Filed 9/7/18 Gavola v. Asbra CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION TWO

APPEAL from the Superior Court of Riverside County. John W. Vineyard, Judge. Affirmed.

Karen Novorr and Law Offices of Karen Novorr for Defendant and Appellant.

Susan Barilich for Plaintiffs and Respondents.

Defendant and appellant James Asbra appeals after a judgment entered on an arbitration award. Plaintiffs and respondents Robert S. Gavola, Linda A. Gavola and Robert S. and Linda A. Gavola Family Trust (collectively, Gavolas) were awarded $605,692 in connection with Asbra inducing the Gavolas to invest in dilapidated property in St. Louis, Missouri. When Asbra failed to pay the award, the Gavolas filed their petition to confirm arbitration award (Petition) pursuant to Code of Civil Procedure section 1288.[1] Asbra opposed the Petition and filed his own petition to vacate the arbitration award (Petition to Vacate) but the trial court found the submissions untimely and such failure to file a timely response or correction was an admission of the Petition.

Asbra claims on appeal as follows: (1) Sections 1288.6 and 1288.4 prove the Petition was untimely and barred; (2) the requirements under sections 1288.4 and 1288.6 are mandatory, unlike section 1290.6, which gives the trial court discretion to extend the 10-day deadline for filing a motion to vacate or correct the arbitration award; and (3) the trial court improperly denied the petition to correct the award as to CSJ Services Inc. and Financial Concepts, Inc., since at no time were they parties to the Petition. We affirm the judgment.

FACTUAL AND PROCEDURAL HISTORY

A. ARBITRATION OF COMPLAINT FILED BY GAVOLAS

On November 29, 2012, the Gavolas filed a complaint against Asbra.[2] In 2008, the Gavolas wanted to invest their money for retirement and sought financial advice from Asbra. Asbra persuaded the Gavolas to invest $360,000 in a building they had never seen located in St. Louis, Missouri. They were assured they would make a profit. Asbra had also not seen or inspected the building. Asbra later informed the Gavolas that in fact they would not be receiving the promised profit in time for their retirement as the building was in disrepair and could not be immediately rented. The Gavolas demanded a return of their investment. They filed their complaint against Asbra and several others including Advanced Financial Concepts, Inc., Beacon Associates, Inc., and CSJ Services, Inc., who were all represented by the same counsel.

On March 19, 2014, the parties entered into a stipulation and agreement to arbitrate their claims. The arbitration was to be conducted by Inland Valley Arbitration and Mediation Services (IVAMS) and was to be binding. The arbitration was subject to IVAMS rules and sections 1280 through 1294.2.

On May 21, 2015, the arbitrator signed the Award. The arbitrator concluded that Asbra breached his fiduciary duty to the Gavolas. The actual damages to the Gavolas due to the breach was $360,000. The arbitrator also found a violation of California Corporations Code sections 25401 and 25501 with damages totaling $107,100. The arbitrator also found that there was constructive fraud committed by Asbra and the damages totaled $70,000. The Award only referred to Asbra. The Award was served on June 15, 2015, only on counsel for the Gavolas.

B. PETITION TO CONFIRM ARBITRATION AWARD

On June 30, 2015, Asbra had filed an application to correct the award directly with the arbitrator pursuant to section 1284. Asbra’s counsel confirmed that he received a copy of the Award from the Gavolas. Asbra sought correction of the arbitration award on several grounds including that constructive fraud was not a cause of action in the complaint; he could not be held personally liable; and the arbitrator had promised a separate hearing on damages if it concluded Asbra was liable to the Gavolas. On July 2, 2015, the Gavolas filed opposition to the application to correct the award.

On July 13, 2015, the Gavolas filed a motion with IVAMS for attorney fees. On September 18, 2015, the arbitrator ruled on both motions, the motion for attorney fees and the motion to correct the arbitration award. Pursuant to the ruling, Asbra’s request to correct the arbitration award was denied on the merits, and pursuant to section 1284.[3]

On July 31, 2015, which was 30 days after Asbra had filed his request to vacate the award directly with the arbitrator, the Gavolas filed their Petition in the trial court. The Gavolas represented that the arbitration award of $537,100 was awarded on May 21, 2015. The Gavolas sought the trial court to confirm the award and enter judgment. The Gavolas also sought the payment of interest from June 25, 2015, in the statutory amount, and costs of the suit which totaled $38,311.35.

On October 2, 2015, over 60 days later, Asbra filed opposition to the Petition on the grounds that it was untimely. Asbra noted that the Gavolas were served with the Award on June 15, 2015. Neither Asbra nor his counsel were ever served with the Award. On June 24, 2015, Asbra’s counsel was sent a copy of the Award by the Gavolas. With that copy, counsel for the Gavolas advised Asbra that the award should be paid immediately. The Gavolas also warned that if it was not paid by July 1, 2015, the Gavolas would file a petition to confirm the award and would incur additional costs and attorney fees.

