Judge Thomas D. Long, Case Number: BC526794, Date: 2023-05-11 Tentative Ruling

On November 6, 2013, Plaintiff Patrice Honeycutt filed this action against Defendants JP Morgan Chase Bank and JP Morgan Chase & Co. (collectively, “Defendants”), alleging (1) racial discrimination; (2) disability discrimination; (3) retaliation; (4) harassment; (5) failure to prevent discrimination, retaliation, and harassment; (6) negligence and negligent infliction of emotional distress; (7) negligent hiring, supervision, and retention; (8) intentional infliction of emotion distress; (9) wrongful termination in violation of public policy; and (10) battery.

On March 7, 2014, the Court granted Defendants’ petition to compel arbitration. On February 7, 2017, the Court granted Defendants’ petition to confirm the arbitration award.

On August 2, 2018, the Court of Appeal reversed, and it ordered the court to enter a new order denying the petition to confirm the award and granting the petition to vacate it. (Honeycutt v. JPMorgan Chase Bank, N.A. (2018) 25 Cal.App.5th 909.)

The parties returned to arbitration. On December 15, 2022, Arbitrator Joseph L. Paller Jr. (“Arbitrator Paller”) issued a written opinion and award denying Plaintiff’s claims in their entirety.

On January 23, 2023, Defendants filed a petition to confirm the arbitration award. On February 6, 2023, Plaintiff filed a response.

On February 14, 2023, Plaintiff filed a petition to vacate the arbitration award. On February 21, 2023, Defendants filed a response. Plaintiff later filed a reply, supplemental reply, and request for judicial notice.

Defendants’ March 20, 2023 objection and request to strike is granted in part. The request to strike Plaintiff’s March 2, 2023 reply is denied. The request to strike Plaintiff’s March 17, 2023 improper supplemental reply and request for judicial notice is granted.

Under the Court’s First Amended General Order for electronic filing, the table of contents and all attachments, including exhibits, must be bookmarked. (General Order No. 2019-GEN-014-00, at ¶¶ 6(b)-(d); California Rules of Court, rule 3.1110(f)(4).) Plaintiff’s filings do not comply with this requirement. This is particularly troublesome when Plaintiff’s counsel’s declaration is filed as a 368-page document with numerous exhibits and no functional bookmarks. It appears Plaintiff submitted its materials in a way designed to obfuscate the issues and complicate the work the court needs to do. If Plaintiff continues to electronically file noncompliant documents, the Court may strike the filings and/or issue sanctions.

A party may petition the court to confirm, correct, or vacate an arbitration award, and a response to a petition may request that the court dismiss the petition or confirm, correct, or vacate the award. (Code Civ. Proc., §§ 1285, 1285.2.) The petition or response must set forth (1) the substance of or have attached a copy of the agreement to arbitrate, (2) the names of the arbitrators, and (3) the award and the written opinion of the arbitrators, or attach a copy. (Code Civ. Proc., §§ 1285.4, 1285.6.) The court must either confirm the award as made, correct the award and confirm it as corrected, vacate the award, or dismiss the proceeding. (Code Civ. Proc., § 1286.)

Under the California Arbitration Act (“CAA”), the court must vacate the award if it determines that (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 failed to make required disclosures or failed to disqualify himself. (Code Civ. Proc., § 1286.2, subd. (a).) “Because the standard for disclosure by a neutral arbitrator under section 1281.9, subdivision (a) is the same as the standard for disqualification of a judge under section 170.1, subdivision (a)(6)(A)(iii), case law applicable to judicial disqualification is relevant to the present case.” (Haworth v. Superior Court (2010) 50 Cal.4th 372, 389 (Haworth).)

Under the Federal Arbitration Act (“FAA”), the Court may vacate an arbitration award only (1) where the award was procured by corruption, fraud, or undue means; (2) where there was evident partiality or corruption in the arbitrators, or either of them; (3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or (4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made. (9 U.S.C. § 10(a).)

Plaintiff’s motion to vacate the award attaches as Attachment 10c(2) her response to Defendants’ petition to confirm the award. For simplicity, the Court will generally cite Plaintiff’s response to Defendants’ motion and Defendants’ response to Plaintiff’s motion.

Plaintiff’s Notice of Motion seeks to vacate the award on five grounds: (1) the award was procured by corruption and fraud, which substantially prejudiced Plaintiff’s rights; (2) Arbitrator Paller’s misconduct and manifest disregard of law and evidence substantially prejudiced Plaintiff’s rights; (3) Arbitrator Paller exceeded his powers by failing to recuse himself; (4) Arbitrator Paller has testified as both an expert in employment cases involving LAUSD employees; and (5) Arbitrator Paller failed to disclose grounds for disqualification. (See Notice of Motion to Vacate.)

