Judge Matthew C. Braner, Case Number: 37-2022-00031933-CU-BC-CTL, Date: 2024-05-24 Tentative Ruling

Judge: Matthew C. Braner, Case: 37-2022-00031933-CU-BC-CTL, Date: 2024-05-24 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - May 23, 2024

05/24/2024 09:00:00 AM C-60 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Matthew C. Braner

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Civil - Unlimited Breach of Contract/Warranty Motion Hearing (Civil) 37-2022-00031933-CU-BC-CTL BOLS LLC VS SIDNEY H LEVINE TRUSTEE OF THE LEVINE FAMILY TRUST DATED OCTOBER 19 1971 AS AMENDED MARCH 17 1982 [IMAGED] CAUSAL DOCUMENT/DATE FILED:

Defendants Sidney H. Levine and Judith A. Levine's motion to confirm arbitration award is GRANTED.

Plaintiff Bols, LLC's motion to vacate arbitration award is DENIED.

Defendants' motion to expunge lis pendens and award attorney fees is GRANTED.

Defendants' motion to name Ponani Sugumar as Alter Ego of Bols, LLC is DENIED without prejudice.

Cross-Motions to Confirm or Vacate Arbitration Award '[P]arties must be free to fashion agreements which restrict or limit the arbitrator's authority.' (California Faculty Assn. v. Superior Court (1998) 63 Cal.App.4th 935, 944; see also Mocharsh v. Heily & Blase (1992) 3 Cal.4th 1, 8 ['In cases involving private arbitration, '[t]he scope of arbitration is . . . a matter of agreement between the parties.'' (quoting Ericksen, Arbuthnot, McCarthy, Kearney & Walsh, Inc. v. 100 Oak Street (1983) 35 Cal.3d 312, 323)].) As such, the scope of judicial review of arbitration awards is extremely narrow; the court 'may not review either the merits of the controversy or the sufficiency of the evidence supporting the award.' (California Faculty Assn. v. Superior Court (1998) 63 Cal.App.4th 935, 943.) Although this creates a risk of an erroneous decision by the arbitrator, it is tolerated because the parties have voluntarily submitted to arbitration, and because 'the Legislature has reduced the risk to the parties of such a decision by providing for judicial review in circumstances involving serious problems with the award itself, or with the fairness of the arbitration process.' (Mocharsh v. Heily & Blase (1992) 3 Cal.4th 1, 12.) Plaintiff seeks to vacate the final arbitration award rendered by retired Justice Richard D. Aldrich on November 1, 2023 (corrected on November 16, 2023 as to total amount of fees and costs) on the ground he exceeded his authority when he: 1) prohibited Plaintiff from taking third-party depositions; and 2) refused to issue Plaintiff a blank subpoena to compel third-party witnesses to appear and produce documents at the arbitration hearing. Plaintiff contends Justice Aldrich's authority was limited by Code of Civil Procedure section 1283.05 and 1282.6 because the parties' arbitration agreement incorporated section 1283.05. (Code Civ. Proc., � 1283.1, subd. (b) ['Only if the parties by their agreement so provide, may the provisions of Section 1283.05 be incorporated into, made a part of, or made applicable to, any other arbitration agreement.'].) According to Plaintiff, by failing to strictly adhere to the provisions of the Discovery Act and laws concerning third-party subpoenas, Justice Aldrich exceeded his authority.

The court disagrees.

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3119052 22 CASE NUMBER: CASE TITLE: BOLS LLC VS SIDNEY H LEVINE TRUSTEE OF THE LEVINE FAMILY 37-2022-00031933-CU-BC-CTL First, it is true section 1283.05 states: After the appointment of the arbitrator or arbitrators, the parties to the arbitration shall have the right to take depositions and to obtain discovery regarding the subject matter of the arbitration, and, to that end, to use and exercise all of the same rights, remedies, and procedures, and be subject to all of the same duties, liabilities, and obligations in the arbitration with respect to the subject matter thereof, as provided in Chapter 2 (commencing with Section 1985) of Title 3 of Part 4, and in Title 4 (commencing with Section 2016.010) of Part 4, as if the subject matter of the arbitration were pending before a superior court of this state in a civil action other than a limited civil case, subject to the limitations as to depositions set forth in subdivision (e) of this section.

