Judge: H. Jay Ford, III, Case: 20SMCV00941, Date: 2024-11-14 Tentative Ruling

Case Number: 20SMCV00941    Hearing Date: November 14, 2024    Dept: O

  Case Name:  Naeini v. TD Ameritrade Inc., et al.          

SUBJECT:                PETITION TO VACATE ARBITRATION AWARD  

MOVING PARTY:   Petitioner Ava Naeini

RESP. PARTY:         Respondents TD Ameritrade, Inc. and TD Ameritrade Clearing

TENTATIVE RULING

            Petitioner Ava Naeini Petition to Vacate Arbitration Award is DENIED. Petitioner did not provide any evidence, or otherwise meet its burden to vacate the arbitration award under CCP § 1286.2(a)(1)–(6).

            Accordingly, because no grounds to vacate the arbitration award exist, and the requirements of CCP § 1285.4 are met, and Respondents TD Ameritrade, Inc. and TD Ameritrade Clearing Petition to Confirm Arbitration Award is GRANTED pursuant to CCP § 1286.  TD Ameritrade, Inc. 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., § 1285.4.)

            “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.)

            “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.) “[C]ourts will not review the validity of the arbitrator's reasoning.” (Id., at p. 11.) “ Further, a court may not review the sufficiency of the evidence supporting an arbitrator's award.” (Ibid.) “Thus, it is the general rule that, with narrow exceptions, an arbitrator's decision cannot be reviewed for errors of fact or law. In reaffirming this general rule, we recognize there is a risk that the arbitrator will make a mistake. That risk, however, is acceptable for two reasons. First, by voluntarily submitting to arbitration, the parties have agreed to bear that risk in return for a quick, inexpensive, and conclusive resolution to their dispute.” (Ibid.)

            “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.)

            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.)

I.                Petitioner fails to satisfy her burden to vacate the arbitration award

            Petitioner Ava Naeini (“Naeini”) Petitions the Court to vacate the 1-5-24 arbitration award. (See Petition, Attachment 8(c). Naeiini meets all the statutory requirement of CCP § 1285.4 by attaching the arbitration award, which includes the names of the arbitrators and substance of the award. (Ibid.) Naeini filed the petition on 3-14-24, and thus the petition to vacate was filed within 100 days of the arbitration award pursuant to CCP § 1288.

            Naeini petitions to vacate the award based on all available grounds to vacate an arbitration award, by checking all the boxes on Form ADR-106, § 10(c), however the main arguments appear to be based on CCP § 1286.4(a)(3)–(5). (see Petition to Vacate at p. 3, § 10, subd. (c).) In the Petition attachment 10(c)(2) at p. 19 of the Petition, Naeini argues that the proceedings were not fair and efficient, the arbitrator did not comply with the applicable law or arbitration agreement, and the arbitrator lacked impartiality or independence. (see Petition to Vacate, Ex. 10(c)(2) at pp. 20–24.)

            However, Naeini fails to submit any declaration, evidence or authority to support her petition.  Naeini references to the arbitration hearings does not show bias, prejudice or non-compliance with the law or arbitration agreement. The Court may not generally review and vacate an arbitration award based on errors of law.  (Moncharsh, supra,  Cal.4th at p. 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.”  (Id., at p. 1110.)

            Naeini’s Reply also includes allegations of Arbitrators mocking Naeini for taking prayer time, favoritism towards respondents, unfair distribution of time, bias, mismanagement of a motion in limine, and failure to understand key issues. Again, Naeini does not submit any evidence that persuasively shows any grounds to support of a motion to vacate an arbitration award under CCP § 1286.4(a)(3)–(5). (See FCM Investments, LLC v. Grove Pham, LLC (2023) 96 Cal.App.5th 545, 552, review denied (Jan. 17, 2024) [“The narrow grounds stated in section 1286.2 for vacating an award protect against error that is so egregious as to constitute misconduct or so profound as to render the process unfair.”].)

            The Court finds that there is no evidence of Arbitrator corruption. It is Naeini’s burden to provide evidence and establish facts that the arbitrator was biased or corrupt, and Naeini fails to do so. Bias cannot be construed from the “merest unsubstantiated suggestion of personal bias or prejudice.” (Haworth v. Superior Court (2010) 50 Cal.4th 372, 389, as modified (Sept. 1, 2010).) Naeini does not provide any evidence other than her subjective view that arbitrators were biased or corrupt, and thus Naeini does not meet her burden to show bias. ([A]n arbitrator's decision is not generally reviewable for errors of fact or law, whether or not such error appears on the face of the award and causes substantial injustice to the parties.” (Moncharsh, at p. 6, 10 Cal.Rptr.2d 183, 832 P.2d 899.)

            The Court finds that the arbitrators did not exceed their powers due to Naeini not providing any allegations, facts or evidence to show that arbitrator in fact exceeded their powers. (Advanced Micro Devices, Inc. v. Intel Corp. (1994) 9 Cal.4th 362, 374 [“The Court must follow the rule of substantial deference to the arbitrators' jurisdictional determinations”].)

            The Court finds that that Naeini does not present any clear evidence of prejudicial conduct, and in fact the provided evidence shows that the Arbitrators were deferential to Naeini allowing Naeini to file an untimely brief, and accommodating Naeini’s “inappropriate behavior” of abruptly leaving the virtual hearing prompting a lengthy delay of the proceedings. (10-31-24 Oppo., p. 16:7–16.)

                        Thus, Naeini’s Petition to Vacate the Arbitration Award is DENIED.

            Respondents request that the arbitration award be confirmed if the petition to vacate is denied.  If a petition to vacate is filed the Court is required “to settle all issues relating to the status of the arbitral award in a single proceeding, by either confirming the award (as rendered or as corrected by the court) or by vacating it.” (Law Finance Group, LLC v. Key (2023) 14 Cal.5th 932, 947; see Code Civ. Proc., § 1286. [“If a petition or response under this chapter is duly served and filed, the court shall confirm the award as made, whether rendered in this state or another state, unless in accordance with this chapter it corrects the award and confirms it as corrected, vacates the award or dismisses the proceeding”].)

            The petition to vacate the award included all the requirements of CCP § 1285.4 including a copy of the agreement to arbitrate, , and a copy of the arbitration award including the names of the arbitrators. (See Petition to Vacate Arbitration Award, Ex. 4(c), 8(c).) Thus, all the requirements of a petition to confirm an arbitration award are met.

            The Court finds that due to the denial of the Petition to Vacate the Arbitration award, thus no grounds to vacate the arbitration award exist, the Court orders the 1-5-24 Arbitration Award Confirmed pursuant to CCP § 1286.