Opinion
NOT TO BE PUBLISHED
APPEAL from the Superior Court of San Bernardino County No. RCVRS079320. Barry L. Plotkin, Judge.
Anderson & Kriger, Sarita Patel; Law Offices of Kimberly A. Knill and Kimberly A. Knill for Plaintiffs and Appellants.
Green & Hall, Robert L. Green and Katherine V. Lizardo for Defendant and Respondent.
OPINION
Codrington J.
I
INTRODUCTION
Plaintiffs Sergio Figueroa, Martha Figueroa, and Tom Kim (plaintiffs) appeal judgment confirming an arbitration award entered in a construction defect case. Plaintiffs argue the trial court should have vacated the award on the ground the arbitrator exceeded his powers by dismissing the arbitration. Alternatively, plaintiffs argue the arbitrator committed prejudicial misconduct and refused to hear evidence material to the controversy.
We conclude the trial court did not abuse its discretion in denying plaintiffs’ motion to vacate and confirming the arbitration award dismissing the proceedings. The judgment is affirmed.
II
FACTS AND PROCEDURAL BACKGROUND
On March 22, 2004, plaintiffs, along with several others, filed a construction defect complaint against defendant Standard Pacific Corporation (SPC). In July 2005, plaintiffs and SPC stipulated to submitting the dispute to binding arbitration under the jurisdiction of Judicial Arbitration Mediation Services (JAMS). It was agreed JAMS’s rules would govern the arbitration proceedings, with the exception of those items specifically referred to in the stipulation. The parties agreed to JAMS arbitrator Judge Robert E. Thomas (Ret.) serving as the arbitrator.
By the end of 2005, the others had all been dismissed from the case, leaving only plaintiffs.
The matter was set for arbitration in March 2006, but plaintiffs’ counsel requested the arbitration be taken off calendar because the parties were engaging in settlement discussions. The parties did not succeed in settling plaintiffs’ claims.
In 2007, the parties discovered the trial court had dismissed the entire action due to a clerical error. Rather than dismissing only the claims of the parties who settled their claims, in January 2006, the court dismissed the entire action, including plaintiffs’ claims which were not settled. Two years later, in January 2008, plaintiffs filed a motion to set aside the dismissal of their claims, which the trial court granted in February 2008.
In March 2008, plaintiffs informed Judge Thomas that settlement negotiations had failed and requested a conference call to schedule arbitration. Plaintiffs’ attorney acknowledged that the case was “now quite old.” Nothing was done to prosecute the case, apart from settlement negotiations, for over four years, from March 2004 to March 2008.
In July 2008, SPC submitted to the arbitrator a letter brief moving to dismiss arbitration under Code of Civil Procedure section 583.410, on the ground plaintiffs failed to arbitrate their case within three years. In September 2008, the arbitrator denied the motion, concluding plaintiffs’ delay in prosecuting the action did not cause SPC such severe prejudice as to warrant granting the discretionary dismissal motion.
All statutory references are to the Code of Civil Procedure unless otherwise indicated.
On November 6, 2008, plaintiffs’ attorney sent an email to the arbitrator and SPC, confirming an arbitration status conference call scheduled for November 19, 2008. Plaintiffs’ counsel suggested in the email a proposed timeframe for proceeding with litigating and arbitrating plaintiffs’ claims, with a proposed arbitration date of March 17-19, 2009.
During the status conference call on November 19, 2008, the arbitrator did not schedule the arbitration hearing. The parties agreed it was premature to set the arbitration hearing date since discovery had not been completed. The arbitrator scheduled another status conference call for February 25, 2009, after discovery was to be completed in accordance with plaintiffs’ proposed timeframe for preparing the case for arbitration.
In January 2009, plaintiffs responded to defendant’s discovery and provided defendant with expert investigation information. There was also a site inspection in February.
In February 2009, the trial court set an order to show cause hearing for May 13, 2009, regarding dismissal of the action for failure to prosecute.
Because JAMS miscalendared the February 2009 status conference call, the arbitrator failed to participate in the call. JAMS rescheduled the status conference for April 1, 2009.
On March 24, 2009, more than five years after plaintiffs had filed their complaint, SPC filed a motion to dismiss the action under section 583.310 in the trial court.
