2013-00153031-CL-PT

Vision Service Plan vs. Lucy P. Lu, O.D.

Nature of Proceeding:    Motion for Leave to File Under Seal

Filed By:  Struve, Andrew H.

VSP’s Motion for Leave to File Under Seal is unopposed and is granted, pursuant to
the standards set out in CRC 2.550 and 2.551.

VSP seeks to seal the following documents related to its dispute with Respondent
Lucy P. Lu, O.D.:

1. Reporter’s Transcript of Proceedings, Quality Care Committee Hearing of Lucy
Lu, O.D., dated May I , 2013 (“Transcript”), Exhibit 12 to the Declaration of Nicole D.
Wasylkiw filed in support of Petition (“Wasylkiw Decl.”).

2. Final Decision of the VSP Quality Care Committee Hearing Panel in the Matter of
Lucy D. Lu, O.D., dated May 28, 2013 (“Decision ofthe Fair Hearing Panel”), Exhibit 4
to the Wasylkiw Decl.

3. Network Doctor Agreement between Lu and VSP (“Agreement”), pages 6 to 20 of
Exhibit 1 to Wasylkiw Decl.

4. Vision Service Plan Peer Review Plan and Fair Hearing Policy (“Fair Hearing
Procedure”), pages 22 to 34 of Exhibit 1 to Wasylkiw Decl.
Pursuant to Rule 2.550(d), the court may grant leave to file records under seal upon
finding the following facts:
(1) There exists an overriding interest that overcomes the right of public access to
the record; (2) The overriding interest supports sealing the record; (3) A substantial
probability exists that the overriding interest will be prejudiced if
the record is not sealed; (4) No less restrictive means exist to achieve the overriding
interest.

VSP has established that the documents to be sealed are either confidential records
under the peer review privilege or are subject to the trade secret privilege.  The Court
finds that all requirements of Rule 2.550(d) have been met.

The prevailing party shall prepare a formal order that complies with CRC 2.550(e) for
the Court’s signature pursuant to C.R.C. 3.1312.

Item   17   2013-00153031-CL-PT

Vision Service Plan vs. Lucy P. Lu, O.D.

Nature of Proceeding:    Petition to Confirm Arbitration Award

Filed By:  Struve, Andrew H.

VSP’s Petition to Confirm Arbitration Award is denied.  VSP’s alternative request to
order Respondent to proceed with her previously initiated arbitration is granted.

After the parties dispute arose, Lu submitted her dispute to the Fair Hearing Panel,
which issued a written decision.  Under the terms of the Fair Hearing Procedure, if the
Fair Hearing Panel issues a written decision but arbitration is not pursued, the decision
of the panel becomes final and “shall itself be considered an Arbitration Award for
purposes of Confirming an Award under California Code of Civil Procedure (CCP)
section 1285, et seq.” See Fair Hearing Procedure, p. 9, Sec. 9a, b (Wasylkiw Decl.
Ex. 1, p.29).

After Lu submitted the dispute to the Fair Hearing Panel, which issued a written
decision,  Lu initiated an arbitration proceeding for the review of the Fair Hearing
Panel’s written decision.  Thereafter, Petitioner [VSP] made a motion in this court to
appoint an arbitrator pursuant to CCP 1281.6.  In opposition to the motion, Lu argued
that the dispute was not arbitrable, but in the alternative requested that the Court
appoint a neutral arbitrator such as a JAMS arbitrator.

On February 13, 2014, the Court granted the petition for appointment of a neutral
arbitrator, and granted Lu’s request to appoint a neutral JAMS arbitrator.  The parties
engaged in the process authorized by CCP 1281.6 and the Court appointed Mr.
Kenneth Gack on March 13, 2014..  (See rulings of February 13, 2014 and  March 13,
2014.)   After the court granted the motion, Lu has refused to participate in the
arbitration.  (Wasylkiw Decl., Ex. 9 and 11)

Lu filed another civil action in San Bernardino Superior Court raising the same
substantive issues she raised in her Request for Arbitration and in her opposition to
VSP’s petition to appoint an arbitrator.   On June 2, 2014, the San Bernardino Superior
Court, Judge Michael A. Sachs, granted VSP’s CCP 128.7 sanctions motion, finding
that the action was frivolous.  However Judge Sachs did not dismiss the case, and a  demurrer remains pending in that court, contingent on the court’s ruling on this motion.

