Filed 4/2/20 Hymanson, Inc. v. Mad Dogg Athletics, Inc. CA2/1

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

SECOND APPELLATE DISTRICT

DIVISION ONE

HYMANSON, INC.,

Plaintiff, Cross-defendant and Respondent,

v.

MAD DOGG ATHLETICS, INC.,

Defendant, Cross-complainant and Appellant.

B296770

(Los Angeles County

Super. Ct. No. BS167515)

APPEAL from a judgment of the Superior Court of Los Angeles County, Samantha P. Jessner, Judge. Affirmed.

Anderson, McPharlin & Conners, Kenneth D. Watnick for Plaintiff, Cross-defendant, and Respondent.

Keats Gatien, Konrad K. Gatien and Matthew E. Graham for Defendant, Cross-complainant, and Appellant.

____________________

Mad Dogg Athletics, Inc. (Mad Dogg) appeals from a judgment confirming an arbitration award as corrected in favor of Hymanson, Inc. (Hymanson). Mad Dogg contends that the arbitrator failed to disclose a ground for her disqualification and exceeded her authority in various ways. We reject these contentions and affirm the judgment.

FACTUAL SUMMARY AND PROCEDURAL HISTORY

Hymanson developed and sold a personal fitness product known as the Bodyblade. Mad Dogg created and sold products under the “Spinning® ” brand name.

In February 2009, Hymanson and Mad Dogg entered into a written distribution and license agreement (the agreement). Under the agreement, Hymanson granted to Mad Dogg an exclusive license to market and distribute Bodyblade products in exchange for Mad Dogg’s payment of royalties from the sale of the products. The parties amended the agreement in 2012 and again in 2015.

In July 2016, Hymanson gave Mad Dogg written notice of its intent not to renew the agreement. The agreement then terminated according to its terms on August 31, 2016.

Disputes arose between the parties. In January 2017, Hymanson, in accordance with an arbitration provision in the agreement, filed a demand for arbitration with the American Arbitration Association (AAA). Hymanson alleged in its final statement of claim that Mad Dogg breached the agreement in numerous ways, including failing to pay required royalty payments, failing to maintain accurate and complete books and records, and failing to deliver certain assets to Hymanson after the contract terminated. Hymanson further alleged that Mad Dogg engaged in a variety of anti-competitive and unfair business practices and interfered with Hymanson’s existing contractual relationships and prospective economic advantage. Hymanson sought, among other relief, $786,753 in unpaid royalties, $300,000 as damages for breach of contract, $189,038 as damages on its business interference claims, and the recovery of its attorney fees.

Mad Dogg filed an answer and counterclaim with the AAA, seeking damages and other relief under various theories. Mad Dogg also requested an award of its reasonable attorney fees.

In December 2017, the arbitrator provided the parties with a disclosure form that, insofar as it is relevant here, stated that she was not aware of any “matter that might cause a person aware of the facts to reasonably entertain a doubt that [she] would be able to be impartial.” She did not disclose any knowledge of a relationship with Mad Dogg’s co founder and former Mad Dogg shareholder, Johnny Goldberg.

Evidentiary hearings in the arbitration took place over six consecutive days, concluding on March 3, 2018. John Baudhuin—a co-founder of Mad Dogg and its chief executive officer—testified at the hearing. Mad Dogg does not claim that Goldberg’s name was mentioned in any papers filed with the AAA or during the hearing, and the record does not indicate otherwise.

On March 5, 2018, the arbitrator provided the parties with a supplemental disclosure, stating the following:

“On Saturday March 3, 2018, the 6th and final day of evidentiary hearings in the above case, during a recess, the parties, counsel and I were sitting at the hearing room table ca[su]ally discussing the weather in Santa Barbara. It had rained there the night before and some evacuations were ordered. Mr. Baudhuim [sic] said that his partner or his former partner, lost his house in the flash foods earlier in the year and that he barely had time to get out alive before his house on Olive Mill Road in Montecito, was swept away and destroyed.

