Judge Lisa K. Sepe-Wiesenfeld, Case Number: SS029337, Date: 2023-12-07 Tentative Ruling

Judge: Lisa K. Sepe-Wiesenfeld, Case: SS029337, Date: 2023-12-07 Tentative Ruling

Case Number: SS029337 Hearing Date: December 7, 2023 Dept: N

TENTATIVE RULING

Respondents Paul Kambur and Kambur Construction Group, Inc.’s Petition to Vacate Arbitration Award is DENIED.

Petitioners Zalman Nemtzov and Zalman N., Inc.’s Petition to Confirm Arbitration Award Against Paul Kambur and Kambur Construction Group, Inc. is GRANTED.

Petitioners Zalman Nemtzov and Zalman N., Inc. shall prepare, serve, and submit a proposed judgment as per statute.

Moving parties to give notice.

REASONING

Petitioners Zalman Nemtzov and Zalman N., Inc. (“Petitioners”) petition the Court for an order confirming the arbitration award dated July 13, 2023, which awarded Petitioners the total sum of $318,444.65, consisting of $98,750 for foundation work provided to Respondents Paul Kambur and Kambur Construction Group, Inc. (“Kambur Construction”) (collectively “Respondents”), $95,000 for a violation of Business and Professions Code section 7108.5, attorney fees of $105,000, and legal costs of $19,694.65. Respondents petition the Court to vacate the same award. The Court notes that Respondents have filed a Notice to Appear at Hearing seeking to require Petitioner Zalman Nemtzov to testify as a witness at this hearing. This request is DENIED, as the Court does not require further testimony to resolve the pending motions. (See Metis Development LLC v. Bohacek (2011) 200 Cal.App.4th 679, 689 [petition to compel arbitration may be decided “upon declarations or, if necessary, live testimony”].)

Request for Judicial Notice

Kambur Construction requests judicial notice of eight court records in Los Angeles Superior Court Case No. 20SMCV01191. Kambur Construction’s request is GRANTED pursuant to Evidence Code section 452, subdivision (d). However, the Court notes that it may “only take judicial notice of the truth of facts asserted in documents such as orders, findings of fact and conclusions of law, and judgments.” (Day v. Sharp (1975) 50 Cal.App.3d 904, 914.)

Legal Standard

“Any party to an arbitration in which an award has been made may petition the court to confirm, correct or vacate the award.” (Code Civ. Proc., § 1285.) “The petition shall name as respondents all parties to the arbitration and may name as respondents any other persons bound by the arbitration award.” (Ibid.) The petition must be filed and served no less than ten days and no more than 100 days after the award is served on the party seeking confirmation. (Code Civ. Proc., §§ 1288, 1288.4.)

Code of Civil Procedure section 1286.2, subdivision (a), provides that the trial court shall vacate an arbitration award if it 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.

Until it is either confirmed or vacated, an arbitration award “has the same force and effect as a contract in writing between the parties to the arbitration.” (Code Civ. Proc., § 1287.6.) On the other hand, once confirmed, “judgment shall be entered in conformity therewith” with “the same force and effect as, and is subject to all the provisions of law relating to, a judgment in a civil action of the same jurisdictional classification.” (Code Civ. Proc., § 1287.4.)

Code of Civil Procedure section 1285.4 requires the petition to set forth (1) the substance of the arbitration agreement if a complete copy is not attached, (2) the names of the arbitrators, and (3) the arbitration award and the arbitrator’s opinion if a complete copy is not attached. Code of Civil Procedure section 1290.4, subdivision (a), provides that “[a] copy of the petition” to correct an arbitration award, “a written notice of the time and place for the hearing,” “and any other papers upon which the petition is based shall be served in the manner provided in the arbitration agreement.” In the event that the arbitration agreement does not provide a method of service, the petition must be served pursuant to one of the methods set forth in Code of Civil Procedure section 1290.4, subdivision (b) or (c).

Analysis

On July 13, 2023, the arbitrator issued his arbitration award finding that Respondents owed Petitioners a total of $318,444.65, which consisted of $98,750 for foundation work provided to Respondents, $95,000 for a violation of Business and Professions Code section 7108.5, and payment of legal fees and costs of $105,000 and $19,694.65. (Pet. To Confirm, Boji Decl. ¶ 5, Ex. A.)

Respondents move to vacate the arbitration award on the ground that Zalman N., Inc. has never had a contractor’s license, such that no judgment can be entered in his favor for construction work, Paul Kambur was not a party to the underlying agreement with Zalman N., Inc., Zalman Nemtzov was not a party to the subcontract upon which the award was based, and workers employed by Petitioners lacked workers’ compensation insurance. Petitioners move to confirm the award and have judgment entered in their favor in the amount of $318,444.65.

Put simply, Respondents are seeking a second bite at the apple in their petition, which is not a proper basis for vacating an arbitration award because, as detailed above, Code of Civil Procedure section 1286.2, subdivision (a), provides only limited grounds for vacating an award. It is axiomatic that “[n]either the merits of the controversy nor the sufficiency of the evidence to support the arbitrator’s award are matters for judicial review,” and it is not this Court’s place to “substitute its judgment for that of the arbitrators.” (Morris v. Zuckerman (1968) 69 Cal.2d 686, 691.) Insofar as Respondents present new arguments and new evidence here, this is an improper basis to vacate the arbitration award because Respondents had ample opportunity to present these arguments and evidence to the arbitrator, and it is not this Court’s role to consider new arguments and evidence where the matter was properly sent to arbitration. (See Cal. Rules of Court, rule 3.823(a) [“All evidence must be taken in the presence of the arbitrator and all parties, except where any of the parties has waived the right to be present or is absent after due notice of the hearing”].)

The filings in the arbitration indicate that both Respondents were identified as parties to the arbitration, with both Petitioners, and Respondents made no objection to the inclusion of Zalman N., Inc. or Paul Kambur as a party to allow the arbitrator to consider whether their inclusion was proper, and it is not this Court’s role to accept new evidence on this issue where it was available to Respondents at the time of arbitration. Moreover, where Code of Civil Procedure section 1286.2, subdivision (a), sets forth limited grounds upon which the trial court may vacate an arbitration award, the Court lacks a basis to determine that the inclusion of a party, where they were identified as a party to the arbitration, supports a conclusion that the award was procured by corruption, fraud or other undue means; there was corruption in the arbitrator; the rights of the party were substantially prejudiced by misconduct of a neutral arbitrator; the arbitrator exceeded his power; the arbitrator refused to postpone the hearing despite sufficient cause; or the arbitrator failed to disclose grounds for disqualification.

Insofar as Respondents argue that Zalman N., Inc. has never had a contractor’s license and that the workers employed by Petitioners lacked workers’ compensation insurance, these were issues for the arbitrator to consider, not the Court reviewing the award. Further, simply stating the arbitrator “ignored” prior rulings does not make it so when the Court lacks any evidence in this respect. Accordingly, Respondents Paul Kambur and Kambur Construction Group, Inc.’s Petition to Vacate Arbitration Award is DENIED. Petitioners Zalman Nemtzov and Zalman N., Inc.’s Petition to Confirm Arbitration Award Against Paul Kambur and Kambur Construction Group, Inc. is GRANTED. Petitioners Zalman Nemtzov and Zalman N., Inc. shall prepare, serve, and submit a proposed judgment as per statute.