Filed 6/23/20 Drivetrain v. Desert Mechanical CA4/2
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION TWO
DRIVETRAIN, LLC., as Trustee, etc.,
Plaintiff and Respondent,
v.
DESERT MECHANICAL, INC.,
Defendant and Appellant.
E071652
(Super.Ct.No. CIVDS1816446)
OPINION
APPEAL from the Superior Court of San Bernardino County. Donna G. Garza, Judge. Affirmed.
Nida & Romyn, David C. Romyn and Matthew J. Luce for Defendant and Appellant.
Hogan Lovells US, David Dunn, Vassi Iliadis; Varela, Lee, Metz & Guarino, Nicholas Andrew Merrell and Stephen L. Pessagno for Plaintiff and Respondent.
Defendant and appellant Desert Mechanical, Inc. (DMI) appeals a judgment confirming an arbitration award in favor of plaintiff and respondent Drivetrain, LLC, trustee for the Abeinsa Litigation Trust (Drivetrain). DMI contends (1) each arbitrator on the panel failed to disclose an undeniable ground for his or her disqualification to serve as a neutral arbitrator pursuant to Code of Civil Procedure section 1286.2, and (2) the arbitrators “violated their code of ethics” by “allow[ing] personal biases against [DMI] and its counsel to influence, if not dictate, their Arbitration Award.” For the reasons set forth post, we affirm the judgment.
I. PROCEDURAL BACKGROUND AND FACTS
In 2013, Abener Teyma Mojave General Partnership (Mojave GP) hired DMI to perform work under two separate subcontracts at a solar powerplant near Harper Lake in San Bernardino County (the project). Mojave GP paid DMI $12,129,438.21 for work performed on the project; however, DMI was not licensed when it performed a substantial amount of work during a two-month period in late 2013.
In October 2014, DMI recorded mechanic’s liens against the project for unpaid work totaling $9,800,239.11. On January 16, 2015, DMI sued Mojave GP for, inter alia, breach of contract and enforcement of mechanic’s liens (San Bernardino County case No. CIVDS1500706), and demanded arbitration pursuant to the terms of the subcontracts, which provide that any disputes be resolved by three arbitrators, appointed pursuant to the “Rules of Arbitration of the American Arbitration Association” (AAA) and seated in San Francisco. On February 11, 2015, the parties stipulated to binding arbitration of DMI’s disputes with Mojave GP, and DMI’s civil action was stayed pending conclusion of the arbitration.
In April 2015, AAA appointed a panel of arbitrators that included Ernest Brown Brown), Alan Harris (Harris), and Mary Salamone (Salamone) (the panel). The panel was confirmed in September 2015. Prior to confirmation, each arbitrator provided the required disclosure statement: Harris on March 25, 2015; Brown on April 6, 2015; and Salamone on August 27, 2015. No objections to the panel were raised by any party.
Following confirmation of the panel, Mojave GP filed an answering statement and counterclaim, seeking disgorgement of the $12,376,418 paid to DMI under the subcontracts, pursuant to Business & Professions Code section 7031 (section 7031). Mojave GP argued that DMI’s contractor’s license had lapsed for a brief period while DMI was working on the project. On or about February 16, 2016, the arbitration proceeding was bifurcated, with Mojave GP’s disgorgement counterclaim to be considered before DMI’s claim. Shortly thereafter, Mojave GP and affiliated entities filed a voluntary bankruptcy. After confirmation of the bankruptcy plan, Abeinsa Litigation Trust substituted in place of Mojave GP, and Drivetrain, as trustee, was empowered to initiate legal action with respect to the trust’s assets and claims.
