Judge Carolyn M. Caietti, Case Number: 37-2023-00055964-CU-PA-CTL, Date: 2024-05-31 Tentative Ruling

Judge: Carolyn M. Caietti, Case: 37-2023-00055964-CU-PA-CTL, Date: 2024-05-31 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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EVENT DATE:

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HALL OF JUSTICE

TENTATIVE RULINGS - May 30, 2024

05/31/2024 10:30:00 AM C-70 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Carolyn Caietti

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Civil - Unlimited Petition re: Arbitration Award Motion Hearing (Civil) 37-2023-00055964-CU-PA-CTL HEALEY CUSTOM CONSTRUCTION INC VS MELBO [IMAGED] CAUSAL DOCUMENT/DATE FILED:

Petitioner Healey Custom Construction, Inc. and Jeff Healey's Petition to Confirm Contractual Arbitration Award is DENIED.

Cross-Petitioner Claire Melbo's unopposed Petition to Vacate Contractual Arbitration Award is GRANTED.

Background These petitions involve a dispute between Claire Melbo, a homeowner, and her general contractor, Healey Custom Construction, Inc. (Healey Construction). The parties agreed to arbitrate their dispute.

On August 24, 2023, arbitrator Don Fobian conducted a telephone arbitration. According to Melbo, the arbitrator denied her the opportunity to present physical evidence and Healey Construction reduced its prayer to $22,000 because of 'issues' with his contract. On September 18, 2023, the arbitrator awarded $50,000 to Healey Construction. Melbo sought to correct the award. On October 17, 2023, the arbitrator's program manager emailed an unsigned letter that the arbitrator would not correct the award and affirmed the award.

Discussion Petition to Confirm On December 20, 2023, Healey Custom Construction, Inc. (Healey Construction) and Jeff Healey filed their petition to confirm the award with mail service on Melbo. Healey Construction did not reply to Melbo's argument that she did not receive proper service of the petition. (C.C.P., � 1288, 1290.4; ROA 13 - Declaration of Claire Melbo, at � 13.) Healey Construction also did not reply to Melbo's argument that a corporation cannot represent itself and that Jeff Healey lacks standing. (See, CLD Construction, Inc. v. City of San Ramon (2004) 120 Cal.App.4th 1141, 1145-46 ['under a long-standing common law rule of procedure, a corporation, unlike a natural person, cannot represent itself before courts of record in propria persona, nor can it represent itself through a corporate officer, director or other employee who is not an attorney. It must be represented by licensed counsel in proceedings before courts of record.'].) In addition, for the reasons below, there is a sufficient basis to vacate the arbitration award.

For these reasons, the petition to confirm is DENIED.

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3083855 37 CASE NUMBER: CASE TITLE: HEALEY CUSTOM CONSTRUCTION INC VS MELBO [IMAGED] 37-2023-00055964-CU-PA-CTL Petition to Vacate Melbo's petition to vacate is unopposed. The Court deems the lack of opposition to be a concession that the petition is meritorious. (San Diego County Superior Court Local Rule 2.1.19(B).) Notwithstanding, based on the uncontested evidence and argument provided, the petition to vacate is timely, the arbitrator exceeded his powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted. (C.C.P., � 1286.2(a)(4).) First, the arbitrator exceeded his powers by awarding monetary damages on claims that were time-barred. (C.C.P., � 337; Pearson Dental Supplies, Inc. v. Superior Court (2010) 48 Cal.4th 665, 680 (vacating an arbitration award because the arbitrator committed a 'clear error of law' by failing to give effect to a tolling provision in C.C.P., � 1281.12 and erroneously concluding the plaintiff's claims were time-barred).) As raised by Melbo, there is evidence Healey Construction submitted to arbitration beyond the four year statute of limitations, plus additional time for Emergency Rule 9 COVID-19 tolling. (Declaration of Claire Melbo, at �� 3, 5, 7 & Ex. 6.) Second, the arbitrator awarded money pursuant to an illegal contract. A court shall vacate an award if it determines an arbitrator exceeds his power when he upholds an illegal contract or otherwise violates an 'explicit legislative expression of public policy.' (Jordan v. California Dept. of Motor Vehicles (2002) 100 Cal.App.4th 431, 443; see also Ahdout v. Hekmatjah (2013) 213 Cal.App.4th 21, 38 (ruling Contractors' State License Law constitutes an explicit legislative expression of public policy that if not enforced by an arbitrator, constitutes grounds for judicial review).) Here, there is evidence Healey Construction's contract used an illegal cost-plus-fee contract without the statutory language required by Business and Professions Code sections 7159 and 7159.5, which the arbitrator ignored. (Melbo Decl., at �� 8-10.) In addition, despite Healey Construction reducing its demand to $22,000 in light of issues with the contract, the arbitrator awarded the full $50,000 to Healey Construction. Melbo's rights were substantially prejudiced by the arbitrator's conduct.

Accordingly, Melbo established the petition is timely and grounds to vacate the award. The unopposed petition to vacate the arbitration award is GRANTED.

Concluding Orders The arbitration award issued on September 18, 2023, and confirmed on October 28, 2023, is vacated.

For reference, the award is attached as Exhibit 8(c) to Melbo's Petition to Vacate. (ROA 11.) The Court orders a rehearing before a new arbitrator at the AMCC, the Contractors State License Board's appointed arbitration company pursuant to C.C.P. section 1287.

If the tentative ruling is confirmed without modification, the minute order will be the Court's final ruling on these matters. Melbo is ordered to serve written notice of the Court's final ruling by June 4, 2024.

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