Judge Upinder S. Kalra, Case 22STCP01922 2022-08-22 Tentative Ruling

Judge: Upinder S. Kalra, Case: 22STCP01922, Date: 2022-08-22 Tentative Ruling

Case Number: 22STCP01922 Hearing Date: August 22, 2022 Dept: 51

Tentative Ruling

Judge Upinder S. Kalra, Department 51

HEARING DATE: August 22, 2022

CASE NAME: Steve Levy v. Virgin Fest LLC

CASE NO.: 22STCP01922

PETITIONER’S PETITION TO CONFIRM ARBITRATION AWARD

MOVING PARTY: Steve Levy

RESPONDING PARTY(S): Virgin Fest LLC

REQUESTED RELIEF:

1. Petitioner: An order confirming the Arbitration Award

2. Respondent: An order vacating, or alternatively, correcting the Arbitration Award

3. Respondent: An evidentiary hearing

TENTATIVE RULING:

1. Petition to Confirm Arbitration Award is GRANTED.

2. Petition to Vacate Arbitration Award is DENIED.

3. Petition to Correct Arbitration Award is DENIED.

4. Request for Evidentiary Hearing is DENIED.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

On May 20, 2022, Petitioner Steven Levy filed a Petition to Confirm Arbitration Award. Petitioner moves to confirm the arbitration award that was entered on April 15, 2022. The parties underwent arbitration in November 2021.

On June 6, 2022, Respondent filed a Response to the Petition, requesting the arbitration award be vacated or alternatively, corrected.

On August 12, 2022, Petitioner filed a Reply to the Response to the Petition.

LEGAL STANDARD

Once arbitration is concluded, “any arbitrator’s award is enforceable only when confirmed as a judgment of the superior court.” (O’Hare v. Municipal Resource Consultants (2003) 107¿Cal.App.4th 267, 278.). Any of the parties may file a petition with the court, which must then “confirm the award, correct and confirm it, vacate it, or dismiss the petition.” (Code¿of¿Civil¿Proc.¿§§¿1285, 1286; EHM Productions, Inc. v. Starline Tours of Hollywood,¿Inc.¿(2018) 21 Cal.App.5th 1058, 1063.) “It is well settled that the scope of judicial review of arbitration awards is extremely narrow.” (California Faculty Assn. v. Superior Court¿(1998) 63 Cal.App.4th 935, 943.) “Neither the trial court, nor the appellate court, may ‘review the merits of the dispute, the sufficiency of the evidence, or the arbitrator’s reasoning, nor may we correct or review an award because of an arbitrator’s legal or factual error, even if it appears on the award’s face.” (EHM Productions, supra, at p. 1063-64.)

ANALYSIS:

A. Filing Requirements (CCP § 1285.4)

Code of Civil Procedure, § 1285.4 states: “A petition under this chapter shall:

a. Set forth the substance of or have attached a copy of the agreement to arbitrate unless the petitioner denies the existence of such an agreement.

b. Set forth the names of the arbitrators.

Petitioner submits a copy of the Employment Agreement, which sets forth that the parties agreed to submit any dispute to arbitration. (Petition, Employment Agreement, pg. 4, ¶ 13). The Petition, which includes the Agreement, also indicates that the arbitrator was JAMS Arbitrator, Laura C. Abrahamson, Esq., FCIArb. (Petition ¶ 6). Lastly, the Petition also includes the Award, attached as Exhibit A. Thus, Petitioner has satisfied the filing requirements of § 1285.4.

B. Service of the Arbitration Award & Timeliness of Petition (CCP §§ 1283.6, 1288, 1288.4)

Code of Civil Procedure § 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.” (Emphasis added.). The Proof of Service attached to the arbitration award indicates that the Final Award was served via email on the parties on April 15, 2022. (Pet. Final Award, pg. 28).

In addition, 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, the Petition was filed on May 20, 2022 (Pet. ¶ 11), which is more than 10 days after and less than four years after the Final Arbitration Award was served on April 15, 2022. (Pet. Final Award, pg. 28.)

