Hofmann v. Sup. Ct.

Filed 2/28/07 Hofmann v. Sup. Ct. CA2/3

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION THREE

ORIGINAL PROCEEDINGS in mandate. Michael S. Mink, Judge. Petition denied.

Law Offices of Michael S. Duberchin and Michael S. Duberchin for Petitioner.

No appearance for Respondent

Schmid & Voiles and Suzanne De Rosa for Real Parties in Interest Philip Merritt and AOS Medical Center.

INTRODUCTION

Although an order denying a petition to vacate an arbitration award is not appealable, we treat this appeal as a petition for writ of mandate. Petitioners sole claim is that an arbitrators failure to personally make written disclosure required by the California Arbitration Act (Code Civ. Proc., 1280 et seq.)[1] and the Ethics Standards for Neutral Arbitrators in Contractual Arbitration (the California Standards) violates section 1281.9 and requires vacation of the arbitration award pursuant to section 1286.2. An arbitration service made complete disclosure on behalf of the neutral arbitrator, and there was no claim or evidence that this disclosure misrepresented or omitted material matters which should have been disclosed. We hold that this disclosure satisfied disclosure requirements, affirm the order denying the petition to vacate the arbitration award, and deny the petition for writ of mandate.

FACTUAL AND PROCEDURAL HISTORY

On January 6 and June 26, 2002, defendant Philip Merritt, M.D., performed hip replacement surgery on plaintiff Judith Hofmann. Hofmann alleged that Merritt incorrectly performed a bi-polar hip replacement instead of the full hip replacement which Hofmanns dysplastic hip required. Hofmann alleged that because of defendants negligence, Hofmanns prosthesis had dislocated six times. On March 15, 2002, Hofmann experienced a workplace fall during her employment with CalTrans, causing her to dislocate her hip.

On May 30, 2002, Hofmann filed a workers compensation claim against CalTrans arising from the March 15, 2002, workplace fall.

On January 2, 2004, Hofmann filed a complaint for medical malpractice, respondeat superior negligence, and misrepresentation against defendants Merritt, Carlo A. Orlando, M.D., Gary Davidson, P.A., and AOS Medical Center.

Defendants answer, filed on February 20, 2004, alleged that the dispute arose from a matter covered by a binding arbitration agreement, and sought to submit the matter to arbitration.

In the workers compensation proceeding, Hofmann stipulated to the findings of a Qualified Medical Evaluator, Dr. Sobol. On August 12, 2004, Hofmann was awarded $22,610 for a 31 percent permanent disability rating attributed to the workplace fall.

In the Hofmann v. Merritt malpractice action, on August 19, 2004, the trial court entered an order requiring Hofmann to arbitrate the matter.

On August 24, 2004, Alternative Resolution Centers (ARC) sent counsel for Hofmann and for defendants a letter disclosing the frequency and nature of matters in which the neutral arbitrator, Judge Irwin J. Nebron, had previously been compensated by any parties, law firms or attorneys who had engaged Judge Nebron in this arbitration. For the previous 60 months, the letter attached a three-page disclosure report reflecting 19 ARC cases and cases pending which involved Judge Nebron, and a one-page disclosure report reflecting 6 cases disclosed by the Office of the Independent Administrator involving Judge Nebron. The ARC letter stated that these matters were disclosed to comply with sections 1281.6, 1281.9, and 1281.85.

On August 15, 2005, defendants served a motion requesting application of the judicial estoppel doctrine. The motion cited Hofmanns attribution of her injuries to the workplace fall in her workers compensation proceeding, and Hofmanns July 20, 2004, stipulation to Dr. Sobols findings in his November 26, 2003, QME report, attributing 50 percent of Hofmanns residual hip disability to the workplace fall and 50 percent to her preexisting hip condition, without apportionment to other factors. Defendants motion thus argued that Hofmann should be judicially estopped from taking a position contrary to the position she took in the workers compensation proceeding, i.e., that defendants medical malpractice caused her hip injuries.

Defendants moved to dismiss the arbitration based on judicial estoppel, and Hofmann filed opposition. A majority of the arbitrators, Judge Nebron (the neutral arbitrator) and P. Theodore Hammond (defendants arbitrator), granted defendants motion to dismiss based on the judicial estoppel doctrine. Plaintiff Hofmanns arbitrator, John Mittelman, dissented. Having found in favor of defendants, the majority of the panel dismissed the proceedings with prejudice and entered an arbitration award in favor of defendants and against Hofmann.

