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Date: 09-04-2020
Case Style:
Wilfred Rivera v. Robert Shivers
Case Number: G057919
Judge: Bedsworth, Acting P.J.
Court: California Court of Appeals Fourth Appellate District, Division Three on appeal from the Superior Court, County of Orange
Plaintiff's Attorney: John A. Bunnett
Defendant's Attorney: Natalie Panossian-Bassler
Description:
Arbitration is a recognized method of dispute resolution created by one of
two means – contract or statute. The differences are important. Here we are called upon
to determine whether an arbitration originally statutory in nature morphed into a
contractual arbitration as the result of a vague stipulation by counsel for the parties. The
stipulation failed to specify whether the parties had agreed to binding or nonbinding
arbitration. Nevertheless, neither side ever seems to have entertained the notion that the
completed arbitration was anything but binding, and treated it as such. The trial judge,
however, had other ideas, deciding on his own that the arbitration was not what the
parties intended, a conclusion he derived from their actions rather than their explicit
words. As a result, he denied the appellants’ petition to confirm, vacated the award, and
set a trial date in the case. We reverse and remand with instructions to confirm the
award.
FACTS
Beginning in 2008, appellants Robert Shivers and Linda Shivers rented a
residential property in La Habra from respondent Wilfred Rivera. Almost seven years
later, Rivera filed an unlawful detainer action against Mr. and Mrs. Shivers, alleging they
had not paid rent. He later amended his pleading to add causes of action based on the
allegation they had damaged the property and taken appliances when they vacated it. Mr.
and Mrs. Shivers filed a cross-complaint, alleging Rivera had failed to make repairs to the
property and had left it untenantable.
The case was originally assigned to limited civil jurisdiction but was later
reclassified to unlimited civil. Upon reassignment, the new trial judge ordered counsel to
meet and confer regarding the appointment of a referee under Code of Civil Procedure1
section 638, and a status conference on the subject was scheduled for March 19, 2018.
1 All further statutory references are to the Code of Civil Procedure unless otherwise indicated.
3
Rivera sought leave to amend the complaint to add Mr. and Mrs. Shivers’
three children, Courtney, Jacqueline, and Andrew,2 because they were also allegedly
liable under the parties’ rental agreement. Mr. and Mrs. Shivers opposed this motion. At
the status conference, the parties advised the court they could not agree on a referee. The
court took the matter under submission, but warned that a referee would be appointed if
the parties could not agree on one.
Thereafter, in a minute order dated April 19, 2018, the trial court, instead of
appointing a referee, sua sponte ordered the matter to judicial arbitration. The motion for
leave to amend the complaint was heard and denied, and the parties advised the court
they had stipulated to Lawrence A. Strid as their judicial arbitrator.
Undeterred by the denial of his motion for leave to amend, Rivera filed a
Doe amendment to the complaint, adding the Shivers children as defendants. Mr. and
Mrs. Shivers moved to strike the amendment, and a hearing was scheduled and later
continued. When the hearing was finally held on September 7, 2018, the trial court took
the motion to strike off calendar, pending completion of the arbitration or reference.
Another scheduled status conference took place approximately three
months later, at which time counsel informed the trial court that arbitration before a
retired judge, the Honorable Dennis Choate, at ADR Services, Inc., was set to proceed on
January 30, 2019. The court continued the status conference to February 11, 2019.
Several days later, however, one of the Shivers children filed a motion to dismiss the case
against all three children for failure to prosecute; one of her siblings joined that motion.
The Shivers children’s motion was heard prior to the date set for the
arbitration before Judge Choate. The trial court took the motion off calendar, stating the
parties had ignored its previous orders sending the matter to “non-statutory arbitration”
2 We will refer to Courtney, Jacqueline, and Andrew as the “Shivers children” for purposes of
clarity.
4
and staying the litigation pending the outcome of the arbitration.3 As a result of what it
viewed as the flouting of its previous orders, the trial court set an order to show case
regarding dismissal of the underlying case for failure to prosecute the arbitration. That
hearing was scheduled to take place on February 4, 2019 - a few days after the arbitration
before Judge Choate was set to proceed, but prior to the February 11 status conference.
