UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

ROBERT W. AHLSTROM, No. 20-15114 Plaintiff-Appellant, D.C. No. v. 5:19-cv-03435- BLF DHI MORTGAGE COMPANY, LTD., L.P., OPINION Defendant-Appellee.

Appeal from the United States District Court for the Northern District of California Beth Labson Freeman, District Judge, Presiding

Argued and Submitted March 5, 2021 San Francisco, California

Filed December 29, 2021 Before: Kim McLane Wardlaw and Marsha S. Berzon, Circuit Judges, and Dean D. Pregerson, * District Judge.

Opinion by Judge Pregerson

* The Honorable Dean D. Pregerson, United States District Judge for the Central District of California, sitting by designation. 2 AHLSTROM V. DHI MORTGAGE CO.

SUMMARY *

Arbitration

The panel reversed the district court’s order dismissing a putative class action complaint and granting the defendant’s motion to compel arbitration pursuant to the Federal Arbitration Act, and remanded for further proceedings.

When the plaintiff was hired as a loan officer by DHI Mortgage Co. (“DHIM”), he signed a Mutual Arbitration Agreement (“MAA”) with D.R. Horton, the parent company of DHIM. The MAA included a delegation clause providing that the arbitrator would have “exclusive authority to resolve any dispute relating the formation, enforceability, applicability, or interpretation” of the MAA. The plaintiff brought employment-related claims. DHIM moved to compel arbitration and to dismiss the putative class claims. The plaintiff opposed the motion, contending that the MAA was never properly formed due to a failure to satisfy a condition precedent in the MAA. The district court granted DHIM’s motion. Citing the delegation clause, the district court concluded that formation issues, including the plaintiff’s condition precedent argument, could not be decided by the court, and were instead delegated to the arbitrator.

The panel held that it is well-established that some “gateway” issues pertaining to an arbitration agreement, such as issues of validity and arbitrability, can be delegated

* This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. AHLSTROM V. DHI MORTGAGE CO. 3 to an arbitrator by agreement. Agreeing with other circuits, the panel held, however, that parties may not agree to delegate issues of formation to an arbitrator.

The panel further held that the MAA did not constitute a properly formed agreement between the plaintiff and D.R. Horton, with which the plaintiff had no employment relationship. The panel concluded that the MAA, as drafted, described a relationship between the plaintiff and D.R. Horton that did not exist, and thus did not constitute a properly formed agreement to arbitrate.

COUNSEL Shaun Setareh (argued) and Thomas Segal, Setareh Law Group, Beverly Hills, California, for Plaintiff-Appellant. Jennifer L. Katz (argued) and Jack S. Sholkoff, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Los Angeles, California, for Defendant-Appellee.

OPINION PREGERSON, District Judge:

Robert Ahlstrom (“Ahlstrom”) appeals the district court’s order dismissing his putative class action complaint and granting DHI Mortgage Company, Ltd.’s (“DHIM”) motion to compel arbitration pursuant to the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq.

Ahlstrom contends that the arbitration agreement upon which DHIM relies was not properly formed. The district 4 AHLSTROM V. DHI MORTGAGE C