After its September 2017 evidentiary hearing on Drivetrain’s counterclaim, the panel issued its award in favor of Drivetrain on May 7, 2018. It found that DMI’s failure to maintain proper licensing precluded it from recovering any alleged outstanding invoices or claims against the trust, and DMI was required to disgorge the amount it had been paid under the subcontracts. (§ 7031; M.W. Erectors, Inc. v. Niederhauser Ornamental & Metal Works Co., Inc. (2005) 36 Cal.4th 412, 428, 430-431 [Our Supreme Court explained that the language in § 7031 clarifies “the general rule denying recovery of all compensation for work requiring a contractor’s license if a valid license was not in place when performance began, or if licensure lapsed at any time during the work.”].) The panel further held that “[a]ll other claims that were presented or could have been presented in this arbitration proceeding are denied.” The trust was awarded costs.
On June 27, 2018, Drivetrain filed a petition to confirm the arbitration award. DMI opposed the petition and cross-petitioned to vacate the award. DMI argued the award must be vacated because each member of the panel failed to comply with their statutory disclosure obligations, and that their personal biases influenced and possibly dictated the award. DMI alleged Salamone failed to disclose that, in or about January 2017, she recruited and hired an associate from Castle & Associates, PLC (the Castle firm), the law firm representing DMI, and the associate had access to confidential attorney-client information due to her involvement in analyzing DMI’s position in the matter. DMI alleged that on May 31, 2017, Brown e-mailed DMI’s counsel, sending a short article entitled, “How to Get a Suspension Bridge for Free” via “Mediation News.” The article discussed the pros and cons of mediation versus arbitration of a contractor’s failure to comply with section 7031. And finally, DMI alleged that Harris failed to disclose that, more than a decade ago, he served as counsel in an action in which the opposing parties were two companies that later merged to form the parent company of DMI.
Drivetrain’s request to contact the arbitrators for responses to DMI’s allegations was denied.
On September 18, 2018, the trial court denied DMI’s cross-petition and granted Drivetrain’s petition to confirm the arbitration award. On October 22, 2018, the court entered judgment in favor of Drivetrain. DMI appeals.
II. DISCUSSION
DMI contends the trial court erred in confirming the arbitration award since each member of the arbitration panel failed to make necessary and essential disclosures to ensure impartiality of the arbitration process. We find no error.
A. Standard of Review.
“Judicial review of private arbitration awards is generally limited to the statutory grounds for vacating or correcting an award. [Citations.] One of those statutory grounds is [Code of Civil Procedure] section 1286.2, subdivision (a)(6)(A), which provides that, if the arbitrator fails ‘to disclose within the time required for disclosure a ground for disqualification of which the arbitrator was then aware,’ the court ‘shall vacate the award.’ [Citations.] ‘On its face, the statute leaves no room for discretion. If a statutory ground for vacating the award exists, the trial court must vacate the award.’ [Citation.] [¶] We review de novo the trial court’s ruling on a motion to vacate an arbitration award based on the arbitrator’s failure to make a required disclosure. We review any factual findings or resolutions of disputed factual issues for substantial evidence.” (Honeycutt v. JPMorgan Chase Bank, N.A. (2018) 25 Cal.App.5th 909, 924-925 (Honeycutt).)
B. Analysis.
The Code of Civil Procedure, the California Rules of Court, Ethics Standards for Neutral Arbitrators in Contractual Arbitration adopted by the Judicial Council (Ethics Standards), and the AAA Code of Ethics for Arbitrators in Commercial Disputes (AAA Code of Ethics) “require arbitrators in contractual arbitrations to make various disclosures about themselves, their experience, and their activity as private judges or, as they are sometimes called, ‘dispute resolution neutrals.’” (Honeycutt, supra, 25 Cal.App.5th at p. 915.)
“The statutory scheme, in seeking to ensure that a neutral arbitrator[ ] serves as an impartial decision maker, requires the arbitrator to disclose to the parties any grounds for disqualification. Within 10 days of receiving notice of his or her nomination to serve as a neutral arbitrator, the proposed arbitrator is required, generally, to ‘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.’ ([Code Civ. Proc.,] § 1281.9, subd. (a).) Based upon these disclosures, the parties are afforded an opportunity to disqualify the proposed neutral arbitrator. (§ 1281.91, subds. (b), (d).) If an arbitrator ‘failed to disclose within the time required for disclosure a ground for disqualification of which the arbitrator was then aware,’ the trial court must vacate the arbitration award. (§ 1286.2, subd. (a)(6)(A).)” (Haworth v. Superior Court (2010) 50 Cal.4th 372, 381 (Haworth).)