In her Response to Defendants’ Petition, Plaintiff argues that (1) Arbitrator Paller manifestly disregarded the law on discrimination, retaliation, and harassment, including Government Code section 12923; (2) Arbitrator Paller manifestly disregarded the continuing violation doctrine; (3) Arbitrator Paller failed to make requisite disclosures; (4) Arbitrator Paller engaged in harsh treatment of Plaintiff and bias in favor of Defendants; and (5) Arbitrator Paller failed to timely respond to Plaintiff’s requests for information after the arbitration. (See Plaintiff’s Response at pp. 4-20.)

The parties’ arbitration agreement states that it is governed by the FAA. (Petition to Vacate, Attachment 4(b) at ¶ 17.)

A. Plaintiff Has Not Shown That Arbitrator Paller Exceeded His Powers By Manifestly Disregarding the Facts or Law.

“[I]t is the general rule that, with narrow exceptions, an arbitrator’s decision cannot be reviewed for errors of fact or law.” (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 11 (Moncharsh).) The “Legislature has set forth grounds for vacation [citation] and correction [citation] of an arbitration award and ‘[a]n error of law is not one of the grounds.’” (Id. at p. 14.) “When parties contract to resolve their disputes by private arbitration, their agreement ordinarily contemplates that the arbitrator will have the power to decide any question of contract interpretation, historical fact or general law necessary, in the arbitrator’s understanding of the case, to reach a decision. [Citations.] Inherent in that power is the possibility the arbitrator may err in deciding some aspect of the case. Arbitrators do not ordinarily exceed their contractually created powers simply by reaching an erroneous conclusion on a contested issue of law or fact, and arbitral awards may not ordinarily be vacated because of such error, for ‘“[t]he arbitrator’s resolution of these issues is what the parties bargained for in the arbitration agreement.”’” (Gueyffier v. Ann Summers, Ltd. (2008) 43 Cal.4th 1179, 1184.)

Under the FAA, which governs this arbitration agreement, an arbitrator’s manifest disregard of the law “is shorthand for a statutory ground under the FAA, specifically 9 U.S.C. § 10(a)(4), which states that the court may vacate ‘where the arbitrators exceeded their powers.’” (Comedy Club, Inc. v. Improv West Associates (9th Cir. 2009) 553 F.3d 1277, 1290.) “‘Manifest disregard of the law’ means something more than just an error in the law or a failure on the part of the arbitrators to understand or apply the law. [Citation.] It must be clear from the record that the arbitrators recognized the applicable law and then ignored it.” (Michigan Mut. Ins. Co. v. Unigard Sec. Ins. Co. (9th Cir. 1995) 44 F.3d 826, 832.)

Plaintiff argues that Arbitrator Paller disregarded evidence of racial harassment. (Plaintiff’s Response at pp. 4-11.) However, Arbitrator Paller thoroughly discussed the allegations and facts of the case. (See White Decl., Ex. 1 [“Award”].) Specifically, Arbitrator Paller recounted Plaintiff’s testimony, largely matching Plaintiff’s arguments here. (Id. at pp. 17-20; see Plaintiff’s Response at pp. 6-11.) Arbitrator Paller then stated, “In 21 hearing days, however, no witness, other than [Plaintiff], testified to observing any of the misconduct she recounted, with one exception described below. In fact, every other testifying witness who observed or participated in the alleged interactions emphatically denied that the racial taunts or other abusive statements were made . . . . [Plaintiff] did not call any other current or former Chase employees, including those who were purportedly present when the alleged misconduct occurred, as witnesses. Nor did she produce documentary evidence, including evidence obtained from Chase, to establish that [Plaintiff] complained about these incidents, including, significantly, the multiple instances of battery, to Human Resources or to higher managers outside the branch.” (Award at p. 20.) Arbitrator Paller noted that one branch manager did partially corroborate one interaction when an employee touched Plaintiff’s hair and she appeared uncomfortable, but Plaintiff never complained. (Id. at pp. 20-21.) Accordingly, Arbitrator Paller’s treatment of Plaintiff’s evidence was a matter of credibility, not a manifest disregard for law or evidence in excess of his powers.

Plaintiff also argues that Arbitrator Paller disregarded the law. (Plaintiff’s Response at pp. 12-15.) She contends that Arbitrator Paller “knew of the facts and legal principles as alleged herein and ignored them. His award is devoid of analysis of the legal principles surrounding the Crown Act, the FEHA including Government Code Section 12923, and the continuing violation doctrine.” (Id. at pp. 15.)