Asbra argued in his opposition to the Petition that the arbitrator was required to serve a signed copy of the award on both parties either personally or by mail pursuant to section 1283.4. Asbra further noted that within 10 days of service of a signed copy of the arbitration award, a party may request correction of the award pursuant to section 1284. The arbitrator can correct the award within 30 days of service of the arbitration award upon any grounds set forth in section 1286.6, subdivisions (a) and (c). The arbitrator may issue a denial or grant of the application to correct the award, or, if 30 days expired, it will be considered a denial.

Asbra argued that even if the trial court were to consider the mailing of the Award to defendant from counsel for the Gavolas to suffice as service, the filing of his application to correct the award on June 30, 2015, stayed the Gavolas from filing their Petition. They had to wait for a ruling by the arbitrator or for the 30 days to pass. The earliest date that the Gavolas could file their Petition was September 18, 2015, because they had to wait 10 days after the denial by the arbitrator of the application to correct the Award. Asbra also stated he intended to file a request to vacate or correct the award within the 100-day requirement of section 1288.2. Asbra asked that the Petition be taken off calendar as untimely or that a continuance be granted to a date after November 30.

On October 9, 2015, the Gavolas filed a reply to Asbra’s opposition to the Petition. The Gavolas argued that Asbra was served with the Award and that IVAMS did not have to serve it on Asbra. The Gavolas were charged with serving Asbra and they did so once they received a copy. Not only did the Gavolas send a copy to Asbra on June 22, 2015, they also attached it to the Petition. Asbra’s application to correct the award was denied by the arbitrator and could not be reviewed by the trial court on its merits. The Gavolas also provided that Asbra had failed to pay his share of the arbitration fee as required and they had to pay all of the fees. The IVAMS rules provided that Asbra was not entitled to service of the Award due to his nonpayment of fees.

The Gavolas argued that the Petition was timely as it could be filed any time after 10 days of service of the Award or within four years (§ 1288). Further, the time had expired to filed a petition to modify or correct the arbitration award in the trial court.

On November 4, 2015, Asbra filed for the first time in the trial court his Petition to Vacate. Asbra contended that the arbitration award was not calculated correctly and the arbitrator exceeded his authority. Asbra sought a new arbitration hearing.[4]

On November 10, 2015, the Gavolas filed objections to Asbra’s Petition to Vacate. The Gavolas argued that the trial court lacked jurisdiction to hear the Petition to Vacate. The Gavolas insisted they served the Award on Asbra on June 22, 2015. In fact, on June 30, 2015, Asbra filed a motion to modify or vacate the arbitration award with the arbitrator. They again set forth that the time for filing the Petition to Vacate had expired. The deadline was mandatory and jurisdictional. It did not matter that Asbra filed a request to modify or correct the arbitration award directly with the arbitrator first; it did not stay the time to file in the trial court. Further, on its merits, Asbra was simply asking the trial court to litigate matters decided during arbitration.

C. RULING

On January 8, 2016, the trial court issued its tentative ruling on the submitted matter. In its tentative ruling, the trial court found that the Petition should be granted and that Asbra’s Petition to Vacate was untimely pursuant to section 1290.6, which provided that Asbra had to respond to the Petition within 10 days. As such, Asbra was found to have admitted the allegations in the Petition. The trial court noted that Asbra had filed an application to correct the award with the arbitrator and it was not ruled upon until September 18, 2015. However, it was deemed denied as of July 27, 2015, pursuant to section 1284. Nonetheless, the Petition was properly filed and the Petition to Vacate was untimely. The trial court adopted it tentative ruling. The Petition was granted, and the Petition to Vacate was denied.

On March 8, 2016, Asbra filed his notice of appeal on the grounds of “CCP Section 1284 through 1288.8. Order confirming Arbitration award/denying motion to vacate.”[5] Judgment was filed on March 14, 2016 in the amount of $605,692 which was inclusive of the award, interest and costs. Asbra did not request a reporter’s transcript be prepared on appeal.

DISCUSSION

Asbra first contends that he made a timely request directly to the arbitrator to correct the award on June 30, 2015, pursuant to sections 1284 and 1288.8. He claims that according to section 1288.6, the Petition could not be filed until there was a determination on his application to correct the award by the arbitrator plus 10 days. His second contention appears to be that the 10-day time limit in section 1290.6 to file his Petition to Vacate should not have applied to him. Since resolving the second contention also resolves the first contention, we will first address the second contention.

