Judge: H. Jay Ford, III, Case: 20SMCV00064, Date: 2024-10-29 Tentative Ruling

Case Number: 20SMCV00064    Hearing Date: October 29, 2024    Dept: O

Case Name:  Boodaie, et al. v. Motallebi   

SUBJECT:                PETITION TO CONFIRM ARBITRATION AWARD

MOVING PARTY:   Plaintiff Mojana Boodaie aka Mojgan Neydavood

RESP. PARTY:         Defendant Shahin Motallebi

RULING AFTER HEARING

            Plaintiff Mojana Boodaie aka Mojgan Neydavood Petition to Confirm Arbitration Award is GRANTED. Plaintiff meets all the statutory requirements of CCP § 1285 by attaching the arbitration award, which includes the names of the arbitrators and substance of the award. Plaintiff filed the petition on 8-9-24, and thus the petition to confirm was filed within 100 days of the arbitration award pursuant to CCP § 1285.2. Defendant’s opposition included the Defendant’s timely motion to vacate the arbitration award. Defendant did not provide any sound arguments or evidence for the Court to vacate the arbitration award pursuant to CCP § 1286.2(a)(3)–(5).

            Accordingly, Defendant Shahin Motallebi’s Petition to Vacate Arbitration Award is DENIED. The Court notes that the Motion to Vacate the Arbitraiton award is based on identical arguments submitted in Defendant’s opposition to the motion to confirm the arbitration award. Defendant does not provide any persuasive arguments or evidence for the Court to vacate the arbitration award pursuant to CCP § 1286.2(a)(3)–(5)

            Plaintiff requests sanctions against Defendant Shahin Motallebi in the amount of $2,160.00 (5.4 hrs @ $400/hr.) for Defendant’s opposition being untimely and without merit is DENIED.

            Plaintiff is to submit the proposed judgment.

REASONING

            “Any party to an arbitration which an award has been made may petition the court to confirm, correct or vacate the award.”  CCP §1285.  “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.”  (Code Civ. Proc., § 1285.)

            “A response to a petition under this chapter may request the court to dismiss the petition or to confirm, correct or vacate the award.” (Code Civ. Proc., § 1285.2.)

            “A petition to vacate an award or to correct an award shall 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.” (Code Civ. Proc., § 1288.)

            “A response shall be served and filed within 10 days after service of the petition  . . . . The time provided in this section for serving and filing a response may be extended by an agreement in writing between the parties to the court proceeding or, for good cause, by order of the court.” (Code Civ. Proc., § 1290.6.)

The court may not vacate an award unless:

(a) A petition or response requesting that the award be vacated has been duly served and filed; or

(b) A petition or response requesting that the award be corrected has been duly served and filed and:

(1) All petitioners and respondents are before the court; or

(2) All petitioners and respondents have been given reasonable notice that the court will be requested at the hearing to vacate the award or that the court on its own motion has determined to vacate the award and all petitioners and respondents have been given an opportunity to show why the award should not be vacated.

(Code Civ. Proc., § 1286.4.)

(a) Subject to Section 1286.4, the court shall vacate the award if the court determines any of the following:

(1) The award was procured by corruption, fraud or other undue means.

(2) There was corruption in any of the arbitrators.

(3) The rights of the party were substantially prejudiced by misconduct of a neutral arbitrator.

(4) The arbitrators exceeded their powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted.

(5) The rights of the party were substantially prejudiced by the refusal of the arbitrators to postpone the hearing upon sufficient cause being shown therefor or by the refusal of the arbitrators to hear evidence material to the controversy or by other conduct of the arbitrators contrary to the provisions of this title.

(6) An arbitrator making the award either: (A) failed to disclose within the time required for disclosure a ground for disqualification of which the arbitrator was then aware; or (B) was subject to disqualification upon grounds specified in Section 1281.91 but failed upon receipt of timely demand to disqualify himself or herself as required by that provision. However, this subdivision does not apply to arbitration proceedings conducted under a collective bargaining agreement between employers and employees or between their respective representatives.