Code of Civil Procedure section 1281.9 enumerates specific matters that must be disclosed. One such matter is any relationships between the arbitrator and the parties to the arbitration, including any significant personal or professional relationship with a party or an attorney involved in the arbitration. (§ 1281.9, subd. (a).) The arbitrator also must disclose “any ground specified in [Code of Civil Procedure, s]ection 170.1 for disqualification of a judge,” as well as “matters required to be disclosed by the ethics standards for neutral arbitrators adopted by the Judicial Council.” (§ 1281.9, subd. (a)(1), (2); see Ethics Standards, std. 7(d) at
Focusing on these standards we consider DMI’s assertions as to each arbitrator:
1. Arbitrator Harris.
Code of Civil Procedure sections 170.1, subdivision (a)(6)(A)(iii), and 1281.9, subdivision (a), require an arbitrator to 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.” (§ 1281.9, subd. (a).) Relying on these statutes, DMI faults Harris for failing to disclose the fact that he “had served as senior trial counsel” for the City of San Francisco in a federal action against the predecessor companies (Tutor-Saliba Corp. & Perini Corp.) that merged to form the parent company of DMI (Tutor Perini Corp.). DMI’s counsel, Matthew J. Luce, declared that he only discovered this information “[s]hortly before receiving the final award,” issued on May 7, 2018. According to Luce, the litigation was “highly contentious,” sought damages “approaching $100 million,” and was heavily litigated for several years, “creating feelings of acrimony between the opposing counsel on the matter, including numerous sanction motions between plaintiffs and defendants.” Because he was not involved in the prior federal action, Luce asserted he was unaware of Harris’s prior role as opposing counsel, and was not put on inquiry notice because Harris failed to identify the prior litigation. In response, Drivetrain argued that no reasonable person would believe “Harris’ impartiality to be compromised because he represented clients more than ten years ago in a lawsuit against companies that had no relationship to DMI at the time.”
According to the record, the prior federal litigation occurred on or before 2006, nearly a decade prior to Harris’s appointment as an arbitrator in this matter. The operative pleadings in the federal litigation name Harris on the cover page, but not on the signature page. Nonetheless, Nida (DMI’s counsel), attested to Harris’s significant involvement in the federal case. Nida asserted that he had “personally . . . engaged in correspondence and meetings with Mr. Harris concerning contested discovery matters.” Nida claimed that Harris “attended hearings and meetings” in the action, “was involved in major aspects of the litigation,” and “got into intense arguments with Ms. Castle.” By his own admission, Nida was an attorney of the Castle firm during the time that it defended Tutor-Saliba Corporation and Perini Corporation in the federal litigation, Nida was aware of Harris’s involvement in that litigation, Nida remained an attorney of the Castle firm at the inception of the arbitration in this case, and Nida became a named partner of Nida & Romyn, DMI’s current attorneys. Romyn also acknowledged that he represented Tutor-Saliba Corporation and Perini Corporation in the federal litigation. Moreover, the docket for the federal action confirms DMI’s current counsel’s involvement (with the exception of Luce) in that litigation.
Assuming, without deciding, that Harris should have disclosed his prior relationship with the predecessor companies of DMI’s parent company and/or counsel, we find the consequences of the failure to do so “may be overcome if the pertinent facts are actually revealed, or otherwise known, to the parties in some other fashion.” (Kaiser Foundation Hospitals, Inc. v. Superior Court (1993) 19 Cal.App.4th 513, 517.) Here, given Ms. Castle’s, Romyn’s, and Nida’s prior involvement in the federal litigation, DMI and/or its counsel was aware of the relevant fact of Harris’s participation in that litigation when Harris was identified as a proposed arbitrator. Thus, Harris’s prior relationship with the predecessor companies of the parent company of DMI, and/or with DMI’s counsel, was “actually revealed, or otherwise . . . known.” (Ibid.)