“I remembered being introduced to a woman, Jodi Greenberg [sic] and her husband 5 or 6 years ago, at their house on Olive Mill[ ] Road. I believe it was lost in that same flash flood this past January.

“It then occurred to me that Mr. Baudhuim’s [sic] partner or former partner might be the husband of Jodi[ ] who I had met several years before. In an abundance of caution, I am making this disclosure.

“I met Jodi[ ] and her husband about 5 or 6 years ago at their home in Montecito. Jodi was a friend of a friend of mine. Jodi’s husband showed us his spinning equipment at their house. Thereafter, we met them socially 2 or 3 times. Once when they were away, I stayed at their home when I attended a concert at the Santa Barbara Bowl. In return, I reciprocated and let Jodi and her husband stay at my Malibu rental property on one occasion, when it was not rented. That was over 4 or 5 years ago and I don’t recall having seen them since. This past January after the fires, I received a text from Jodi asking if my Malibu rental was available for a friend. I texted her back stating that a realtor was now handling rentals, not me[,] and when did their friends need a rental. I never heard back from Jodi. That was the day before the flash flood. I have not heard from or spoken to Jodi since.

“When I conducted my conflicts check for this case, no mention of Jodi Greenberg [sic] or her husband Johnny was listed, nor was any person who lived on Olive Mill[ ] Road listed. I had no idea Johnny and Mr. Baudhuim [sic] were partners or former partners. Even if I had, my acquaintance with Jodi and her husband was casual and long ago. Nonetheless, I know them and remember their lovely home. Jodi and her husband were not witnesses in this case and no evidence was presented in this case indicating they had any direct involvement whatsoever.

“My ability to be impartial and fair to both parties in this case has not been impacted by the matters disclosed herein.”

The AAA case administrator informed the parties that they had 15 days to object to the arbitrator’s supplemental disclosure. Neither party objected, and AAA thereafter “reaffirmed” the appointment of the arbitrator.

On May 11, 2018, the arbitrator issued an award in favor of Hymanson. Mad Dogg requested certain corrections to the award, which the arbitrator granted in part and amended the award on June 22, 2018. The arbitrator awarded Hymanson $865,387.94, which included unpaid royalties, prejudgment interest on the unpaid royalties, “tort damages,” “reimbursement” of Hymanson’s attorney fees, and an offset of $50,000.03 Hymanson owed to Mad Dogg. The arbitrator also declared Hymanson to be the sole owner of specified “Bodyblade [p]roduct assets” and ordered Mad Dogg to transfer to Hymanson certain items, including “all Bodyblade customer lists from 2009 to the present.”

In June 2018, Hymanson filed a motion in the superior court to confirm the arbitration award. Mad Dogg filed a petition to vacate and/or correct the award. In a declaration supporting Mad Dogg’s petition, Baudhuin stated: “Goldberg . . . and I were the co-founders of [Mad Dogg] and the Spinning® indoor cycling program and the Spinner® line of indoor cycling bikes. In 2004, . . . Goldberg and I had a year-long dispute resulting in my ultimately purchasing . . . Goldberg’s interest in [Mad Dogg].”

On October 18, 2018, the superior court issued an order correcting a clerical error in the award, striking language that extended the arbitrator’s award to Mad Dogg’s subsidiaries and affiliates, and confirming the award as modified. The court entered judgment on January 28, 2019. Mad Dogg timely appealed.

DISCUSSION

A. The Arbitrator’s Alleged Nondisclosure

An arbitration award may be vacated if the arbitrator “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).) The ground for disqualification that is relevant here is the requirement that an arbitrator disclose within 10 days of his or her proposed appointment “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.” (Cal. Rules of Court, Ethics Stds. for Neutral Arbitrators in Contractual Arbitration, std. 7(d); see §§ 1281.9, subds. (a) & (b), 1281.91, subd. (a).)