(Code Civ. Proc., § 1286.2, emphasis added.)

            Plaintiff Mojana Boodaie aka Mojgan Neydavood (“Mojgan”) Petitions the Court to confirm the 5-30-24 arbitration award. (See Petition, Attachment 8(c). Mojgan meets all the statutory requirement of CCP § 1285 by attaching the arbitration award, which includes the names of the arbitrators and substance of the award. (Ibid.) Mojgan filed the petition on 8-9-24, and thus the petition to confirm was filed within 100 days of the arbitration award pursuant to CCP § 1285.2.

            Defendant Shahin Motallebi (“Motallebi”) responded to the Petition to confirm the arbitration award by filing a separate motion to vacate the arbitration award within 10 days of Mojgan filing the petition to confirm the award, and within 100 days of the 5-30-24 arbitration award. (See 8-12-24 Defendant Petition to Vacate Arbitration Award.)  Motallebi filed an opposition to the petition to confirm the arbitration award on 9-23-24, basically restating the arguments provided in the 8-12-24 Motion To Vacate.

            Motallebi complied with the procedural rules of CCP §§ 1290.6 and 1288 by filing the response to the Petition to Confirm through filing a petition to vacate within 100 days of the arbitration award and within 10 days of the petition to confirm. (See Code Civ. Proc., § 1285.2 [“A response to a petition under this chapter may request the court to . . . vacate the award.”].)  

I.                Motallebi seeks to vacate the arbitration award pursuant to CCP § 1286.2(a)(3) - rights of the party was substantially prejudiced by arbitrator misconduct

            Motallebi argues that the arbitrators alleged misconduct substantially prejudiced Motallebi’s rights by failing to “take into consideration the $100,000 that was already paid to Mojgan in November of 2023, and erroneously included the amount in the Award.” Motallebi argues the Arbitrator failed “to state in the Award that Mojgan has been receiving monthly interest payments from July of 2023 from Motallebi, as per a stipulation between Motallebi and the California State Bar, wherein Motallebi agreed to pay 10% interest on the $100,000, from November of 2020 to November of 2023, until paid off completely,” thus was substantially prejudiced.   

            The Court does not agree with this argument. The Arbitrator did consider both the November 2023 $100,000 payment from the California State Bar’s Recovery fund, and the 10% interest on the $100,000 from 11-20 to 11-23 within the arbitration award. In fact, the arbitrator awarded the 10% interest between 11-20 to 11-23 as part of the Arbitrator granting the breach of contract cause of action. (See Oppo., Ex. A at pp. 5–6.)  The Arbitrator expressly includes information about the November 2023 payment when they state:

On November 7, 2023, the Client Security Fund Commission for the State Bar of California issued a Final Decision denying Respondent’s objection to the Tentative Decision served on April 24, 2023 granting reimbursement in the amount of $100,000 to the Claimant. Respondent’s objection was based on a request that reimbursement happens after the conclusion of this Arbitration as Respondent wished to argue affirmative defenses of the Claimant’s contributory negligence and assumption of risk in not cashing the checks from his CTA sooner.

. . . .

In or around November of 2023, Claimant received $100,000 from the California State Bar’s recovery fund and deposited these funds.

(See Oppo., Ex. A at pp. 3–4.) 

            Additionally, the arbitrator reasoned:

The fact that the State Bar Recovery Fund paid Claimant $100,000 in November of 2023 does not mean that the Claimant has been “made whole” as Respondent would like to argue. Rather, the Claimant lost the ability from November of 2019 to November 2023, a period of 4 years, to use settlement funds that were rightfully hers and placed in trust in Respondent’s CTA and she has spent 4 years trying to recover these funds from the Respondent and had to pursue restitution through the State Bar of California. This led to Claimant not being able to put down a downpayment on a condo, emotional distress, and Claimant suffered the lost opportunity of the use of her money.

(See Oppo., Ex. A at pp. 8–9.) 

            Thus, the Court cannot find that the Motallebi was substantially prejudiced by the arbitrator’s misconduct, when Motallebi cannot point to any actual arbitrator misconduct, nor any authority to support the Court finding that the Arbitrator committed any misconduct.

