Opinion
NOT TO BE PUBLISHED
Appeal from an order of the Superior Court of Orange County, Super. Ct. No. 06CC01185, Frederick P. Horn, Judge.
Irsfeld, Irsfeld & Younger, James J. Waldorf and C. Phillip Jackson, for Plaintiff and Appellant.
Freedman & Taitelman, Michael A. Taitelman and Jacqueline C. Brown, for Defendant and Respondent Lee & Associates Commercial Real Estate Brokerage Company - City of Industry, Inc.
James W. Lundquist for Defendant and Respondent Lee & Associates Commercial Real Estate Brokerage Company - Orange.
OPINION
BEDSWORTH, ACTING P. J.
Vilma Chau appeals from an order that dismissed a petition to vacate an arbitration award denying her claim for a real estate commission. The claim was brought against Stacy Dylan Martin, Sonya Dopp-Grech, Lee & Associates Commercial Real Estate Brokerage Company - City of Industry, Inc., (Lee Industry) and Lee & Associates Commercial Real Estate Brokerage Company - Orange (Lee Orange). Chau argues the award should be vacated because of improper conduct of the arbitrators and failure to disclose known grounds for disqualification. We disagree and affirm.
Stacy Dylan Martin and Sonya Dopp-Grech failed to make an appearance in this court.
FACTS
Chau is a commercial real estate broker employed by Lee Industry. Martin, too, is a broker at Lee Industry, and Dopp-Grech is a broker at Lee Orange. Lee Industry and Lee Orange are two of approximately fifteen independent companies licensed by Lee & Associates Licensing and Administration (Lee Licensing).
The facts are drawn from the petition to vacate the arbitration award, the opposition, and the supporting evidence submitted by the parties.
Chau signed an employment agreement that provides for arbitration of all disputes with other Lee salespersons or offices, under an accompanying arbitration agreement. The arbitration agreement provides that each Lee office will annually designate one representative to serve on the arbitration panel. Upon receipt of a demand for arbitration, Lee Licensing is to eliminate from the panel any arbitrator from an office involved in the dispute, then submit five names to the parties. Within five days of receipt of the list, each party is entitled to strike one name. The arbitration agreement states the rules of evidence applicable in judicial proceedings shall not apply, evidence may be admitted or excluded in the discretion of the arbitrators, and the arbitration is to be conducted according to rules of Judicial Arbitration and Mediations Services, Inc. (JAMS). The arbitrators are required to prepare, execute and acknowledge a written award, and deliver a copy to each party.
After a property listed by Lee Orange was sold by Martin and Dopp-Grech, Chau claimed a share of the commission because she had previously represented the buyer in a search for a similar property. Chau demanded arbitration in a June 27, 2005 letter to her employer, Ed Indvik, president of Lee Industry. She represented herself throughout the arbitration, hiring counsel only after the adverse award. In a declaration supporting the petition, Chau stated she was unaware of the arbitration agreement until it was mentioned in an e-mail in December 2005, and only then did she request and receive a copy.
In January 2006, Indvik prepared a written statement of Chau’s claim, sent it to her for review, then submitted a demand for arbitration to Lee Licensing. The latter selected a panel of five arbitrators and allowed Indvik and the president of Lee Orange (Chuck Noble) to remove one person each. Indvik’s declaration opposing the petition claims he sent Chau copies of the e-mail messages with these proposals, and she did not raise any objection. Chau does not dispute this.
In February 2006, Chau asked Indvik how to obtain the listing agreement and closing file from Lee Orange. He suggested she ask that office. Chau did but was rebuffed by Noble. In an e-mail, Noble said the files were confidential, but “we will bring any and all documentation to the arbitration. If the arbitration panel, based on any of your claims, requests documents from us, we will show them at the hearing for their review.
. . . If you believe certain information is pertinent, then make your request to the panel, and I will respond to them.” Chau also posed several questions to Noble that he initially refused to answer, but Indvik intervened and Noble ultimately replied. After some prodding by Indvik, Noble sent Chau the first page of the listing agreement.
The arbitration was held on March 22, 2006. Chau, Martin, and Indvik were present, but not Dopp-Grech. Chau declared it was “understood [Dopp-Grech]” would attend, but no evidence of an agreement or subpoena was offered. Indivk declared he was asked to be present by Chau, who does not deny this, saying only she did not ask him to be a witness.
One of the three arbitrators, Brad Roppe, was not present when the parties assembled. According to Indvik, someone called Roppe to find out where he was. Roppe said he miscalendared the time of the arbitration, thinking it was set for 1:00 instead of 11:00, and he offered to drive up from Carlsbad immediately. Indvik declared the parties, including Chau, agreed to allow Roppe to participate by telephone and have documents sent to him by facsimile. A declaration from Roppe submitted in opposition to the petition says the same thing. Chau does not dispute this version of events in her declaration.