Mad Dogg contends that the facts surrounding the arbitrator’s relationship with Johnny Goldberg—one of Mad Dogg’s founders—was a ground for disqualification and the arbitrator’s failure to disclose such facts until after the evidentiary hearings requires the award be vacated. We disagree. In considering Mad Dogg’s challenge, our review is de novo. (Honeycutt v. JPMorgan Chase Bank, N.A. (2018) 25 Cal.App.5th 909, 925 (Honeycutt).)

Hymanson contends that Mad Dogg has waived this argument by failing to object after the arbitrator made her supplemental disclosure. The trial court agreed with Hymanson, stating that “Mad Dogg admits it intentionally chose to see if the arbitration ruling would be in [its] favor,” and its “wait and see approach to disqualification is impermissible.” We agree. A “party aware that a disclosure is incomplete . . . cannot passively reserve the issue for consideration after the arbitration has concluded.” (United Health Centers of San Joaquin Valley, Inc. v. Superior Court (2014) 229 Cal.App.4th 63, 85; see also Cox v. Bonni (2018) 30 Cal.App.5th 287, 307 [party waived disqualification argument by failing to object to arbitrator’s noncompliance with disclosure requirement].) Even if Mad Dogg has not waived or forfeited this argument, we reject its nondisclosure argument on its merits.

The only evidence of the arbitrator’s relationship with Goldberg is contained in the arbitrator’s March 5, 2018 supplemental disclosure. Tellingly, the arbitrator refers to Jodi Greenberg and her husband Johnny, indicating that she might not even know the surname of Mad Dogg’s founder: Goldberg. As the trial court observed, this indicates a “lack of familiarity” with Goldberg. The arbitrator’s disclosure further indicates that the relationship between her and Goldberg was limited to two or three occasions where she met “socially” with “Jodi and her husband.” The arbitrator stayed at the Goldberg’s residence once while the Goldbergs were away, and she reciprocated by letting them stay at her rental property. There does not appear to have been any interactions between them on these occasions. The last time the arbitrator saw either of them was four or five years before the arbitration, and the only contact since then was an exchange of text messages with Jodi about an inquiry a friend of Jodi’s made about renting the arbitrator’s rental property. The arbitrator describes the relationship with Goldberg—or Greenberg—in the past tense, as an “acquaintance” that “was casual and [occurred] long ago.”

The acquaintanceship between the arbitrator and Goldberg was superficial, ended many years before the arbitration began, was unrelated to the issues in the case, and was not motivated by any financial or business interest. Its nature and the passage of time since any substantial interaction between the two support the arbitrator’s conclusion that the relationship would not impact her “ability to be impartial and fair to both parties” in the arbitration. Viewed in the context of the entire record, we agree with the trial court that the facts would not cause a person aware of them to reasonably entertain a doubt as to the arbitrator’s impartiality.

Mad Dogg points to statements in its answer and counterclaim and in its arbitration brief connecting Mad Dogg with the Spinning brand indoor cycling program. It then asserts that the arbitrator was aware that Baudhuin was the creator of the Spinning brand and that Goldberg had a “connection” to that brand. There is, however, no evidence that the arbitrator knew of such a connection. Although the arbitrator recalled that “Jodi’s husband” showed her his “spinning equipment at their house,” there is nothing to suggest that Goldberg ever mentioned or discussed any connection between his spinning equipment and Mad Dogg or his former association with Mad Dogg or Baudhuin. Mad Dogg’s attempt to connect the arbitrator’s contact with Goldberg and his spinning equipment to knowledge that Goldberg had a connection to Mad Dogg might be described as frivolous. As such, it does not support a reasonably entertained doubt of impartiality.