Moreover, because DMI knew of Harris’s prior relationship as opposing counsel in the federal litigation at the time he was appointed to the panel, DMI waived its right to vacate the award based on Harris’s failure to comply with the applicable statutes and standards. “[Code of Civil Procedure s]ection 1281.91, subdivision (c), provides that the ‘right of a party to disqualify a proposed neutral arbitrator pursuant to this section shall be waived if the party fails to serve’ a notice of disqualification within 15 days after the arbitrator fails to comply with the disclosure obligations under section 1281.9 or the Ethics Standards, ‘unless the proposed nominee or appointee makes a material omission or material misrepresentation in his or her disclosure.’” (Honeycutt, supra, 25 Cal.App.5th at pp. 925-926.) “‘While an arbitrator has a duty to disclose all of the details required to be disclosed pursuant to [Code of Civil Procedure] section 1281.9 and the Ethics Standards, a party aware that a disclosure is incomplete or otherwise fails to meet the statutory disclosure requirements cannot passively reserve the issue for consideration after the arbitration has concluded. Instead, the party must disqualify the arbitrator on that basis before the arbitration begins.’” (United Health Centers of San Joaquin Valley, Inc. v. Superior Court (2014) 229 Cal.App.4th 63, 85.) To hold otherwise would allow DMI to play games with the arbitration and not raise the issue until it had lost. (Honeycutt, at p. 927; see Caminetti v. Pac. Mutual L. Ins. Co. (1943) 22 Cal.2d 386, 392 [“‘It would seem . . . intolerable to permit a party to play fast and loose with the administration of justice by deliberately standing by without making an objection of which he is aware and thereby permitting the proceedings to go to a conclusion which he may acquiesce in, if favorable, and which he may avoid, if not.’”].)
We conclude DMI waived its right to vacate the award based on Harris’s alleged violation of the applicable duty to disclose prior legal relationships.
2. Arbitrator Brown.
On May 31, 2017, Mediate.com circulated a short article written by Brown. The article, “How to Get a Suspension Bridge for Free,” discussed the consequences of a lapse or absence of a contractor’s license (§ 7031) and our state’s restriction on the ability of contractors to claim “‘substantial compliance’” with section 7031. According to DMI, although it received a “facially” “blind marketing email,” its counsel “couldn’t help but interpret it as a strong suggestion, if not threat from the arbitrator in the case, that DMI should try to settle its dispute with the Trust rather than seek to demonstrate substantial compliance with the license laws as was its right under Business & Professions Code Section 7031.” Thus, DMI argued Brown should have recused himself because it appeared that he “had prejudged the matter” and would not be impartial. In response, Drivetrain argued no reasonable person would conclude that Brown had prejudged the arbitration based on his article that summarized recent case law relating to section 7031, explaining the benefits of mediation over arbitration in cases involving substantial compliance. Also, Drivetrain pointed out that DMI failed to raise any objection or raise any concern about Brown’s alleged bias prior to the evidentiary hearing in September 2017, or the subsequent award issued in May 2018.
We reject DMI’s accusation that Brown committed “misconduct” in circulating his article. To begin with, there is no evidence that Brown’s article was targeted at DMI as a means of communicating to DMI to settle its dispute with Drivetrain. Second, the statements contained in the article do not cause a reasonable person to doubt Brown’s impartiality. “‘The “reasonable person” is not someone who is “hypersensitive or unduly suspicious,” but rather is a “well-informed, thoughtful observer.”’ [Citations.] ‘[T]he partisan litigant emotionally involved in the controversy underlying the lawsuit is not the disinterested objective observer whose doubts concerning the [arbitrator’s] impartiality provide the governing standard.’” (Haworth, supra, 50 Cal.4th at p. 389.) And third, Brown’s article arises from his participation in the business and legal community as evidenced by the fact that it was contained in a newsletter service provided by Mediate.com. (Benjamin, Weill & Mazer v. Kors (2011) 195 Cal.App.4th 40, 72 [“‘“‘[O]rdinary and insubstantial business dealings’” arising from participation in the business or legal community do not necessarily require disclosure’ [and] arbitrators ‘cannot sever all their ties [to] the business world.’”].)
