A recent court decision has upheld an arbitration award in favor of homeowners who sued for undisclosed defects in a property they purchased. The plaintiffs, Miguel Valencia Jr. and Lizette Valencia, filed their complaint in the Superior Court of Los Angeles County on October 2, 2018, against Armando Mendoza and his associated companies.
The case centers around a home purchase made by the Valencias in August 2016 from Coastal Holdings, LLC, a company owned by Mendoza. Shortly after moving into their new home, the Valencias discovered numerous defects that had not been disclosed during the sale. These issues included water intrusion through improperly installed windows and other structural problems that necessitated extensive repairs and forced the Valencias to vacate their home temporarily.
The Valencias' lawsuit accused Mendoza and his companies of fraudulent concealment of these defects. They claimed that Mendoza, an experienced house flipper who had renovated the property without proper permits or licensed contractors, failed to disclose significant issues previously identified by the former owner. The plaintiffs argued that this non-disclosure violated multiple laws including state contractor licensing laws and statutory duties of disclosure.
In January 2019, both parties agreed to binding arbitration. The arbitration hearing took place over five days in June 2021 before retired Judge Judith C. Chirlin. In August 2022, the arbitrator issued a final award in favor of the Valencias amounting to $432,536 for repairs and market value impairment, plus $438,800 in punitive damages due to clear evidence of fraud by Mendoza. Additionally, $364,544 was awarded for attorneys' fees along with costs and prejudgment interest.
Following this decision, Mendoza sought to vacate the arbitration award but filed his petition late under California's Code of Civil Procedure section 1290.6 which requires such petitions within ten days after service of a petition to confirm an arbitration award. The trial court denied Mendoza's petition as untimely and confirmed the arbitration award instead.
Mendoza appealed this decision arguing procedural errors including exclusion of key evidence during arbitration—specifically a building inspection card and expert testimony on building code requirements—which he believed could have altered the outcome. However, both pieces were excluded due to discovery violations: failure to produce documents timely and attempts to introduce new expert opinions without prior disclosure.
The appellate court affirmed the trial court’s judgment emphasizing strict adherence to procedural rules governing arbitration awards’ confirmation or vacation processes while noting no abuse of discretion occurred regarding evidentiary exclusions during arbitration proceedings.
Representing defendants were Stephen B Goldberg & Jeffrey Lewis from Spierer Woodward Corbalis & Golberg while Kerry A Cohen & Barry L Cohen from Cohen & Cohen represented plaintiffs with Judge David Sotelo presiding over initial proceedings (Case ID: BC723902).