Even if we assume that the facts regarding the relationship between the arbitrator and Goldberg constituted a ground for disqualification, vacatur of the award is not authorized unless, at the time the arbitrator failed to disclose the facts, she “was then aware” of them. (§ 1286.2, subd. (a)(6).) The awareness must be “actual awareness, not inquiry or constructive awareness.” (ECC Capital Corp. v. Manatt, Phelps & Phillips, LLP (2017) 9 Cal.App.5th 885, 903.) The party challenging the award has “the burden of proving actual awareness.” (Honeycutt, supra, 25 Cal.App.5th at pp. 928–929.)

Here, no evidence suggests that the arbitrator was aware at any time before March 3, 2018 that the person the arbitrator knew as “Johnny” and the husband of “Jodi Greenberg” [sic] had any possible connection to Mad Dogg or Baudhuin. Mad Dogg has thus failed to satisfy its burden that the arbitrator failed to disclose a ground for disqualification of which she was then aware. (§ 1286.2, subd. (a)(6).) The court, therefore, did not err in denying Mad Dogg’s petition to vacate the award on this basis.

B. Arbitrator’s Alleged Acts in Excess of Her Authority

Mad Dogg contends that the arbitration award should be vacated on the ground that the award exceeded the arbitrator’s authority in various ways. (§ 1286.2, subd. (a)(4).) We disagree.

We review the trial court’s denial of Mad Dogg’s petition to vacate the award on these grounds de novo. (Advanced Micro Devices, Inc. v. Intel Corp. (1994) 9 Cal.4th 362, 376, fn. 9; Greenspan v. LADT, LLC (2010) 185 Cal.App.4th 1413, 1437.) We do not review the arbitrator’s award “for errors of fact or law,” “the validity of the arbitrator’s reasoning,” or “the sufficiency of the evidence supporting an arbitrator’s award.” (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 11 (Moncharsh); see also Harris v. Sandro (2002) 96 Cal.App.4th 1310, 1313 [“arbitrator does not exceed his or her powers by making a legal or factual error or by giving erroneous reasons for an award”].) Instead, our review is limited to determining whether the arbitrator exceeded the authority granted by the parties.

Absent an express limitation in the arbitration contract, “an arbitrator has the authority to find the facts, interpret the contract, and award any relief rationally related to his or her factual findings and contractual interpretation.” (Gueyffier v. Ann Summers, Ltd. (2008) 43 Cal.4th 1179, 1182 (Gueyffier).) The arbitrator is not limited to legal remedies and may fashion equitable relief she determines is “just and fair under the circumstances existing at the time of arbitration, so long as the remedy may be rationally derived from the contract and the breach.” (Advanced Micro Devices, Inc. v. Intel Corp., supra, 9 Cal.4th at p. 383.)

1. The inclusion of Mad Dogg’s subsidiaries and affiliates in award

The award ordered that Mad Dogg “and any of its subsidiaries or affiliates are precluded from marketing or selling” Bodyblade products without Hymanson’s permission. Mad Dogg contends that the arbitrator had no authority over any subsidiary or affiliate of Mad Dogg, and the award should be vacated or corrected on that basis.

As Hymanson points out, Mad Dogg made this argument to the trial court, and the trial court agreed. The court thus corrected the award by striking the phrase, “and any of its subsidiaries or affiliates” from the award. We agree with Hymanson that Mad Dogg’s argument is therefore moot.

2. Order to turn over list of Bodyblade customers

Under section 17(b) of the parties’ agreement, Mad Dogg must return or provide to Hymanson, within 30 business days of the termination of the agreement, “[a]ll [Hymanson] related materials, including, but not limited to, [Hymanson] [i]nstructor [m]anuals, [Hymanson] [c]ontinuing [e]ducation [m]aterials, marketing and administration materials, or any other materials used directly or indirectly to promote, advertise or sell any of the [l]icensed [p]roducts.” The arbitrator interpreted this provision to include Mad Dogg’s list of Bodyblade customers. The list, the arbitrator explained, “is critically necessary to promote, advertise and sell Bodyblades.”