Even if we assume the article provided a basis for Brown’s recusal, we conclude DMI waived its right to vacate the award by failing to object or raise any concerns prior to the evidentiary hearing in September 2017. (Cf. Honeycutt, supra, 25 Cal.App.5th at p. 927; Caminetti v. Pac. Mutual L. Ins. Co., supra, 22 Cal.2d at p. 392.)
3. Arbitrator Salamone.
DMI’s evidence in support of its charges against Salamone includes the declarations of Luce, Nida, Romyn, and Marian Selvaggio (Selvaggio):
Luce declared: “In or about February, 2017, Ms. Salamone recruited and hired an associate from [the Castle firm], the firm representing DMI’s interests in this matter, Marian Selvaggio, who I had consulted with in analysis of DMI’s position in this matter, and as such, had confidential attorney-client information relating to the issues in dispute in the arbitration. Despite hiring an attorney from a law firm currently representing one of the parties to an arbitration on which Ms. Salamone was currently serving as a member of the arbitration panel, Ms. Salamone failed to make a disclosure to the parties of this information at any time.”
Nida declared: “11. Marian Selvaggio, Esq., was hired by the [Castle firm] in July 2012.
“12. The firm’s records indicate that Marian Selvaggio conducted work for [DMI], including on the arbitration that is the subject of this case.
“13. Marian Selvaggio had a contentious relationship with [Ms.] Castle, especially during her last year of employment. I observed this tension in the body language and conduct of both Ms. Selvaggio and Ms. Castle. Additionally, both [Ms.] Castle and Marian Selvaggio expressed their personal and professional distain for each other to me on multiple occasions. In 2016, on multiple occasions, [Ms.] Castle made clear to me that Marian Selvaggio’s employment with the firm was going to end.
“14. The employment of Marian Selvaggio concluded with [the Castle firm] in January 2017.
“15. Marian Selvaggio has since informed me that she went to work for the Atkinson, Andelson, Loya, Ruud & Romo firm (‘Atkinson’), and was hired and worked directly for Mary Salamone, who is a partner with the Atkinson firm. I understand that this employment took place from February 2017 to May 2018.” (Italics added.)
Romyn declared: “6. Marian Selvaggio, Esq., was hired by the [Castle firm] in July 2012.
“7. The firm’s records indicate that Marian Selvaggio conducted work for [DMI], including on the arbitration that is the subject of this case.
“8. Marian Selvaggio’s employment concluded with [the Castle firm] in late January, 2017. After she left her employment with Castle, her office remained unoccupied by another lawyer or employee, until June 2018, when my firm, Nida & Romyn, hired a new associate. In cleaning out her office, we discovered Ms. Selvaggio had left a copy of the written letter offer of employment she had received from Ms. Salamone’s firm. [¶] . . . [¶]
“12. In the more than four years of Ms. Selvaggio’s employment at Castle, I personally witnessed the deterioration of Ms. Selvaggio’s relationship with Ms. Castle and others working at the Castle firm. I have no doubt and have confirmation from third party witnesses that Ms. Selvaggio freely gave her negative opinions of [Ms.] Castle, Matt Luce and others at the Castle firm directly to Arbitrator Salamone while employed at Ms. Salamone’s firm and during Arbitrator Salamone’s retention as arbitrator in the DMI arbitration with the Trust and before Arbitrator Salamone issued her final Arbitration Award.” (Italics added.)
DMI obtained a barebones declaration from Selvaggio, which provides: “1. I am an attorney licensed to practice in all courts of the State of California and was an attorney in the [Castle law firm]. I have personal knowledge of the matters stated herein unless stated on the basis of information and belief.
“2. I was employed by the [Castle firm] from July, 2012 until February, 2017.
