Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County, Los Angeles County Super. Ct. No. SS018413 Linda K. Lefkowitz, Judge.
Haight Brown & Bonesteel, Jules S. Zeman; Fainsbert Mase & Synder, Richard E. Wirick and Lisa Skaist for Plaintiffs and Appellants.
Collins Collins Muir Stewart, Douglas Fee, Christian E. Foy Nagy, and Ryan J. Kohler for Defendants and Respondents.
Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
I. INTRODUCTION
This appeal is from the trial court’s order confirming an arbitration award respondent Robert L. Earl and Associates (Earl) obtained against appellant Amalfi Capital, LLC (Amalfi). Amalfi raises two issues regarding the confirmation of the award and one issue related to attorney’s fees.
Amalfi contends the trial court erred in denying his motion to vacate the arbitration award because the arbitrator (a Los Angeles attorney) did not timely disclose that attorneys in the San Francisco office of the arbitrator’s firm were representing a party in an unrelated arbitration that was adverse to a party represented by the same the law firm representing Earl. Similarly, Amalfi argues that once the untimely disclosure was made, the arbitrator was required to grant Amalfi’s request for the arbitrator to recuse himself. In addition, Amalfi contends the court erred in denying his motion to vacate the arbitration award because the arbitrator improperly refused to continue the arbitration hearing in order to allow Amalfi to be present. Finally, Amalfi claims the court improperly awarded attorney’s fees to Earl.
We affirm the judgment. The fact that attorneys in the San Francisco office of the arbitrator’s firm were involved in arbitration adverse to the law firm representing Earl did not need to be disclosed by the arbitrator and, therefore, could not create a ground for recusal of the arbitrator. In addition, Amalfi failed to establish good cause necessary to postpone the arbitration hearing. Moreover, the parties agreed to have their arbitration governed by construction industry arbitration rules and those rules expressly authorized the award of attorney’s fees.
II. BACKGROUND
Earl entered into a contract with Amalfi to provide architectural design services at the residential property owned by John Mase. The contract required dispute resolution through binding arbitration to be administered by the American Arbitration Association (AAA) pursuant to construction industry arbitration rules. Although Earl provided the services articulated in the contract, the final invoice was not paid. Thus, Earl demanded arbitration.
The arbitrator found Amalfi Capital, LLC was the alter ego of John Mase. However, the superior court granted a motion to vacate the arbitration award against Mase.
The AAA appointed attorney Robert B. Thum as arbitrator. Thum was a partner at Thelen, Reid, Brown, Raysman and Steiner LLP. After Thum was appointed as the arbitrator in the case, he joined the law firm of Howry LLP as an attorney in its Los Angeles office.
On March 26, 2009, Thum notified the Alternative Dispute Resolutions case manager that he had learned attorneys from Howry’s San Francisco office were engaged in AAA arbitration hearings where the adverse party was represented by Collins, Collins, Muir, and Stewart (Collins) – the same firm representing Earl. Thum indicated he had not participated in the unrelated arbitration “in any way” although he had discussed the progress of the hearings with the lawyers assigned to that case. It was through this discussion that Thum learned Collins was involved in the unrelated arbitration. Thum stated “[n]othing [pertaining to the unrelated arbitration would] affect [his] ability to serve impartially as arbitrator in the Earl arbitration” and asked the case manager to disclose the information to the parties. The case manager disclosed the information on March 27, 2009 and invited the parties to submit any objection to Thum’s appointment as the arbitrator.
Amalfi requested Thum be recused from the case. The AAA concluded disqualification was not warranted and, thereafter, Thum issued a five-page decision denying the request. Thum first summarized Amalfi’s argument as “a stated loss of confidence in the integrity, fairness and neutrality of the arbitration.” Amalfi’s loss of confidence was due to the following: (1) a “relationship” between Howry and Collins; (2) the supposition that the two law firms were members of a “construction industry inner circle”; (3) the fact that Earl had not objected to Thum considering his case; (4) the failure of Thum to comply with statutory disclosure requirements; and (5) a “justifiable doubt” that Thum was impartial.
Thum addressed Amalfi’s arguments as follows: (1) prior to the Earl arbitration, he had no personal or professional contact with “any... member” of Collins; (2) he was not a member of “some ‘inner circle’ in the construction industry” with Collins; (3) the absence of an objection by Earl was of no significance; (4) all required information, and more, had been disclosed by Thum as soon as Thum became aware of said information; and (5) no reasonable person would entertain a “justifiable doubt of impartiality....” Thus, Thum denied the request for recusal.
Amalfi did not appear at the arbitration hearing on June 9, 2009. Because Amalfi had been given adequate notice of the hearing, and did not establish good cause to postpone the hearing, Thum conducted the hearing in Amalfi’s absence. Thum ruled Earl was entitled to recover $145,395.34 from Amalfi.
The superior court granted Earl’s petition to confirm the arbitration award against Amalfi and denied Amalfi’s motion to vacate the arbitration award. We affirm the judgment.
III. DISCUSSION
A. Thum was not Required to Disclose the Unrelated Arbitration or Recuse Himself
Whether Thum was required to disclose the fact that attorneys in his San Francisco office were participating in an arbitration proceeding where Collins was representing the adverse party, is a mixed question of fact and law that is reviewed de novo. (Haworth v. Superior Court (2010) 50 Cal.4th 372, 385 (Haworth).)