On October 7, 2005, Hofmann moved for reconsideration, asserting that the facts in her workers compensation case were not totally inconsistent with the facts of the arbitration proceeding and thus judicial estoppel did not apply, particularly insofar as the second medical malpractice, Dr. Merritts second surgery on June 26, 2002, occurred after Hofmanns March 15, 2002, workplace fall. The record does not disclose the ruling, if any, made on Hofmanns motion for reconsideration.

After the arbitration award was served on November 18, 2005, Hofmann filed a petition in Los Angeles County Superior Court for an order vacating the arbitration award on the ground that the arbitrator did not personally make disclosures required by section 1281.9, relying on Ovitz v. Schulman (2005) 133 Cal.App.4th 830. Defendants opposition distinguished the Ovitz case and asserted that Judge Nebron made the required statutory disclosures. On January 13, 2006, the trial court denied Hofmanns petition to vacate the arbitration award.

On March 13, 2006, Hofmann filed a notice of appeal from the January 13, 2006, order denying her petition to vacate the arbitrators award.

ISSUES

1. The first issue is whether the appeal is properly taken from an order denying Hofmanns petition to vacate the arbitration award.

2. Hofmann raises the issue whether an arbitrator must personally sign a written disclosure statement pursuant to section 1281.9.

DISCUSSION

1. Although the Appeal Was Taken from a Non-Appealable Order, We

Assume Jurisdiction by Treating the Appeal as a Petition for Writ of Mandate

Hofmanns notice of appeal states that the appeal was taken from the January 13, 2006, order, by which the trial court denied Hofmanns petition to vacate the arbitration award. Section 1294, subdivision (b) specifies that an aggrieved party may appeal from [a]n order dismissing a petition to confirm, correct or vacate an award. (Italics added.) Based on this statutory language, Mid-Wilshire Associates v. OLeary (1992) 7 Cal.App.4th 1450 held that an order denying a petition to vacate on substantive grounds, which are enumerated in the applicable statute (Code Civ. Proc., 1286.2), is not a final disposition and, therefore, is not directly appealable. [Citations.] Review of an order denying such a petition may be had upon appeal from the judgment of confirmation or by writ of mandate. (7 Cal.App.4th at pp. 1454-1455, fn. omitted.)

No judgment of confirmation was entered in this case, and pursuant to Mid-Wilshire Associates Hofmanns notice of appeal was taken from a non-appealable order. Nonetheless [w]here all the conditions necessary for issuing a writ of mandate are present, and a refusal to decide the issues raised by an improvident appeal would result in unnecessarily dilatory and circuitous litigation, the court has the power to treat the appeal as a petition for writ of mandate. (In re Albert B. (1989) 215 Cal.App.3d 361, 372-373, citing Olson v. Cory (1983) 35 Cal.3d 390, 400-401.) These circumstances are: (1) that appellant has no plain, speedy, and adequate remedy at law to review the trial courts orders, and will be put to the undue burden, delay, and expense of filing a petition for an extraordinary writ; (2) the record and briefs submitted to this court include in substance the necessary elements of a petition for writ of mandate;[2] (3) the circumstances warrant exercise of this courts discretion to treat the appeal as a petition for writ of mandate. (In re Albert B., supra, at p. 373.) These circumstances being present in the instant appeal, we therefore treat the appeal as a petition for writ of mandate seeking reversal of the order denying Hofmanns petition to vacate the arbitration award.

2. Hofmann Has Not Shown That a Neutral Arbitrator Must Make Personal

Disclosure Required by Section 1281.9, Subdivision (a)

Hofmann claims that Ovitz v. Schulman, supra, 133 Cal.App.4th 830 compels a neutral arbitrator to personally sign the disclosure statement required by section 1281.9, subdivision (a).

a. Disclosure Requirements for Neutral Arbitrators

Two sources provide disclosure requirements for neutral arbitrators.