Since the neutral arbitrator served the Binding Arbitration Award on both parties and Petitioner filed a timely Petition to Confirm Arbitration Reward, Petitioner has satisfied the requirements of §§ 1283.6, 1288, and 1288.4.

C. Service of the Petition, and Notice of Hearing (Code Civ. Proc., §1290.4)

Code of Civil Procedure § 1290.4, the statute governing proper service of this Petition states, in pertinent part:

“(a) A copy of the petition and a written notice of the time and place of the hearing thereof and any other papers upon which the petition is based shall be served in the manner provided in the arbitration agreement for the service of such petition and notice.

(b) If the arbitration agreement does not provide the manner in which such service shall be made and the person upon whom service is to be made has not previously appeared in the proceeding and has not previously been served in accordance with this subdivision: ¶ (1) Service within this State shall be made in the manner provided by law for the service of summons in an action.

On June 6, 2022, Petitioner filed a Proof of Service, which indicates that Registered Agent for Virgin Fest, LLC, Steven Smith, and Lonnie D. Giamela were all served by certified mail. Additionally, the proof of service provides the tracking number and indicates that the item was delivered to the front desk at 11:45 am on May 23, 2022.

The Petition to Confirm the Arbitration Award is valid and complies with the appropriate statutes.

Respondent filed a response to Plaintiff’s Petition. In it, the Respondent argues that the award should be vacated, or alternatively, corrected as well as requests an evidentiary hearing on the matter. “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.).

“Once a petition to confirm an award is filed, the superior court must select one of only four courses of action: it may confirm the award, correct and confirm it, vacate it, or dismiss the petition.” (EHM Productions, Inc. v. Starline Tours of Hollywood, Inc.¿(2018) 21 Cal.App.5th 1058, 1063.) “It is well settled that the scope of judicial review of arbitration awards is extremely narrow.” (California Faculty Assn. v. Superior Court¿(1998) 63 Cal.App.4th 935, 943.) “Neither the trial court, nor the appellate court, may ‘review the merits of the dispute, the sufficiency of the evidence, or the arbitrator's reasoning, nor may we correct or review an award because of an arbitrator's legal or factual error, even if it appears on the award's face. Instead, we restrict our review to whether the award should be vacated under the grounds listed in section 1286.2. [Citations.]’” (Id.)

Code of Civil Procedure section 1286.2, subdivision (a), states, in pertinent part:

“Subject to Section 1286.4, the court shall vacate the award if the court determines any of the following:

(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 parties 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.

(6) An arbitrator making the award . . . (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. . . .”

(Code Civ. Proc., § 1286.2, subd. (a).)

Only where both (1) the arbitrator abused his or her discretion and (2) there was resulting prejudice, can a trial court properly vacate an arbitration award. (SWAB Financial, LLC v. E*Trade Securities, LLC (2007) 150 Cal.App.4th 1181, 1198.)

Respondent argues that the award should be vacated, or corrected, for the following reasons: the arbitrator should have recused herself following an ex parte communication, the arbitrator did not have jurisdiction, the sanctions are improper and should be correct, and fees awarded to Jessica Abreu should be modified.

The Court finds that these arguments are insufficient to vacate the arbitration award. CCP § 1286.2(a) provides the circumstances where a court must vacate an award, as provided above. First, Respondent did not indicate which of the above circumstances applies to either the jurisdictional argument or the ex-parte communication argument. Moreover, no evidence has been presented that the award was obtained by corruption, fraud, or other undue means nor evidence presented that there was corruption on the part of the arbitrator. The ex-parte communication could be considered misconduct, subsection (3). However, this argument fails. As the Award states, after Respondent filed a Motion to Disqualify Arbitrator based on these communications, the JAMS National Arbitration Committee reviewed the challenge and denied the motion. (Pet. Final Award, pg. 8.)

