Soni v. Sheldon & Mak

Filed 3/22/07 Soni v. Sheldon & Mak CA2/4

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 FOUR

APPEAL from an order of the Superior Court of Los Angeles County, Joanne B. ODonnell, Judge. Affirmed.

The Soni Law Firm, Leo E. Lundberg, Jr., and M. Danton Richardson for Plaintiff and Appellant.

Bird, Marella, Boxer, Wolpert, Nessim, Drooks & Lincenberg, Mark T. Drooks, and Sharon Ben-Shahar for Defendants and Respondents.

In his fourth trip before this court, plaintiff Surjit Soni (Soni) appeals a judgment entered after the trial court confirmed an arbitration award against him and denied his subsequent request to amend his complaint. We find no error, and we affirm.

FACTS AND PROCEDURAL HISTORY

I. The First Arbitration

Soni is a former partner of defendant law firm Sheldon & Mak, P.C. He left the firm in 1999. Later that year, he filed a 10-count complaint against the firm and its shareholders (collectively, Sheldon & Mak or the firm) alleging that he was owed additional money, including compensation and a bonus for 1999 and the value of his interest as a firm shareholder.

On January 12, 2000, Sheldon & Mak moved to compel arbitration pursuant to an arbitration clause in the firms shareholders agreement. Two weeks later, Soni filed a first amended complaint that realleged the 10 causes of action in the original complaint and added two new causes of action, for nonpayment of wages under Labor Code section 201, and for statutory penalties under Labor Code section 203.

The trial court granted the firms motion to compel, ordering the parties to arbitrate this controversy except as to the eleventh and twelfth causes of action and staying the entire action pending the conclusion of arbitration.

Arbitrator Richard Chernick issued a partial final award on October 12, 2000 (the first arbitration award). In it, he concluded that: (1) all of Sonis claims were arbitrable, including the eleventh and twelfth causes of action; (2) Soni was not entitled to any additional sums from the firm; and (3) Soni owed the firm $293,758. The trial court confirmed the award.

Soni appealed (the first appeal). We held that the trial court properly confirmed the arbitrators award with regard to the first 10 causes of action, but erred in confirming it with regard to Sonis wage claims (the eleventh and twelfth causes of action) because the arbitrator lacked authority to decide them. We thus affirmed the judgment except for that portion dealing with the wage claims. That portion of the judgment is reversed and the matter is remanded to the trial court with directions to correct the arbitration award by deleting any findings regarding wage claims and for such further proceedings as are appropriate.

II. The Second Arbitration

After remand, Soni sought leave to file a second amended complaint to make it clear beyond doubt the scope of the wage claims Plaintiff Soni seeks to adjudicate.[1] The trial court granted the motion and, on June 3, 2002, Soni filed a second amended complaint. The second amended complaint was identical to the prior complaint in all respects except with regard to paragraph 56, which formerly alleged that On August 1, 2000, at the time that defendants terminated plaintiffs employment, plaintiff had last been paid accrued wages at the end of June 1999 and was owed wages for July 1999. The amended paragraph 56 instead alleged: On August 1, 1999, at the time that defendants terminated plaintiffs employment, plaintiff had only received partial payment of wages (within the meaning of Labor Code section 200) accrued to him for his services to Defendants and was owed the balance of his wages for services rendered, as well as additional amounts Defendants promised to pay him as set forth in paragraphs 25 through 28 [alleging an oral contract to pay plaintiff for services provided for Sheldon & Mak after July 31, 1999]. Paragraph 57 (eleventh cause of action) continued to allege that Defendants failure to pay the full amount due plaintiff on termination violates the provisions of Labor Code Section 201, and paragraph 60 (twelfth cause of action) continued to allege that The defendants failure to pay wages, as alleged in paragraph 57, above, was willful in that at all times defendants knew of the amount owed, were capable of making such payments, yet refused to do so as required by law, thus entitling plaintiff to penalties under Labor Code Section 203 . . . .