Mad Dogg asserts that it owns “a confidential customer list,” containing information regarding a “wide variety of fitness products” that includes products unrelated to Hymanson, as well as Bodyblades. It then argues that the arbitrator ordered it “to turn over its confidential customer lists” to Hymanson, implying that the arbitrator ordered Mad Dogg to turn over information about customers of products other than Bodyblades. She did not. The award unambiguously orders Mad Dogg to transfer to Hymanson “all Bodyblade customer lists from 2009 to the present.” As the trial court stated, the order “has no impact on Mad Dogg’s customer lists related to its other products.”

To the extent Mad Dogg is arguing that the arbitrator did not have the authority to interpret section 17(b) of the agreement to encompass a list of Bodyblade customers, we reject the argument as well. Because the agreement does not provide otherwise, the arbitrator had the authority to interpret the agreement “and award any relief rationally related to . . . her factual findings and contractual interpretation.” (Gueyffier, supra, 43 Cal.4th at p. 1182.) An order to turn over the Bodyblade customer lists is rationally related to the contractual requirement that Mad Dogg provide to Hymanson “marketing and administration materials, or any other materials used directly or indirectly to promote, advertise, or sell any of the [l]icensed [p]roducts.”

3. Identification of jointly developed assets and reimbursement of development costs

Section 8 of the agreement provides: “[J]ointly developed products or educational materials shall be jointly owned by [Mad Dogg] and [Hymanson]. If either party should wish to own the developed products or education materials exclusively in the event of termination or expiration of this agreement, either party may reimburse the other for the [other party’s] original development costs.” The arbitrator found that Hymanson wished to acquire certain jointly developed assets and agreed to reimburse Mad Dogg for its development costs, but that Mad Dogg “refused to accept reimbursement as required by [section] 8.”

The arbitrator identified the pertinent jointly developed assets as “all Bodyblade DVD’s from the 2011 Shoot, Bodyblade 8 week B&A testimonials group . . . (from Eddie Gaut and Detaug) Bodyblade Instructor Manual, 8 week Instructor Training Manual, Bodyblade 8 week Weight Loss Program booklet, [and] Bodyblade Guide to Drive booklet, except infomercial.” The arbitrator determined that $50,000.03 was Mad Dogg’s development cost for the assets and that Hymanson was therefore required, pursuant to section 8, to pay Mad Dogg that sum, which the arbitrator applied as an offset against the larger award in favor of Hymanson.

Mad Dogg argues that the identified assets were part of an infomercial, which the arbitrator had excluded from the list of jointly developed assets. The pages in the record to which Mad Dogg cites for this point reveal only the arbitrator’s discussion of the evidence on the disputed issues; they do not support Mad Dogg’s assertion. Mad Dogg has not satisfied its burden that the arbitrator’s resolution of these issues exceeded her authority.

Mad Dogg further contends that the arbitrator “improperly assigned [Mad Dogg’s] copyright interest in the jointly developed Bodyblade [i]nstructor [m]anual to [Hymanson] without any compensation or reimbursement to [Mad Dogg].” In a related argument, Mad Dogg argues that declaring Hymanson the owner of the copyrighted material contravenes federal copyright law and thereby exceeds the arbitrator’s authority. The arbitrator rejected these contentions based in part on section 8 of the agreement, stating that Hymanson “had the right to full ownership of the ‘jointly developed assets,’ provided it reimbursed [Mad Dogg’s] share of the original redevelopment cost”; Mad Dogg, the arbitrator continued, “was not entitled to compensation in excess of the amount permitted by [section] 8 of the [a]greement.” Mad Dogg has not pointed to any other provision of the agreement addressing copyright, and the arbitrator’s interpretation and application of section 8 to alleged copyrighted material did not exceed her authority.

