Judge: Mark A. Young, Case: 23SMCP00262, Date: 2023-10-25 Tentative Ruling

Case Number: 23SMCP00262    Hearing Date: October 25, 2023    Dept: M

CASE NAME:           DeCarolis, et al., v. Grecco

CASE NO.:                23SMCP00262

MOTION:                  Motion to Confirm/Correct/Vacate Arbitration Award

HEARING DATE:   10/25/2023

Legal Standard

Confirm Standard

Any party to an arbitration may petition the court to confirm an arbitration award. (CCP § 1285.) If a petition to confirm an arbitration award is duly served and filed, the court must confirm the award as made, unless the court corrects or vacates the award pursuant to a response to the petition or a petition to correct or vacate the award. (CCP § 1286; Valsan Partners Limited Partnership v. Calcor Space Facility, Inc. (1994) 25 Cal.App.4th 809, 818 [no authority to alter terms of award absent petition to correct]; see Thriftimart, Inc. v. Superior Court (1962) 202 Cal.App.2d 421, 425-26 [an objection to the granting of a motion to confirm an award is equivalent to a motion to vacate].)

A petition to confirm an arbitration award must set forth the substance of or attach the arbitration agreement, include the name of the arbitrator, and attach a copy of the award and the written opinion of the arbitrator, if any. (CCP § 1285.4.) The petition must be served no earlier than 10 days, but no later than 4 years, after service of the award on the petitioner. (CCP §§ 1288, 1288.4.) If the agreement sets forth a method of service for the petition, that method holds. (CCP §1290.4(a).) If the arbitration agreement does not set forth a method, service shall be made in the manner provided by law for service of summons in an action if the party has not appeared. (CCP § 1290.4(b).) If the party upon whom the petition is to be made has appeared, service can be made by noticed motion. (CCP § 1290.4(c).) 

A response to a petition must be served and filed within 10 days after service of the petition. The time for response may be extended by an agreement in writing between the parties or for good cause by order of the court. (CCP § 1290.6.) 

Every presumption is in favor of the arbitration award. (Firestone Tire & Rubber Co. v. United Rubber Workers of America (1959) 168 Cal.App.2d 444, 449.) CCP section 1286.2 provides that “the court shall vacate the award if the court determines any of the following: (1) [t]he award was procured by corruption, fraud or other undue means.” (CCP § 1286.2(a).) The defendant moving for vacation of an arbitration award due to corruption, fraud, or other undue means must demonstrate a nexus between the award and the alleged undue means used to attain it. (Pour Le Bebe, Inc. v. Guess? Inc. (2003) 112 Cal.App.4th 810, 833-34.)

Vacate Standard

A request to vacate or correct an arbitration award must be filed and served within 100 days of service of the award. (CCP § 1288.) “In order to comply with the purpose of expeditious resolution of disputes through arbitration, time limits in which to challenge arbitration awards must be strictly enforced.” (Knass v. Blue Cross of California (1991) 228 Cal.App.3d 390, 395.) Service of a petition within California shall be made in the manner provided by law for the service of a summons. (CCP §1290.4(b)(1).) The timing requirements for filing and serving a petition to vacate an arbitration award are jurisdictional. (Abers v. Rohrs (2013) 217 Cal.App.4th 1119, 1212; Knass, supra, 228 Cal.App.3d at 395[section 1288’s timing requirements must be strictly enforced]; Santa Monica Coll. Faculty Assn. v. Santa Monica Cmty. Coll. Dist. (2015) 243 Cal.App.4th 538, 545 [“the filing and service deadline for a petition to vacate is jurisdictional; noncompliance deprives a court of the power to vacate an award unless the party has timely requested vacation.”].) Section 1286.4 expressly limits the court's power to vacate an award, stating that a “court may not vacate an award unless… a petition or response requesting the award be vacated has been duly served and filed…”  

Judicial review of private arbitration awards is generally limited to the¿statutory grounds for vacating or correcting an award. (ECC Capital Corp. v. Manatt, Phelps & Phillips, LLP¿(2017) 9 Cal.App.5th 885, 899-900.) These grounds include:

(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; or

(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.

(CCP § 1286.2(a).) “On its face, the statute leaves no room¿for discretion. If a statutory ground for vacating the award exists, the trial court must vacate the award.” (Ovitz v. Schulman (2005) 133 Cal.App.4th 830, 845.)  

Code of Civil Procedure section 1286.6 provides that the court “shall correct the award and confirm it as corrected if the court determines that: [¶] (a) There was an evident miscalculation of figures or an evident mistake in the description of any person, thing or property referred to in the award; [¶] (b) The arbitrators exceeded their powers but the award may be corrected without affecting the merits of the decision upon the controversy submitted; or [¶] (c) The award is imperfect in a matter of form, not affecting the merits of the controversy.” 

Analysis

Petitioners Patrick DeCarolis and the DeCarolis Family Law Group (DFLG) move to confirm the Final Arbitration Award entered by the Honorable Elizabeth R. Feffer (LASC Judge Ret.) (“Arbitrator”) on April 21, 2023. Respondent Michael Grecco opposes and moves to vacate the award. Petitioners request sanctions against Respondent and counsel of record, Melinda Ebelhar of Benedon & Serlin, LLP, in the sum of $7,200.00, on the grounds that Grecco’s Opposition/Request to Vacate is frivolous and interposed solely for improper purposes.  The sanctions matter is scheduled to be heard on November 17, 2023.

