Judge: Kerry Bensinger, Case: 22STCV20414, Date: 2024-05-14 Tentative Ruling

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Case Number: 22STCV20414    Hearing Date: May 14, 2024    Dept: 31

Tentative Ruling

Judge Kerry Bensinger, Department 31

HEARING DATE:     May 14, 2024                         TRIAL DATE:  N/A

CASE:                         David Forseth v. The Lobster, LLC, et al.

CASE NO.:                 22STCV20414

PETITION TO VACATE ARBITRATION AWARD

CROSS-PETITION TO CONFIRM THE AWARD

MOVING PARTY:               Plaintiff David Forseth

RESPONDING PARTY:     Defendant The Lobster, LLC

I.          BACKGROUND

            On June 22, 2022, Plaintiff David Forseth filed a Complaint against The Lobster, LLC; Robert Kull (“Kull”); and Natasha Nathan (“Nathan”) (collectively “Defendants”), for wrongful termination and violations of the California Labor Code and the FEHA.  Plaintiff alleges that Kull and Nathan discriminated against him because of his age.                                 

On July 22, 2022, Defendants moved to compel arbitration.  The court granted the motion on August 17, 2022.  The arbitration proceeded with JAMS.  Arbitrator Zela G. Claiborne (Arbitrator Claiborne) issued a Final Arbitration Award on December 11, 2023.

            On December 21, 2023, Defendants filed a Petition to Confirm Contractual Arbitration Award.  On January 5, 2024, Plaintiff filed an Objection and Request to Strike the Petition on the grounds that Defendants had not provided notice of the hearing.  The court ordered the parties to participate in further arbitration and struck Defendants’ Petition.  Plaintiff concurrently filed a Notice of Agreement to Extend Time Pursuant to CCP § 1290.6 To Respond [sic] Defendant’s Petition to Confirm Arbitrator’s Award.

            On March 18, 2024, Plaintiff filed a Petition to Vacate Contractual Arbitration Award.  On March 20, 2024, Plaintiff filed an Amended Petition and a Notice of Hearing of Plaintiff’s Petition to Vacate Arbitration Award.

            On March 25, 2024, Defendant The Lobster, LLC (hereafter, “Lobster” or “Defendant”) filed an Opposition to Amended Petition to Vacate Contractual Arbitration Award and Cross-Petition to Confirm the Award (Cross-Petition).

            On May 1, 2024, Plaintiff filed an Opposition to Defendant’s Cross-Petition.

            On May 3, 2024, Defendant filed a Reply to Plaintiff’s Opposition to the Cross-Petition.

            On May 7, 2024, Plaintiff filed a Reply to Defendant’s Opposition to the Amended Petition.

            Before the court are the parties’ cross-petitions regarding the arbitration award issued in this matter on December 11, 2023.  The court addresses the cross-petitions together.

II.        LEGAL STANDARD

Once arbitration is concluded, “any arbitrator’s award is enforceable only when confirmed as a judgment of the superior court.”¿ (O’Hare v. Municipal Resource Consultants (2003) 107¿Cal.App.4th 267, 278 (O’Hare).)¿ Any of the parties may file a petition with the court, which must then “confirm the award, correct and confirm it, vacate it, or dismiss the petition.”¿ (Code Civ. Proc.,¿§§¿1285, 1286; EHM Productions, Inc. v. Starline Tours of Hollywood,¿Inc. (2018) 21 Cal.App.5th 1058, 1063 (EHM Productions).)¿ “It is well settled that the scope of judicial review of arbitration awards is extremely narrow.”  (California Faculty Assn. v. Superior Court¿(1998) 63 Cal.App.4th 935, 943.)¿ “Neither the trial court, nor the appellate court, may ‘review the merits of the dispute, the sufficiency of the evidence, or the arbitrator’s reasoning, nor may we correct or review an award because of an arbitrator’s legal or factual error, even if it appears on the award’s face.  Instead, we restrict our review to whether the award should be vacated under the grounds listed in section 1286.2.” ¿ (EHM Productions, supra, at pp. 1063-64.)¿

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 parties 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  . . . (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. . . .” 

(Code Civ. Proc., § 1286.2, subd. (a).) 

Only where both (1) the arbitrator abused his or her discretion and (2) there was resulting prejudice, can a trial court properly vacate an arbitration award. (SWAB Financial, LLC v. E*Trade Securities, LLC (2007) 150 Cal.App.4th 1181, 1198.) 