First, section 1281.9, subdivision (a) states, in relevant part: In any arbitration pursuant to an arbitration agreement, when a person is to serve as a neutral arbitrator, the proposed neutral arbitrator shall 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, including all of the following:

(1) The existence of any ground specified in Section 170.1 for disqualification of a judge. For purposes of paragraph (8) of subdivision (a) of Section 170.1, the proposed neutral arbitrator shall disclose whether or not he or she has a current arrangement concerning prospective employment or other compensated service as a dispute resolution neutral or is participating in, or, within the last two years, has participated in, discussions regarding such prospective employment or service with a party to the proceeding.

(2) Any matters required to be disclosed by the ethics standards for neutral arbitrators adopted by the Judicial Council pursuant to this chapter.

(3) The names of the parties to all prior or pending noncollective bargaining cases in which the proposed neutral arbitrator served or is serving as a party arbitrator for any party to the arbitration proceeding or for a lawyer for a party and the results of each case arbitrated to conclusion, including the date of the arbitration award, identification of the prevailing party, the names of the parties attorneys and the amount of monetary damages awarded, if any. . . .

(4) The names of the parties to all prior or pending noncollective bargaining cases involving any party to the arbitration or lawyer for a party for which the proposed neutral arbitrator served or is serving as neutral arbitrator, and the results of each case arbitrated to conclusion, including the date of the arbitration award, identification of the prevailing party, the names of the parties attorneys and the amount of monetary damages awarded, if any. . . .

(5) Any attorney-client relationship the proposed neutral arbitrator has or had with any party or lawyer for a party to the arbitration proceeding.

Second, section 1281.85, subdivision (a), states that a person serving as a neutral arbitrator shall comply with the ethics standards for arbitrators adopted by the Judicial Council pursuant to this section. These standards are found in the Ethics Standards for Neutral Arbitrators in Contractual Arbitration, an appendix to the California Rules of Court (the California Standards). Of particular importance to neutral arbitrators are Standard 7(a), which identifies matters that must be disclosed by a person nominated or appointed as an arbitrator; Standard 9, the Arbitrators Duty to Inform Themselves About Matters to Be Disclosed; Standard 10, Disqualification; and Standard 12, Duties and Limitations Regarding Future Professional Relationships or Employment.

b. Ovitz v. Schulman, supra, 133 Cal.App.4th 830 Does Not Provide

Support for Hofmanns Argument That an Arbitrator Must Make Personal Disclosure

Ovitz involved a dispute between Schulman and her employer, APG. The employment contract required arbitration before the American Arbitration Association (the AAA). After an arbitrator was appointed, the AAA sent the parties an executed Arbitrator Disclosure form (which the AAA stated complied with section 1281.9) and an  Arbitrator Disclosure Worksheet  completed by the arbitrator. Neither Schulman nor APG filed a notice of disqualification by the response date, the AAA confirmed the arbitrators appointment, and the parties agreed to submit all claims to binding arbitration. After 23 days of arbitration, the arbitrator orally found against Schulman on all her claims, ruled in favor of APG on some of its claims and awarded APG $1.5 million in damages, and later ruled that the APG parties were entitled to $1,878,739.15 in attorney fees and costs. The arbitrator directed APG to draft a written award. (Ovitz v. Schulman, supra, 133 Cal.App.4th at pp. 834-836.)

After APG circulated a proposed draft of the award, the AAA directed the parties attention to a disclosure from the arbitrator regarding the Schulman-APG arbitration and a second arbitration, California National Bank v. Kathleen Farnham, et al. The arbitrators disclosure stated that while the Schulman-APG matter was pending, the arbitrator was appointed and conducted a preliminary hearing in the California National Bank arbitration. The law firm representing APG in the Schulman-APG arbitration also represented the claimant in the California National Bank arbitration, although different attorneys from that law firm appeared in the two arbitration proceedings. In the California National Bank arbitration, the arbitrator disclosed his participation in the Schulman-APG arbitration with the same law firm, and stated that he believed the AAA case manager in the California National Bank case would send his disclosure to the case manager in the APG-Schulman arbitration to see if those parties had any objections to the arbitrators accepting the California National Bank case. The arbitrator received no objections, and was appointed arbitrator and held a preliminary hearing in the California National Bank case. The California National Bank case was later suspended because deposits were not paid pursuant to AAA rules. The arbitrator stated he was willing to recuse himself from the California National Bank case without payment of any fee. (Ovitz v. Schulman, supra, 133 Cal.App.4th at p. 836.)