The arbitration before Judge Choate commenced as scheduled on January
30, 2019, but was not completed until February 7, 2019. In the intervening time, the
order to show cause hearing was held, and the parties advised the trial court the
arbitration was in progress. Consequently, the trial court set a status conference for April
8, 2019, noting in the minute order the following: “Pursuant to stipulation of parties,
arbitration is proceeding as binding arbitration.”
On March 13, 2019, Judge Choate issued his arbitration findings, which
were in Mr. and Mrs. Shivers’ favor. The result appeared largely to be based on Judge
Choate’s conclusion Rivera was combative, untruthful, and not credible as a witness.
Judge Choate ordered that Mr. and Mrs. Shivers recover $22,500 in damages and that
Rivera take nothing. Additionally, he awarded them a sizeable amount in attorney fees
and costs as prevailing parties.
Judge Choate did not file the award with the court. Rather, Mr. and Mrs.
Shivers filed a petition on April 3, 2019 to confirm the award, citing section 1285.4. The
petition included a copy of an undated stipulation signed only by counsel agreeing to
“arbitrate the pending action.” The same day, the Shivers children refiled their motion to
dismiss. Both the petition to confirm and the motion to dismiss were scheduled to be
heard on the same day.
The court held its planned status conference on April 8, 2019, and counsel
advised that the “binding arbitration” had been “completed with an award.” Counsel also
3 Despite this statement in the minute order, we have found no evidence in the record that the trial
court officially pronounced the case stayed pending arbitration.
5
informed the court of the upcoming hearing on the petition to confirm and motion to
dismiss.
On June 3, 2019, Rivera filed an opposition to the petition to confirm,
arguing that Judge Choate had failed to disclose that he had a professional mentoring
relationship at one time with the Shivers’ counsel’s father, a late judge of the Los
Angeles County Superior Court. Rivera argued that Judge Choate was biased and asked
the trial court to vacate the March 13, 2019 award and to order the parties to arbitrate
before a new arbitrator. Rivera attached to his opposition Judge Choate’s disclosure
statement, which did not disclose this relationship.
In their reply brief, Mr. and Mrs. Shivers argued that Rivera’s request to
vacate the award was untimely because it was not filed within 10 days of the petition to
confirm, as is required under section 1290.6. They also argued that Judge Choate was
unaware that his former mentor was counsel’s father until opening arguments were to
begin, at which time he disclosed the relationship, and Rivera raised no objection.
The trial court granted the Shivers children’s motion to dismiss. However,
it denied Mr. and Mrs. Shivers’ petition to confirm and set a trial date in the case. At the
hearing, the trial court expressed concern that the stipulation for arbitration was entered
into by counsel rather than the parties and concluded the arbitration had been nonbinding.
Mr. and Mrs. Shivers promptly appealed the ruling.
DISCUSSION
Where a party files a petition to confirm an arbitration award pursuant to
section 1285 et seq., “the court shall confirm the award as made” unless it “vacates the
award or dismisses the proceeding.” (§ 1286.) To the extent the trial court makes
findings of fact in this decision, “we affirm the findings if they are supported by
substantial evidence,” but if “the trial court resolved questions of law on undisputed facts,
we review the trial court’s rulings de novo.” (Cooper v. Lavely & Singer Professional
Corp. (2014) 230 Cal.App.4th 1, 11-12.) Here, neither party disputes the facts in the
6
record and so the trial court’s rulings present pure questions of law which we review de
novo.
I. Judicial or Contractual Arbitration
One major point of confusion was whether the arbitration before Judge
Choate was judicial or contractual in nature. The distinction is critical. Contractual
arbitration is regulated by section 1280 et seq. and “generally results in a binding and
final decision.” (Mercury Ins. Group v. Superior Court (1998) 19 Cal.4th 332, 342.)