On September 13, 2002, Sheldon & Mak moved to compel arbitration of the claims asserted in the second amended complaint. The trial court denied the motion and Sheldon & Mak appealed (the second appeal). We reversed, holding that the eleventh and twelfth causes of action were arbitrable, and that the remaining claims had been decided in the prior arbitration. Accordingly, we directed the trial court to vacate its [order] denying the motion to compel arbitration and to enter a new and different order granting the motion to compel arbitration as to the claims for wages contained in the 11th and 12th causes of action of the Second Amended Complaint, and dismissing the remainder of the claims in the Second Amended Complaint.

On remand, the trial court ordered the parties to arbitrate the eleventh and twelfth causes of action before Mr. Chernick. Over Sonis objection, the American Arbitration Association (AAA) reaffirmed Mr. Chernicks appointment, but Mr. Chernick subsequently withdrew. The parties then selected Richard Mainland as the new arbitrator.

At a preliminary hearing, the parties advised Mr. Mainland that they disagreed about the scope of the claims to be arbitrated. He ordered Soni to file a specification of his claims and granted Sheldon & Mak leave to file a motion to dismiss Sonis claims or any part thereof.

Soni filed a detailed statement of wage claims on March 4, 2004. It identified five categories of wages Soni claimed he was owed: (1) accumulated wages for services rendered through August 1999, for which Sheldon & Mak was paid during 1999; (2) bonus wages due in 1999 for services rendered through August 1999, for which Sheldon & Mak was paid in 1999; (3) accumulated deferred compensation due to Soni for services rendered through August 1999; (4) accumulated wages for services rendered through August 1999, for which Sheldon & Mak was not paid during 1999; and (5) wages for services performed at Sheldon & Maks request, under an oral agreement, after August 1999.

Sheldon & Mak filed two motions to dismiss: (1) a motion to dismiss the individual defendants (Jeffrey Sheldon, Danton Mak, Denton Anderson and Robert Rose) on the grounds that they were not liable to Soni for wages because they were not his employer, and (2) a motion to dismiss Sonis arbitration complaint in its entirety on the grounds that all the factual allegations supporting Sonis claims had been resolved against him in the first arbitration. After a hearing, all parties filed supplemental memoranda on the second motion to dismiss.

On July 29, 2005, the arbitrator granted both motions. He found that the first arbitration award did not preclude Sonis claims because this courts opinion in the first appeal removed all wage claim findings from the award. However, the arbitrator concluded that Sonis claims nonetheless should be dismissed because they either were not encompassed by the eleventh or twelfth causes of action or were not wage claims within the meaning of sections 201 and 203 of the Labor Code. He explained that the claims alleged in the eleventh and twelfth causes of action were for nonpayment of wages in violation of Labor Code section 201, and for statutory waiting time penalties pursuant to Labor Code section 203. Further, he said section 201 provides that wages earned and unpaid at the time of discharge are due and payable immediately, and section 203 provides for waiting time penalties for willful failure to pay wages in accordance with the time requirements of Sections 201 and 202. These sections of the Labor Code contemplate wages that are both earned and calculable in amount at the time the employee quits or is discharged. Otherwise, the employer would be unable to make immediate payment of the earned wages, nor should an employer be subject to waiting time penalties for failing to pay an unknown amount. The sums Soni sought to recover in arbitration, however, either could not have been calculated at the time of his resignation from the firm on August 1, 1999 or were not wages at all. Accordingly, the arbitrator concluded that they were not claims for wages or penalties within the meaning of the applicable Labor Code provisions and, thus, they were outside the scope of the arbitration.

Soni moved for reconsideration on August 19, 2005. On September 26, the AAA issued notice that the arbitration hearing was completed and the arbitrator had declared the matter closed.

III. Sonis Posthearing Attempt to Disqualify the Arbitrator

On September 27, 2005, Soni sent a letter demanding that the arbitrator immediately disqualify himself because he had a significant undisclosed relationship with Sheldon & Maks counsel, the law firm of Bird, Marella, Boxer, Wolpert, Nessim, Drooks & Lincenberg, P.C. (Bird Marella). Specifically, Soni alleged that the arbitrator was on the board of trustees of the Center for Law in the Public Interest (CLIPI) from 2002 to 2005, that Bird Marella partnered with CLIPI in 2004 to oppose the City of Los Angeles in an action concerning the privatization of certain property, and that Bird Marella partner Tom Freeman served on the CLIPI board after the arbitrators departure in 2005.

