Melchor Investment Co. v. Rolm Systems

1. Introduction

Plaintiff Melchor Investment Company (lessor) purports to appeal from the denial of its request to preliminarily enjoin arbitration jointly requested by defendant Rolm Systems (sublessee) and defendant International Business Machines Corporation (sublessor). Lessor claims it is not required to submit to an arbitration demand by sublessee because the lease’s arbitration provision is inapplicable and they have no other arbitration agreement. For the reasons stated below, we will dismiss this matter as nonappealable.

2. Facts

On April 14, 1976, lessor entered into two substantially identical written agreements (collectively the lease) to construct three buildings on two parcels in the City of Santa Clara and lease them to ROLM Corporation (lessee). Lessor promised in paragraph 2 to “design and construct or cause to be designed and constructed, in a good and workmanlike manner” the buildings. The initial term of the lease is 20 years from the earlier of lessee’s occupancy or acceptance of the completed buildings. Rent is due monthly. Lessee began occupancy in early 1977.

In December 1987 lessor was informed that lessee would be merging at the end of the…