Opinion
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of Los Angeles County No. BC 426895, Coleman S. Swart, Judge.
Nevers, Palazzo, Maddux & Packard, Gary W. Nevers and Roxanne Torabian-Bashardoust for Defendants and Appellants.
Law Offices of Jonathan G. Gabriel, Jonathan G. Gabriel, Jeffrey P. Alpert and David Mayes for Plaintiff and Respondent.
FLIER, J.
The Helman Group, Ltd. (THG), Beacon Place Investments, LLC (BPI), Barry Helman and Andrew Helman (collectively appellants) appeal from an order of the superior court denying THG’s motion to compel arbitration and for stay of this action brought by respondent Gregg Bond. For the reasons we explain below, we dismiss the appeal.
FACTS AND PROCEDURAL HISTORY
On November 25, 2009, Bond filed a complaint against appellants for breach of contract, conversion, breach of fiduciary duty, accounting, dissolution of THG and BPI, and injunctive relief. The complaint alleged as follows.
Bond later dismissed the claim for dissolution without prejudice.
Since 2003, Bond has been corporate vice president and a 15 percent shareholder of THG. Of the remaining shares of THG, Barry Helman owns 44 percent and Andrew Helman 41 percent. THG operated under the terms of a written shareholders’ agreement (THG Agreement). Additionally, since 2006, Bond and the Helmans verbally agreed that all distributions from THG would be split 40 percent to Barry Helman, 40 percent to Andrew Helman and 20 percent to Bond, and distributions in fact were made according to this formula.
In February 2000, Bond and the Helmans formed BPI, with Bond having 13 percent, Barry Helman 45 percent and Andrew Helman 42 percent. BPI was operated pursuant to an operating agreement (BPI Agreement). BPI was the owner of a property located on Beacon Place in Oxnard.
Beginning in January 2006, the Helmans paid their personal expenses out of THG’s revenues without Bond’s knowledge or consent. Those self-payments resulted in the Helmans’ receiving excess distributions from THG. The Helmans never repaid THG for the excess distributions, and they failed to report or deliberately concealed those distributions. Since January 2007, the Helmans also allowed THG’s defined benefits plan to become underfunded and to fall out of compliance with tax laws and regulations such that Bond could not transfer sums accumulated in the THG retirement plan to another account without incurring a substantial tax or penalty.
In 2009, appellants caused one of two parcels of real property BPI owned to be sold. The Helmans refused to give Bond any information about the sale of the property despite Bond’s requests. Beginning in September 2009, the Helmans distributed proceeds of the sale without Bond’s knowledge or consent. After the sale closed in October 2009, Bond received a letter from appellants’ attorney, informing him that appellants had applied about $1 million of the sale proceeds to offset funds they had borrowed to pay a creditor of THG. This was done without Bond’s knowledge or consent and without following proper corporate procedures or accepted accounting practices.
Beginning in 2009, the Helmans failed to properly account to Bond and THG for the Helmans’ pro-rata share of the personal guaranties they had signed to guarantee payment of THG’s debts to its creditors. Specifically, they refused to split liability to THG’s factor in proportion to their ownership interests in THG.
The BPI Agreement, but not the THG Agreement, provided for arbitration of any controversy between the parties.
Paragraph 12.6(A) of the BPI Agreement provides: “Except as otherwise provided in this Agreement, any controversy between the parties arising out of this Agreement shall be submitted to the American Arbitration Association for binding arbitration in Ventura County, California.” The parties to the BPI Agreement were Barry Helman, Andrew Helman and Gregg Bond.
In March 2010, all appellants, including THG, moved to compel Bond to submit his claims to arbitration and for an order staying all proceedings in this action pending the outcome of the arbitration. Bond opposed appellants’ motion arguing no claims should be submitted to arbitration because the disputes regarding THG and the equitable and punitive damages claims would not be subject to arbitration. Additionally, Bond argued, submission of a few claims to arbitration would necessarily expose the parties to inconsistent findings of fact or law.
Andrew Helman noted in a declaration in support of the motion that even though there was common ownership between THG and BPI, the operation of the businesses was separate and distinct. Further, he declared, in the event only the BPI portion of the case was ordered to arbitration, “there would be no possibility of conflicting rulings.”
The trial court granted the motion to compel arbitration. However, in light of Bond’s objection, the trial court denied the motion to compel arbitration of the claims against THG. The court stayed the action with respect to Bond’s claim for injunctive relief, accounting and punitive damages relating to BPI but ruled that “[t]his case is not stayed with respect to the plaintiff’s claim relating to defendant [THG], which will go forward at this time.”
The court entered an order granting the motion to compel arbitration as to all moving parties except THG, denying the motion to compel arbitration as to THG, and staying the action as to BPI with respect to Bond’s claims for injunctive relief, accounting and punitive damages. Appellants appealed the court’s order.
CONTENTIONS
On appeal, appellants contend the trial court erred in denying THG’s motion to stay the action concerning Bond’s “claims which are related and intermingled with his claims now in arbitration” against the Helmans and BPI. In their opening brief, appellants expressly state that THG is not appealing the court’s denial of its motion to compel arbitration but is appealing the other portion of the court’s order that denied a stay of the superior court action against THG while arbitration proceeds against the other three appellants.
