MDL Medical Diagnosis Laboratories v. Shram
Bialik Benjamin is a shareholder and president of MDL Medical Diagnosis Laboratories (MDL). MDL borrowed money from Moshe Shram. Benjamin signed a written promissory note on behalf of MDL and a separate personal guaranty of MDL's loan, as well as deeds of trust securing two parcels of real property as collateral. The personal guaranty included an arbitration agreement. After paying off the principal loan amount plus $279,000 in interest, MDL and Benjamin sued Shram, contending the interest extracted from them was usurious. In response, Shram moved to compel arbitration of the entire action on the grounds the personal guaranty agreement bound both Benjamin and MDL to arbitrate any controversy arising out of the interrelated loan documents. The trial court denied the motion. We conclude the court correctly denied arbitration of the dispute between MDL and Shram but erred in failing to order Benjamin to arbitrate his dispute with Shram. We therefore affirm in part, reverse in part and remand with directions as explained herein.
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