The arbitrator referred the disqualification request to the AAA on September 28, 2005. He advised the AAA that he had served on the board of CLIPI for several years; he resigned from the CLIPI board effective September 28, 2004; he had not been aware of the matter purportedly involving CLIPI and Bird Marella until he received Sonis letter; he did not know Tom Freeman; and, to the best of his knowledge, he and Tom Freeman did not serve on the CLIPI board at the same time. Thus, he believed there were no facts, other than the facts set forth in his initial disclosure at the outset of the case, that he was obligated to disclose.

On October 19, 2005, the AAA reaffirmed the arbitrators appointment, and later that day the arbitrator issued his final award (second award). The second award incorporated the July 29, 2005 order in all respects, denied Sonis motion for reconsideration, deemed Sheldon & Mak the prevailing party, and awarded Sheldon & Mak costs of $14,593.

IV. Confirmation of the Second Arbitration Award and Denial of Sonis Motion for Leave to File a Third Amended Complaint

Sheldon & Mak timely filed a motion to confirm the arbitration award and Soni filed a petition to vacate it. On December 2, 2005, the trial court confirmed the arbitration award.

The same day, Soni filed a motion for leave to amend his eleventh and twelfth causes of action to expand his wage claims beyond sections 201 and 203 of the Labor Code. The trial court denied the motion on January 9, 2006. The court noted that while leave to amend generally is liberally granted, the court has discretion to deny leave where the party seeking the amendment has been dilatory and the delay has prejudiced the opposing party by delaying trial, resulting in loss of critical evidence, added costs of preparation or increased discovery burdens. The court concluded that all of these forms of prejudice existed here because the case had been pending for six years, there had been two prior appeals and two arbitrations, and the new causes of action, if added, would result in additional discovery. Moreover, the court said, plaintiff failed to present any evidence as to why he failed to raise these claims in a timely manner. Plaintiffs claims for unpaid wages were the subject of the first appeal decided five years ago, in November 2001, and Plaintiff amended these claims in June 2002. They were then the subject of the second appeal decided in December 2003, two years ago. In July 2005 plaintiff received Arbitrator Mainlands Order Re Motions to Dismiss which clearly put plaintiff on notice that wage claims not based on the Labor Code would not be decided in the arbitration and, therefore, that Plaintiff would need to amend his complaint. He did not seek leave to amend from the Court at that time, however, but waited not only until after the issuance of the arbitration award in October 2005 and the filing of defendants motion to confirm that award, but until the actual hearing date on the motion December 2, 2005 before seeking this relief. [] Plaintiffs extreme delay in filing this motion and timing it to coincide with the ruling on the motion to confirm the Arbitration Award raises an inference that Plaintiff has acted in bad faith; it appears that he filed this motion only to increase costs for Defendants and further stall resolution of this case after six years. Because of plaintiffs bad faith, inexcusable delay and the prejudice to defendants if the amendments were allowed, the motion to amend is denied.

On January 11, 2006, the trial court entered judgment nunc pro tunc as of December 21, 2005. This timely appeal followed.

DISCUSSION

I. The Trial Court Properly Confirmed the Arbitration Award

Soni urges three statutory grounds for vacating the arbitrators award: (1) the arbitrator exceeded his powers (Code Civ. Proc., 1286.2, subd. (a)(4)); (2) the arbitrator refused to hear evidence material to the controversy (id.,  1286.2, subd. (a)(5)); and (3) the arbitrator was subject to disqualification but failed to make the required disclosures or to disqualify himself upon a timely demand to do so (id., 1286.2, subd. (a)(6)).[2] For the reasons discussed below, we reject each contention.

A. Standard of Review

Judicial review of an arbitration award is extremely limited. As our Supreme Court has said, [A]rbitral finality is a core component of the parties agreement to submit to arbitration. Thus, an arbitration decision is final and conclusive because the parties have agreed that it be so. (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 10.)