“3. In February, 2017, I was recruited and hired by [the Atkinson firm] and given the title, ‘Of Counsel.’ Mary Salamone was involved in my hiring and I was initially supervised by Mary Salamone, and I was later assigned to work with other partners.
“4. In May, 2018, I left the employment of the Atkinson . . . firm.”
In moving to vacate the arbitration award, DMI argued that Salamone’s failure to disclose “her hiring of an attorney from a law firm currently representing a party in a pending arbitration on which she was serving” raises a doubt as to her impartiality since she had access to confidential attorney-client information. The trial court reviewed “all the paperwork that the parties had disclosed and written about.” It found no evidence of “any interaction between” Salamone and Selvaggio, and no evidence that Salamone “was biased in this matter.” Relying on Code of Civil Procedure sections 1286.2, subdivision (a)(6), and 1281.9, subdivision (a), along with the Ethics Standard, standard 7(d)(9) and (f), DMI argues “the arbitration award must be vacated on account of Ms. Salamone’s failure to notify the parties of a relationship she was mandated to disclose under the applicable law.” We disagree.
To begin with, we note there is no issue with Salamone’s initial disclosure. (Code Civ. Proc., § 1286.2, subd. (a)(6)(A).) Rather, this case presents a situation where the issue is whether an arbitrator’s breach of the continued ethical duty of disclosure (Ethics Standards, std. 7) warrants vacation of the arbitration award. Under the facts presented, we conclude that it does not. (Honeycutt, supra, 25 Cal.App.5th at p. 928 [“An arbitrator’s violation of his or her disclosure obligations under the Ethics Standards, however, does not necessarily entitle a party challenging an arbitration award to an order vacating the award.”].)
“[B]ecause the standard for disclosure by a neutral arbitrator under [Code of Civil Procedure] 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. [¶] ‘Impartiality’ entails the ‘absence of bias or prejudice in favor of, or against, particular parties or classes of parties, as well as maintenance of an open mind.’ [Citation.] In the context of judicial recusal, ‘[p]otential bias and prejudice must clearly be established by an objective standard.’ [Citations.] . . . [¶] In interpreting a comparable provision of the federal law requiring recusal of a judge when his or her ‘impartiality might reasonably be questioned’ [citation], federal courts have stated that the appearance-of-partiality ‘standard “must not be so broadly construed that it becomes, in effect, presumptive, so that recusal is mandated upon the merest unsubstantiated suggestion of personal bias or prejudice.”’ [Citations.] . . . [¶] ‘An impression of possible bias in the arbitration context means that one could reasonably form a belief that an arbitrator was biased for or against a party for a particular reason.’” (Haworth, supra, 50 Cal.4th at p. 389.)
DMI contends that Selvaggio’s employment by Salamone’s law firm would cause a person to reasonably conclude that Salamone was biased against DMI in the arbitration because (1) “Selvaggio had a contentious relationship with [Ms.] Castle,” (2) “Selvaggio freely gave her negative opinions of [Ms.] Castle, Matt Luce and others at the Castle firm directly to Arbitrator Salamone,” and (3) “Selvaggio conducted work for [DMI], including on the arbitration that is the subject of this case.” However, DMI offers nothing more than a mere “‘“unsubstantiated suggestion of personal bias or prejudice.”’” (Haworth, supra, 50 Cal.4th at p. 389.) The declarations of DMI’s attorneys provide self-serving assertions with no independent, objective, corroborating evidence, despite the availability of such evidence via their law firm’s billing records and Selvaggio herself. We note that Selvaggio’s declaration failed to mention any work she performed for DMI or any information she conveyed to Salamone. Likewise, DMI failed to provide any billing records to evidence the nature or extent of the legal work that Selvaggio performed on its behalf. The absence of such evidence supports the inference that such evidence would be adverse to DMI. (Evid. Code, § 413 [“In determining what inferences to draw from the evidence or facts in the case against a party, the trier of fact may consider, among other things, the party’s failure to explain or to deny by his testimony such evidence or facts in the case against him, or his willful suppression of evidence relating thereto, if such be the case.”]; see Taylor v. County of Los Angeles (2020) 2020 Cal.App. Lexis 513, at pp. *10-*15 [contemporaneous time records are the best evidence of the work lawyers performed for clients].)