The arbitrator failed to participate in the April 2009 status conference call. Counsel for plaintiffs and SPC agreed the rescheduled status conference should not be held until after the hearing on SPC’s motion to dismiss. JAMS rescheduled the SC for May 8, 2009.
Plaintiffs filed opposition to plaintiffs’ motion to dismiss, arguing (1) the five-year limitation period was tolled while the case was submitted to arbitration, (2) the delay was due to inadvertent clerical error in dismissing the case, and (3) the case was being actively prosecuted.
In April 2009, the trial court denied SPC’s motion to dismiss on the ground the motion should be decided by the arbitrator, not the trial court.
On May 8, 2009, the arbitrator and the parties’ counsel participated in a status conference call, during which SPC brought its motion to dismiss before the arbitrator. Copies of the same briefs filed in the trial court were submitted to the arbitrator. The parties waived oral argument.
On August 14, 2009, the arbitrator granted SPC’s motion to dismiss on the ground plaintiffs had failed to pursue arbitration with reasonable diligence, and the five-year period under section 583.310 had run as of March 2009.
SPC filed a petition to confirm the arbitration award in the trial court. Plaintiffs opposed the petition and filed a motion to vacate the arbitration award, arguing the arbitrator committed judicial misconduct by missing scheduled status conference calls in February and April 2009. In addition, the arbitrator refused to hear evidence material to the controversy. On October 8, 2009, the trial court granted SPC’s petition to confirm the arbitration award and denied plaintiffs’ motion to vacate the award. The trial court agreed that plaintiffs had not exercised reasonable diligence in bringing the case to arbitration. The court entered an order confirming the arbitrator’s award thereafter.
III
STANDARD OF REVIEW
Generally, an arbitrator’s award cannot be reviewed for errors of fact or law. “[B]oth because it vindicates the intentions of the parties that the award be final, and because an arbitrator is not ordinarily constrained to decide according to the rule of law, it is the general rule that, ‘The merits of the controversy between the parties are not subject to judicial review.’ [Citations.] More specifically, courts will not review the validity of the arbitrator’s reasoning. [Citations.] Further, a court may not review the sufficiency of the evidence supporting an arbitrator’s award. [Citations.]” (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 11 (Moncharsh); see also Jones v. Humanscale Corp. (2005) 130 Cal.App.4th 401, 407-408.)
While there is the risk an arbitrator will make a mistake, that risk is tolerated in part because, “by voluntarily submitting to arbitration, the parties have agreed to bear that risk in return for a quick, inexpensive, and conclusive resolution to their dispute.” (Moncharsh, supra, 3 Cal.4th at p. 11.)
In addition, “the Legislature has reduced the risk to the parties of such a decision by providing for judicial review in circumstances involving serious problems with the award itself, or with the fairness of the arbitration process. [P]rivate arbitration proceedings are governed by title 9 of the Code of Civil Procedure, sections 1280-1294.2. Section 1286.2 sets forth the grounds for vacation of an arbitrator’s award.” (Moncharsh, supra, 3 Cal.4th at p. 12.)
Plaintiffs contend the trial court should have vacated the arbitration award based on paragraphs (3), (4), and (5) of section 1286.2, subdivision (a), which provides in relevant part: “[T]he court shall vacate the award if the court determines any of the following:... [¶] (3) The rights of the party were substantially prejudiced by misconduct of a neutral arbitrator. [¶] (4) The arbitrators exceeded their powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted. [¶] (5) The rights of the party were substantially prejudiced... by the refusal of the arbitrators to hear evidence material to the controversy....” (§ 1286.2, subd. (a).)
Whether the trial court erred in denying plaintiffs’ motion to vacate presents a mixed question of law and fact. Since the legal issue predominates and the relevant facts are undisputed, we review de novo plaintiffs’ challenge to the judgment confirming the arbitration award under section 1286.2. (Harustak v. Wilkins (2000) 84 Cal.App.4th 208, 213.)
IV
ACTING IN EXCESS OF ARBITRATION POWERS
Plaintiffs argue they established in their motion to vacate the arbitration award under section 1286.2, subdivision (a)(4), that the arbitrator exceeded his powers by dismissing the arbitration proceedings because plaintiffs failed to arbitrate the case within five years.