To the extent Mad Dogg asserts that Hymanson violated Mad Dogg’s rights under copyright law, Mad Dogg did not allege such a claim in its answer and counterclaim in the arbitration proceedings. The arbitrator ruled that Mad Dogg was therefore barred from asserting the claim, and Mad Dogg does not challenge that ruling. To the extent Mad Dogg argues that federal copyright law limited the arbitrator’s power and the arbitrator exceeded that limit, the argument is without merit. The federal statute Mad Dogg cites—section 1202(a) and (b) of title 17 of the United States Code—prohibits the distribution of false copyright information and the unauthorized and intentional removal or alteration of copyright information. Mad Dogg, however, does not cite to any evidence that it held any copyright in the jointly developed assets or explain how the statutory proscriptions prevented the arbitrator from ordering the transfer of such assets to Hymanson.

4. Award of attorney fees

The arbitrator awarded Hymanson $116,201.25 for attorney fees. Mad Dogg contends that this was beyond the arbitrator’s authority because the agreement did not provide for the recovery of attorney fees. We disagree.

The parties agreed to arbitrate pursuant to the commercial arbitration rules of the AAA. Under the version of those rules in effect at the time the parties entered into the agreement and the version in effect at the time of the arbitrator’s award, the arbitrator had the authority to include “an award of attorneys’ fees if all parties have requested such an award or it is authorized by law or their arbitration agreement.” (AAA, Commercial Arbitration Rules and Mediation Procedures, rule R-43(d)(ii) (eff. Sept. 1, 2007); id., rule R-47(d)(ii) (eff. Oct. 1, 2013).)

Hymanson and Mad Dogg each requested an award of attorney fees in their respective statement of claims and counterclaim. Hymanson repeated the request in its final statement of claim and Mad Dogg argued for an award of its attorney fees in its arbitration brief filed one week before the arbitration began. Because both parties requested an award of attorney fees, the arbitrator was empowered by the parties’ agreement and the arbitration rules to award such fees.

In its reply brief, Mad Dogg asserts that it had stated in a “trial brief” that it did not seek an award of its attorney fees. The referenced “trial brief” is not included in our record. The arbitrator, however, did refer in the award to Mad Dogg’s statement in a trial brief that it was not seeking attorney fees. The arbitrator rejected Mad Dogg’s reliance on this statement, explaining that once both sides had requested attorney fees, they were bound by the rules they had incorporated into their agreement, and “neither party can insulate themselves from such liability by unilaterally withdrawing its claims at the penultimate stage of the proceedings, the eve of trial.” The conclusion is rationally related to the arbitrator’s interpretation of the contract and is “just and fair under the circumstances existing at the time of arbitration.” (Advanced Micro Devices, Inc. v. Intel Corp., supra, 9 Cal.4th at p. 383.)

Mad Dogg also argues that the award of fees is duplicative and impermissibly punitive given the award of fees and costs as damages for Mad Dogg’s failure to provide accurate financial books and records to Hymanson. The perfunctory contention is made without any citation to the record or cogent argument. We therefore reject it. (See Cahill v. San Diego Gas & Electric Co. (2011) 194 Cal.App.4th 939, 956; Sharabianlou v. Karp (2010) 181 Cal.App.4th 1133, 1149.)

5. Punitive damages

Mad Dogg contends that the arbitrator awarded punitive damages despite the parties’ agreement to waive the right to such damages. We reject the argument.

In the agreement, the parties “waive[d] any rights they may have to seek punitive damages from one another,” and agreed that the “arbitrator will have no power to . . . assess punitive damages against either party.” Consistent with these provisions, the arbitrator did not expressly award punitive or exemplary damages.

Mad Dogg, however, argues that the $124,509.84 award of damages for its failure to provide accurate books and records, the award of $69,555 as damages for its interference with prospective economic advantage, and the award of prejudgment interest on unpaid royalties must be deemed punitive because they “have no rational relationship to the alleged breach.” We disagree.