Schulman objected that the arbitrator violated the California Standards and sections 1281.9 and 1281.91 by failing to disclose that he would entertain offers of employment from the law firm representing APG, and by failing to disclose his employment by that firm in the California National Bank arbitration. The AAA denied Schulmans disqualification request. The AAA then served the parties with the arbitrators final written award. APG filed a petition to confirm the arbitration award in superior court. Schulman filed a response and cross-petition to vacate the award, again contending that the arbitrator had violated his disclosure obligations. The trial court found that the arbitrator failed to comply with his disclosure obligation under Standard 12(b) of the California Standards, denied APGs petition to confirm the award, granted Schulmans cross-petition to vacate the award, and vacated the arbitration award under section 1286.2, subdivision (a)(6)(A). APG appealed. (Ovitz v. Schulman, supra, 133 Cal.App.4th at pp. 833, 837.)

Ovitz found that the arbitrators disclosure failed to comply in three ways. (Ovitz v. Schulman, supra, 133 Cal.App.4th at pp. 833, 838.)

First, the arbitrators Disclosure Worksheet did not contain the disclosure required by California Standard 12(b), because it contained no declaration that while that arbitration is pending, he or she will entertain offers of employment or new professional relationships in any capacity other than as a lawyer, expert witness, or consultant from a party or a lawyer for a party, including offers to serve as a dispute resolution neutral in another case. (Ovitz v. Schulman, supra, 133 Cal.App.4th at p. 839.)

Second, without the disclosure required by California Standard 12(b), the arbitrators acceptance of employment in the California National Bank case violated California Standard 12(c),[3] which barred the arbitrator from serving as arbitrator in any other matter involving the parties or any lawyer for the parties until the APG-Schulman arbitration was completed. (Ovitz v. Schulman, supra, 133 Cal.App.4th at pp. 833, 843.)

Third, the arbitrators failure to disclose his appointment as an arbitrator in the California National Bank arbitration within 10 calendar days violated California Standards 7(c) and 7(d)(4)(A)(i). California Standard 7(c)[4] required written disclosure in the APG-Schullman arbitration, pursuant to California Standard 7(d)(4)(A)(i),[5] of his service as arbitrator in the California National Bank arbitration within 10 calendar days of his appointment in the latter arbitration. The arbitrator in Ovitz made no such disclosure until nearly three months after the first hearing in the California National Bank case. (Ovitz v. Schulman, supra, 133 Cal.App.4th at pp. 833, 844.)

Based on these three violations, Ovitz held that section 1286.2, subdivision (a)(6)(A) required the court, on a properly served and filed petition, to vacate the award if the court determined that  . . . (6) An 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. (Ovitz v. Schulman, supra, 133 Cal.App.4th at p. 845.)

Hofmann relies on Ovitz as authority to argue that the arbitrator was required to personally sign a written disclosure statement under section 1281.9, subdivision (a). Ovitz, however, does not support this argument.

Ovitz did not find that the disclosure was defective because the arbitrator did not personally sign it. Instead Ovitz found that the disclosure was defective because it did not disclose matters required to be disclosed pursuant to California Standard 12(b). (Ovitz v. Schulman, supra, 133 Cal.App.4th at pp. 833, 842.) By contrast, the disclosure in this arbitration specifically included the language absent from the disclosure in Ovitz. The August 24, 2004, letter from ARC to counsel specifically stated: To further comply with CCP section 1281.85 as adopted by the Judicial Council of California and effective as of July 1, 2002[,] ARC makes the following disclosure: If selected as a neutral arbitrator the Arbitrator selected in the instant matter will entertain and accept offers of permitted employment or new professional relationships from parties, attorneys, or law firms involved in a case while this case is pending.

Not only did the arbitrator in this case make the disclosure omitted in the Ovitz case, but Hofmann makes no claim and offers no evidence that while the Hofmann v. Merritt arbitration was pending, Judge Nebron was appointed as an arbitrator in another arbitration in which counsel for Merritt appeared. Thus this appeal is factually distinguishable from Ovitz.