Under the parties’ stipulation to arbitrate, the parties agreed the arbitration proceedings would be governed by JAMS’s rules, with various noted exceptions. Plaintiffs argue the parties did not agree in the arbitration stipulation (1) to a specific time limit within which to complete arbitration, or (2) that section 583.310 would apply to the arbitration proceedings. Plaintiffs also argue the JAMS rules do not provide the arbitrator with authority to hear a motion to dismiss under section 583.310.
These are new contentions which plaintiffs did not raise when opposing SPC’s motion to dismiss and petition to confirm the arbitration award. Nevertheless plaintiffs’ contentions are not forfeited since they raise questions of law arising from undisputed evidence, regarding alleged noncurable substantive defects. (Bonner v. City of Santa Ana (1996) 45 Cal.App.4th 1465, 1476-1477.)
While we review the determination of whether the arbitrator exceeded his powers de novo, we give substantial deference to the arbitrator’s determination of his contractual authority. We must draw all reasonable inferences in support of the award. (Jones v. Humanscale Corp., supra, 130 Cal.App.4th at p. 887.)
We first look to the arbitration stipulation to determine whether it contains any specific provisions pertaining to dismissal of the case. The stipulation makes no mention of dismissal, other than stating the JAMS rules shall govern the resolution of this dispute, with the exception of various specified terms, which are not relevant.
Since the JAMS rules are not included in the record, plaintiffs have requested this court to take judicial notice of the JAMS rules under Evidence Code section 452, subdivisions (g) [facts and propositions that are of common knowledge] and (h) [facts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination]. SPC opposes judicial notice of the JAMS rules. Plaintiffs’ request for judicial notice is denied because the copy of the JAMS rules plaintiffs request be judicially noticed is not applicable to the instant matter. The copy provided states the rules did not become effective until July 15, 2009, which was after the parties stipulated in July 2005 to arbitration, and after SPC filed its motion to dismiss in the trial court in March 2009, and submitted it to the arbitrator in May 2009.
Nothing in the record demonstrates that the arbitrator was expressly precluded under contract or otherwise from dismissing the case due to plaintiffs failing to resolve the case within a reasonable period of time, such as within the five-year period under section 583.310. The stipulation to arbitrate the case is silent on any such time limits.
Case law, on the other hand, supports the proposition that the arbitrator had discretion to dismiss the arbitration proceeding due to unreasonable delay in arbitrating the matter. (Burgess v. Kaiser Foundation Hospitals (1993) 16 Cal.App.4th 1077, 1081 (Burgess.) For instance in Burgess, the court stated: “An arbitrator has discretion to dismiss a proceeding due to unreasonable delay by the claimant in bringing the matter to a hearing. The statute requiring mandatory dismissal of a superior court action not brought to trial within five years (Code Civ. Proc., § 583.310) does not directly apply to arbitration, but its concept and limits have been imported into the test of reasonable diligence in bringing a claim to arbitration. Thus, if a matter is not brought to arbitration within five years, the arbitrator may dismiss the matter for failure to proceed with reasonable diligence.” (Ibid.)
Plaintiffs argue that, unlike in Burgess, supra, 16 Cal.App.4th at page 1080, the arbitration agreement did not state that the claim was waived and barred if not pursued with reasonable diligence. We do not consider the absence of such language in the arbitration agreement dispositive here since the parties could reasonably assume the claim would be waived or barred if not pursued with reasonable diligence. It would not be reasonable to assume plaintiffs could delay prosecuting their case indefinitely, with the arbitrator having no authority to terminate the proceedings. Furthermore, in concluding an arbitrator has discretion to dismiss a proceeding due to unreasonable delay, the Burgess court did not condition this upon the existence of an express contract term stating the claim is barred if not pursued with reasonable diligence.
The court in Brock v. Kaiser Foundation Hospitals (1992) 10 Cal.App.4th 1790, 1808 (Brock), explained that, where the plaintiffs fail to prosecute diligently their claims, which are submitted to contractual arbitration, “[t]he offended party may move in the arbitration proceedings to terminate them for failure to pursue the arbitration claim with reasonable diligence.... Using the ‘measuring rod’ provided by [§ 583.310], the arbitrator may conclude that the claimants have failed to proceed with reasonable diligence. If so, the arbitrator may order that the claimants take nothing on their claims by reason of their dilatory prosecution. [Citation.] This type of order is the functional equivalent of an award against the claimants which the court may confirm.” (Ibid.; see also Young v. Ross-Loos Medical Group, Inc. (1982) 135 Cal.App.3d 669, 673.)
