Judge Mark E. Windham, Case Number: 21STCP02576, Date: 2024-01-10 Tentative Ruling

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Petitioner Duane R. Folke’s Petition to Vacate Arbitration Award is DISMISSED. RESPONDENT’S REQUEST TO CONFIRM THE ARBITRATION AWARD IS GRANTED. JUDGMENT IS TO BE ENTERED IN THE AMOUNT OF $11,700.00, PLUS THE FILING FEE OF $585.00, AND INTEREST AT THE MAXIMUM LEGAL RATE FROM THE DATE OF PAYMENT, FEBRUARY 5, 2019. RESPONDENT IS TO FILE A PROPOSED JUDGMENT WITHIN 30 DAYS OF THIS ORDER.

On August 9, 2021, Petitioner Duane R. Folke (“Petitioner”) filed the instant Petition to Vacate Arbitration Award against Respondent Carol Pulliam (“Respondent”). Respondent filed a response on November 29, 2021. The Petition initially came for hearing on December 13, 2021 and was continued to January 19, 2022 to allow Petitioner to file a proof of service demonstrating proper service of the Petition. (Minute Order, 12/13/21.) On January 12, 2022, Petitioner filed a “Response to Order to Show Cause Showing that Respondent was Timely Served with Extenuating Circumstances.”

On January 19, 2022, the hearing was again continued to allow Petitioner to file and serve a declaration attaching any evidence in support of the Petition. (Minute Order, 01/19/22.) On March 17, 2022, Petitioner filed another supplemental response to the order to show cause. At the hearing on March 28, 2022, the Court heard oral argument, denied the Petition to Vacate, and confirmed the arbitration award. (Minute Order, 03/28/22.)

On April 26, 2022, Petitioner filed a notice of appeal. The Appellate Division issued a ruling on October 6, 2023 reversing the trial court’s ruling and ordering the hearing on the Petition to be reset. (Remittitur, filed 12/08/23.) The Appellate Division adopted the trial court’s findings that (1) 100 days from the date of service of the Award was August 20, 2021; (2) the arbitration award was served by the arbitrator on May 12, 2021; and (3) the Petition had to be filed and served no later than August 20, 2021. (See Minute Order, 03/28/22, p. 4 at ¶5; Remittitur, filed 10/06/23.) The Appellate Division ordered the trial court “to determine, in the first instance, whether Folke is entitled to equitable relief from the failure to timely serve the petition, in a manner consistent with the law and this opinion.” (Remittitur, 10/06/23, p. 12:3-7.)

The Petition was reset for hearing in the trial court on November 28, 2023, however, on that date, the action was transferred from Department 25 of the Spring Street Courthouse to Department 26 of the Spring Street Courthouse.

Timeliness of the Petition to Vacate Under Code of Civil Procedure section 1288 and Grounds for Equitable Tolling

“A petition to confirm an award shall be served and filed not later than four years after the date of service of a signed copy of the award on the petitioner. 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 requesting that an award be vacated or that an award be corrected shall be served and filed not later than 100 days after the date of service of a signed copy of the award upon: (a) The respondent if he was a party to the arbitration; or (b) The respondent's representative if the respondent was not a party to the arbitration.” (Code Civ. Proc., § 1288.2)

“Section 1288.2 speaks only to obligations of the litigants and makes no reference at all to the power of the courts — in other words, the section reads as an ordinary statute of limitations.” (Law Finance Group, LLC v. Key (2023) 14 Cal.5th 932, 950.) “In short, absent clearer evidence of legislative intent, we presume that the Legislature did not intend to limit the fundamental jurisdiction of the courts by enacting the 100-day deadline to challenge an arbitral award under section 1288.2.” (Id.) Thus, the 100-day deadline “is a nonjurisdictional statute of limitations that is subject to equitable tolling and equitable estoppel.” (Id. at 959-960.)

Equitable tolling is a judicially created, nonstatutory doctrine that suspends or extends a statute of limitations as necessary to ensure fundamental practicality and fairness. The doctrine applies occasionally and in special situations to soften the harsh impact of technical rules which might otherwise prevent a good faith litigant from having a day in court. Courts draw authority to toll a filing deadline from their inherent equitable powers — not from what the Legislature has declared in any particular statute.