One of the arbitrators suggested Chau make her presentation first, then Martin, but each would be excluded during the other’s case. According to Indvik, all present agreed. Chau does not dispute this, saying only that she was told to leave the room after making her case and did so. Chau declared she was rushed during the hearing, given only 15 minutes for her presentation and able to fax only 18 of 38 pages of her written presentation to Roppe. Indivk disputed the time limit, as did Roppe. Chau declared – without contradiction – that Indvik spoke with the arbitrators alone for 15 minutes after her presentation.
The award was issued on March 30, 2006. Chau received notice of the award from the president of Lee Licensing (Steve Jehorek), who sent it via e-mail to the parties and two of the three arbitrators (Brad Roppe and Mike Tingus). In an unsigned decision, the panel discussed the facts and law, and found Chau was not entitled to a share of the commission. Roppe’s declaration stated he was the author of the award.
The petition alleged the award should be vacated because it was not signed by the arbitrators, Chau was denied the right of cross-examination and access to documents, Indvik improperly spoke to the arbitrators, and the arbitrators failed to disclose they were presidents of affiliated Lee offices and Indvik had a preexisting relationship with one of them (Mike Tingus). Lee Industry submitted the Indvik and Roppe declarations as part of its opposition. Chau objected to Roppe’s declaration on the ground that an arbitrator is not competent to testify in a subsequent proceeding as to matters occurring during the arbitration proceeding.
The trial court overruled Chau’s objection and found the Roppe declaration was admissible on the issue of disqualification. It found she waived all other objections to the arbitration procedure and any conflicts of interest. Judgment was entered dismissing the petition.
I
Chau argues Roppe was incompetent to testify about his conduct as an arbitrator, so his declaration should have been excluded. We have to agree.
“No arbitrator or mediator shall be competent to testify, in any subsequent civil proceeding, as to any statement, conduct, decision, or ruling, occurring at or in conjunction with the prior proceeding, except as to a statement or conduct that could . . . (d) give rise to disqualification proceedings under [Code of Civil Procedure section 170.1, subdivision (a) (1) or (a) (6)].” (Evid. Code, § 703.5.) Code of Civil Procedure section 170.1, subdivision (a)(1) provides a judge shall be disqualified if he has “personal knowledge of disputed evidentiary facts concerning the proceeding.” Code of Civil Procedure section 170.1, subdivision (a)(6) provides a judge shall be disqualified if he believes recusal would be in the interests of justice, there is a doubt whether he can be impartial, and bias or prejudice toward a lawyer in the matter “may be grounds for disqualification.”
All statutory references are to the Code of Civil Procedure unless otherwise indicated.
The Roppe declaration was improper and must be excluded. His testimony concerned matters that occurred at the arbitration hearing – Chau’s agreement to his telephonic appearance, her waiver of cross-examination, the time allowed for her presentation, and preparation of the award. An arbitrator is not competent to testify as to such matters. The objection to Roppe’s declaration should have been sustained.
Lee Industry argues the declaration was admissible because it went to Chau’s claim of arbitrator misconduct. But the disqualification exception (Evid. Code, § 703.5, subd. (d)) does not apply here. There was no claim Roppe was disqualified based on personal knowledge of the facts, lack of impartiality, or prejudice toward a lawyer, the only situations where he could testify.
Nor is this case analogous to Betz v. Pankow (1993) 16 Cal.App.4th 919, 927, cited by Lee Industry. There, arbitrators’ declarations were considered to the extent they responded to allegations they had exhibited gender bias and were not impartial. Here, there was no claim Roppe was unable to be impartial, nor any other that falls under the disqualification exception that would allow him to offer a declaration. So we put aside and do not consider Roppe’s declaration.
II
Chau next contends the award must be vacated because it was not signed. Here she is mistaken.
An arbitration award “shall be in writing and signed by the arbitrators concurring therein.” (§ 1283.4.) But an award may not be vacated for this failing unless substantial prejudice is shown. (United Brotherhood of Carpenters etc., Local 642 v. DeMello (1972) 22 Cal.App.3d 838, 840.)
Chau claims the failure to sign the award was prejudicial because the arbitrators did not do what was required of them, nor take responsibility for their award. But that does not explain how the missing signatures harmed Chau, and it is undisputed the written decision was the award prepared by and rendered by the arbitrators. So the failure to sign the award does not permit us to set it aside.
III
Next, Chau contends the award should be set aside because she was denied documents necessary to her case, and denied the right to cross-examine Martin or Indvik. She asserts this shows the award was obtained by undue means and misconduct of the arbitrators. We disagree.
The grounds for vacating an arbitration award are found in section 1286.2. An award must be vacated if the court finds, among other things, “[t]he award was procured by corruption, fraud, or other undue means” (§ 1286.2, subd. (a)(1)), or “[t]he rights of the party were substantially prejudiced by misconduct of a neutral arbitrator” (§ 1286.2, subd. (a)(3).)