(Code Civ. Proc., � 1283.05, subd. (a).) Plaintiff interprets this subsection as a limitation on the arbitrator's authority. Plaintiff is mistaken; the provision quite plainly refers to the rights of the parties.

Other subsections establish and clarify the (very broad) authority of the arbitrator: The arbitrator or arbitrators themselves shall have power, in addition to the power of determining the merits of the arbitration, to enforce the rights, remedies, procedures, duties, liabilities, and obligations of discovery by the imposition of the same terms, conditions, consequences, liabilities, sanctions, and penalties as can be or may be imposed in like circumstances in a civil action by a superior court of this state under the provisions of this code, except the power to order the arrest or imprisonment of a person.

(Code Civ. Proc., � 1283.05, subd. (b).) The arbitrator or arbitrators may consider, determine, and make such orders imposing such terms, conditions, consequences, liabilities, sanctions, and penalties, whenever necessary or appropriate at any time or stage in the course of the arbitration, and such orders shall be as conclusive, final, and enforceable as an arbitration award on the merits, if the making of any such order that is equivalent to an award or correction of an award is subject to the same conditions, if any, as are applicable to the making of an award or correction of an award.

(Code Civ. Proc., � 1283.05, subd. (c).) As these provisions make clear, the arbitrator's authority to make decisions concerning discovery is equivalent to his or her authority to render a final and enforceable arbitration award. (See Alexander v. Blue Cross of California (2001) 88 Cal.App.4th 1082, 1088 ['As a general rule, the right to discovery is highly restricted in arbitration proceedings. However, sctions 1283.1 and 1283.05 grant arbitrators broad authority to order discovery in certain types of arbitration proceedings.'].) Plaintiff essentially argues that because section 1283.05 was incorporated into the arbitration agreement, 'any discovery order inconsistent with California law exceeds the arbitrator's powers.' (Id. at p. 1089.) This argument has been expressly rejected by the court of appeal.

(Id. at pp. 1089-1090 ['[E]ven if sections 1283.1 and 1283.05 were read to mean that arbitrators must precisely follow California discovery law, this would not mean that arbitrators exceed their powers when they fail to follow that law.'].) In sum, Justice Aldrich's decisions regarding the third-party subpoenas was an exercise of the authority granted him by the parties' agreement, and whether those decisions were correct 'is not an issue that is subject to judicial review.' (Alexander v. Blue Cross of California, supra, 88 Cal.App.4th at p. 1091.) Plaintiff has not otherwise established that any grounds exist to vacate or modify the final corrected arbitration award. As such, the court must confirm the award.

Accordingly, Plaintiff's motion to vacate is denied, and Defendants' motion to confirm the award is granted.

Defendants are instructed to submit a proposed order and judgment for the court's signature.

Motion to Expunge Lis Pendens Calendar No.: Event ID: TENTATIVE RULINGS

3119052 22 CASE NUMBER: CASE TITLE: BOLS LLC VS SIDNEY H LEVINE TRUSTEE OF THE LEVINE FAMILY 37-2022-00031933-CU-BC-CTL Defendants request an order expunging the lis pendens recorded on September 27, 2022 in the San Diego County Recorder's Office (No. 2022-0377316). (Code Civ. Proc., � 405.30.) The court must order expungement if it 'finds that the pleading on which the notice is based does not contain a real property claim.' (Code Civ. Proc., � 405.31.) If the pleading does contain a real property claim, the court must still order the notice expunged if it 'finds that the claimant has not established by a preponderance of the evidence the probable validity of the real property claim.' (Code Civ. Proc., � 405.32; see also Code Civ.

Proc., � 405.3 [''Probable validity,' with respect to a real property claim, means that it is more likely than not that the claimant will obtain a judgment against the defendant on the claim.'].) Here, Plaintiff refused to withdraw the lis pendens following Justice Aldrich's final arbitration decision because it intended to, and did, seek to vacate the arbitration award. Now that the motion to vacate has been denied and Defendants' motion to confirm the award has been granted, Plaintiff has not, and cannot, establish a probable validity of succeeding on its real property claim.