An award reached by an arbitrator pursuant to a contractual agreement to arbitrate is not subject to judicial review except on the grounds set forth in Code of Civil Procedure sections 1286.2 (to vacate) and 1286.6 (for correction). (Malek v. Blue Cross of California (2004) 121 Cal.App.4th 44, 55.) In reviewing an arbitration award under these sections, the general rule [is] that an arbitrators decision cannot be reviewed for errors of fact or law. [Citation.] (Aguilar v. Lerner (2004) 32 Cal.4th 974, 981-982.) [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 arbitrators reasoning. [Citations.] Further, a court may not review the sufficiency of the evidence supporting an arbitrators award. [Citations.] (Moncharsh v. Heily & Blase, supra, 3 Cal.4th at p. 11.) (Jones v. Humanscale Corp. (2005) 130 Cal.App.4th 401, 407-408.) And, even though a court must vacate an award that exceeds an arbitrators powers, the deference due an arbitrators decision on the merits of the controversy requires a court to refrain from substituting its judgment for the arbitrators in determining the contractual scope of those powers. (Advanced Micro Devices, Inc. v. Intel Corp. (1994) 9 Cal.4th 362, 372-373.) Any other result would invite frequent and protracted judicial proceedings, contravening the parties expectations of finality. (Id. at p. 373.)

On appeal from an order confirming an arbitration award, we review the trial courts order (not the arbitration award) under a de novo standard. (Advanced Micro Devices, Inc. v. Intel Corp., supra, 9 Cal.4th at p. 373; Reed v. Mutual Service Corp. (2003) 106 Cal.App.4th 1359, 1364-1365.)

B. The Arbitrator Did Not Exceed His Powers

Section 1286.2, subdivision (a)(4) provides that an arbitration award shall be vacated if [t]he arbitrators exceeded their powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted. An appellate court reviews a determination whether an arbitrator has exceeded his or her powers de novo, but gives substantial deference to the arbitrators determination of his or her contractual authority. (Jones v. Humanscale Corp., supra, 130 Cal.App.4th at pp. 407-408; Jordan v. Department of Motor Vehicles (2002) 100 Cal.App.4th 431, 443-444.)

Soni urges that the arbitrator exceeded his powers by failing to decide his wage claims, deciding an issue not presented for adjudication, and basing his award on extrinsic sources. None of these contentions has merit.

First, Soni urges that we must vacate the award pursuant to section 1283.4 because the arbitrator exceeded his powers by failing to adjudicate all of Sonis wage claims.[3] We do not agree. Judicial authority to vacate an arbitration award derives exclusively from section 1286.2, not 1283.4 (Malek v. Blue Cross of California, supra, 121 Cal.App.4th at p. 55), and nothing Soni cites suggests that section 1286.2 permits us to vacate an arbitration award merely because the arbitrator failed to adjudicate all submitted claims.[4] Moreover, Sonis claim is not that the arbitrator failed to resolve his wage claimsto the contrary, he concedes that the arbitrator rule[d] the wage claims should be dismissed with prejudicebut instead that Mr. Mainland did not resolve them on the merits. Soni cites no authority for the proposition that an arbitrator is bound to adjudicate the merits of all submitted issues, and thus the contention is waived. (Berger v. California Ins. Guarantee Assn. (2005) 128 Cal.App.4th 989, 1007 [issue waived on appeal where appellants fail[ed] to make a coherent argument or cite any authority to support their contention]; see also Cal. Rules of Court, rule 8.204(a)(1)(B) [each point in a brief must be supported by argument and, if possible, by citation of authority].) As to the merits of Sonis claim, there is abundant authority for the proposition that an arbitrator may resolve arbitration claims on procedural grounds, rather than on the merits. (E.g., Young v. Ross-Loos Medical Group, Inc. (1982) 135 Cal.App.3d 669, 673-674 [arbitrator did not exceed his authority by dismissing contractual arbitration claims for failure to timely prosecute them; Such an order, even if regarded as in the nature of a sanction, is as much an award as any other final resolution of the arbitration proceeding. [Citation & fn. omitted.] Absent some basis for vacating it, . . . the superior court should have enforced it]; Brock v. Kaiser Foundation Hospitals (1992) 10 Cal.App.4th 1790, 1808 [same].) Thus, we reject Sonis contention that the arbitrator exceeded his authority by failing to reach the merits of his wage claims.