II.             Motallebi seeks to vacate the arbitration award pursuant to CCP § 1286.2(a)(4) – arbitrators exceeded their power

            This statute requires a court to vacate an award if the “arbitrators exceeded their powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted.” (§ 1286.2, subd. (a)(4).) “This exception is narrowly construed. Arbitrators do not exceed their powers by reaching erroneous factual or legal conclusions on the merits of the parties' claims, even if the award causes substantial injustice to one of the parties.” (Starr v. Mayhew (2022) 83 Cal.App.5th 842, 859.)

            “ ‘[a]rbitrators, unless specifically required to act in conformity with rules of law, may base their decision upon broad principles of justice and equity, and in doing so may expressly or impliedly reject a claim that a party might successfully have asserted in a judicial action.’ ” (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 10–11.)

            “Absent an express and unambiguous limitation in the contract or the submission to arbitration, an arbitrator has the authority to find the facts, interpret the contract, and award any relief rationally related to his or her factual findings and contractual interpretation.” (Gueyffier v. Ann Summers, Ltd. (2008) 43 Cal.4th 1179, 1182

            Motallebi argues that the Arbitrator exceeded their power by awarding Mojgan $75,000 in non-economic damages “despite the fact that no evidence was presented by [Mojgan] that she was able to purchase an alleged condo in, January of 2020, that an actual offer to purchase was made by Mojgan and was accepted by the seller, the exact address and the asking price of the alleged condo, Mojgan’s loan approval for the remaining balance of the alleged condo’s price, and her ability to qualify for a loan, and her ability to pay the monthly mortgage.” (Oppo., p. 9: 5–7.)

            The Court does not agree with this argument. Motallebi provides no authority to vacate the arbitration award by arguing that they were not allowed to present alleged evidence of Mojgan’s financial situation from years earlier to support the claim that the arbitrator exceeded their power. Nor does Motallebi point to any provision within the arbitration agreement or submission within the arbitration that expressly stated the arbitrator must allow Motallebi to present this alleged evidence. The Court may not generally review and vacate an arbitration award based on errors of law.  (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 11.)  This includes erroneous evidentiary rulings. (See Schlessinger v. Rosenfeld, Meyer & Susman (1995) 40 Cal.App.4^th 1096, 1110-1111.)  “Plainly, this type of attack on the arbitrator's decision, if not properly limited, could swallow the rule that arbitration awards are generally not reviewable on the merits. Accordingly, a challenge to an arbitrator's evidentiary rulings or limitations on discovery should not provide a basis for vacating an award unless the error substantially prejudiced a party's ability to present material evidence in support of its case.”  (Schlessinger v. Rosenfeld, Meyer & Susman (1995) 40 Cal.App.4th 1096, 1110.)

            Motallebi argues that the Arbitrator exceeded their powers by awarding Mojgan $5000 in attorney’s fees dispute the arbitrator finding that Mojgan failed to establish a right to attorneys’ fees by contract or statute. (See Oppo., p. 9:8–16; Ex. B (“Arbitration Award for Attorney’s Fees”)  

            Again, the Court does not agree with this argument. Motallebi does not point to any provision of the contract, and or arbitration agreement, where there is an express and unambiguous limitation to the arbitrator awarding attorneys’ fees. The arbitrator has broad authority to award any relief deemed just and equitable, which may include an award of attorneys’ fees.

            Additionally, within the arbitrator award on attorney’s fees, the arbitrator specifically cites the AAA Consumer Rules which “provide an independent basis to award attorney fees where there is no right to attorney fees established by contract or statute. AAA Rule R-44(a) permits an award of attorney fees and costs because “the arbitrator may grant any remedy, relief, or outcome that the parties could have received in court, including awards of attorney’s fees and costs, in accordance with the law(s) that apply to the case.” (Oppo., Ex. B at p. 2.) Arbitrator continues by explaining that “both parties requested attorney fees in this matter, so the Arbitrator has jurisdiction to award attorney fees and costs under Consumer Rule 44.” (Ibid.)