A review of the relevant statutory provisions is necessary. Section 1283.4 provides that an arbitration award shall be in writing and signed by the arbitrators resolving all the questions presented to them in the proceedings. “A petition to confirm an award shall be served and filed not later than four years after the date of service of a signed copy of the award on the petitioner. A petition to vacate an award or to correct an award shall be served and filed not later than 100 days after the date of the service of a signed copy of the award on the petitioner.” (§ 1288.) Section 1288.2 provides, “A response requesting that an award be vacated or that an award be corrected shall be served and filed not later than 100 days after the date of service of a signed copy of the award[.]” Additionally, section 1290.6 reads, “A response shall be served and filed within 10 days after service of the petition. . . . The time provided in this section for serving and filing a response may be extended by an agreement in writing between the parties to the court proceeding or, for good cause, by order of the court.”

Courts have consistently found that the 10-day limitation in section 1290.6 has priority over the 100-day rules in sections 1288 and 1288.2. “Under a well delineated statutory scheme . . . 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 [citations]. The same 100-day limitation applies when vacation or correction of the award is sought by response. Section 1288.2 provides in part that ‘A response requesting that an award be vacated or that an award be corrected shall be served and filed not later than 100 days after the date of service of a signed copy of the award upon: (a) The respondent if he was a party to the arbitration . . . .’ [] 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.” (DeMello v. Souza (1973) 36 Cal.App.3d 79, 83, fn. omitted; see also Oaktree Capital Management, L.P. v. Bernard (2010) 182 Cal.App.4th 60, 64 [“ ‘When [a] party petitions the court to confirm the award . . . , [the opposing party] may seek vacation . . . 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 [the other side]’ ” (Fns. omitted.).] We see no reason to deviate from this established case law.

Here, the Gavolas filed their Petition on July 31, 2015, prior to Asbra filing a petition to vacate or correct the award in the trial court. As such, the filing of the Petition triggered the 10-day limitation in section 1290.6. Asbra filed a response to the Petition on October 2, 2015. He filed his Petition to Vacate on November 4, 2015. Both of these responses far exceeded the 10-day deadline and were untimely. As such, pursuant to section 1290, the “allegations of [the] petition are deemed to be admitted.”

This necessarily resolves Asbra’s first contention that the Petition could not be filed because the matter was stayed. Section 1284 provides that “The arbitrators, upon written application of a party to the arbitration, may correct the award upon any of the grounds set forth in subdivisions (a) and (c) of Section 1286.6 not later than 30 days after service of a signed copy of the award on the applicant.”[6] It also provides that the correction shall be filed no later than 10 days after service of a signed copy of the award. In addition, section 1284 provides, “If no denial of the application or correction of the award is served within the 30-day period provided in this section, the application for correction shall be deemed denied on the last day thereof.” Section 1288.6 provides, “If an application is made to the arbitrators for correction of the award, a petition may not be served and filed under this chapter until the determination of that application.”

Asbra had to raise the issue of timeliness in his response to the Petition or in his Petition to Vacate. As we have found, ante, his response and Petition to Vacate were filed untimely. The trial court did not have to address the issue as it was not properly raised. By failing to properly raise the issue in the trial court, Asbra forfeited the contention on appeal. (See Mundy v. Lenc (2012) 203 Cal.App.4th 1401, 1406 [“ ‘As a general rule, failure to raise a point in the trial court constitutes . . . waiver and appellant is estopped to raise that objection on appeal’ ”].)

Asbra appears to contend the trial court extended the time for him to file the Petition to Vacate during a hearing. He insists that during a hearing on October 19, 2015, the parties discussed the timeliness of the Petition. The matter was continued so that he could file his Petition to Vacate. However, the record does not support Asbra’s contention. Asbra chose to proceed on appeal without the reporter’s transcript and was advised that, by choosing to proceed without the oral record, this court would not consider what was said during the proceedings. The only citation in support of Asbra’s claim was to the case sheet, which refers to the parties discussing timeliness and the hearing being continued. This does not support Asbra’s claim that the trial court agreed to extend the 10-day deadline.

Asbra’s final contention is unclear and unsupported by any relevant or cogent legal argument. Asbra states that the trial court improperly denied the “petition to correct the award” as to CSJ Services, Inc. and Advanced Placement Financial Concepts, Inc. because they were not named in the Petition. Asbra cites to sections 1288 and 1288.2 and then concludes, “At no time did Plaintiff file a Petition to Confirm the Award as to any other Defendant, other than Jeremy Asbra. As such, Judge Vineyard should have made a ruling on the Petition to Vacate/Correct the award as to those defendants.” The Award made no mention of these parties and applied only to Asbra. We have no knowledge of the involvement of these entities. Asbra provides no information as to why they were not included in the Award. We will not address this issue raised for the first time on appeal.

DISPOSITION

The trial court’s order confirming the arbitration award is affirmed. Respondents are awarded their costs on appeal.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

MILLER

J.

We concur:

RAMIREZ

P. J.

McKINSTER

J.