Second, Soni argues that the basis for the arbitrators order dismissing Sonis claimsthat none of the claims were for wages or penalties within the meaning of Labor Code sections 201 and 203was not urged by either party. He thus contends that the award must be vacated as beyond the arbitrators powers because it was based on an unsubmitted . . . issue. We do not agree. As Sheldon & Mak correctly notes, there is no dispute that the parties submitted Sonis wage claims to the arbitrator; Sonis only contention is that the arbitrator adjudicated those claims on a ground not briefed by the parties. An arbitration award cannot be vacated on that basis: Although the parties, by agreement, can certainly exclude specific questions from arbitration, in the absence of such restriction an arbitrator has the power to decide the submitted matter on any legal or factual basis, whether or not any party has relied upon that particular basis. (Moshonov v. Walsh (2000) 22 Cal.4th 771, 777, italics added.)

Third, citing Advanced Micro Devices, Inc. v. Intel Corp., supra, 9 Cal.4th 362, 377-381 (Advanced Micro Devices), Soni contends that an arbitrator exceeds his or her power by basing an arbitration award on sources extrinsic to the arbitration agreement. He claims that the present arbitration award must be vacated because the arbitrator relied on extrinsic documents (two orders of this Court and Sonis Second Amended Complaint), not the arbitration agreement. The claim is without merit. As an initial matter, Advanced Micro Devices does not stand for the proposition for which Soni cites it: It does not limit the sources to which an arbitrator may look in determining liability, but instead holds that in fashioning a remedy, the arbitrator is constrained by the underlying [arbitration agreement] as interpreted, expressly or impliedly, by the arbitrator and to the breach of contract found, expressly or impliedly, by the arbitrator. (Advanced Micro Devices, supra, 9 Cal.4th at p. 367.) Since the present appeal does not concern the scope of the arbitrators power to fashion a remedy, Advanced Micro Devices does not apply.

Moreover, having prevailed in the first appeal on the contention that the scope of the arbitrators power to resolve disputes between the parties is limited by the courts order compelling arbitration, Soni is judicially estopped from taking a contrary position here. (E.g., Gottlieb v. Kest (2006) 141 Cal.App.4th 110, 130-131 [Judicial estoppel, sometimes referred to as the doctrine of preclusion of inconsistent positions, prevents a party from asserting a position in a legal proceeding that is contrary to a position previously taken in the same or some earlier proceeding. . . . [Citation.]].) In the first arbitration, the arbitrator concluded that he had the power under the arbitration agreement to resolve all disputes between the parties, including Sonis wage claims. Soni appealed, contending that the arbitrator exceeded his authority by arbitrating Sonis wage claims because the Superior Court had already ruled on this issue by declining to send the wage claim dispute to arbitration. We agreed and reversed the judgment as to the eleventh and twelfth causes of action, concluding that the arbitrator acted in excess of his jurisdiction in addressing the wage claims for any purpose because the trial court already had determined that the claims were not subject to arbitration. Having prevailed on the contention that an arbitrator is limited not only by the arbitration agreement but also by the scope of the order compelling arbitration, Soni cannot now be heard to urge a contrary result. (See also Malek v. Blue Cross of California, supra, 121 Cal.App.4th 44, 57-58 [because the trial court had already determined arbitrability when it granted motion to compel arbitration, that issue was not within the province of the arbitrator].)

C. The Arbitrator Did Not Fail to Hear Evidence Material to the Controversy

Section 1286.2, subdivision (a)(5) provides that an arbitration award shall be vacated if [t]he rights of the party were substantially prejudiced by . . . the refusal of the arbitrators to hear evidence material to the controversy . . . . Soni contends that this section compels us to vacate the present award because the arbitrator refused to allow him to introduce evidence that Sheldon & Maks well-established custom and practice with respect to similarly situated previously departing employee-shareholders was to pay them wages even though such wages were not calculable in amount at the time of their departure, and to pay such wages independent of any other compensation to which these employees may have been entitled to in their capacity as shareholders.

