lack, Joseph A. Lack, and Christopher A. Kanne for Plaintiffs and Respondents.