Case Name: Joshua M. Castrence, et al. v. Diamond Resorts U.S. Collection Development, LLC, et al.
Case No.: 2017-CV-318570

Demurrer to the Petition to Confirm and Clarify Arbitration Award by Respondents Diamond Resorts U.S. Collection Development, LLC and Diamond Resorts International Marketing, Inc.

Factual and Procedural Background

On November 2, 2017, petitioners Joshua M. Castrence and Jacqueline L. Eroles (collectively, “Petitioners”) filed a verified petition to confirm and clarify the arbitration award. Under California Code of Civil Procedure section 1285 et seq., Petitioners move the Court for an order confirming the Final Award issued by the American Arbitration Association on July 11, 2017. Petitioners also move for entry of judgment against respondents Diamond Resorts U.S. Collection Development, LLC, and Diamond Resorts International Marketing, Inc., (collectively, “Diamond”) in the amount of $67,818.25 plus post-award interest arising from the arbitration proceeding. In addition, Petitioners request clarification of the Award to specify that all previous contracts executed between the parties are unenforceable, null and void, and of no legal force or effect. Finally, Petitioners seek reasonable attorney fees and costs associated with prosecution of this motion.

Demurrer to Petition to Confirm and Clarify Arbitration Award

Currently before the Court is Diamond’s demurrer to the petition to confirm and clarify the arbitration award on the ground that it fails to state a claim. (Code Civ. Proc., § 430.10, subd. (e).) Petitioners filed written opposition. Diamond filed reply papers.

Meet and Confer

As a preliminary matter, the Court notes that Diamond did not meet and confer with Petitioners with respect to issues regarding the demurrer before filing the motion.

Before filing a demurrer, a demurring party must “meet and confer in person or by telephone” with the opposing party to determine “whether an agreement can be reached that would resolve the objections to be raised in the demurrer.” (Code Civ. Proc., § 430.41, subd. (a).) This conference should occur at least five days before the deadline to file. (Code Civ. Proc., § 430.41, subd. (a)(2).)

When filing the demurrer, the demurring party must include a declaration stating either “the means by which the demurring party met and conferred with [the other party] and that the party did not reach an agreement resolving the objections raised in the demurrer” or “[the other party] failed to respond to the meet and confer request of the demurring party or otherwise failed to meet in good faith.” (Code Civ. Proc., § 430.41, subd. (a)(3).) A court’s determination the meet and confer process was insufficient is not a ground to sustain or overrule a demurrer. (Code Civ. Proc., § 430.41, subd. (a)(4).)

Here, Diamond did not submit any declaration to the Court showing their efforts to meet and confer with Petitioners on issues related to this demurrer. However, because a deficient meet and confer process is not a ground to sustain or overrule a demurrer, the Court will consider the merits of the motion. Counsel for Diamond is admonished to comply with court rules and procedures with respect to future filings.

Legal Standard

In reviewing the sufficiency of a complaint against a general demurer, we are guided by long settled rules. ‘We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. We also consider matters which may be judicially noticed.’” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “A demurrer tests only the legal sufficiency of the pleading. It admits the truth of all material factual allegations in the complaint; the question of plaintiff’s ability to prove these allegations, or the possible difficulty in making such proof does not concern the reviewing court.” (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213–214.)

“The reviewing court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded. The court does not, however, assume the truth of contentions, deductions or conclusions of law. … [I]t is error for a trial court to sustain a demurrer when the plaintiff has stated a cause of action under any possible legal theory. And it is an abuse of discretion to sustain a demurrer without leave to amend if the plaintiff shows there is a reasonable possibility any defect identified by the defendant can be cured by amendment.” (Gregory v. Albertson’s, Inc. (2002) 104 Cal.App.4th 845, 850.)

Analysis

“Pursuant to Code of Civil Procedure section 1285, any party to an arbitration in which an award has been made may petition the court to ‘confirm, correct or vacate the award.’ 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.) “[I]t is the general rule that, with narrow exceptions, an arbitrator’s decision cannot be reviewed for errors of fact or law.” (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 11.) In fact, the court may vacate an award only for very limited circumstances provided under Code of Civil Procedure section 1286.2. (Roehl v. Ritchie (2007) 147 Cal.App.4th 338, 347.)

As a threshold matter, Diamond did not provide any legal authority showing that a respondent may challenge a petition to confirm an arbitration award by way of a demurrer. (See Quantum Cooking Concepts, Inc. v. LV Assocs., Inc. (2011) 197 Cal.App.4th 927, 934 [courts are not required to “comb the record and the law for factual and legal support that a party has failed to identify or provide”]; see also Chavez v. Netflix, Inc. (2008) 162 Cal.App.4th 43, 52 [where appellant’s motion was supported by deficient memorandum, trial court was justified in denying the motion on procedural grounds].) The Code of Civil Procedure provides that a demurrer may be brought against a complaint, cross-complaint and answer. (See Code Civ. Proc., §§ 430.10, 430.20.) In addition, courts may consider demurrers addressed to a petition for writ of mandate. (See Code Civ. Proc., § 1089; see also Nast v. State Bd. of Equalization (1996) 46 Cal.App.4th 343, 348 [demurrer to petition for writ of mandate sustained without leave to amend].) Diamond does not submit any statutory or case authority for challenging a petition to confirm an arbitration award by demurrer.

Instead, where a party, like Diamond, seeks to dismiss the petition, the proper procedural vehicle is to file and serve a response under Code of Civil Procedure section 1285.2. That section provides “[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.) Any such response must be filed and served within 100 days after the award is served on Diamond. (See Code Civ. Proc., § 1288.2.) By filing this demurrer, Diamond is asking the Court to dismiss the petition on grounds that (1) Petitioners are improperly invoking California state arbitration law instead of the Federal Arbitration Act which both sides agreed to in writing; and (2) Petitioners’ remedy for “clarification” is improper and time barred. Such arguments must be incorporated as part of a response in compliance with Code of Civil Procedure sections 1285.2 and 1288.2. Diamond cannot circumvent these statutes by filing a demurrer to the petition to confirm the arbitration award.

Accordingly, the demurrer to the petition to confirm and clarify the arbitration award on the ground that it fails to state a claim is OVERRULED.