We do not agree that the arbitrators exclusion of this evidence requires vacating the award. Where, as here, a party complains of excluded material evidence, the reviewing court should generally focus first on prejudice, not materiality. To find substantial prejudice the court must accept, for purposes of analysis, the arbitrators legal theory and conclude that the arbitrator might well have made a different award had the evidence been allowed. (Schlessinger v. Rosenfeld, Meyer & Susman (1995) 40 Cal.App.4th 1096, 1111, quoting Hall v. Superior Court (1993) 18 Cal.App.4th 427, 438-439.) Were the rule otherwise, section 1286.2, subdivision (a)(5) would provide a back door to Moncharsh through which parties may routinely test the validity of legal theories of arbitrators. (Schlessinger, supra, 40 Cal.App.4th at pp. 1110-1111.)

Here, the arbitrator concluded that Labor Code sections 201 and 203 were the only bases for Sonis wage claims and that those sections permit recovery of wages that are both earned and calculable in amount at the time the employee quits or is discharged. Accepting as we must the accuracy of the arbitrators legal analysis (Schlessinger, supra, 40 Cal.App.4th at pp. 1110-1111), we cannot conclude that excluding Sonis proffered evidence caused him substantial[] prejudice or, indeed, any prejudice at all. That is, even if Soni is correct that Sheldon & Maks practice was to pay departing shareholders wages that were not calculable at the time of departure, that could have no effect on Sonis entitlement under Labor Code sections 201 and 203 because those sections authorize recovery of only those wages that were calculable at the time of his departure. Thus, the purported exclusion of evidence is not a proper ground for vacating the arbitration award.

D. The Arbitrator Was Not Subject to Disqualification

Soni contends that the arbitration award must be vacated under section 1286.2, subdivision (a)(6) because the arbitrator failed to disclose his alleged relationship with Sheldon & Maks law firm, Bird Marella, and to disqualify himself when requested to do so. For the reasons that follow, we disagree.

1. The Arbitrator Did Not Fail to Disclose a Ground for Disqualification of Which He Was Aware

Section 1286.2, subdivision (a)(6)(A) requires vacating the arbitration award if the arbitrator failed to disclose within the time required for disclosure a ground for disqualification of which the arbitrator was then aware. As the party seeking to vacate the arbitration award, Soni bears the burden of proving the necessary factsi.e., a ground for disqualification and knowledge by the arbitrator. (Betz v. Pankow (1993) 16 Cal.App.4th 919, 926, citing National Marble Co. v. Bricklayers & Allied Craftsmen (1986) 184 Cal.App.3d 1057, 1066.)

Soni wholly fails to satisfy this burden of proof. Even if we were to find, which we do not, that the asserted relationship between the arbitrator and Sheldon & Maks counsel constituted a ground for disqualification, there is no evidence that the arbitrator was aware of that relationship when he was required to make his section 1281.9 disclosuresi.e., within 10 days of service of notice of his appointment. ( 1281.9, subd. (b).) All Soni asserts in this regard is that any denial by Sheldon & Mak that Mainland had such knowledge [of the asserted relationship between CLIPI and Bird Marella] lacks credibility because [i]t is unlikely that a member of the board of directors would not know about the corporations ties to law firms. This is insufficient to satisfy Sonis burden of proof because disbelief of [a witness] testimony does not constitute affirmative evidence of the contrary proposition. (Viner v. Sweet (2004) 117 Cal.App.4th 1218, 1229, fn. omitted; see also California Shoppers, Inc. v. Royal Globe Ins. Co. (1985) 175 Cal.App.3d 1, 48 [If a witness testifies, for instance, that it was not raining at the time of the collision, and if the jury disbelieves that testimony, such disbelief does not provide evidence that it was raining at the time of the collision], italics omitted.) Thus, there is no basis for vacating the award under section 1286.2, subdivision (a)(6)(A).

2. The Arbitrator Was Not Subject to Mandatory Disqualification Pursuant to Section 1281.91

Section 1286.2, subdivision (a)(6)(B) provides that an arbitration award shall be vacated if the arbitrator who rendered the award was subject to disqualification upon grounds specified in Section 1281.91 but failed upon receipt of timely demand to disqualify himself or herself as required by that provision.