Finally, the element of “reasonable and good faith conduct” “encompass[es] two distinct requirements: A plaintiff’s conduct must be objectively reasonable and subjectively in good faith.” (Id. at 729.) “An analysis of reasonableness focuses not on a party’s intentions or the motives behind a party's actions, but instead on whether that party's actions were fair, proper, and sensible in light of the circumstances.” (Ibid.) A party seeking equitable tolling “must satisfy a similar standard: It must demonstrate that its late filing was objectively reasonable under the circumstances.” (Ibid. at 729.) “Good faith pivots instead on a party's intentions. It is a test ordinarily used to describe that state of mind denoting honesty of purpose, freedom from intention to defraud, and, generally speaking, being faithful to one's duty or obligation.” (Id.)

(1) Timely notice. “When considering whether a plaintiff provided timely notice, courts focus on whether the party’s actions caused the defendant to be fully notified within the statute of limitations of plaintiffs’ claims and their intent to litigate.” (Saint Francis Memorial Hospital, supra, 9 Cal.5th at 726.) Therefore, Petitioner must establish that Respondent was fully notified of Petitioner’s intent to vacate the Award and his intent to litigate by August 20, 2021, the expiration of the 100-day period. Petitioner, however, fails to present any evidence indicating that Respondent had notice of Petitioner’s intent to vacate the Award by that date. Petitioner testifies that he mailed a copy of the Petition to Vacate on August 17, 2021 to Respondent’s former counsel, Wole Akineymei. (Folke Supp. Dec. filed 03/17/22, ¶2.) On September 16, 2021, Akineymei indicated that he had not represented Respondent since the end of the arbitration in May 2021 and he was not authorized to accept service on her behalf. (Id. at ¶2(d).) Respondent filed an opposition indicating actual notice of the action on November 29, 2021, nearly three months after expiration of the August 20, 2021 deadline. Respondent’s opposition, therefore, is not evidence of “timely notice” of Petitioner’s intent to vacate the arbitration award or of his intent to litigate the issue.

The Court finds Petitioner has failed to establish the “timely notice” element of the equitable tolling doctrine. This alone is grounds to deny Petitioner’s request for equitable tolling of the 100-day deadline.

(2) Lack of prejudice to the defendant. “Whether application of the equitable tolling would prevent the defendant from defending a claim on the merits.” Application of equitable tolling would not prevent Respondent from defendant on the merits. Here, Respondent filed an opposition and prevailed in the initial proceedings. (Id. at 728.) This satisfies the “lack of prejudice” element of the equitable tolling doctrine.

(3) Reasonable and good faith conduct. “A plaintiff’s conduct must be objectively reasonable and subjectively in good faith.” (Id. at 729.) “An analysis of reasonableness focuses not on a party's intentions or the motives behind a party's actions, but instead on whether that party’s actions were fair, proper, and sensible in light of the circumstances.” (Ibid.) Petitioner filed the Petition on August 9, 2021, only 11 days before the 100-day limitations period expired. Petitioner then waited an additional eight days before even attempting service on Respondent’s former counsel. Petitioner did not verify Respondent’s address or continued representation by Akineymei before the attempt at service on August 17, 2021. Petitioner only attempted to locate Respondent’s proper service address after Akineymei’s September 16, 2021 letter indicating that he was not counsel of record for Respondent. (Folke Supp. Dec., filed 03/17/22, ¶2(g) and (f).)

Petitioner did not attempt to inform Respondent or her former counsel of his intent to seek vacatur of the Award until August 17, 2021, only three days before expiration of the 100-day limitations period. Petitioner also provides no explanation for delaying to inform Respondent of his intent to seek vacatur. By waiting until the 97th day of the 100-day deadline to attempt service without first attempting to verify the proper service address, the Court finds Petitioner’s actions were not reasonable, fair, proper, or sensible. Therefore, the third element of “reasonable and good faith conduct” is not met.

Based on the foregoing, the Petition to Vacate Arbitration Award is denied as untimely under Code of Civil Procedure section 1288. Petitioner fails to establish either “timely notice” or “reasonable and good faith conduct” to support application of equitable tolling.

Even if the Petition were timely under Code of Civil Procedure section 1288, Petitioner fails to establish grounds to vacate the arbitration award pursuant to Code of Civil Procedure section 1286.2, subdivision (a)(5). “Subject to Section 1286.4, the court shall vacate the award if the court determines any of the following:…(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.” (Code Civ. Proc., §1286.2, subd. (a)(5).)