Except as provided by sections 1286.2 and 1286.6, the awards resulting from such
arbitrations are not subject to judicial review. (See Moncharsh v. Heily & Blase (1992) 3
Cal.4th 1, 12-13 (Moncharsh).)
By contrast, the statutory system of judicial arbitration, governed by section
1141.10 et seq., “generally does not result in a binding or final decision . . . but instead
allows a trial de novo at the election of any party by timely request therefor[.]” (Mercury
Ins. Group v. Superior Court, supra, 19 Cal.4th at p. 343.) Such a request must be filed
within 60 days of “the date the arbitrator files the award with the court.” (§ 1141.20,
subd. (a).) Thus, a great deal hinges on the characterization of the proceeding as judicial
or contractual.
There is one attribute shared by judicial and contractual arbitration - the
parties can voluntarily submit to either. (§§ 1141.12, 1281.) Contractual arbitrations are,
as their moniker suggests, always a matter of agreement. And while judicial arbitrations
can be stipulated or mandatory, the court’s power to order the parties to judicial
arbitration is limited. In superior courts with more than 18 judges, it may be ordered in
“all nonexempt unlimited civil cases . . . if the amount in controversy, in the opinion of
the court, will not exceed fifty thousand dollars ($50,000) for each plaintiff.” (§ 1141.11,
subd. (a), italics added.) But significantly for our purposes, unlawful detainer actions are
exempt. (See § 1141.15; see also Cal. Rules of Court, rule 3.811, subd. (b)(4).)
7
Initially, the trial court indicated its intention to send the case to a referee
under sections 638 and 639, but it shortly changed its mind and ordered the case to
judicial arbitration. The parties proceeded on that assumption and stipulated to a judicial
arbitrator. However, events stalled when Rivera decided to add the Shivers children as
defendants, and several months were consumed with Mr. and Mrs. Shivers’ attempts to
nullify that addition. At some point during the delay, Mr. and Mrs. Shivers and Rivera
stipulated to “arbitrate.” The stipulation did not clearly indicate what type of arbitration
was contemplated, thus leaving ambiguous the question of whether the parties stipulated
to judicial or contractual arbitration.
We nevertheless have some clues as to the proper categorization of the
arbitration. The stipulation referenced Judge Choate of ADR Services, Inc., rather than
Mr. Strid. Additionally, the parties informed the court at the February 2019 order to
show cause hearing that the arbitration, then in progress, was proceeding as a binding
arbitration pursuant to their stipulation. The point was memorialized in the court’s
minute order. Upon completion of the arbitration, Judge Choate framed his findings as
an order and served the document on both parties, without filing it with the court. Such
filing would have been necessary to trigger Rivera’s window to request trial de novo
under section 1141.20, subdivision (a), were it a judicial arbitration. Rivera never filed a
request for trial de novo. Instead, Mr. and Mrs. Shivers filed a petition to confirm the
award under the statutory framework for contractual arbitration – a step they would not
have needed to take had the arbitration been judicial in nature. Rivera did not oppose the
petition on the basis that the arbitration was judicial. He opposed confirmation on the
ground that Judge Choate was biased. Clearly, both sides thought the arbitration was
contractual and binding.
The trial court disagreed, stating “there’s no basis for regarding this as a
binding arbitration” because the arbitration “was ordered by me, the judge. Not by the
8
parties. And that didn’t change when the parties stipulated to move from Strid to
Choate.”
This was incorrect. Essentially, the trial court believed that the arbitration
before Judge Choate was a mandatory, nonbinding judicial arbitration. But it could not
have been. The court was without authority to order mandatory judicial arbitration since,
as noted above, unlawful detainer cases are exempt from the procedure. In any event,
litigants are always free to voluntarily submit their dispute to arbitration on their own
terms. They may turn to contractual arbitration after a dispute has arisen. (See Douglass
v. Serenivision, Inc. (2018) 20 Cal.App.5th 376, 387; see also Armendariz v. Foundation
Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 112 [speaking approvingly of
“postdispute arbitration agreements” in the employment context].) Or they might
stipulate to waive trial de novo and pursue a binding arbitration under the judicial
arbitration framework. (See, e.g., Porreco v. Red Top RV Center (1989) 216 Cal.App.3d
113, 130-131.) Either way, we are satisfied the stipulation made in this case was for
binding arbitration.