To establish a claim for harassment, a plaintiff must demonstrate that: (1) she is a member of a protected group; (2) he was subjected to harassment because he belonged to this group; and (3) the alleged harassment was so severe that it created a hostile work environment. (See Aguilar v. Avis Rent A Car Sys., Inc. (1999) 21 Cal.4th 121.) Arbitrator Paller determined that Plaintiff “did not meet her burden of proving her harassment, emotional distress, and battery claims by a preponderance of the evidence. Her factual allegations lacked credibility. Although most of the racist taunting and all of the physical assaults took place in plain view of other employees or customers, there was no testimonial or other evidentiary support for them other than Honeycutt’s own testimony.” (Award at p. 12.) Additionally, many of the alleged actions “constitute lawful managerial conduct, including scheduling her to take early lunches, denying a request for time off, assigning her to different teller windows, issuing corrective action, and giving performance reviews. As a matter of law, these actions are insufficient to establish unlawful harassment or discrimination.” (Ibid.)

For claims of discrimination or retaliation, if an employer provides a legitimate reason for the adverse employment action, the burden shifts back to the employee to prove discriminatory motivation or intentional retaliation. (Featherstone v. Southern California Permanente Medical Group (2017) 10 Cal.App.5th 1150, 1158-1159; Yanowitz v. L’Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1042.) Here, Arbitrator Paller found that Plaintiff’s termination was not unlawful because Defendants had legitimate and nondiscriminatory reasons for terminating her employment. (Motion at pp. 16, 23.)

With respect to Plaintiff’s argument about the Award’s finding of no adverse employment action (Plaintiff’s Response at p. 12), the award correctly stated, with citation to legal authority, that “the written warning and performance evaluation do not constitute independently actionable adverse employment actions.” (Award at p. 21.) For Plaintiff’s termination, she “did not establish that any of the personnel involved in the force balancing investigation or the termination decision harbored any racial or other prohibited animus towards her.” (Ibid.; see id. at p. 23.)

Plaintiff did not raise the continuing violation doctrine in her arbitration briefs. (See Defendants’ Ex. E [Plaintiff’s Arbitration Brief]; Defendants’ Ex. F [Plaintiff’s Closing Brief].) Defendants did raise this doctrine in its argument about claims being time-barred, but it was not their burden to disprove its application. (Defendants’ Ex. G [Arbitration Brief] at pp. 5-6; Defendants’ Ex. H [Post-Arbitration Brief] at pp. 35-36 [recycling argument from opening brief].)

In sum, Arbitrator Paller did not demonstrate a manifest disregard for the facts or law, and he did not exceed his powers on this basis.

B. Plaintiff Has Not Identified Matters That Arbitrator Paller Was Required to, But Failed to, Disclose.

The Court shall vacate an arbitration award if an arbitrator making the award “failed to disclose within the time required for disclosure a ground for disqualification of which the arbitrator was then aware.” (Code Civ. Proc., § 1286.2, subd. (a)(6).) A proposed arbitrator must disclose “all matters that could cause a person aware of the facts to reasonably entertain a doubt that the proposed neutral arbitrator would be able to be impartial,” including “[a]ny matters required to be disclosed by the ethics standards for neutral arbitrators adopted by the Judicial Council pursuant to this chapter.” (Code Civ. Proc., § 1281.9, subd (a)(2).) This duty to disclose is a continuing duty from service of the notice of the arbitrator’s proposed nomination or appointment until the conclusion of the arbitration proceeding. (California Rules of Court, Ethics Standards for Neutral Arbitrators, Standard 7(f).) An arbitrator must disclose any matters within ten calendar days after he becomes aware of the matter. (Id., Standard 7(c)(2).)

Plaintiff argues that Arbitrator Paller is a Personnel Commissioner of LAUSD, and in this role, he “has testified in court seeking to uphold employment decisions made by LAUSD that employees alleged were wrongful, and has made findings of whether employees receive promotions and rehire and maintain employment at LAUSD.” (Plaintiff’s Response at p. 18.) Plaintiff also argues that Arbitrator Paller “failed to disclose that his law firm, Gilbert and Sackman, was involved in representing unions in at least two cases in which [Plaintiff’s counsel] represented the Plaintiff.” (Ibid.)

Defendants argue that disclosure was not required under California Rules of Court, Ethics Standards for Neutral Arbitrators, Standard 7(d)(4)(A)(i) or Standard 7(d)(5) because Arbitrator Paller did not serve as a neutral arbitrator with the LAUSD Personnel Commission or by virtue of having colleagues that represented a Kaiser employee union. (Defendants’ Response at p. 11.)

