Judge Daniel M. Crowley, Case Number: 22STCP04495, Date: 2024-02-27 Tentative Ruling

Petitioner Highland Construction, Inc.’s motion to vacate the arbitration order and judgment entered on September 27, 2022, and to request this Court order a new arbitration hearing and a new arbitrator be appointed is denied.

Respondent State of California, Department of Transportation’s unopposed motion to dismiss petition to petition to vacate arbitration award is granted. Respondent is directed to submit a judgment to the Court in its favor.

Petitioner Highland Construction, Inc. (“Highland”) (“Petitioner”) moves to vacate the arbitration order and judgment entered on September 27, 2022, and requests this Court order a new arbitration hearing and appoint a new arbitrator. (Notice of Motion Vacate, pgs. 1-2; C.C.P. §1286.2(a)(4), 1287.)

Respondent State of California, Department of Transportation (“Caltrans”) (“Respondent”) moves unopposed for an order (1) dismissing this action in its entirety and entering judgment in Respondent’s favor in conformity with the subject arbitration award, on the grounds that Petitioner failed to timely serve its petition to vacate on Respondent as required by C.C.P. §1288; and (2) alternatively, for confirmation of the arbitration award as a judgment in Respondent’s favor pursuant to C.C.P. §1285.2 based on the merits of the arbitrator’s rulings dismissing Petitioner’s arbitration complaint. (Notice Motion Dismiss, pgs. 1-2.) Respondent requests an order confirming the arbitration award as a judgment as noted above pursuant to C.C.P. §1285, and to have judgment entered in conformity therewith pursuant to C.C.P. §1287.4. (Notice Motion Dismiss, pg. 2.)

On June 19, 2020, Petitioner filed a Verified Complaint for Arbitration before the Office Administrative Hearings of the State of California, Case No. A-0011-2020. (Decl. of Soll ¶3, Exh. B.) Petitioner’s Complaint for Arbitration arises from a contract between Petitioner and Respondent. (Decl. of Soll §2, Exh. A.)

On or about July 16, 2020, Respondent filed a Notice of Objection to the Complaint, a Memorandum of Points and Authorities, and the Declaration of Andrew Brandt in Support of the Objection.

Robert Pearman was appointed as the arbitrator. The parties stipulated that the Complaint was premature because Respondent had not yet issued a Final Determination of Claims and that a hearing on the objections would be deferred, and that Petitioner could file an Amended Complaint at that time. (Decl. of Soll ¶7, Exh. F.)

On April 1, 2022, Respondent issued its Final Determination of Claims denying virtually all of Respondent’s claims. (Decl. of Soll ¶8, Exh. G.)

Arbitration which attached numerous documents supporting its claim. (Decl. of Soll ¶9, Exh. H.)

On or about May 20, 2022, Respondent filed its Notice of Objections to Petitioner’s First Amended Complaint and Memorandum of Points and Authorities in Support of Objections to the First Amended Complaint, which was in effect a Demurrer to the First Amended Complaint.

Petitioner filed its opposition to the objections on June 27, 2022. Respondent submitted its Reply Brief on or about July 7, 2022. On July 19, 2022, the arbitrator sustained the objections and gave Petitioner 30 days leave to amend its First Amended Complaint. (Decl. of Soll ¶14, Exh. M.) On August 29, 2022, Petitioner filed its Response to Leave to File a Second Amended Complaint stating that Petitioner would stand on its First Amended Complaint. (Decl. of Soll ¶15, Exh. N.)

On or about September 1, 2022, Respondent filed its Ex Parte Motion to Dismiss the Action and Request Entry of Judgment in its Favor. Petitioner filed its Opposition to Motion to Dismiss on September 14, 2022.

On September 27, 2022, the arbitrator issued his Ruling dismissing the Complaint and entering judgment in favor of Respondent. Notice of the Ruling was served by mail on October 4, 2022. (Decl. of Soll ¶20, Exh. S.)