The procedure to be followed in arbitration is a matter of agreement. Both discovery and cross-examination may be waived. Discovery is available in arbitration only if provided for in the arbitration agreement (§ 1283.1, subd. (b)), not as a matter of right. (Coast Plaza Doctors Hospital v. Blue Cross of California (2000) 83 Cal.App.4th 677, 689-690.) Likewise, the right to cross-examine witnesses that obtains absent agreement (§ 1282.2, subd. (d)) may be waived in the arbitration agreement or other agreeement of the parties that is not contrary to the arbitration agreement. (§ 1282.2 [introductory paragraph]; see Schlessinger v. Rosenfeld, Meyer & Susman (1995) 40 Cal.App.4th 1096, 1106-1107 [summary adjudication motion did not deny party right to present live testimony and cross-examine where arbitration agreement permitted arbitrator to receive and consider evidence by affidavit]; Ferguson v. Writers Guild of America (1991) 226 Cal.App.3d 1382, 1391 [failure to disclose names of arbitrators proper where arbitration agreement provided parties cannot appear in person or learn names of arbitrators].)
The instant arbitration agreement provides for arbitration according to JAMS rules. Under those rules, parties must produce for the hearing all specified witnesses in their employ or under their control without the need for a subpoena, but “[t]he Arbitrator may issue subpoenas for the attendance of witnesses or the production of documents.” (Rule 16.) The rules set other parameters for the arbitration hearing, but they are silent on cross-examination of witnesses. The hearing may be conducted by telephone in the discretion of the arbitrator, if the parties agree. (Rule 17 (g).) The parties may waive an oral hearing by agreement. (Rule 18.) There is also a rule on waiver: “If a party becomes aware of a violation of or failure to comply with these Rules and fails promptly to object in writing, the objection will be deemed waived, unless the Arbitrator determines that waiver will cause substantial injustice or hardship.” (Rule 22 (a).)
No undue means or arbitrator misconduct is shown here. Chau cannot complain about her inability to obtain documents when she never sought a subpoena after Noble rebuffed her request. In fact, Noble impliedly indicated the way to obtain the documents when he told Chau she should make a request to the arbitrators, but she did not pursue the matter.
The situation regarding cross-examination is similarly Chau’s responsibility. While the parties differ over when the arbitrators proposed each side present its evidence and then leave the hearing (Indvik claims it was at the outset, Chau only after she completed her case), it is undisputed that Chau agreed and followed the proposal. While perhaps a tactical mistake, the fact is Chau did agree to forego the right to cross-examine opposing witnesses.
Chau contends the arbitrators acted improperly in suggesting there be no cross-examination. She insists the right to cross-examination is not waivable. No authority is cited for either proposition, and neither is correct. The ability to cross-examine in arbitration proceedings may be waived – and it was here.
IV
Chau also argues the award cannot stand because the arbitrators failed to disclose that each was the president of an affiliated Lee office, and arbitrator Mike Tingus did not reveal he had a preexisting relationship with Indvik. She is mistaken.
An arbitration award must be set aside if the court finds “[a]n arbitrator making the award . . . (A) failed to disclose within the time required for disclosure a ground for disqualification of which the arbitrator was then aware . . . .” (§ 1286.2, subd. (a)(6).) A proposed neutral arbitrator is required to disclose, among other things, “[a]ny professional or significant personal relationship the proposed neutral arbitrator . . . has or has had with any party to the arbitration proceeding or lawyer for a party.” (§ 1281.9, subd. (a)(6).)
Chau cannot object that the arbitrators were drawn from affiliated Lee offices. That is what the arbitration agreement calls for – each Lee office designates one member to serve in the arbitration pool, and upon receiving a demand for arbitration, five names drawn from the pool are submitted to the parties, who are entitled to strike one name. Moreover, during the selection process, Chau made no protest when notified the arbitrators would probably be the presidents of their respective offices. In a January 16, 2006 e-mail, Lee Licensing’s president told Indvik he would select five offices to provide arbitrators and “I assume the person will most likely be the president of the offices selected, but it could be anybody from his office.” Indvik sent a copy of the message to Chau, who replied with a thank you and nothing more. Since Chau agreed to arbitration before a panel drawn from Lee companies, both in the arbitration agreement and during the selection process, that professional relationship was known to her and there was nothing to disclose.
Nor was there evidence of a preexisting relationship with Indvik that required disclosure. In support of the petition to vacate, Chau submitted a copy of a magazine article about Lee Associates that said Indvik wanted to see Tingus succeed because they had invested in each other’s business. But the trial court sustained Lee Industry’s objection to the article (no foundation, hearsay), and Chau does not argue that ruling was error. So there is no admissible evidence of any relationship between Tingus and Indvik, and again, there was nothing to disclose.
V
Finally, Chau asserts the entire arbitration was unfair because she did not know her rights and cannot be said to have waived them. While we sympathize, the problem was largely of her own making and could have been avoided by her. Chau made a decision not to retain counsel until after the award, and before that, it would appear she did not acquaint herself with either the arbitration agreement or the applicable JAMS arbitration rules. Given the size of the commission claim ($96,250), a prudent person might have sought out a lawyer sooner. Having chosen to go it alone, Chau must abide the consequences.
Since no grounds to vacate the arbitration award are shown, the order appealed from must be affirmed. Respondent is entitled to costs on appeal.
WE CONCUR: O’LEARY, J., MOORE, J.