Judge Randolph M. Hammock, Case Number: 24STCP02609, Date: 2024-11-12 Tentative Ruling

Judge: Randolph M. Hammock, Case: 24STCP02609, Date: 2024-11-12 Tentative Ruling

There are two related petitions between SO DecommissioningSolutions (“SDS”) and Southern California Edison Company (“SCE”) arising from an arbitration proceeding between the parties. In 24STCP02583, Petitioner Southern California Edison Company petitions to compel Respondents EnergySolutions Services, Inc. and Hunt Construction Group, Inc. (collectively dba SO DecommissioningSolutions) to finish a pending arbitration proceeding. In the related matter 24STCP02609, Petitioner SO DecommissioningSolutions seeks to vacate the arbitration award.

SDS is performing the decommissioning work at the San Onofre Nuclear Generating Station, pursuant to the Decommissioning General Contractor Agreement between SDS and SCE. In a previous arbitration proceeding before the Hon. John Zebrowski, the parties arbitrated a payment dispute to near conclusion. Two petitions were then filed before this court. In 24STCP02583, SCE as Petitioner moves to compel SDS to finish the arbitration. In the instant matter, 24STCP02609, SDS as Petitioner moves to vacate the arbitration award.

SCE opposes the petition to vacate on the preliminary ground that the Petition to Vacate is untimely. Given this potentially dispositive issue, the court and parties agreed at the October 2, 2024 hearing in 24STCP02583 that the court would decide this limited issue first. (See Yoshihara-Saint Decl. ¶¶ 2, Exh. 1 [hearing transcript].)

The court now addresses the Petition’s timeliness. “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.” (CCP § 1288 [emphasis added].) Where the arbitration agreement does not provide the manner in which service shall be made, “[s]ervice within this State shall be made in the manner provided by law for the service of summons in an action.” (CCP § 1290.4(b)(1).)

The following facts are undisputed. The Parties were served with the final Arbitration Award on May 8, 2024. Therefore, SDS was required to file and serve its Petition to Vacate and supporting papers “in the manner provided by law for the service of summons in an action” on or before August 16, 2024—100 days after May 8, 2024. (CCP § 1290.4, subd. (b)(1).) On August 15, 2024—day 99 after service of the Award—SDS filed the Petition to Vacate. However, SDS did not serve the summons and conformed copy of the petition on that day (or the following day, for that matter.) As of the day SCE raised the timeliness issue in its opposition to the petition on August 26, 2024, SDS still had not served SCE. It appears complete and valid service did not occur until later on September 3, 2024.

SDS’s arguments to the contrary are unavailing. First, SDS argues the 100-day clock did not start running until May 28, 2024—the day the award became final under ADR Services’ Rule 34(e). [FN 1] But CCP section 1288 is clear where it refers to the “date of the service of a signed copy of the award on the petitioner.” That the award may become “final” for purposes of ADR rules does not trump the plain language of the Code of Civil Procedure. Therefore, the 100-day clock began running on May 8, 2024.

Second, assuming the petition was untimely, SDS contends that the court maintains jurisdiction to hear a late Petition based on equitable tolling. For this point, it relies primarily on the California Supreme Court decision in L. Fin. Grp., LLC v. Key (2023)14 Cal. 5th 932. There, Law Finance Group, LLC prevailed in arbitration against Sarah Plott Key and moved to confirm the award. (Id. at 941.) Key filed a response seeking vacatur of the award, but did so outside of the 100-day deadline. (Id.; see also CCP § 1288.2 [“A response requesting that an award be vacated…shall be served and filed not later than 100 days after the date of service of a signed copy of the award…”].) The issue before the Court was whether section 1288.2’s 100-day deadline was jurisdictional and, if not, whether the deadline is subject to the equitable doctrine of tolling and estoppel.