Under the agreement, Mad Dogg was required to “keep, maintain and preserve . . . accurate books of account and records covering all transactions relating to the [l]icensed [p]roducts, . . . and this [a]greement.” The arbitrator found that Mad Dogg breached this duty, which required Hymanson to hire “forensic accountants to comb through extensive books, record[s] and accounts in order to obtain the information, write reports, evaluations and analysis needed to accurately calculate royalties and present the information.” The arbitrator based her award of damages for the breach on a provision in the agreement that allows the arbitrator to award “any relief which is deemed proper under the circumstances; including, without limitation, money damages.” The efforts of accountants and others, the arbitrator explained, caused Hymanson to incur $124,509.84 in fees and costs, not including Hymanson’s attorney fees. Thus, there exists a rational relationship between the breach and the award.

The arbitrator’s award of $69,555 in tort damages is, according to the award, based upon evidence establishing that, after termination of the agreement, Mad Dogg agreed with one retailer to sell the Bodyblade products Mad Dogg still possessed for a price that was below the wholesale price that Hymanson was selling the products to Amazon and other dealers. The price difference caused Amazon to discontinue selling Bodyblades unless Hymanson matched the reduced price. The arbitrator determined that Mad Dogg’s conduct constituted intentional interference with Hymanson’s prospective economic advantage with Amazon. She calculated Hymanson’s damages based upon evidence of lost sales due to the interruption of Amazon-based sales and the lost profits from subsequent sales at reduced prices. The award thus establishes a rational relationship between the breach and the award.

The award includes prejudgment interest applied to the unpaid royalties that the arbitrator determined Mad Dogg owed to Hymanson. Under California law, prejudgment interest is available when “damages [are] certain, or capable of being made certain by calculation.” (Civ. Code, § 3287, subd. (a).) Mad Dogg contends that the arbitrator erred as a matter of law in her determination that the unpaid royalties satisfied this test. Even if Mad Dogg is correct, the error of law is not a ground for vacating the award. (Moncharsh, supra, 3 Cal.4th at p. 11.)

Mad Dogg argues that the punitive nature of the award is evident from the fact it exceeds three times the amount Hymanson requested in its original statement of claim. Although Hymanson’s original statement of claim sought “damages of at least $450,000.00” (in addition to other relief), the arbitration went forward on Hymanson’s amended—or “final”—statement of claim, which requested “damages of at least $786,753.00 in unpaid royalties,” “at least $300,000.00” resulting from “Mad Dogg’s failure to provide appropriate accounting services,” and “at least $189,038.00” on its business interference claims. The sum the arbitrator awarded Hymanson—$865,387.94—was thus substantially less than the approximately $1,275,000 that Hymanson sought. We therefore reject Mad Dogg’s reliance on the size of the award as evidence that it included punitive damages.

6. Consideration of reimbursement to Mad Dogg for cost of goods sold

Mad Dogg contends that the arbitrator erred by calculating the royalties due to Hymanson “without considering [Mad Dogg’s] reimbursement for ‘actual costs of goods sold.’ ” Mad Dogg points to a provision in the agreement which establishes a royalty based upon “[g]ross [m]argin,” and defines gross margin to mean “the gross sales price less cost of goods sold including freight in, duties and taxes (landed cost).”

In the award, the arbitrator addressed at some length and in some detail the parties’ conflicting evidence and competing arguments concerning the calculation of royalties, including the cost of goods sold. The arbitrator interpreted the cost of goods sold provision and applied that interpretation to her evidentiary findings. The arbitrator’s award is rationally related to her findings and contractual interpretation, and therefore not subject to being vacated on this ground. (Gueyffier, supra, 43 Cal.4th at p. 1182; Moncharsh, supra, 3 Cal.4th at p. 11.)

DISPOSITION

The judgment is affirmed. Respondent Hymanson, Inc., is awarded its costs on appeal.

NOT TO BE PUBLISHED.

ROTHSCHILD, P. J.

We concur.

CHANEY, J.

WEINGART, J.*