Petitioners provide a copy of the award and the written opinion of the arbitrator. (Hinds Decl., Ex. A.) Petitioners also attach the subject arbitration agreement.  (Hinds Decl., Ex. B.) On August 24, 2021, Respondent made an arbitration demand for legal malpractice against Petitioners following the conclusion of the underlying dissolution action. (Hinds Decl., ¶5.) On November 17, 2021, DFLG made a counterclaim in arbitration for breach of contract and account stated. (Id. ¶6, Ex. D.) The arbitration took place from October 31, 2022, to November 15, 2022, via ADR Services, Inc. The case was arbitrated by Hon. Elizabeth R. Feffer (ret.) (“Arbitrator”). (Id. ¶ 7.) The Arbitrator issued an Interim Award on January 27, 2023. On March 30, 2023, DFLG timely filed a motion to fix the amount of attorneys’ fees and other awardable costs concurrently with a memorandum of costs and a compendium of documentary evidence. (Id. ¶ 8.) On April 21, 2023, the Arbitrator held a hearing on the motion to fix the amount of attorneys’ fees and other awardable costs. (Id. ¶9; Ex. A at p. 2 ¶3.) The final arbitration award (the “Final Award”) was issued on April 21, 2023. (Id. at p. 2 ¶3.)

In the Final Award, the Arbitrator concluded that Respondent’s argument that Petitioners’ presence on February 13, 2020, at an ex parte hearing in family court, or submission of a written opposition in that matter would have caused the court to deny a second extension was based “wholly on speculation” and that the Respondent failed to meet his burden of proving that “the non-appearance at an in-chambers ex parte proceeding was the proximate cause of the ultimate outcome.” (Id. at pp. 26-28.) The Arbitrator similarly dismissed all of Respondent’s other contentions of legal malpractice by Petitioners and additionally concluded that, even if the Respondent could have met his burden of proof, which he could not, the Respondent did not establish entitlement to any damages. (Id., at pp. 28-33.)

The Arbitrator issued a total award of $451,146.59 for Petitioners on their counterclaim. The Arbitrator found that DFLG “met the burden of establishing entitlement to recover on its breach of contract and account stated theories” and awarded DFLG $69,307.39 in unpaid legal fees and costs which included interest pursuant to the Professional Services Agreement. (Id., at p. 33-34.) The Arbitrator also found that DFLG is entitled to prejudgment interest as well as interest in the amount of $18.90 per day from the date of the hearing on the motion and until the fees are paid. (Id., at p. 40.) The Arbitrator additionally ruled that DFLG was entitled to recoverable costs and attorneys’ fees pursuant to the attorneys’ fees provision set forth in the Professional Services Agreement which stated that the prevailing party in legal proceedings pursuant to the Agreement would be entitled to receive attorneys’ fees and costs. (Id., at pp. 34-40.) The Arbitrator awarded $257,531 in attorneys’ fees for the work on the arbitration, $3,600 in attorneys’ fees in connection with the attorney fee motion, costs in the amounts of $67,595.37, and $36,004.35 in costs pursuant to CCP § 998. (Id. at 40.)

Petitioners meet the procedural requirements for confirmation. Respondents therefore have the burden to show one of the statutory grounds for vacating or correcting the award.

Respondents move to vacate pursuant to section 1286.2(a)(2) and (3), on the grounds that “there was corruption in … the arbitrator,” and/or “the rights of the party were substantially prejudiced by misconduct of a neutral arbitrator.” Grecco provides a statement attempting to show this corruption:

“During the arbitration hearing there were multiple occasions when the participants went ‘off the record’ to take short breaks. At least twice during those breaks, on two different days, I personally observed and heard Arbitrator Feffer look at and speak directly to Patrick DeCarolis, reminding him that she was an experienced family law judge and that she was available for family law mediations at any time.”

(Grecco Decl., ¶ 4.) Grecco does not give any other details on this subject. Respondents thereby contend that the arbitrator, a former family law judge and now a private neutral specializing in family law related mediations and arbitrations, created a substantial impression of possible bias by “soliciting” DeCarolis for private family law appointments during the pendency of the arbitration. Respondents argue that this solicitation is in direct violation of the Ethics Standards for Neutral Arbitrators in Contractual Arbitration.

The Court agrees that such a statement would show possible bias, if made in the context of an arbitration hearing. (See Ceriale v. AMCO Ins. Co. (1996) 48 Cal.App.4th 500, 506 [“the question is whether ‘a person aware of the facts might reasonably entertain a doubt that the [arbitrator] would be able to be impartial’ given the particular circumstances of the case”].) That said, the Court finds that, as a matter of fact, the arbitrator did not make those solicitations. Grecco provides an entirely self-serving allegation that he heard the Arbitrator twice solicit opposing counsel during breaks in the Arbitration. Aside from this conclusory statement, with contain no details, Grecco provides no corroborating evidence. For example, Grecco does not provide the declaration of anyone else who was present and may have heard the comments, including his counsel at the time. Grecco fails to explain why, for example, his counsel at the arbitration did not object to the statements at the time or submit a declaration corroborating Grecco’s assertions. On the other hand, Hinds, DeCarolis and the Arbitrator herself submitted declarations that the Arbitrator did not make such comments. (Feffer Decl., ¶¶5-7; Supp. Hinds Decl., ¶ 12; DeCarolis Decl., ¶¶ 6-10.) Notably, Grecco did not raise this issue until he submitted a State Bar complaint against opposing counsel, apparently after the award was issued. (DeCarolis Decl., ¶ 12.)  The Court also notes that the family law judge, Judge Giza found that Grecco lacked credibility and engaged in “suspect” litigation behavior, as well as sanctioning him $8,000 pursuant to Family Code § 271 for intentionally trying to frustrate the divorce proceedings or unreasonably increasing the cost of litigation.  Combined, the Court concludes that Grecco’s allegations lack credibility. 

Therefore, the Court finds no grounds for vacating or correcting the award. Accordingly, the motion to confirm the final arbitration award is GRANTED.