Although Plaintiff calls this “an absurd and misleading argument,” she apparently concedes that Arbitrator Paller was not serving as an arbitrator in the LAUSD or other union matters, and she argues that “[i]t is not relevant whether he was an arbitrator in LAUSD cases.” (Reply at p. 8.) Instead, she frames the argument as “whether the facts in question might create an impression of possible bias.” (Ibid.; see Plaintiff’s Response at p. 17.)

“A proposed arbitrator or arbitrator must disclose all matters that could cause a person aware of the facts to reasonably entertain a doubt that the arbitrator would be able to be impartial, including, but not limited to” any matter that “(A) Might cause a person aware of the facts to reasonably entertain a doubt that the arbitrator would be able to be impartial; (B) Leads the proposed arbitrator to believe there is a substantial doubt as to his or her capacity to be impartial, including, but not limited to, bias or prejudice toward a party, lawyer, or law firm in the arbitration; or (C) Otherwise leads the arbitrator to believe that his or her disqualification will further the interests of justice.” (California Rules of Court, Ethics Standards for Neutral Arbitrators, Standard 7(d)(15).) “In the context of judicial recusal, ‘[p]otential bias and prejudice must clearly be established by an objective standard.’ [Citations.] ‘Judges, like all human beings, have widely varying experiences and backgrounds. Except perhaps in extreme circumstances, those not directly related to the case or the parties do not disqualify them.’ [Citation.]” (Haworth, supra, 50 Cal.4th at p. 389.)

As Defendants note (Defendants’ Response at pp. 11-13), this case did not involve the same parties as any LAUSD matter where Arbitrator Paller was a Personnel Commissioner, nor does it involve the Kaiser employee union that Arbitrator Paller’s has represented. Plaintiff does not identify any case where her counsel represented LAUSD employees in matters involving Arbitrator Paller or in cases where her clients were adverse to the LAUSD Personnel Commission. Instead, counsel simply declares that she has “engaged in at least three cases against LAUSD and am currently engaged in two active cases against LAUSD.” (White Decl. ¶ 7.) Plaintiff’s counsel does not identify the cases or explain if Arbitrator Paller is involved.

Plaintiff’s counsel provides a “list of reports which show Paller’s authority within LAUSD, compiled cases wherein Paller testified and/or was a witness in cases involving LAUSD.” (White Decl. ¶ 45.) This exhibit consists of (1) the appellate opinion in Melendez v. Los Angeles Unified School District, where Arbitrator Paller is identified as a personnel commissioner who interviewed candidates, and his fact testimony is described; (2) the trial court order on summary judgment in the same case, where Arbitrator Paller provided a declaration; (3) the appellate opinion in Los Angeles Unified School Dist. Personnel Commission v. Brynjolfsson, which quotes Arbitrator Paller from a transcript of the proceedings for an appeal of discipline; (4) the appellant’s opening brief in the same case, citing Arbitrator Paller and the Personnel Commission’s decision; (5) the 2011-2012 Annual Report of the LAUSD Personnel Commission, which identifies Arbitrator Paller as the Chair of the Personnel Commission; and (6) the 2005-2006 Report of the LAUSD Personnel Commission, which identifies Arbitrator Paller as a member of the Personnel Commission. (White Decl., Ex. K.) None of these documents show an actual or perceived conflict with this case.

Plaintiff identifies only two cases in Los Angeles Superior Court where Arbitrator Paller’s firm, Gilbert & Sackman, represented the union for Kaiser employees, and Plaintiff’s counsel represented those employees in lawsuits against Kaiser. (White Decl. ¶ 5.) The Court takes judicial notice of the fact that in those identified cases (Case No. BC598063 and Case No. BC435221), the plaintiffs did not sue the union for Kaiser employees, so Plaintiff’s counsel and Arbitrator Paller’s firm were not representing adverse parties. Plaintiff’s counsel directs the Court to “See attached emails where Paller’s firm was involved and he failed to disclose or recuse himself.” (White Decl. ¶ 5; see id. ¶ 46.) The only such email is from a different attorney at Gilbert & Sackman, regarding improper service of a deposition subpoena for production of business records directed at a union. (White Decl., Ex. L.) This does not show any ground for disqualifying Arbitrator Paller.

Plaintiff’s counsel also declares that there is a conflict of interest due to Perez v. Kaiser Foundation Hospitals, Case No. CIVDS1920836 (which appears to be filed in a different jurisdiction) and Tamblyn Johnson v. Kaiser Foundation Hospitals, Case No. BC699355, where both plaintiffs filed union grievances. (White Decl. ¶ 6.) The Court takes judicial notice of the fact that the plaintiff in Case No. BC699355 did not sue the Kaiser employees’ union, and Plaintiff provides no evidence of an actual conflict.

