Lawler v. Casey
A partnership to run a bed and breakfast in Nicaragua soured. Amidst ongoing legal jockeying in Nicaragua, one partner, Michael Lawler, has sued his partners, John and Patricia Casey, and their former corporation, Montecito Designs, Inc. (collectively Casey) in California. Lawler alleges fraud surrounding an oral partnership agreement the parties allegedly entered into in San Mateo, California. Casey petitioned to compel arbitration of Lawler’s claims based on an arbitration clause in a written partnership agreement signed by the parties in Nicaragua. The trial court denied arbitration because the arbitration clause appointed a biased arbitrator—namely, Casey’s lawyer. While we agree the named arbitrator cannot serve as such, we nevertheless reverse and remand because the trial court should have severed the biased appointment from the remainder of the arbitration clause, instead of voiding the clause in its entirety.
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