III.      DISCUSSION

A.    Timeliness

A petition to vacate an arbitration award must be filed and served no later than 100 days after the date of the service of a signed copy of the award on Petitioner.  (Code Civ. Proc., §  1288.)  “The filing and service deadline for a petition to vacate is jurisdictional; noncompliance deprives a court of the power to vacate an award…” (Santa Monica College Faculty Assn. v. Santa Monica Community College District (2015) 243 Cal.App.4th 538, 544-45.)  

Defendant argues the Petition to Vacate is untimely but cites 9 U.S.C. section 12 rather than CCP section 1288.  9 U.S.C. section 12 provides, “Notice of a motion to vacate, modify, or correct an award must be served upon the adverse party or his attorney within three months after the award is filed or delivered.” 

The lack of argument and evidence complicates the timeliness inquiry.  The parties do not address whether state or federal law applies.  Further, although Defendant represents that the Final Arbitration Award was made and served on December 11, 2023, neither party provides proof of service of the Final Arbitration Award indicating when it was served.  Assuming for the moment that December 11, 2023 is the correct date, and applying federal law, the Petition to Vacate may well be untimely since more than three months separate December 11, 2023 and March 18, 2024 (when the first Petition to Vacate was filed).  However, if California law applies, Plaintiff’s Petition to Vacate is timely since exactly 100 days separate December 11, 2023 and March 20, 2023 (when the Amended Petition was filed).  Given the lack of clarity, the court reaches the merits of Plaintiff’s Petition to Vacate.[1] 

B.     Petition to Vacate Arbitration Award

Plaintiff identifies multiple grounds to vacate the arbitration award.  The court addresses each in turn.

                                i.            Corruption of the Arbitrators (CCP § 1286.2(a)(2))

Plaintiff argues the arbitration award should be vacated because Arbitrator Claiborne was prejudiced against his counsel, Armando Galvan, which amounts to corruption.  In his declaration, Mr. Galvan states “that the Arbitrator visually was a prejudiced, racist or bigot and was discriminating against me for being a person of Mexican descent and/or Hispanic; in effect by her tone and her vehement reaction to my statements she all but told me “boy” in repeatedly chastising me to “Be Quiet!” when I exercised my right to act on behalf of Plaintiff.  It was obvious she favored in a discriminatory manner, the older and whiter [Defendant] Mr. Kull.  That I am middle aged makes her treatment of me all the worst and an obvious discriminatory tone and mistreatment; this was corruption.”  (Decl. Galvan, ¶ 5.)

Plaintiff’s argument lacks merit.  Plaintiff does not reference any transcripts or any record whatsoever to support the allegations that the arbitrator was prejudiced against Plaintiff’s counsel based upon race or ethnicity.  Plaintiff also fails to cite the alleged rulings or findings that were the product of the arbitrator’s racist behavior.  The assertion is unsubstantiated and does not provide a basis for vacating the award. 

ii.                  The arbitrators exceeded their powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted (CCP § 1286.2(a)(4))

            Plaintiff argues Arbitrator Claiborne exceeded her powers.  The argument is difficult to discern.  Plaintiff appears to argue the Arbitrator exceeded her authority by deciding some of the alleged conduct was barred by the three-year limitations for violations of the FEHA in Prehearing Order No. 4 (“Order No. 4”).  Plaintiff characterizes Order No. 4, which granted in part Defendants’ Motion to Narrow Issues, as an unauthorized granting of summary judgment.

Plaintiff mischaracterizes the ruling.  Order No. 4 states, in pertinent part:

“Respondents have filed a "Motion to Narrow Issues" on February 1, 2023. Although not characterized as a motion for summary adjudication, it appears to be just that: an attempt to bar discovery and evidence regarding acts done before June 6, 2019, when they assert that the three-year statute of limitations would have run.

The Motion is denied insofar as it is an attempt to preclude evidence of events that occurred before June 6, 2019. Claimant may present testimony on claims of a toxic work environment before that date. That testimony should be limited to the testimony of two or three witnesses at most. There will be no time for cumulative testimony at the hearings.

However, the motion is granted with regard to the claims asserted here. Claimant is limited to claims dated after June 6, 2019. Claimant may present evidence of discrimination, a hostile work environment, and so forth in support of his allegation that he was terminated due to his age. Respondents may assert the defense of the statute of limitations when appropriate.”