Because the THG Agreement contained no agreement to arbitrate, it is manifest that an appeal from the order denying arbitration as to this claim would hold no water.
Appellants assert the order denying a stay is appealable as one ancillary to an appealable order. We disagree.
STANDARD OF REVIEW
Whether an order or judgment is appealable raises an issue of law subject to our de novo review. (See Westra v. Marcus & Millichap Real Estate Investment Brokerage Co., Inc. (2005) 129 Cal.App.4th 759, 762, 768.)
DISCUSSION
Subject to narrow limitations, there is no constitutional right to appeal. (Lindsey v. Normet (1972) 405 U.S. 56, 77; Rubin v. Western Mutual Ins. Co. (1999) 71 Cal.App.4th 1539, 1544.) Our California Supreme Court has repeatedly held that the right to appeal is wholly statutory. (Powers v. City of Richmond (1995) 10 Cal.4th 85, 109; Agricultural Labor Relations Bd. v. Tex-Cal Land Management, Inc. (1987) 43 Cal.3d 696, 705; Title Ins. & Trust Co. v. Cal. etc. Co. (1911) 159 Cal. 484, 486.) A reviewing court has jurisdiction over an appeal only when there is an appealable order or judgment. (Griset v. Fair Political Practices Com. (2001) 25 Cal.4th 688, 696; Jennings v. Marralle (1994) 8 Cal.4th 121, 126.) Whenever a doubt exists, the reviewing court must on its own initiative raise the issue whether an appeal is being taken from an appealable judgment or order. (Jennings, supra, at p. 126; see Olson v. Cory (1983) 35 Cal.3d 390, 398; Rubin, supra, at p. 1543.) When no appellate jurisdiction exists, the parties cannot create jurisdiction by consent, waiver or estoppel. (Hollister Convalescent Hosp., Inc. v. Rico (1975) 15 Cal.3d 660, 666.)
It is clear there is no appellate jurisdiction in this case because the trial court’s order denying a stay is not an appealable order. Code of Civil Procedure section 1294 provides that an aggrieved party may appeal from (a) an order dismissing or denying a petition to compel arbitration; (b) an order dismissing a petition to confirm, correct or vacate an award; (c) an order vacating an award unless a rehearing in arbitration is ordered; (d) a judgment entered pursuant to title 9 (§ 1280 et seq.); and (e) a special order after final judgment. (See Otay River Constructors v. San Diego Expressway (2008) 158 Cal.App.4th 796, 802.) Thus, an order denying a petition to compel arbitration is an appealable order pursuant to section 1294. (§ 1294, subd. (a); Berman v. Renart Sportswear Corp. (1963) 222 Cal.App.2d 385, 387 (Berman).) And, an order denying a stay is reviewable on appeal from an order refusing to compel arbitration. (Pacific Inv. Co. v. Townsend (1976) 58 Cal.App.3d 1, 6.)
All further statutory references are to the Code of Civil Procedure.
In this case, the notice of appeal purports to encompass an order denying a petition to compel arbitration. However, appellants have expressly represented they are not appealing from the order denying their motion to compel arbitration as to THG. Relying on language from Berman, supra, 222 Cal.App.2d at page 388, appellants state they are appealing solely from “the other portion of the Court’s Order which denied a stay of the Superior Court action against THG while arbitration proceeds against the other three... Appellants.” (Italics added.) That “other portion” is not one of the independently appealable orders specified in section 1294.
Nor does Berman hold otherwise. In Berman, the appellant appealed from an order denying a petition for arbitration, which the court held to be appealable under section 1294. (Berman, supra, 222 Cal.App.2d at pp. 387-388.) Because the court had jurisdiction over the order denying arbitration, it further concluded an order denying a stay was also properly reviewable by the court. (Id. at p. 388.) Berman explained that the granting of such a stay, as an incident to arbitration, was provided for under the provisions of the sections 1281.4 and 1292.8.
Under section 1281.4, if an application for arbitration has been made to a court of competent jurisdiction of a controversy that is an issue in an action pending before a court of this state, the court in which the action is pending upon motion “shall stay” the action until the application is determined and, if arbitration is ordered, until completion of arbitration or an earlier time specified by the court. Section 1292.8 provides for motions for stay in the court where the action is pending.
The Berman court noted, “We are directed in section 1294.2 to review, on an appeal under section 1294 , ‘the decision and any intermediate ruling, proceeding, order or decision which involves the merits or necessarily affects the order or judgment appealed from, or which substantially affects the rights of a party.’” (Berman, supra, 222 Cal.App.2d at p. 388, italics added.) The court concluded, “It is clear that, although the order denying a stay is not appealable itself, since it is interlocutory in nature and not expressly made appealable by any language in section 1294, it ‘affects the order... appealed from’ and ‘substantially affects the rights’ of appellant, and, thus, is reviewable on the appeal from the order denying arbitration.” (Ibid., italics added.) Accepting appellants’ representation to this court at face value, this proceeding is not an “appeal from the order denying arbitration.” There is no appeal to which the order denying a stay is incident or subordinate.
Accordingly, the appeal must be dismissed.
At oral argument, counsel for appellants for the first time asked this court to treat their appeal as a writ. We decline to do so.
DISPOSITION
The appeal is dismissed. Respondent is to recover costs on appeal.
We concur: BIGELOW, P.J., RUBIN, J.