Judge: Colin Leis, Case: 24STCP00450, Date: 2024-08-28 Tentative Ruling

Case Number: 24STCP00450    Hearing Date: August 28, 2024    Dept: 74

Brent Lee v. Concorde Investment Services, et al.

Petitioners Brent Lee and Jennifer Donais’ Petition to Confirm Arbitration Award

BACKGROUND¿ 

On February 13, 2024, Petitioner Brent Lee and Jennifer Donais filed this petition to confirm arbitration award.

LEGAL STANDARD 

¿¿Any party to an arbitration in which an award has been made may petition the court for confirmation of the award. (CCP § 1285.) Upon service and filing of a petition to confirm arbitration award, the court shall confirm the award as made, unless it corrects or vacates the award, or dismisses the proceeding. (CCP § 1286.) The contents of a petition to confirm an arbitration award shall set forth the substance of or have attached a copy of the agreement to arbitrate, the names of the arbitrators, and shall set forth or have attached a copy of the award and the written opinion of the arbitrators.  (CCP § 1285.4.) Where the petition is served but no response is served and filed, the allegations in the petition are deemed admitted.  (CCP § 1290; Taheri Law Group, A.P.C. v. Sorokurs (2009) 176 Cal.App.4th 956, 962.)    

Every presumption is in favor of the arbitration award. (See Firestone Tire & Rubber Co. v. United Rubber Workers of America (1959) 168 Cal.App.2d 444, 449.) Code of Civil Procedure section 1286.2 provides that “the court shall vacate the award if the court determines any of the following: (1) [t]he award was procured by corruption, fraud or other undue means.” (CCP § 1286.2(a).) The defendant moving for vacation of an arbitration award due to corruption, fraud, or other undue means must demonstrate a nexus between the award and the alleged undue means used to attain it. (See Pour Le Bebe, Inc. v. Guess? Inc. (2003) 112 Cal.App.4th 810, 833-34.) An objection to the granting of a motion to confirm an award is equivalent to a motion to vacate. (See Thriftimart, Inc. v. Superior Court (1962) 202 Cal.App.2d 421, 425-26.) 

DISCUSSION¿  

Petitioners seek to confirm a FINRA arbitration award, which recommended expungement of all references to Occurrence Number 2015876 from registration records maintained by the Central Registration Depository (“CRD”) for Brent Wayne Lee, and Occurrence Number 2016112 from registration records maintained by the CRD for Jennifer Lynn Donais. The arbitration panel issued the award on September 13, 2023.

Service of the Arbitration Award  

Code of Civil Procedure section 1283.6 provides that: “The neutral arbitrator shall serve a signed copy of the award on each party to the arbitration personally or by registered or certified mail or as provided in the agreement.”  (Id., [Italics added].) 

Here, the arbitration award was served on Respondent on September 13, 2023, by FINRA – the neutral arbitrator.  (Petition, Exh. 8(c).)  Therefore, service of the award is proper. 

Service of the Petition to Confirm Arbitration and Notice of Hearing on Petition 

A copy of the petition and a written notice of the time and place of the hearing thereof and any other papers upon which the petition is based shall be served in the manner provided in the arbitration agreement for the service of such petition and notice (Abers v. Rohrs (2013) 159 Cal.App.4^th 1199, 1205); but if the arbitration agreement does not provide the manner in which such service shall be made and the person upon whom service is to be made has not previously appeared in the proceeding and has not previously been served, service outside of this state shall be made by mailing the copy of the petition and notice and other papers by registered or certified mail. Personal service is the equivalent of such service by mail. Proof of service by mail shall be made by affidavit showing such mailing together with the return receipt of the United States Post Office bearing the signature of the person on whom service was made. Notwithstanding any other provision of this title, if service is made in the manner provided in this paragraph, the petition may not be heard until at least 30 days after the date of such service. (Code Civ. Proc., § 1290.4.) 

Here, the arbitration agreement attached to the petition does not set forth a manner of service of a petition to confirm the award.  The court notes that Respondent Concorde Investment Services, LLC’s address is in Michigan. Thus, the manner of service must be made pursuant to CCP § 1290.4(b)(2), which provides for service outside of this state, and it requires the petition and notice of the hearing to be served by registered or certified mail with the return receipt bearing the signature of the person on whom service was made.  (See CCP § 1290.4(b)(2).) 

 On July 11, 2024, Petitioners filed a notice of hearing on their petition to confirm the arbitration award. As noted above, Respondent Concorde Investment Services, LLC is outside the state of California, as such service must be made by registered or certified mail with the return receipt bearing the signature of Respondent. However, the proof of service shows Respondent was served by mail, but it does not state whether it was certified or registered mail and there is no return receipt. Thus, service of the notice of hearing is not adequate.

In addition, the court notes that as to service of the petition on Respondent, on March 7, 2024, Petitioners filed a notice and acknowledgement of receipt, which is signed by Respondent. But there is no proof of service filed indicating if the petition was served by registered or certified mail.

Accordingly, Petitioners have failed to demonstrate proper service pursuant to CCP § 1290.4 and the petition is denied without prejudice.  

Timeliness of Petition to Confirm Arbitration Award 

An arbitration award is not directly enforceable until it is confirmed by a court and judgment is entered.  (CCP § 1287.6; Jones v. Kvistad (1971) 19 Cal.App.3d 836, 840.) A party may seek a court judgment confirming an arbitration award by filing and serving a petition at least 10 days, but no more than four years after the award is served.  (CCP §§ 1288, 1288.4.)  

As noted above, the award was served on September 13, 2023.  The instant petition was filed on February 13, 2024.  However, as noted above, there are issues with service.

Confirmation of the Arbitration Award 

The court must confirm the award as made, unless it corrects or vacates the award, or dismisses the proceeding.  (CCP § 1286; Valsan Partners Limited Partnership v. Calcor Space Facility, Inc. (1994) 25 Cal.App.4th 809, 818.) CCP section 1285.4 states a petition under this chapter shall: 

a)         Set forth the substance of or have attached a copy of the agreement to arbitrate unless the petitioner denies the existence of such an agreement. 

b)         Set forth the names of the arbitrators. 

c)         Set forth or have attached a copy of the award and the written opinion of the arbitrators, if any. 

(CCP § 1285.4.)  

The Petition complies with the above requirements.  Petitioners seek to confirm the award as made.  The agreement to arbitration is attached.  (Petition, Attachment 4(B).)  The arbitrators’ names are set forth.  (Petition, ¶ 6.)  Finally, the written opinion setting forth the award has been attached.  (Petition, Attachment 8(c).) 

CONCLUSION¿ 

The court DENIES without prejudice Petitioners’ petition to confirm the arbitration award.