Judge: Elaine W. Mandel, Case: 21SMCV00703, Date: 2023-04-18 Tentative Ruling
Case Number: 21SMCV00703 Hearing Date: April 18, 2023 Dept: P
Tentative Ruling
Chelico v. TJB
Gearys, LLC et al., Case No. 21SMCV00703
Hearing Date April
18, 2023
Petitioner
Chelico’s Motion to Vacate Arbitration Award
Plaintiff sued his
former employer TJB Gearys for harassment, discrimination, wrongful termination
and violation of the California Family Rights Act (CFRA). The court granted Gearys’
motion to compel arbitration, and the matter proceeded before an AAA
arbitrator. The arbitrator’s final award denied plaintiff’s claims, while
awarding Chelico attorney’s fees, expert witness fees and deposition costs
arising out of Labor Code claims resolved before arbitration. Chelico decl.
¶¶1-2. Chelico argues the arbitrator’s conduct and decisions showed bias
towards Gearys, justifying a set aside of the award.
An arbitration
award is subject to limited judicial review, with all presumptions drawn in
favor of the award’s validity. E.g. Walter v. National Indemnity Co. (1970)
3 Cal.App.3d 630, 633. Code of Civ. Proc. §1286.2 sets forth criteria for
vacating an arbitration award, including “corruption in any of the
arbitrators,” or “[t]he rights of the party were substantially prejudiced by
misconduct of a neutral arbitrator.” An award must be vacated if the arbitrator
fails to disclose a basis for disqualification. Grabowski v. Kaiser
Foundation Health Plan, Inc. (2021) 64 Cal.App.5th 67, 76. One basis
for disqualification is bias or prejudice. Id. at pg. 78. Bias is
determined on an objective, “reasonable person” standard. Id. at 77. An
arbitrator who engages in ex parte communication with one party must
disclose the communication to the other party, even if the communication concerns
only administrative matters. Id. at 78-79.
Objections:Objections 1-2
OVERRULED.
Arbitrator’s
Alleged Bias
On May 27, 2022
Gearys filed a letter with the arbitrator regarding its request to move for
summary adjudication (“the MSA request”). That same day, the arbitrator sent an
email to the parties asking “[d]oes claimant have a view of this request?” Chelico
decl. ¶11. Chelico argues since he previously told the arbitrator he intended
to oppose the MSA request, the May 27 email shows bias in favor of Gearys.
On June 28, 2022, after
briefing and argument on the MSA request was concluded, Gearys’ counsel sent an
email to the parties and the arbitrator’s case manager asking for an update
regarding the request. The arbitrator’s email stating “[t]hanks for asking. I
thought I had already responded, but realize it was only in my head. Respondent
has permission to file a Motion for Summary Adjudication.” Chelico Decl.,
exhibit 4. Chelico argues the arbitrator was inattentive, suggesting bias in
favor of Gearys.
Neither email support
Chelico’s allegations. The messages show the arbitrator remained in contact
with the parties and do not demonstrate bias. The May email asking if Chelico
intended to oppose the MSA request does not show bias. To the contrary, it suggests
the arbitrator wanted to ensure Chelico would have an opportunity to oppose. The
June 28 email indicates the arbitrator made a mistake. Nothing suggests bias. Chelico
argues the failure to convey the ruling constituted “unprofessional conduct”;
if so, it affected both sides equally. The arbitrator denied Gearys’ MSA, which
does not suggest bias for Gearys. The evidence does not suggest a reasonable,
objective person would find the arbitrator was prejudiced in favor of Gearys.
Chelico argues the
arbitrator was taking directives from Gearys as to how the case should proceed
but provides no evidentiary support. He claims the arbitrator showed bias by
ordering counsel to violate the attorney-client privilege and bifurcating the
proceedings. Chelico decl. ¶¶14, 16. Chelico does not provide specifics as to
the nature of the privileged material or how the production order or decision
to bifurcate was allegedly motivated by bias.
Chelico claims the
arbitrator engaged in ex parte communication with Gearys, so under Grabowski
the award be vacated. Grabowksi holds an undisclosed ex parte communication
requires vacation of an award only when the content of the communication “could
cause a person aware of the facts to reasonably entertain a doubt that the
arbitrator would be able to be impartial.” An award will not be vacated “based
on minor omissions of details.” Grabowski, supra, 64 Cal.App.5th at 83.
Chelico alleges
the arbitrator engaged in ex parte communication when they decided
Gearys, not the arbitrator, would host the Zoom hearing. The arbitrator told
Chelico’s counsel the host was changed because Gearys “had trouble connecting”
to the arbitrator-hosted meeting. Chelico decl. exh. 7. Based on the evidence,
the communication appears to have been administrative, with no substantive
issues discussed. Chelico admits the arbitrator sent him an email disclosing
the ex parte communication. Even if the arbitrator failed to disclose
the communication, Grabowski requires vacation only if the ex parte
communication suggests bias. The communication here does not. Chelico presents
no evidence that Gearys’ hosting the Zoom call conferred any advantage. No
reasonable observer would conclude this suggests bias.
Chelico alleges the
parties disputed whether witnesses would appear in person or remotely, and AAA
and the arbitrator changed the hearing to Zoom. The arbitrator’s case manager
sent an email that the hearing had to be online/remote due to a burst pipe at
AAA’s office. Chelico claims there was no pipe issue, and the hearing was moved
to benefit Gearys. Chelico argues AAA’s office was closed since mid-August
2022, but he was not informed of the plumbing issue until September 14, 2022. Chelico
decl. at ¶19. Chelico does not explain how shifting the hearing to Zoom allegedly
harmed his case or helped Gearys. Further, Gearys presents evidence AAA
provided Chelico an opportunity to select a different in-person location, but Chelico
choose to proceed with a Zoom hearing. La Mar decl. ¶13-15.
Chelico has not
proven by a reasonable, objective standard that the arbitrator or AAA were biased
or prejudiced in favor of Gearys.
Errors of Law
Chelico argues the
award contained errors of law. An arbitration award is not subject to judicial
review on the basis of an error of law absent a statutory basis to vacate
listed in §1286.2. E.g. Roitz v. Coldwell Banker Residential Brokerage Co. (1998)
62 Cal.App.4th 716, 718; Starr v. Mayhew (2022) 83 Cal.App.5th 842, 857.
Absent such a statutory basis, the court cannot consider arguments regarding errors
of law.
Chelico argues the
arbitrator failed to consider the wrongful termination/FEHA claim. Failure to
decide a submitted issue is a valid basis to vacate an arbitration award. Banks
v. Milwaukee Ins. Co. (1966) 247 Cal.App.2d 34, 38-39. However, the award
states “[t]here is no basis in this evidentiary record to conclude that the
discharge was substantially motivated by discrimination.” Exhibit 2, pg. 9.
This is sufficient to dispose of Chelico’s FEHA claim, since the basis of that
cause of action was discrimination due to age, race and national origin.
Exhibit 18, ¶44. The award addressed the FEHA claim.
DENIED.