As to the first question, the Court held that section 1288.2 does not limit a court’s “fundamental jurisdiction.” “[W]e presume,” the Court concluded, “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. at 951.) To the second question, the Court held that section 1288.2’s 100-day deadline does not preclude court’s from applying “traditional principles of equity,” and therefore, “section 1288.2 is subject to both equitable tolling and claims of equitable estoppel.” (Id. at 956.) The court also noted that equitable tolling “is not a cure-all for an entirely common state of affairs but instead applies only in carefully considered situations to prevent the unjust technical forfeiture of causes of action…” (L. Fin. Grp., LLC, supra, 14 Cal. 5th at 954–55, emphasis added [cleaned up].) For these reasons, “tolling of the 100-day period for seeking vacatur will be the exception, not the norm.” (Id.)

Therefore, because section 1288.2’s 100-day period for a response requesting that an award be vacated is nonjurisdictional and equitable principles can apply, this court assumes the same is true apply for section 1288’s 100-day period for filing a standalone motion to vacate. Thus, the issue becomes whether the requirements of equitable tolling are met in this case.

“Equitable tolling is a judge-made doctrine ‘which operates independently of the literal wording of the Code of Civil Procedure’ to suspend or extend a statute of limitations as necessary to ensure fundamental practicality and fairness.” (California State Univ., Fresno Assn., Inc. v. Cnty. of Fresno (2017) 9 Cal. App. 5th 250, 268–69.) Generally, equitable tolling applies when three elements are present: “[(1)] timely notice, and [(2)] lack of prejudice, to the defendant, and [(3)] reasonable and good faith conduct on the part of the plaintiff.” (Saint Francis Mem'l Hosp. v. State Dep't of Pub. Health (2020) 9 Cal. 5th 710, 724–25.) These requirements are designed to “balanc[e] the injustice to the plaintiff occasioned by the bar of his claim against the effect upon the important public interest or policy expressed by the [operative] limitations statute.” (Id.)

SDS contends the 100-day deadline should be equitably tolled because SDS gave Edison timely notice of the petition by August 16, 2024, when it “emailed copies of the relevant documents to Edison’s counsel in accordance with the Parties’ agreement to email service for arbitration related filings.” (Opp. 7: 4-6.) SDS also contends that Edison will suffer no prejudice if equitable tolling applies. Finally, SDS suggests it acted reasonably and in good faith.

As to the first point, the fact that Edison had actual notice of the petition within the 100 day period is not an “equitable tolling” argument at all -- it is an argument as to whether it was actually timely served or not. The doctrine of equitable estoppel or tolling usually applies when the party who attempts to argue untimeliness, took some action which “estops” it from asserting the timeliness defense, such as misleading the other party from timely acting. A classic example of equitable tolling is if Edison had attempted to avoid service of process. Such is not the case here.

As to prejudice, it does appear that SDS itself is unlikely to prevail on its petition on its merits, even if the petition had been timely filed and served. In essence, its main argument to vacate the award is the Arbitrator somehow lacked the mental capacity to make his decision at that time. This argument appears to be based solely on the fact that the Arbitrator unilaterally withdrew after he made his final decision for “health reasons.” Given the limited legal basis for vacating an arbitration award, this argument is likely doomed for failure.

Here, considering the totality of the circumstances, equitable tolling is unavailable because SDS has not established its “reasonable and good faith conduct.” (Saint Francis Mem'l Hosp., supra, 9 Cal. 5th at 724–25.) “[T]he statutes make clear that” a motion to vacate an arbitration award “must be made promptly to promote the timely final resolution of the matters submitted to arbitration.” (L. Fin. Grp., LLC, supra, 14 Cal. 5th at 947.) Notably, SDS had 100 days to serve SCE with the petition. It did not begin the process in earnest until the 99th day and provided no explanation for that delay.

This lack of reasonable diligence opened the possibility that even minor hiccups in service could render the petition untimely. Equitable tolling cannot now be a “cure-all,” because the possibility of delays in service under these circumstances was an entirely foreseeable “state of affairs.” (L. Fin. Grp., LLC, supra, 14 Cal. 5th at 954–55, emphasis added [cleaned up].) Therefore, Petitioner has not demonstrated that equitable tolling applies, and its motion to vacate the award is untimely.

FN 1 - Rule 34(e) provides that an Arbitration Award “is considered final, for purposes of a judicial proceeding to enforce, modify or vacate the Award, twenty (20) calendar days after service is deemed effective if no request for a correction is made, or as of the effective date of service of a corrected Award.”