On December 29, 2022, Petitioner filed its initial petition. On February 16, 2023, Respondent filed a response to Petitioner’s petition. On January 19, 2024, Petitioner filed the instant motion. On February 13, 2024, Respondent filed its opposition. On February 20, 2024, Petitioner filed its reply.

On January 30, 2024, Respondent filed its instant motion to dismiss. On February 20, 2024, Respondent filed a reply. As of the date of this hearing Petitioner has not filed an opposition.

The California Supreme Court has long held that the merits of an arbitrator's decision are generally not subject to judicial review. (Moncharsh v. Heily & Blasé (1992) 3 Cal.4th 1, 6, 10-11.) More specifically, courts may not review the validity of an arbitrator’s reasoning or the sufficiency of the evidence supporting the arbitrator's award. (Id. at pg. 11.) Judicial review of an arbitration award is limited exclusively to the statutory grounds for vacating or correcting the award. (Id. at 27-28; see SWAB Financial, LLC v. E*Trade Securities, LLC (2007) 150 Cal.App.4th 1181, 1201-1202 [arbitrators’ refusal to allow amendment to introduce new claims into pending arbitration is not statutory ground on which judge may vacate arbitration award].)

C.C.P. §1285.2 provides that a respondent may respond to a petition to vacate by requesting “the court to dismiss the petition or to confirm, correct or vacate the award.” (C.C.P. §1285.2.) In these circumstances, dismissal is appropriate due to Petitioner’s failure to serve Respondent with its petition within 100 days as required by statute.

C.C.P. §1288 required Petitioner’s petition to be “served and filed not later than 100 days after the date of the service of a signed copy of the award on the petitioner.” (C.C.P. §1288.)

Petitioner’s petition reflects the arbitration award was served on Petitioner on October 4, 2022. (Petition, ¶9(b).) Petitioner did not serve Respondent with its initial petition until February 6, 2023, as confirmed by the Proof of Service Petitioner filed with this Court. (2/8/23 Proof of Service.) Calculating the 100-day service requirement from the date Petitioner alleges it was served with the arbitrator’s dismissal order (October 4, 2022), Petitioner was required to serve Respondent no later than January 12, 2023.

Because Petitioner failed to timely serve Respondent, the petition must be dismissed pursuant to C.C.P. §§1285.2 and 1288.

Further, equitable relief is unavailable to excuse Petitioner’s failure to comply with the 100-day statute of limitations. Petitioner did not satisfy two of the three elements of equitable tolling, i.e., timely notice to Respondent, and an objectively reasonable good faith mistake. (Saint Francis Memorial Hospital v. State Department of Public Health (2020) 9 Cal.5th 710, 727-729 [timely notice, lack of prejudice, and objectively reasonable good faith mistakes are the three elements].)

Also, Public Contract Code §10240.8, cited by the arbitrator in his dismissal order, requires arbitration decisions to be made in accordance with California law. Under C.C.P. §581(f)(2), a court or arbitrator may dismiss the complaint when, after a demurrer to the complaint is sustained with leave to amend, the plaintiff fails to amend it within the time allowed by the court and either party moves for dismissal. Therefore, the arbitrator’s decision to dismiss Petitioner’s First Amended Complaint after Petitioner stated it would stand on its pleadings and not amend it to include additional facts in a Second Amended Complaint.

Petitioner Highland Construction, Inc.’s motion to vacate the arbitration order and judgment entered on September 27, 2022, and to request this Court order a new arbitration hearing and a new arbitrator be appointed is denied.

For the reasons stated above, Respondent’s motion to dismiss Petitioner’s petition is granted. Respondent’s request for this Court to enter judgment in Respondent’s favor in conformity with the subject arbitration award on the grounds that Petitioner failed to timely serve its Petition in the instant case of Respondent is granted, pursuant to C.C.P. §1287.4.

Accordingly, Respondent is directed to submit a judgment to the Court in its favor.

Hon. Daniel M. Crowley

Judge of the Superior Court