Hearing Date:

Tuesday, April 17, 2018

Calendar No.:

Case Name:

Elements436, LLC, et al. v. Schaffel Development Company

Case No.:

BC 641232

Matter:

(1) Petition for Order Confirming Arbitration Award and Request for Award of Attorney Fees and Costs

(2) Petition to Correct, or in the alternative, Vacate the Arbitration Award

Moving Parties:

Plaintiffs Elements436, LLC and River Range – Element436, LLC (collectively “Plaintiffs”)

Responding Party:

Defendant Schaffel Development Company (“Defendant”)

Notice:

OK

Tentative Ruling:

Plaintiffs’ Petition for Order Confirming Arbitration Award and Request for Award of Attorney Fees and Costs are GRANTED.

Defendant’s Petition to Correct, or in the alternative, Vacate the Arbitration Award, is DENIED.

On February 13, 2018, plaintiffs Elements436, LLC and River Range – Element436, LLC (collectively “Plaintiffs”) filed their petition to confirm arbitration award and request for award of attorney fees and costs. Plaintiffs seek to confirm the award pursuant to CCP § 1285 and have judgment entered in conformity therewith under CCP § 1287.4. Plaintiffs also seek attorney fees and costs pursuant to the final award and for an award of $6,472.50 of attorney fees and costs incurred in connection with this petition.

On May 9, 2018, defendant Schaffel Development Company (“Defendant”) filed a petition seeking to correct or, in the alternative, vacate the arbitration award. Defendant seeks to deny Plaintiff’s petition to confirm arbitration award and request for attorney fees and costs. Defendant seeks the Court to enter an order correcting or vacating the arbitration award.

A. Legal Standard

Any party to an arbitration can petition the superior court to confirm, correct or vacate the award. (CCP § 1285.) The limited grounds for vacatur are:

(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.

(6) An arbitrator making the award either: (A) failed to disclose within the time required for disclosure a ground for disqualification of which the arbitrator was then aware; or (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. However, this subdivision does not apply to arbitration proceedings conducted under a collective bargaining agreement between employers and employees or between their respective representatives.

(CCP § 1286.2(a).)

The grounds for correction are:

(a) There was an evident miscalculation of figures or an evident mistake in the description of any person, thing or property referred to in the award;

(b) The arbitrators exceeded their powers but the award may be corrected without affecting the merits of the decision upon the controversy submitted; or

(c) The award is imperfect in a matter of form, not affecting the merits of the controversy.

(CCP § 1286.6.)

A petition to vacate or correct an award shall set forth the grounds on which the request for relief is based. (CCP § 1285.8.) A petition to vacate or correct an award shall be served and filed no later than 100 days after service of a signed copy of the award on the petitioner. (CCP § 1288.) A response to a petition is due within 10 days, or 30 days if it was served out of state. (CCP § 1290.6; Coordinated Const., Inc. v. J. M. Arnoff Co. (1965) 238 Cal.App.2d 313, 317 [“section 1290.6 limits the 100-day provision found in section 1288.2.]; Oaktree Capital Management, L.P. v. Bernard (2010) 182 Cal.App.4th 60, 66.)

An arbitration award is not directly enforceable until it is confirmed by a court and judgment is entered. (CCP § 1287.6; Jones v. Vested (1971) 19 Cal.App.3d 836, 840.) A party who is satisfied with an arbitration award should move to confirm the award. A party may seek a court judgment confirming an arbitration award by filing and serving a petition at least 10 days, but no more than four years after the award is served. (CCP §§ 1288, 1288.4.)

The court must confirm the award as made, unless it corrects or vacates the award, or dismisses the proceeding. (CCP § 1286; Valsan Partners Limited Partnership v. Calcor Space Facility, Inc. (1994) 25 Cal.App.4th 809, 818.) If the award is confirmed, an enforceable judgment is entered with the same force and effect as a judgment in a civil action. (CCP § 1287.4.)

CCP § 1290.4(a) provides that a copy of the petition to confirm arbitration award, a written notice of the time and place for the hearing, and any other papers upon which the petition is based shall be served in the manner provided in the arbitration agreement. In the event that the arbitration agreement does not provide a method of service, the petition must be served pursuant to one of the methods set forth in CCP § 1290.4(b)(1), (2) or (3). CCP § 1290.4(b)(1) allows the petitioner to serve the petition by any means available for serving summons, including by mail. (CCP §§ 415.30, 1290.4(b)(1).) A petition shall attach the agreement to arbitrate, set forth the names of the arbitrators, and include a copy of the award and the written opinion of the arbitrators, if any. (CCP § 1285.4.)

B. Discussion

Defendant argues that the arbitration award should be corrected or vacated because (1) the arbitrator exceeded his power or made a mistake by not properly interpreting the subject contract according to precedential law; (2) admitted testimony of an unqualified witness and refused to allow Defendant to rebut said witness’s testimony; and (3) because Plaintiff’s case relied on red herrings and false information.

None of Defendant’s arguments are persuasive. By agreeing to arbitrate this dispute, Defendants took the risk the arbitrator might make a mistake:

“[I]t is the general rule that, with narrow exceptions, an arbitrator’s decision cannot be reviewed for errors of fact or law. In reaffirming this general rule, we recognize there is a risk that the arbitrator will make a mistake. That risk, however, is acceptable for two reasons. First, by voluntarily submitting to arbitration, the parties have agreed to bear that risk in return for a quick, inexpensive, and conclusive resolution to their dispute. […] A second reason why we tolerate the risk of an erroneous decision is because the Legislature has reduced the risk to the parties of such a decision by providing for judicial review in circumstances involving serious problems with the award itself, or with the fairness of the arbitration process.”

(Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 11-12.) All of Defendant’s arguments go to the merits of its case, which are generally not the proper subject for a petition to confirm or vacate an arbitration award. Defendant contends that the arbitrator improperly allowed the testimony of an unqualified witness or refused to allow Defendant to rebut said witness’s testimony. However, on the facts before it, the Court cannot second guess the arbitrator’s decisions about the admission of evidence. Further, the Court cannot second guess the merits of the arbitrator’s interpretation of the subject contract, or the merits of the Plaintiffs’ case otherwise.

Defendant has not met its burden of establishing that the arbitrator exceeded his powers in reaching his findings. Defendant has not established that there was misconduct or corruption by the arbitrator or that the award was procured by corruption, fraud, or by other undue means. Defendant does not establish that there was an evident miscalculation of figures or an evident mistake in the description of any person, thing or property referred to in the award. Defendant does not cite to any of the record of the arbitration in support of its petition.

The Court finds that Plaintiffs have properly filed their petition for order confirming arbitration award, pursuant to CCP § 1285, et seq., which includes their request for award of attorney fees and costs in connection with the final award. The Court also finds that Plaintiffs’ request for attorney fees and costs in the amount of $6,472.50 is proper and appropriate pursuant to sections 13.8.6 and 15.3.6 of the parties’ Agreement. (Petition, Exh. 1 [First Amended Agreement, pp. 7, 12].)

C. Order

The Court GRANTS plaintiffs Elements436, LLC and River Range – Element436, LLC’s petition for order confirming arbitration award and request for award of attorney fees and costs in the amount of $6,472.50.

The Court DENIES defendant Schaffel Development Company’s petition to correct or, in the alternative, to vacate the arbitration award.

Plaintiffs Elements436, LLC and River Range – Element436, LLC are ordered to give notice.