[W]hen…an arbitrator exercises discretion in denying a continuance request, there are two issues to be resolved in vacatur proceedings. First, the trial court must determine whether the arbitrator abused his or her discretion by refusing to postpone the hearing upon sufficient cause being shown. Second, if there was an abuse of discretion, the trial court must determine whether the moving party suffered substantial prejudice as a result…Only if the arbitrators abused their discretion and there was resulting prejudice could the trial court properly vacate the arbitration award.

(SWAB Financial, LLC v. E*Trade Securities, LLC (2007) 150 Cal.App.4th 1181, 1198.) Courts will not interfere in an arbitrator's postponement decision if any reasonable basis exists for the arbitrator's ruling. (Id. at 1197.) Petitioner fails to show substantial prejudice from the Arbitrator’s refusal to postpone the hearing. Petitioner testifies that he “had a very difficult time hearing and understanding the Counsel for Ms. Pulliam, Mr. Akinyemi; and, both following the questioning and, responding fully to the questions posed.” (Petition, Attachment 10c(2), Folke Dec., ¶6.) Petitioner states in a conclusory fashion that “a very bad result occurred directly as a result of not being able to provide all the information and testimony necessary to show work was done related to the underlying matter.” (Id. at ¶7.) However, Petitioner fails to identify what precisely he was unable to present due to the failure to postpone, or what specific prejudice resulted from the refusal to postpone. Also, the arbitration award itself indicates that Folke attended the hearing and fully participated, testifying at length about the work he performed. (Peti., Attachment 6(c) at p. 3:23-28.)

The Court finds the Arbitrator did not abuse his discretion in refusing to postpone the hearing. Petitioner submitted a doctor’s note dated April 21, 2021 indicating that Petitioner was under his care for cancer treatment since December 2019 and was “preparing for several procedures for medical issues and doctor’s appointments. As such, Mr. Folke is unable to participate in any legal proceedings until August 21, 2021.” (Petition, Attachment 10c(2), Folke Dec., Ex. 1.) Petitioner fails to submit any evidence of the Arbitrator’s response to his request for a continuance. Petitioner therefore fails to establish that the denial was an abuse of discretion. Moreover, Respondent attaches the Arbitrator’s response to Petitioner request for postponement. (Opposition filed on November 29, 2021, Ex. B, PDF p. 12/20.) The Arbitrator indicated that he was denying the request, because the doctor’s note was vague as to what Petitioner could and could not do. (Id.) The Arbitrator also indicated that Petitioner’s participation in the arbitration proceeding thus far (sending emails and discussing the matter) “demonstrated his ability to articulate his position and operate his computer. This hearing should not require much more ability than what he has already demonstrated he has.” (Id.) The Arbitrator provided a reasonable basis for denying the request for continuance and the decision was neither arbitrary nor capricious.

Therefore, the Petition to Vacate is denied on substantive grounds, as well. Petitioner fails to demonstrate that the Arbitrator’s refusal to postpone the matter was an abuse of discretion and that he was substantially prejudiced by the refusal.

Respondent requests that the Court confirm the arbitration award. (11/29/21 Response, pp. 2-3.) “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 Petition includes a copy of the arbitration award, which sets forth that the attorney-client fee arbitration was conducted pursuant to Business and Professions Code section 6200, et seq., as well as the name of the neutral arbitrator as required by Code of Civil Procedure section 1285.4. (Pet., ¶ 6, Exh. 2.)

Code of Civil Procedure section 1283.6 provides that: “The neutral arbitrator shall serve a signed copy of the award on each party to the arbitration personally or by registered or certified mail or as provided in the agreement.” Here, the award includes a proof of service demonstrating the award was served on the parties on May 12, 2021 via first-class mail, not certified or registered mail. (Pet., ¶ 6, Exh. 2.) Neither party disputes the neutral arbitrator served the arbitration award on May 12, 2021. Thus, the Court finds the requirements of Section 1283.6 satisfied.

Lastly, a party may seek a court judgment confirming an arbitration award by filing and serving a petition no more than four years, but not less than 10 days, after the award is served. (Code Civ. Proc., §§ 1288, 1288.4.) Here, both the Petition and response were filed at least ten days, but no more than four years, after a copy of the award was initially served on May 12, 2021. Therefore, Respondent’s request to confirm the arbitration award is granted.