VSP contends that Lu’s refusal to arbitrate the dispute, including her pursuit of the San
Bernardino action, constitutes a withdrawal of her Request for Arbitration, which VSP
analogizes to a failure to request arbitration.  Pursuant to the written Agreement
between the parties, failure to request arbitration after the Fair Hearing Panel’s
Decision results in the decision of the Fair Hearing Panel becoming final and subject to
confirmation pursuant to section 1285 et seq. of the California Code of Civil Procedure.
Therefore VSP seeks an order confirming the panel’s decision as an arbitration award
and entry of judgment in conformance therewith, and an award of attorney’s fees and
costs.

In the alternative, VSP seeks an order compelling arbitration of any remaining
dispute between the parties. The parties’ written Agreement provides that the Fair
Hearing Procedure is the sole method for the resolution of any dispute between the
parties. The Fair Hearing Procedure includes a binding arbitration provision.  At the
hearing on the Petition to Appoint Arbitrator, Lu specifically requested, and the Court
granted, her request to appoint a neutral arbitrator for the binding arbitration.

The Court denies VSP’s request that the Court determine that plaintiff has withdrawn
her request for arbitration and thus has waived the right to arbitration.  Once the matter
is before the arbitrator, the court retains only vestigal powers with regard to the
arbitration.   Titan/Value Equities Group, Inc. v Superior Court (1994) 29 Cal.App.4th
482, 486.    For example, the Court has the power under CCP 1281.6 to appoint
another arbitrator if the arbitrator appointed fails to act.   The Court can also order
certain injunctive relief pursuant to statute.  The Court can also move the case along
and order arbitration by a date certain on a showing of delay.  Other than that, the
Court may only confirm, correct or vacate the award.  CCP 1286.  Id .

VSP has provided no authority that the Court has jurisdiction to determine that the
arbitration should no longer go forward.  The Court has no power to dismiss an
arbitration proceeding for dilatory tactics or delay in arbitration.  Titan/Value Equities
Group, Inc. v Superior Court, supra, at p. 489; see Finley v Saturn of Roseville (2004)
117 Cal.App.4th 1253, 1258-1259. Thus, a court “‘may not step into a case submitted
to arbitration [pursuant to a private contract] and tell the arbitrator what to do and when
to do it: it may not resolve procedural questions, order discovery, determine the status
of claims before the arbitrator or set the case for trial because of a party’s alleged
dilatory conduct. It is for the arbitrator, and not the court, to resolve such questions.”
SWAB Financial, LLC v. E*Trade Securities, LLC (2007) 150 Cal.App.4th 1181, 1200-
1201.

If Lu fails to cooperate with submission of the dispute to arbitration, the arbitrator may
make the appropriate ruling.  If Lu does not appear at the arbitration, any judgment of
the arbitrator may be confirmed by the Court.

Lu is cautioned to tread carefully, to avoid prejudice to her interests. For example, in
Brock v. Kaiser Foundation Hospitals (1992) 10 Cal.App.4th 1790, 1808, the Court
noted that where the plaintiffs failed to prosecute diligently their claims, which are
submitted to contractual arbitration, “[t]he offended party may move in the arbitration
proceedings to terminate them for failure to pursue the arbitration claim with
reasonable diligence. . . . Using the ‘measuring rod’ provided by [§ 583.310], the
arbitrator may conclude that the claimants have failed to proceed with reasonable  diligence. If so, the arbitrator may order that the claimants take nothing on their claims
by reason of their dilatory prosecution. [Citation.] This type of order is the functional
equivalent of an award against the claimants which the court may confirm.” (Ibid.; see
also Young v. Ross-Loos Medical Group, Inc. (1982) 135 Cal.App.3d 669, 673.)

Lu’s further arguments that the Court’s previous ruling was in excess of its jurisdiction
violate CCP 1008.    Moreover, the Court appointed a neutral arbitrator at Lu’s
request, and therefore she has no grounds to challenge Mr. Gack’s appointment.  See
e.g. Norgart v Upjohn Co. (1999) 21 Cal.4th 383, 403.

The parties are ordered to proceed with arbitration before Mr. Gack, at such date and
time as may be prescribed by the Arbitrator .

The prevailing party shall prepare a formal order for the Court’s signature pursuant to
C.R.C. 3.1312.