            Thus, the Court finds that the Arbitrator did no exceed their powers under CCP § 1286.2(a)(4).

III.           Motallebi seeks to vacate the arbitration award pursuant to CCP § 1286.2(a)(5) – substantially prejudiced by the refusal of an arbitrator to hear evidence material to the controversy

            Motallebi argues that the arbitrator substantially prejudiced Motallebi’s rights by refusing to allow Motallebi to question Mojgan regarding Mojgan’s 2009 bankruptcy filing, and the arbitrator refusing to allow evidence related to Mojgan’s bankruptcy case. Motallebi argues by not allowing this evidence the arbitrator prevented Motallebi from introducing Mogjan’s comparative negligence for “her intentional refusal to remove her funds from Motallebi’s IOLTA account, despite numerous requests.” (Oppo., at p. 10:6–11.)

            CCP 1286.2(a)(5) “was designed as a ‘safety valve in private arbitration that permits a court to intercede when an arbitrator has prevented a party from fairly presenting its case.’ [Citation.] It comes into play, for example, when an arbitrator, without justification, permits only one side to present evidence on a disputed material issue. [Citation.] The Arbitration Act codifies ‘the fundamental principle that “[a]rbitration should give both parties an opportunity to be heard.” [Citation.] ... [T]he opportunity to be heard must be extended to all parties equitably.’ [Citation.] To conduct an arbitration without abiding by that principle evinces bias, constituting misconduct.”  (Bacall v. Shumway (2021) 61 Cal.App.5th 950, 963.)

            “[t]he statutory provisions for [review of an arbitration award] are manifestly for the sole purpose of preventing the misuse of the proceeding, where corruption, fraud, misconduct, gross error, or mistake has been carried into the award to the substantial prejudice of a party to the proceeding.” (Id., at p. 974.)

            The Court finds that the Abitrator did not substantially prejudice Motallebi by refusing to hear evidence material to the controversy. The arbitration award states that the arbitrator did allow Motallebi to argue that Mojgan’s 2009 bankruptcy should be allowed in as evidence, but the arbitrator reasoned that “this tactic speaks to [Motallebi’s[ nonrecognition of his nondelegable duties and the fact that [Mojgan’s] prior bankruptcy has no relevance when analyzing his fiduciary duties.” (Oppo., Ex. A, p. 9, third paragraph.) Arbitrator continues by stating:

Claimant credibly testified that she had not cashed the two checks in the amount of $50,000 each because she knew if she did, she would spend the money and she wanted to save the money for a downpayment on a condo. Further only 5 months had elapsed since she cashed a prior check for $50,000. The Respondent was provided with two Orders giving notice that the Arbitrator was taking arbitral notice of decisions by the State Bar Court agencies that “Respondent had a nondelegable duty to safeguard the entrusted client funds in his Client Trust Account” and yet, at the Hearing, Respondent continued to defend himself by attempting to shift blame on the Claimant.

(Ibid.)

Additionally, Motallebi provides transcripts of the Arbitration hearings to support his argument. (See Oppo., Ex F, G,.) The transcripts show that the Arbitrator heard both parties arguments, and made a rulings while providing the reasoning for those rulings. There is no evidence of misuse of the proceeding, corruption, fraud or misconduct, but there is an arbitrator ruling that this evidence of Mojgan’s bankruptcy is immaterial to the matter of Motallebi’s nondelegable duty, and also immaterial to the matter since the bankruptcy occurred ten years prior to the events at issue. Furthermore, the Court may not generally review and vacate an arbitration award based on errors of law.  (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 11.)  This includes erroneous evidentiary rulings. (See Schlessinger v. Rosenfeld, Meyer & Susman (1995) 40 Cal.App.4^th 1096, 1110-1111.)

The Court finds that Motallebi was not substantially prejudiced by the refusal of an arbitrator to hear evidence material to the controversy, and thus the Court will not vacate the arbitration pursuant to CCP 1286.2(a)(5).