Nowhere in Ovitz is there any suggestion that the disclosure was defective because the arbitrator did not make disclosure personally to the parties counsel. The disclosure in Ovitz was made by the arbitration service, the AAA. In this case, the arbitration service, ARC, made the disclosure on behalf of Judge Nebron. We repeat that unlike in Ovitz, Hofmann does not claim that the disclosure made by ARC on Judge Nebrons behalf contained a material omission or material misrepresentation ( 1281.91, subd. (c)), or failed to comply with disclosure requirements in the California Arbitration Act ( 1280 et seq.) or in the California Standards. Unlike in Ovitz, there is no claim or evidence that Judge Nebron performed services for a party or for the law firm representing the party while the arbitration was pending, and therefore no such activity required disclosure. (See Michael v. Aetna Life & Casualty Ins. Co. (2001) 88 Cal.App.4th 925, 938.) The sole claim is that Judge Nebron had to personally make the disclosure and that it was error for the arbitration service, ARC, to make disclosure on his behalf. Ovitz provides no authority for this claim.

We further note that although the purported defects now claimed by Hofmann were clearly present in ARCs August 24, 2004, written disclosure, Hofmann made no objection within 15 calendar days after the purported non-compliance required by section 1281.91, subdivision (a). Hofmann therefore waived her right to disqualify a proposed neutral arbitrator pursuant to section 1281.91, subdivision (c).[6]

Furthermore Hofmanns petition to vacate the arbitration award did not claim that Judge Nebron 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).) The trial court correctly found that there [was] no showing that any ground for disqualification was not disclosed to the parties in a form designated a disclosure, and . . . there was no conduct by the arbitrator rendering the disclosure improper due to the inability of a party to timely object on the basis of some valid potential ground for disqualification.

Hofmann has provided no authority requiring the neutral arbitrator to personally execute written disclosure. Disclosure made by the arbitration service which is complete and complies with requirements of the California Arbitration Act and the California Standards is sufficient. A court may vacate an appraisal award only if it finds that a ground in section 1286.2 exists. (Michael v. Aetna Life & Casualty Ins. Co., supra, 88 Cal.App.4th at p. 937.) Hofmanns petition contained no such ground. We deny the petition for writ of mandate seeking to reverse the order denying Hofmanns petition to vacate the arbitration award.

DISPOSITION

The petition for writ of mandate is denied. Costs are awarded to real parties in interest.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

KITCHING, J.

We concur:

KLEIN, P. J.

ALDRICH, J.

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[1] Unless otherwise specified, statutes in this opinion will refer to the Code of Civil Procedure.

[2] Although Hofmanns opening brief violates California Rules of Court, rule 8.204(a)(1)C) and (2)(C) by failing to cite the record on appeal in its statement of facts and statement of procedure, pursuant to rule 8.204(c)(2)(C) we disregard the violation.

[3] California Standard 12(c) states: If an arbitrator fails to make the disclosure required by subdivision (b) of this standard, from the time of appointment until the conclusion of the arbitration the arbitrator must not entertain or accept any such offers of employment or new professional relationships, including offers to serve as a dispute resolution neutral.

[4] California Standard 7(c) states: Within ten calendar days of service of notice of the proposed nomination or appointment, a proposed arbitrator must disclose to all parties in writing all matters listed in subdivisions (d) and (e) of this standard of which the arbitrator is then aware. If an arbitrator subsequently becomes aware of a matter that must be disclosed under either subdivision (d) or (e) of this standard, the arbitrator must disclose that matter to the parties in writing within 10 calendar days after the arbitrator becomes aware of the matter.

[5] California Standard 7(d) states: A person who is nominated or appointed as an arbitrator must disclose all matters that could cause a person aware of the facts to reasonably entertain a doubt that the proposed arbitrator would be able to be impartial, including all of the following: [] . . . []

(4) Service as arbitrator for a party or lawyer for party

(A) The arbitrator is serving or, within the preceding five years, has served:

(i) As a neutral arbitrator in another prior or pending noncollective bargaining case involving a party to the current arbitration or a lawyer for a party.

[6] Section 1281.91, subdivision (c), states: The right of a party to disqualify a proposed neutral arbitrator pursuant to this section shall be waived if the party fails to serve the notice pursuant to the times set forth in this section, unless the proposed nominee or appointee makes a material omission or material misrepresentation in his or her disclosure. Except as provided in subdivision (d), in no event may a notice of disqualification be given after a hearing of any contested issue of fact relating to the merits of the claim or after any ruling by the arbitrator regarding any contested matter. Nothing in this subdivision shall limit the right of a party to vacate an award pursuant to Section 1286.2, or to disqualify an arbitrator pursuant to any other law or statute.