We recognize the five-year mandatory dismissal statutes, sections 583.310 and 583.360, are inapplicable in arbitration proceedings. (Young v. Ross-Loos Medical Group, Inc., supra, 135 Cal.App.3d at p. 673.) Nevertheless, the time limitations provided in these statutes provide reasonable guidelines for the arbitrator to consider when determining whether an arbitration claim has been pursued with reasonable diligence. (Brock, supra, 10 Cal.App.4th at p. 1808.) Using the “measuring rod” provided by sections 583.310 and 583.360, “the arbitrator may conclude that the claimants have failed to proceed with reasonable diligence. If so, the arbitrator may order that the claimants take nothing on their claims by reason of their dilatory prosecution.” (Brock, at p. 1808.)
In the instant case, plaintiffs did not object to the arbitrator relying on the section 583.310 limitation period in determining whether to grant SPC’s motion to dismiss. Furthermore, the arbitrator’s ruling on the motion reflects that he did not dismiss the arbitration proceedings based solely on expiration of the five-year limitation period under section 583.310. The arbitrator stated in his statement of decision that he also considered whether plaintiffs exercised reasonable diligence in prosecuting the case and concluded: “[These] facts do not show due diligences [sic] on the part of Claimants. It is the finding of this arbitrator that reasonable diligence is lacking in this factual history.” Under such circumstances the arbitrator did not exceed his authority by dismissing the arbitration proceedings due to plaintiffs’ delay in arbitrating the case.
V
MISCONDUCT
Plaintiffs contend they established the arbitrator committed prejudicial misconduct, requiring the trial court to vacate the arbitration award under section 1286.2, subdivision (a)(3). The misconduct, which plaintiffs claim requires setting aside the award, consisted of the arbitrator failing to participate in two noticed status conference calls; one in February 2009 and the second in April 2009. Plaintiffs argue such misconduct was particularly prejudicial because it occurred shortly before expiration of the five-year mark, thereby forcing a continuance of proceedings when time was of the essence. This prevented plaintiffs from arbitrating the case within 5-years, which led to the arbitrator dismissing the arbitration proceedings.
We first note the second conference call in April 2009 was after expiration of the five-year period in March 2009. It therefore was not a factor in preventing plaintiffs from arbitrating the case within five years. We further note the arbitrator did not dismiss the case based solely on the fact plaintiffs failed to arbitrate the case within five years. The arbitrator stated he dismissed the arbitration proceedings, not only because the five-year period to resolve the case had run, but also because plaintiffs had not been reasonably diligent in bringing the matter to arbitration.
The delay caused by the arbitrator missing the February and April 2009 status conference calls was minimal (approximately two months), with the arbitrator participating in the next status conference call in May 2009. In the meantime, in March 2009, SPC filed its motion to dismiss for failure to resolve the case within five years, and the parties agreed to postpone rescheduling the April 2009 status conference until after SPC’s motion to dismiss was heard on April 27, 2009. Plaintiffs did nothing to expedite scheduling the arbitration hearing.
Furthermore, the record reflects that the arbitrator missed the February 2009 status conference call because JAMS inadvertently miscalendared the status conference call, not because of any misconduct on the part of the arbitrator. It is unclear from the record why the arbitrator missed the April 2009 status conference call but there is no evidence in the record to show that it was due to the arbitrator’s misconduct. Such error does not rise to the level of misconduct and neglect requiring the trial court to vacate an arbitration award under section 1286.2, subdivision (a)(3).
In Banks v. Milwaukee Ins. Co. (1966) 247 Cal.App.2d 34, 38 (Banks), the court concluded that the failure to act did not constitute “misconduct” within the meaning of section 1286.2. The Banks court stated: “without attempting here to define the meaning of ‘misconduct’ as used in section 1286.2, subdivision (c) [now section 1286.2, subdivision (a)(3)], we think it clear that the mere failure to act is not the kind of ‘misconduct’ that is there contemplated.” (Banks, at p. 38.)