Moreover, a similar inference may be made regarding DMI’s counsel’s intimation they were ignorant of Salamone’s alleged bias. (Williamson v. Superior Court (1978) 21 Cal.3d 829, 835, fn. 2 [“‘A defendant is not under a duty to produce testimony adverse to himself, but if he fails to produce evidence that would naturally have been produced he must take the risk that the trier of fact will infer, and properly so, that the evidence, had it been produced, would have been adverse.’ (Italics added.)”].) Their declarations insinuate their ignorance of Selvaggio’s employment with the Atkinson firm based on their claims that her “office remained unoccupied by another lawyer or employee, until June 2018,” and “[i]n cleaning out her office, we discovered . . . a copy of the written letter offer of employment she had received from Ms. Salamone’s firm.” However, their declarations are vague as to the actual date that they became aware of Selvaggio’s new place of employment. For example, Nida declared that Selvaggio “concluded [her employment] with [the Castle firm] in January 2017,” and she “has since informed me that she went to work for the Atkinson [firm].” (Italics added.) And while Romyn declared they discovered Selvaggio’s offer of employment when they cleaned out her office, he failed to specify the actual date that they cleaned out her office. Selvaggio’s declaration also fails to provide any information as to what she told the Castle firm about her new employment when she left. Did she provide the Castle firm with a forwarding address given the fact she had been employed with them for nearly five years? If she did provide a forwarding address, then DMI’s counsel was aware of the identity of her new employer but failed to demand that Salamone disqualify herself. (Code Civ. Proc., §§ 1286.2, subd. (a)(6)(B) [“the court shall vacate the award if the court determines . . . [¶] . . . [¶] (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. . . .”], 1281.9, subd. (a)(6).)
Based on the vague evidence of the circumstances surrounding Selvaggio’s move from the Castle firm to the Atkinson firm, DMI asks us to presume lack of impartiality on the part of Salamone and conclude that her failure to disclose her firm’s employment of Selvaggio supports its motion to vacate the arbitration award. However, as previously noted, “the appearance-of-partiality ‘standard “must not be so broadly construed that it becomes, in effect, presumptive, so that recusal is mandated upon the merest unsubstantiated suggestion of personal bias or prejudice.”’” (Haworth, supra, 50 Cal.4th at p. 389.) That is what has been presented to this court: “‘“the merest unsubstantiated suggestion of personal bias or prejudice.”’” (Ibid.) It is equally plausible that DMI’s counsel was aware of Selvaggio’s employment by the Atkinson firm, but waived its right to disqualify Salamone by failing to object to her failure to disclose a matter the Ethics Standards require the arbitrator to disclose. (Honeycutt, supra, 25 Cal.App.5th at pp. 925-926 [“A party may waive the right to disqualify an arbitrator by failing to object to the arbitrator’s failure to disclose a matter the Ethics Standards require the arbitrator to disclose. Code of Civil Procedure Section 1281.91, subdivision (c), provides that the ‘right of a party to disqualify a proposed neutral arbitrator pursuant to this section shall be waived if the party fails to serve’ a notice of disqualification within 15 days after the arbitrator fails to comply with the disclosure obligations under section 1281.9 or the Ethics Standards, ‘unless the proposed nominee or appointee makes a material omission or material misrepresentation in his or her disclosure.’”].) Accordingly, the evidence fails to support DMI’s assertion that Salamone’s alleged violation of her ethical duty of disclosure raises a doubt as to her impartiality, mandating vacation of the arbitration award.
Having failed to establish any arbitrator’s violation of his or her disclosure obligations, DMI failed to justify its cross-petition to vacate the arbitration award.
III. DISPOSITION
The judgment is affirmed.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
McKINSTER
Acting P. J.
We concur:
MILLER
J.
MENETREZ
J.
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