Accordingly, Defendants' motion to expunge is granted. The lis pendens recorded on September 27, 2022 in the San Diego County Recorder's Office (No. 2022-0377316), on the real property commonly known as 6590 Calle Reina, Rancho Santa Fe, CA 92067, is ordered expunged.

Defendants are instructed to submit a proposed order for the court's signature.

Attorney's Fees and Costs The real estate contract from which this case arose includes a prevailing party attorney's fees provision, which states: 'In any action, proceeding, or arbitration between Buyer and Seller arising out of this Agreement, the prevailing Buyer or Seller shall be entitled to reasonable attorney fees and costs from the non-prevailing Buyer or Seller . . . .' Both this court action and the arbitration that resulted in the (now confirmed) award rendered by Justice Aldrich unquestionably 'arise out of' the real estate contract.

As such, attorney's fees and costs are owed to the prevailing party, which is Defendants. (Civ. Code, � 1717, subd. (a).) The court has the authority to award such costs. (Code Civ. Proc., � 1293.2.) Plaintiff argues that because the contract was cancelled due to the now confirmed final arbitration award, Defendants cannot rely on the attorney fees and costs provision. This argument is without merit.

'It is now settled that a party is entitled to attorney fees under section 1717 'even when the party prevails on grounds the contract is inapplicable, invalid, unenforceable or nonexistent, if the other party would have been entitled to attorney's fees had it prevailed.'' (Hsu v. Abbara (1995) 9 Cal.4th 863, 870 [quoting Bovard v. American Horse Enterprises, Inc. (1988) 201 Cal.App.3d 832, 842].) The rule effectuates the purpose underlying section 1717, which was 'enacted to establish mutuality of remedy where [a] contractual provision makes recovery of attorney's fees available for only one party [citations], and to prevent oppressive use of one-sided attorney's fees provisions.' (Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124, 128.) Thus, to achieve its goal, 'the statute generally must apply in favor of the party prevailing on a contract claim whenever that party would have been liable under the contract for attorney fees had the other party prevailed.' (Hsu v. Abbara, supra, 9 Cal.4th at pp. 870-71.) Quite simply, if Plaintiff had succeeded in arbitration and enforced the contract, it would have been the prevailing party and Defendants would have been liable for its fees and costs. As such, Civil Code section 1717 ensures Defendants have the same right to fees and costs, notwithstanding cancellation of the contract.

In connection with the motions before the court, which were reasonably brought and opposed as part of an action that arose from the parties' real estate contract, Defendants request a total of $49,915.50.

These fees and costs were incurred as follows: $37,500 by attorney Levine for 75 hours of work at $500/hour; $10,887.50 by attorney Fisher for 16.75 hours of work at $650/hour; $1,350 by paralegal Dollar for 9 hours of work at $150/hour; and $180 in filing fees. Based on its knowledge of the southern California legal market, its review of the briefing, time entries, and summaries of work performed, the court concludes Defendants' request is reasonable.

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3119052 22 CASE NUMBER: CASE TITLE: BOLS LLC VS SIDNEY H LEVINE TRUSTEE OF THE LEVINE FAMILY 37-2022-00031933-CU-BC-CTL Accordingly, Defendants are awarded $49,915.50 in fees and costs.

Defendants are instructed to include the amount of this award in their proposed judgment and order.

Motion to Name Ponani Sugumar as Alter Ego of Bols, LLC The court declines at this time to order that Ponani Sugumar be named as the alter ego of Plaintiff Bols, LLC. Although Justice Aldrich indicated Mr. Sugumar should be so named, the issue was not before him; recognizing that, he expressly left it for this court's determination. Although the court agrees with Defendants that evidence exists indicating a substantial degree of asset commingling and undercapitalization, the court considers the request premature. Unless or until Plaintiff claims insufficient assets to pay the arbitration award ($587,464.64) and the fees and costs associated with the instant motions ($49,915.50), the court is not inclined to take the drastic step of expressly naming Mr. Sugumar an alter ego, thereby rendering him a judgment creditor.

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