II. Client Consent to Arbitrate
The trial court noted that the parties had not themselves signed the
stipulation and concluded that a stipulation signed by counsel was insufficient to show an
arbitration agreement. We believe this, too, was incorrect. “A stipulation is an
agreement between counsel respecting business before the court . . ., and like any other
agreement or contract, it is essential that the parties or their counsel agree to its terms.”
(Palmer v. City of Long Beach (1948) 33 Cal.2d 134, 142, italics added.) And “a
stipulation of the attorneys will be presumed to have been authorized by the client” unless
the opposing side and the court are aware that the client has not consented to the
9
stipulation. (See Clemens v. Gregg (1917) 34 Cal.App. 245, 253, citing Knowlton v.
Mackenzie (1895) 110 Cal. 183, 188.)4
This principle applies even though the stipulation in this case was for
binding arbitration and the waiver of a judicial forum. To be sure, “‘the implied authority
of an attorney ordinarily does not extend to the doing of acts which will result in the
surrender or giving up any substantial right of the client.’” (Redsted v. Weiss (1945) 71
Cal.App.2d 660, 663; see also Blanton v. Womancare, Inc. (1985) 38 Cal.3d 396, 407-
408 (Blanton) [noting that “‘attorney does not have implied plenary authority to enter
into contracts on behalf of his client. [Citations.]’”].) But even an unauthorized act by an
attorney concerning substantial rights can be later ratified by the client and thus bind him
or her. (See Blanton, supra, 38 Cal.3d at p. 408; see also Caro v. Smith (1997) 59
Cal.App.4th 725, 732 [client’s express assent to binding arbitration and acquiescence
without objection “more than sufficient to establish ratification.”])
In Blanton, there was no act of ratification. The plaintiff’s attorney entered
into a stipulation for binding arbitration without her knowledge and consent, and when
plaintiff discovered this, she immediately objected and fired the attorney. (Blanton,
supra, 38 Cal.3d at p. 400.) She then substituted new counsel and sought to invalidate
the stipulation, arguing she had never given her consent to it. (Ibid.) Here, in stark
contrast, the record shows no evidence either side ever objected to the stipulation or to
the arbitration itself. Perhaps most tellingly, neither side argued, in the trial court or on
appeal, that the stipulation to binding arbitration lacked consent. It was the trial court’s
4 Under section 283, an attorney stipulation “1. . . . entered upon the minutes of the court” or “by
. . . agreement filed with the clerk” presumptively binds the client. While we recognize that the stipulation here was
mentioned in the trial court’s minute order for the order to show cause hearing, the impact of this language is
unclear. There is no evidence that the written stipulation was handed to the trial court or orally recited to the trial
court in order that its terms could be “entered upon the minutes of the court.” The existence of the stipulation may
simply have been reported to the court. The record does not reflect that the written stipulation itself was filed with
the court prior to the arbitration.
10
decision to throw out the stipulation.5 But “[a] court is free to disregard a stipulation
only if it is ‘illegal’ or ‘contrary to public policy.’ [Citations.]” (Estate of Burson (1975)
51 Cal.App.3d 300, 306.) This stipulation was neither.
We recognize the observation made in Sanker v. Brown (1985) 167
Cal.App.3d 1144 (Sanker) that “[a]n attorney’s mere assertion of authority to waive a
trial de novo on behalf of his client cannot be relied upon[,]” and that arbitration
stipulations should include signature lines for the clients themselves. (Id. at p. 1147.)
We have no quibble with this advice. Indeed, had counsel in this case included signature
lines in the stipulation for their clients, the present appeal may not have been necessary.
