3. Motion to Dismiss

On September 19, 2000, SDG&E moved to dismiss this complaint on grounds that (1) the parties have agreed that complaints alleging breach of contract because of non-payment are to be brought in civil court rather than in a Commission proceeding, and (2) the complaint fails to allege a violation of any provision of law or of any order or rule of the Commission, as required by Pub. Util. Code § 1702.

SDG&E asserts that the parties agreed that disputes of this nature were to be taken to civil court in San Diego County and not to the Commission, citing Section 25 of the parties' agreement:

"Except for matters and disputes with respect to which the CPUC is the sole proper venue for dispute resolution pursuant to applicable law or this Agreement, the federal and state courts located in San Diego County, California shall constitute the sole proper venue for resolution of any matter or dispute hereunder, and the Parties submit to the exclusive jurisdiction of such courts with respect to such matters and disputes."

SDG&E states that the parties further agreed in Section 24.1 of their agreement on the limited types of disputes that would be taken to the Commission:

"Disputes regarding the interpretation of this Agreement or relating to the Administrators' performance of CPUC rules, orders, or other requirements shall be taken to the CPUC for resolution before pursuing any other remedies at law or in equity."

As an alternative ground for dismissal, SDG&E asserts that the complaint fails to state a violation of law or of any order or rule of the Commission, as required by Pub. Util. Code § 1702. Instead, according to SDG&E, the complaint simply seeks a Commission ruling that the work was substantially performed and that the contractor is entitled to payment.

Quality Conservation on November 17, 2000, responded to the motion to dismiss. It argues that since SDG&E takes the position that it is not required to pay under the terms of the agreement, the dispute involves "the interpretation of this Agreement" under Section 24.1. Moreover, it contends that in approving the language of Section 24 (entitled Alternative Dispute Resolution), the Commission in effect established a binding arbitration clause, agreeing to arbitrate disputes between the parties. Quality Conservation cites Cheng-Canindin v. Renaissance Hotel Associates (1996) 50 Cal.App.4^th 676, as establishing a broad definition of arbitration even when an agreement does not use the word "arbitration."

Quality Conservation concedes that the Commission lacks jurisdiction to award damages. (Penaloza v. P.T.& T. (1965) 64 CPUC 496, 497.) Nevertheless, complainant argues that the Commission may make findings of fact and conclusions of law in an arbitration decision that then could be filed and enforced in civil court.