(Galvan Decl., Ex. 3.)

Contrary to Plaintiff’s assertion, Arbitrator Claiborne did not rule in advance of the arbitration hearing that Plaintiff’s FEHA claim was barred by the statute of limitations.  Rather, Arbitrator Claiborne ruled that some of Plaintiff’s alleged claims would not be recoverable—specifically those dated after June 6, 2019.  The court further notes that the parties briefed the statute of limitations issue.  (See Galvan Decl., Exs. 4 and 5.)  Plaintiff had notice of the Motion to Narrow Issues and had an opportunity to respond. 

At bottom, Plaintiff takes issue with Arbitrator Claiborne’s reasoning and application of the law in Order No. 4.  This is not a basis to vacate an arbitration award.  “Neither the trial court, nor the appellate court, may ‘review the merits of the dispute, the sufficiency of the evidence, or the arbitrator’s reasoning, nor may we correct or review an award because of an arbitrator’s legal or factual error, even if it appears on the award’s face.  Instead, we restrict our review to whether the award should be vacated under the grounds listed in section 1286.2.” ¿ (EHM Productions, supra, at pp. 1063-64.)¿ Thus, even if the court were to disagree with Arbitrator Claiborne’s reasoning or to find that the award is based upon a legal error, the court cannot vacate the award on those grounds.[2]  Plaintiff does not demonstrate Arbitrator Claiborne exceeded her powers.

iii.                The rights of the parties were substantially prejudiced … 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  (CCP § 1286.2(a)(5))

Plaintiff next argues that Arbitrator Claiborne unjustly excluded witness testimony from Chris Prell (“Prell”) and Julia Lehman (“Lehman”).  Prell was Defendant’s former employee and Prell similarly alleged that in 2017 and 2018 he was discriminated against because of his age by former managers.  Plaintiff’s argument lacks merit.  As Defendant points out, there is no evidence that Arbitrator Claiborne prevented Plaintiff from calling Prell or Lehman as witnesses.  The court further notes that, over four days, Plaintiff called six witnesses in his case in chief.  (See Kull Decl., ¶ 5.)  By all accounts, Plaintiff had ample opportunity to present extensive evidence in support of his claims.  Plaintiff does not merit an order vacating the arbitration award on this ground.

C.     Cross-Petition to Confirm Arbitration Award

Defendant The Lobster, LLC seeks an order confirming the Final Award.  An arbitrator’s award is enforceable only after being confirmed by a court of law. (O’Hare, 107 Cal.App.4th at p. 278.)¿ “An award that has not been confirmed or vacated has the same force and effect as a contract in writing between the parties to the arbitration.”¿ (Code Civ. Proc., § 1287.6.)¿

“Any party to an arbitration award in which an award has been made may petition the court to confirm, correct or vacate the award.” (Code Civ. Proc. § 1285.) “A petition under this chapter shall: (1) 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.)

The procedural requirements of Code of Civil Procedure section 1285.4 have been satisfied.  In moving to vacate the Final Award, Plaintiff included a copy of the agreement to arbitrate (Amended Pet. to Vacate, Attachment 4(b)) and copy of the Final Award issued by Arbitrator Claiborne (Amended Pet. to Vacate, Attachment 8(c)).  Further, the court has considered Plaintiff’s challenges to the Final Award which are set forth in Plaintiff’s Petition to Vacate and Opposition to the Cross-Petition to Confirm Arbitration Award.

            Plaintiff makes one additional argument against confirming the Final Award.  He argues that because Defendants Hull and Nathan are not parties to the Cross-Petition to Confirm (or the Opposition to Plaintiff’s Petition to Vacate), Defendants Hull and Nathan have defaulted.  The argument lacks merit.  Defendant The Lobster, LLC opposed Plaintiff’s Petition to Vacate and cross-petitioned to confirm the arbitration award.  Plaintiff does not cite any authority for the proposition the arguments raised here do not apply to Hull and Nathan.

IV.        CONCLUSION

            Plaintiff’s Petition to Vacate Arbitration Award is DENIED. 

            Defendant’s Cross-Petition to Confirm Arbitration Award is GRANTED. Defendant is directed to file a proposed judgment consistent with this decision within 10 days. 

Defendant to give notice. 

DATED: May 13, 2024