San Luis Obispo Bay Properties, Inc. v. Pacific Gas & Electric Co.

This appeal is taken from a judgment confirming an arbitration award. The major issue is whether or not the trial court erred in rejecting appellant’s contention that as a matter of law the arbitrator who made the award was disqualified by reason of undisclosed relationships. The challenged award was based upon the arbitrator’s appraisal of appellant’s leasehold interest in certain parcels of real property situated on the coast in San Luis Obispo County.

In 1966, Luigi Marré and Cattle Company entered into a lease with San Luis Obispo Bay Properties, Inc. (appellant), leasing to appellant certain parcels of coastal land (designated as parcels P, T, R and L) for a period of 99 years with options to renew.

Appellant in turn subleased certain interests in parcels P, T, and R to Pacific Gas and Electric Company (respondent). In lieu of paying cash rental, respondent agreed to guarantee the repayment of loans or advances made to appellant by third party lenders. The amount of the loans to be guaranteed was to be established by appraisers’ opinions of the market-value of appellant’s leasehold interests in all four parcels. The initial maximum amount of loans to be guaranteed…