An arbitrator has a duty 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).) In this respect, “An arbitrator’s duty to disclose arises under the same circumstances that give rise to a judge’s duty to recuse, that is, if ‘[f]or any reason … [¶] … [¶] … [a] person aware of the facts might reasonably entertain a doubt that the judge would be able to be impartial.’ (§ 170.1, subd. (a)(6)(A)(iii).) [B]ecause the standard for disclosure by a neutral arbitrator under 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.” (Haworth, supra, 50 Cal.4th pp. 388-389.)
All further statutory references are to the Code of Civil Procedure.
“‘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.]” (Haworth, supra, at p. 389.)
Based on these authorities, the question here is how a reasonable person would view Thum’s ability to be impartial in light of the unrelated arbitration originating in Howry’s San Francisco office. (See Haworth, supra, . at pp. 385-386.) In issuing his decision denying the recusal request, Thum indicated: (1) prior to his appointment as an arbitrator, he had no professional or personal contact with “any of the counsel, or any other attorneys in their respective law firms”; and (2) he had “not participated in and [had] no knowledge of the [u]nrelated [a]rbitration”; (3) “[n]either the conduct nor the outcome of the [u]nrelated [a]rbitration [had] any bearing whatsoever on the present arbitration”; and (4) “as far as [he was] aware, ” parties in the unrelated arbitration had “no relation to or connection with the parties in the [Earl] arbitration.”
There is nothing in the record to refute these assertions. There is no suggestion Thum had any control over the San Francisco arbitration or that he had supervisory power over the lawyers handling that matter. Thum’s assertions regarding his lack of familiarity with the San Francisco arbitration and irrelevance of it to the Earl arbitration are entirely consistent with his position as a member of a law firm with offices in multiple locations.
The unrelated arbitration did not give rise to “‘[p]otential bias and prejudice [that was] clearly... established by an objective standard.’ [Citations.]” (Haworth, supra, at p. 389.) The objective appearance of Thum’s impartially is not dependant on the absence of an unrelated arbitration, out of a separate Howry location, that includes lawyers from one of the firms representing a client arbitrating before Thum. Amalfi’s theory that Thum had a “relationship” with Collins and that such a relationship “raise[d] the specter of horse trading” is not supported by the record and, in light of Thum’s assertions, amounts to unrealistic speculation. Because he had no duty to disclose this information, it follows that the motion to vacate the arbitration award on the ground that the unrelated arbitration required Thum’s recusal was properly denied by the trial court.
B. Thum’s Refusal to Continue the Hearing did not Entitle Amalfi to Vacate the Arbitration Award
On April 29, 2009, Thum issued a preliminary conference order indicating the arbitration hearing would be held on June 9 and 10, 2009 “on the condition that [Amalfi’s attorney was] not required to appear for trial in [s]uperior [c]ourt on [either of those dates].” The order provided that there would be no postponement of the hearing “except upon a showing of manifest good cause.”
On June 3, 2009, David White, the attorney representing Amalfi, sent a letter to Thum indicating the hearing dates were “forced on [him], ” that he “informed AAA, ... Thum and opposing counsel that the dates would not work, ” and that he had no opportunity to determine the availability of his expert or Mase.
On June 5, 2009, Thum issued an order addressing potential postponement of the hearing. He indicated, “The hearing dates are firm and [Amalfi had] ample notice thereof. [Amalfi has] not shown that... counsel is required to appear in [s]uperior [c]ourt on the hearing days, or demonstrated manifest good cause for a postponement.” Thus, the arbitration hearing was conducted, and completed, on June 9, 2009.
On July 1, 2009 (approximately three weeks after the arbitration hearing), White sent another letter to Thum indicating the June hearing dates were “never firm.” He explained he was home with the flu for “most of [the] week” in which the hearings were scheduled.
Section 1286.2 allows a trial court to vacate an arbitration award on five grounds, including that “[t]he 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....” (§ 1286.2, subd. (a)(5).) We conduct a de novo review to determine whether the trial court should have found the arbitrator abused his discretion when he refused to continue the hearing. (SWAB Financial, LLC v. E*Trade Securities, LLC (2007) 150 Cal.App.4th 1181, 1198 (SWAB).)
The only apparent objection by Amalfi, prior to the hearing date, appears to be in White’s June 3, 2009, letter. However, White was present during an April 17, 2009, conference call in which scheduling was discussed and, pursuant to that discussion, Thum issued his April 29, 2009 order setting the June 9 hearing date. Thus, Amalfi knew of the June hearing date for at least one month before sending his June 3 letter. The letter lacked good cause to continue the hearing because it did not explain the delay in documenting an objection to the hearing date nor did it explain why, during the one-month period prior to the hearing date, White was unable to contact his expert and Mase to determine their availability.
Thum reasonably concluded Amalfi failed to establish good cause to delay the arbitration. (See SWAB, supra, 150 Cal.App.4th at p. 1199.) Accordingly, the trial court properly ruled the denial of Amalfi’s continuance request was not a legitimate basis to vacate the arbitration award.
C. The Contract Authorized an Award of Attorney’s Fees
Amalfi contends the arbitrator improperly awarded attorney fees to Earl because “the parties’ agreement did not permit an award of attorney’s fees.” He is incorrect.
The agreement indicated any dispute or matter in question “shall be subject to and decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association currently in effect....” Rule R-44(d) of these provisions provides that an arbitrator’s award “may 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 Rules and Procedures, R-44, eff. July 1, 2003.)
Earl’s demand for arbitration and Amalfi’s counterclaim requested attorney’s fees. Thus, the parties intended the “question” of attorney’s fees to be governed by the AAA rules which, in turn, authorized the arbitrator to award attorney fees.
IV. DISPOSITION
The judgment is affirmed.
We concur: TURNER, P. J., KRIEGLER, J.