As for the jurisdictional issue, the Arbitrator already determined the merits of this issue. Firstly, a jurisdictional issue would not trigger situations (a)(1)-(4). Under subsection CCP § 1286.2(a)(5), the award can be vacated if the arbitrator failed to postpone the matter based on sufficient cause or refused to hear material evidence. “The parties may be heard on the papers rather than at a live hearing [citation], but the opportunity to be heard must be extended to all parties equitably.” (Royal Alliance Associates, Inc. v. Liebhaber (2016) 2 Cal.App.5th 1092, 1108.) Here, when Respondent belatedly moved to dismiss based on jurisdictional grounds, the Arbitrator allowed arguments, from both parties. Moreover, stated above, judicial review of an award is extremely narrow and cannot review the reasoning behind the award. The Arbitration Award indicates that the parties confirmed jurisdiction at the Preliminary Arbitration Management Conference that jurisdiction was undisputed. (Pet. Final Award p. 4.)

According to Respondent, these emails between the parties novated the Employment agreement and indicated that Claimant would be “treated as an independent contractor.” (Response 8: 16-17.) However, the Arbitrator indicated that Respondent’s argument about these emails failed. Specifically, Respondent referenced Wells Fargo Bank v. Bank of America (1995) 32 Cal.App.4^th 424, 431; the Respondent referenced the same authority in their opposition to the petition. The Arbitrator stated that the evidence presented does not indicate that the parties intended to extinguish the original agreement via these emails. The same arguments raised previously to the Arbitrator were raised in response to this petition. Again, the court cannot review the reasoning of the Arbitrator. As such, the jurisdictional argument fails.

Lastly, the Respondent indicates that the awarding of sanctions and the requested attorneys’ fees for Ms. Arbeu should be corrected. The Arbitrator sanctioned Respondent in the amount of $20,000 for failing to post arbitration fees. As stated above, the Court cannot review the reasoning of the Arbitrator. Moreover, footnote 30 of the Arbitration Award indicates that the Respondent’s brief opposing fees and sanctions stated that Respondent had the right not to pay the fees and have the matter return to civil court. (Pet. Final Award pg. 26, fn. 30.). The Arbitrator was in her authority to impose sanctions. Under both JAMS Rule 31(c) and CCP § 1281.98, Respondent was required to pay arbitration fees. (Pet. Final Award, pg. 25.) Failure to post these fees was a violation; under subsection (d) of CCP § 1281.98, the arbitrator “shall impose appropriate sanctions on the drafting party, including monetary sanctions.” As such, this argument fails. None of the circumstances in CCP § 1286.2(a) are applicable and therefore, the imposition of sanctions cannot be reviewed.

As for the argument concerning Ms. Abreu rates, the Arbitrator used the lodestar method to determine Ms. Abreu’s rate prior to passing the California Bar in November 2021, and the rates after. The Arbitrator indicated that having a paralegal/second attorney was reasonable and found the calculations, except for 1.2 hours, were appropriate. Like above, none of the circumstances that the court uses to vacate an arbitration award are applicable to Ms. Abreu’s rates. Because judicial review of arbitration awards is very narrow, the court finds the fees reasonable and will not modify or correct them.

The Arbitrator was in her authority to sanction Respondent and found the requested fees for Ms. Abreu’s work appropriate based on the lodestar method. The request to vacate the award is DENIED.

Conclusion:

For the foregoing reasons, the Court decides the pending motion as follows:

Petition to Confirm Arbitration Award of $397,805.78 is GRANTED; Petition to Vacate Arbitration Award is DENIED; Petition to Correct Arbitration Award is DENIED; Request for Evidentiary Hearing is DENIED.

Petitioner is awarded costs to confirm the arbitration award in the amount of $550.29.

Using a lodestar method, the Court finds that amount of attorney fees reasonably expended to be $11,000.

Moving party is give notice.

IT IS SO ORDERED.

Dated: August 22, 2022 _________________________________ Upinder S. Kalra

Judge of the Superior Court