Even so, context matters. Sanker involved a party who had requested trial de novo and
disavowed the stipulation signed by his counsel. (Id. at p. 1146.) He thought the
arbitration was only “advisory” in nature, and not binding. (Ibid.) The failure of counsel
in Sanker to obtain his client’s signature on the stipulation was thus fatal to its validity.
In contrast, here, the parties’ conduct was always consonant with a binding arbitration,
and thus the failure to obtain the clients’ signatures on the stipulation was harmless.
III. Arbitrator Bias
Given our determination the parties did indeed stipulate to binding
arbitration, the only issue remaining is the one raised by Rivera: should the arbitration
award have been vacated based on evidence of bias on Judge Choate’s part? Mr. and
Mrs. Shivers contend the issue should not even be considered, given that Rivera’s request
to vacate was untimely pursuant to section 1290.6, which required him to respond to the
petition within 10 days. To support this point, Mr. and Mrs. Shivers cite De Mello v.
Souza (1973) 36 Cal.App.3d 79, in which the following was stated:
“Under a well delineated statutory scheme the parties to an arbitration may
seek correction of the award first by filing an application to the arbitrator within 10 days
5 The trial judge was twice made aware that the parties viewed the arbitration as binding. There is
no evidence in the record that he interjected a different view on those occasions.
11
after the service of award (§ 1284). [Fn. omitted.] As a second step, the parties may
petition the court to confirm, correct or vacate the award (§ 1285). Vacation or correction
of an award may also be requested from the court by way of a response filed to a petition
to confirm the award. However, while a petition to confirm an award may be served and
filed within four years, the petition to vacate or correct an award must be served and filed
within 100 days after the service of the award on the petitioner (§ 1288; Archuleta v.
Grand Lodge etc. of Machinists (1968) 262 Cal.App.2d 202 . . .). The same 100-day
limitation applies when vacation or correction of the award is sought by response. . . . To
this latter rule there is only one exception. When the party petitions the court to confirm
the award before the expiration of the 100-day period, respondent may seek vacation or
correction of the award by way of response only if he serves and files his response within
10 days after the service of the petition (§ 1290.6). Unless the response is duly served and
filed, under section 1290 the allegations of the petition are deemed to be admitted by
respondent [citation].” (De Mello v. Souza, supra, 36 Cal.App.3d at p. 83; accord,
Oaktree Capital Management, L.P. v. Bernard (2010) 182 Cal.App.4th 60, 66.) In this
case, Rivera filed his response containing the request to vacate within the 100-day period
under section 1288.2, but beyond the 10-day period under section 1290.6.
The court’s power to vacate an arbitration award is governed by sections
1286, 1286.2, and 1286.4.6 Section 1286 describes the powers of the trial court when
presented with a petition – it can confirm the award, correct it and confirm as modified,
vacate the award, or dismiss the proceeding. Section 1286.2 provides the grounds that
may be used “[s]ubject to [s]ection 1286.4” to vacate an award. The one pertinent here,
subdivision (a)(6), allows the court to vacate when an arbitrator “either: (A) failed to
6 Rivera cites the Federal Arbitration Act (9 U.S.C. §1 et seq.) (FAA), and cases decided under it, in
support of vacating the award. However, the FAA applies when an arbitration is related to a transaction arising out
of interstate commerce. (See 9 U.S.C. §§ 1, 2.) This lawsuit has no relationship to interstate commerce so the FAA
would not apply to the arbitration unless the parties explicitly agreed that it would. There is no indication from the
record that they did.
12
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 [s]ection 1281.91 but failed upon receipt of timely demand to disqualify himself or
herself as required by that provision.” (§ 1286.2, subd. (a)(6).) Section 1286.4
conditions the court’s power to vacate on the petition or response requesting such relief
being “duly served and filed.” (§ 1286.4, subd. (a).)
Because Rivera’s response to the petition to confirm was not filed and
served within 10 days of the petition, it was not “duly served and filed,” and thus the trial
court had no authority to hear it. But even if the trial court had such authority, Rivera’s
request to vacate lacked merit.