In Banks, the arbitrator failed to consider awarding general damages. (Banks, supra, 247 Cal.App.2dat p. 38.) Even though the arbitrator should have awarded general damages, the Banks court concluded this was not misconduct under section 1286.2, subdivision (c). Likewise, here, we conclude the arbitrator’s failure to participate in two status conference calls does not qualify as “misconduct” under section 1286.2, subdivision (a)(3) (formerly § 1286.2, subd. (c)).
Nor have plaintiffs established the arbitrator’s failure to participate in the two status conference calls was prejudicial. Dismissal of the arbitration proceedings for failing to arbitrate within five years was not mandatory and any delay caused by the arbitrator missing the status conference calls could have been taken into account by the arbitrator in determining whether to dismiss the arbitration proceedings for failure to pursue the arbitration claim with reasonable diligence. Even if the arbitrator had participated in the February 2009 status conference call, it is unlikely the arbitration hearing would have been scheduled before the running of the five-year period. Since the February 2009 status conference call was scheduled only a month before the five-year period ran, it is reasonably probable that, regardless of whether the February 2009 status conference went forward, SPC would have filed its motion to dismiss and the case would not have been arbitrated until after the motion was decided in the trial court and thereafter by the arbitrator.
Plaintiffs failed to demonstrate any arbitrator misconduct within the meaning of section 1286.2, subdivision (a)(3) that would support vacating the arbitration award.
VI
REFUSAL TO HEAR MATERIAL EVIDENCE
Plaintiffs contend the trial court should have vacated the arbitration award under section 1286.2, subdivision (a)(5), which required the court to vacate the award if plaintiffs were substantially prejudiced by the arbitrator’s refusal to hear evidence material to the controversy. (§ 1286.2, subd. (a)(5).) Specifically, plaintiffs complain the arbitrator failed to schedule the arbitration hearing before the five-year period ran and, as a consequence, the arbitrator dismissed the arbitration proceedings.
The only authority plaintiffs cite in support of this proposition is Burlage v. Superior Court (2009) 178 Cal.App.4th 524, 530 (Burlage), which is not on point. In Burlage, the arbitrator in a real property dispute refused to consider highly relevant evidence which would have been dispositive. The defendant filed a motion to vacate the arbitration award under section 1286.2, subdivision (a)(5) on the ground the arbitrator refused to consider material evidence during the arbitration hearing. (Burlage, at p. 528.) The trial court granted the motion and vacated the award. On appeal the Burlage court affirmed the trial court ruling. (Ibid.)
In reaching its holding, the Burlage court noted that “[s]ection 1286.2, subdivision (a)(5) provides that a court ‘shall’ vacate an award when a party’s rights ‘were substantially prejudiced... by the refusal of the arbitrator[] to hear evidence material to the controversy....’ This section has been interpreted as ‘a safety valve in private arbitration that permits a court to intercede when an arbitrator has prevented a party from fairly presenting its case.’” (Burlage, supra, 178 Cal.App.4th at p. 529, quoting Hall v. Superior Court (1993) 18 Cal.App.4th 427, 439.) The court in Burlage explained that the JAMS arbitrator was required to afford the parties the opportunity to present material and relevant evidence, and the failure to do so constituted substantial prejudice, requiring setting aside the arbitration award. (Id. at pp. 530-531.)
Burlage has no bearing here since the instant matter was never arbitrated. There was thus never any proffering of evidence, which the arbitrator refused to hear. While, here, material evidence was not considered by the arbitrator, this was not because the arbitrator refused to consider it, but because the proceedings were dismissed due to plaintiffs’ failure to pursue arbitration with reasonable diligence. As discussed above, the arbitrator had authority to dismiss the arbitration proceedings on such grounds.
Furthermore, since plaintiffs never submitted any evidence to the arbitrator, there is no way of knowing what evidence would have been presented, whether the arbitrator would have excluded it, or whether the exclusion of plaintiffs’ evidence was substantially prejudicial. Under such circumstances, the trial court was not required to set aside the arbitration award under section 1286.2, subdivision (a)(5) since it was inapplicable.
VII
DISPOSITION
The judgment is affirmed. SPC is awarded its costs on appeal.
We concur: Hollenhorst Acting P.J., Miller J.