In reply, Plaintiff relies on cases where the arbitrator did not disclose substantial past and projected business relationships with the claimants’ party attorney-appraiser, the arbitrator was employed as an expert witness by law firm representing one of the parties in unrelated case, and the arbitrator was an accountant for a party insurance company in five unrelated matters during period of arbitration. (Reply at p. 11.) Plaintiff argues that it similar to here, where Arbitrator Paller “has not disclosed that he and his firm engaged with LAUSD and Kaiser.” (Ibid.) But LAUSD and Kaiser are not parties to this action. This is not at all similar to Plaintiff’s cited cases. Here, the only connection between Arbitrator Paller and a party is that he also serves as a Personnel Commissioner of LAUSD, and Plaintiff’s counsel sometimes represents plaintiffs in lawsuits against LAUSD.

In sum, Plaintiff has failed to identify any actual or perceived conflict of interest that required Arbitrator Paller’s disclosure and disqualification. Plaintiff’s arguments focus on Arbitrator Paller’s experience and matters that are not directly related to this case or the parties, and they do not disqualify him. (See Haworth, supra, 50 Cal.4th at p. 389.) The Court finds that none of these arguments could cause a person aware of the facts to reasonably entertain a doubt that Arbitrator Paller would be able to be impartial.

C. Plaintiff Has Not Shown Corruption or Other Misconduct Causing Substantial Prejudice to Her.

Plaintiff argues that Arbitrator Paller engaged in conduct during the arbitration proceedings that left the impression that he was biased in favor of Defendants. (Plaintiff’s Response at pp. 19-20.) Specifically, he “allowed Chase’s lawyers to berate [Plaintiff], and accuse her of lying and cheating, making [Plaintiff] cry during the arbitration,” required Plaintiff to scan private areas of her home in response to the accusations, closed the door to his home office when Plaintiff testified, “allowed Chase’s lawyers along with their in-house counsel and third party witnesses whom [Plaintiff’s counsel] was examining to go into Zoom break rooms to be coached about their testimony throughout the day,” and took notes for defense witnesses but not during Plaintiff’s testimony about her damages. (Ibid.; see White Decl. ¶¶ 8-9.)

Defendants’ counsel explains that on November 3, 2021, he requested that Plaintiff scan her room due to her use of aids during her testimony. (Wortman Decl. ¶ 9.) Arbitrator Paller “did not oblige Petitioner to scan her room, but only asked generic descriptions of the contents on the table at which Petitioner was sitting.” (Ibid.) Arbitrator Paller also made rulings against Defendants. (Wortman Decl. ¶ 10.) Regarding the Zoom breakout rooms, there is no evidence that Plaintiff or her witnesses were prohibited from doing the same. (See Defendants’ Response at p. 19.)

Whether Arbitrator Paller “allow[ed]” Defendants’ counsel to “berate” Plaintiff, left the door to his home office open for some witness testimony and closed it for Plaintiff’s testimony, and did not take notes regarding Plaintiff’s damages is not sufficient to find corruption or misconduct causing substantial prejudice.

D. Plaintiff’s Post-Arbitration Request for Information Does Not Require Vacating the Award.

Plaintiff contends that Arbitrator Paller provided only partial responses to her counsel’s January 3, 2023 request for a copy of every Ethics Rule 7, 8 or 12 disclosure, whether initial or supplemental, that he made in this matter. (Plaintiff’s Response at p. 20.) However, AAA’s January 23, 2023 response to Plaintiff’s request, which was sent to all parties, states, “From the appointment of the arbitrator through to the conclusion of the matter AAA did not receive any supplemental disclosures from Arbitrator Paller. I have attached a copy of all the original disclosures on this matter for parties’ convenience.” (Wortman Decl., Ex. J.)

Plaintiff does not argue—and the Court does not see—any reason for vacating the December 15, 2022 award on this basis.

Accordingly, the motion to vacate the arbitration award is DENIED. The petition to confirm the arbitration award is GRANTED.

Defendants are ordered to submit a proposed judgment that is consistent with the arbitration award within five days.

A Non-Appearance Case Review Re: Submission of Proposed Judgment is scheduled for 05/17/2023 (May 17, 2023) at 8:30 AM.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. Parties intending to appear are encouraged to appear remotely and should be prepared to comply with Dept. 48’s new requirement that those attending court in person wear a surgical or N95 or KN95 mask.

Hon. Thomas D. Long

Judge of the Superior Court