Patel

Background

The Patels entered into a franchise agreement with Del Taco, Inc. under which the Patels were to operate a Del Taco restaurant in Hanford, California. The franchise agreement contained an arbitration clause that provided that “any contro- versy or claim arising out of or relating to this Agreement, whether such [a] controversy is one of law, fact or both, shall be submitted to arbitration” before the American Arbitration Association (“AAA”) in Orange County, California. In 2003, Del Taco accused the Patels of breaching the franchise agree- ment and initiated arbitration proceedings. Both Del Taco and the AAA served the Patels with a demand for arbitration. Although the Patels’ attorney was aware of the hearing, nei- ther the Patels nor their attorney appeared at the arbitration hearing. The arbitrators issued an unanimous award in favor of Del Taco, terminating the franchise agreement and award- ing Del Taco over $20,000 in damages.

On February 10, 2004, Del Taco filed a petition to confirm the arbitration award in Orange County Superior Court. Shortly thereafter, Del Taco filed a motion to confirm the 5004 PATEL v. DEL TACO, INC. award, and a…