“Every reasonable intendment is indulged to give effect to arbitration
proceedings; the burden is on the party attacking the award to affirmatively establish the
existence of error by a proper record.” (Lopes v. Millsap (1992) 6 Cal.App.4th 1679,
1685.) The words “by a proper record” are particularly apropos here. Rivera failed to
create one.7
“[S]ection 1286.2, subdivision (a)(6)(A), provides for vacatur only where
the arbitrator fails to disclose a ground for disqualification ‘of which the arbitrator was
then aware.’” (ECC Capital Corp. v. Manatt, Phelps & Phillips, LLP (2017) 9
Cal.App.5th 885, 902, italics added.) The only evidence of bias Rivera submitted was a
declaration from his attorney, in which she averred that Judge Choate told counsel after a
brief break during the arbitration that the Shivers’ counsel’s father had been a mentor to
him as a young prosecutor in Los Angeles. Rivera introduced no evidence that Judge
Choate was aware counsel was the late judge’s son at the time he made his required
7 Even had he attempted to create a proper record on this issue, Mr. and Mrs. Shivers correctly point
out that Rivera’s responding brief largely lacked citations as required by California Rules of Court, rule 8.204,
subdivision (a)(1)(C).
13
disclosures prior to the arbitration. Thus section 1286.2, subdivision (a)(6)(A) would not
apply.
Nor did Rivera submit evidence that he moved to disqualify Judge Choate
upon learning of this prior relationship with counsel’s father, as is required to invoke
section 1281.91. Under section 1281.91, subdivision (c), even when an arbitrator makes
a “material omission or material misrepresentation in his or her disclosure,” as Rivera
alleges was the case here, “in no event may a notice of disqualification be given after a
hearing of any contested issue of fact relating to the merits of the claim or after any ruling
by the arbitrator regarding any contested matter.” Rivera submitted no evidence that he
served a notice of disqualification prior to the conclusion of the arbitration.
Rivera cites Commonwealth Coat. Corp. v. Continental Cas. Co. (1968)
393 U.S. 145, 149, for the notion that an arbitrator’s failure to notify the parties of any
information tending to create an impression of bias is grounds for vacatur. But there is
no evidence Judge Choate failed to notify the parties of relevant information. To the
contrary, the only reason that Rivera knew about the information was because Judge
Choate disclosed it to the parties, albeit after the arbitration proceedings had commenced.
Rivera apparently did nothing in response to this information.
Rivera argues he could not have raised any substantial objection to the bias
issue without incurring the wrath of the trial court, given that there was a pending order
to show cause hearing at which his case might have been dismissed if the arbitration was
not complete. We disagree that the pending order to show cause hearing required him to
keep mum on his concerns about arbitrator bias. The trial court set the order to show
cause because it felt the parties had “fail[ed] to pursue the underlying arbitraton.” But the
parties very clearly had been pursuing the underlying arbitration, and both parties
reported as much to the trial court at the order to show cause hearing. There could not
have been any harm, therefore, if Rivera had made the objections necessary to ensure
impartiality. Indeed, upon learning of the potential basis for disqualification, Rivera
14
could have immediately moved to disqualify Judge Choate in the arbitration proceeding,
then sought relief in the trial court prior to the order to show cause hearing. He did not
do this, but instead proceeded quietly with arbitration to its unfavorable outcome. Not
having acted to protect his rights before that unfavorable outcome, he cannot seek to
undo the arbitration after the fact.
Finally, Mr. and Mrs. Shivers request that we include Rivera’s alias in the
judgment to be entered. While they made this request in the trial court, it was mooted by
the trial court’s denial of their petition to confirm, and never addressed. We decline to
review an issue the trial court did not decide. (See Association for Los Angeles Deputy
Sheriffs v. County of Los Angeles (2015) 234 Cal.App.4th 459, 467, fn. 2.) The trial court
is to resolve this issue on remand.
Outcome: The order denying the petition to confirm arbitration award is reversed and
remanded to the trial court with the instruction that the arbitration award be confirmed. Appellants will recover their costs on appeal.
Plaintiff's Experts:
Defendant's Experts:
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