Under section 1281.91, an arbitrator is subject to disqualification if (1) he or she fails to make the disclosures required by section 1281.9 (i.e., of 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), and (2) if any party entitled to receive the disclosure serves a notice of disqualification within 15 calendar days after the proposed nominee or appointee fails to comply with Section 1281.9. ( 1281.91, subd. (a).) If notice of disqualification is not timely served within 15 calendar days, the right to disqualify the proposed arbitrator is waived unless the proposed arbitrator makes a material omission or material misrepresentation in his or her disclosure. ( 1281.91, subd. (c).) Further, 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, unless a ground specified in section 170.1 exists and a party makes a disqualification demand before the conclusion of the arbitration proceeding. ( 1281.91, subds. (c), (d), italics added.)

In the present case, Soni first served notice of disqualification on September 27, 2005, nearly two months after the arbitrator granted Sheldon & Maks motion to dismiss Sonis claims. The order of dismissal was plainly a ruling by the arbitrator regarding [a] contested matter. ( 1281.91, subd. (c).) Thus, Sonis disqualification notice was untimely unless a ground specified in section 170.1 existed and the disqualification demand was made before the arbitration proceedings conclu[ded]. ( 1281.91, subd. (d).)

Arguably, the arbitration proceeding already had concluded when Soni made his disqualification demand: As we have said, that demand followed both the arbitrators dismissal of Sonis claims and the AAAs notice to the parties that the hearing in the above-entitled matter was completed on September 26,2005, and declared closed by the arbitrator on that date. (Emphasis omitted and italics added.) In any event, Sonis claim of arbitrator bias does not implicate a ground specified in section 170.1. The only provision of section 170.1 that arguably could be relevant here (and the only ground Soni urges) is subdivision (a)(6)(A)(iii), which provides for mandatory disqualification if [a] person aware of the facts might reasonably entertain a doubt that the judge would be able to be impartial. This standard is fundamentally an objective one, requiring disqualification only if a reasonable member of the public at large, aware of all the facts, would fairly entertain doubts concerning the judges impartiality. (Flier v. Superior Court (1994) 23 Cal.App.4th 165, 170.) While this objective standard clearly indicates that the decision on disqualification not be based on the judges personal view of his own impartiality [fn. omitted], it also suggests that the litigants necessarily partisan views not provide the applicable frame of reference. (Leland Stanford Junior University v. Superior Court (1985) 173 Cal.App.3d 403, 408.)

In support of disqualification, Soni alleges that the arbitrator previously had been on the board of CLIPI; that Bird Marella partner Tom Freeman currently was on CLIPIs board; and that in 2004 CLIPI and Bird Marella partnered to oppose an action by the City of Los Angeles. Assuming these facts to be true, they do not meet the mandatory disqualification standards of section 170.1, subdivision (a)(6)(A)(iii). At best, they establish that the arbitrator and a Bird Marella partner whom the arbitrator had never met, served on the CLIPI board at different times, and that while the arbitrator served on CLIPIs board, CLIPI acted as cocounsel with Bird Marella for a common client. In view of the arbitrators uncontroverted statements that he was not aware of the matter involving Bird Marella and CLIPI until after he issued the order dismissing Sonis claims, did not know Mr. Freeman, and was not aware until he received Sonis disqualification demand that Mr. Freeman was a member of the CLIPI board or otherwise was involved with CLIPI, these facts would not cause a reasonable member of the public to question the arbitrators impartiality. Thus, they do not implicate section 170.1, subdivision (a)(6)(A)(iii).

II. The Trial Court Did Not Abuse Its Discretion by Denying Sonis Motion to File a Third Amended Complaint

Soni contends finally that the trial court abused its discretion by denying his motion to file a third amended complaint to allege wage claims not encompassed by Labor Code sections 201 and 203. We do not agree.

[T]he trial court has wide discretion in allowing the amendment of any pleading [citations], [and] as a matter of policy the ruling of the trial court in such matters will be upheld unless a manifest or gross abuse of discretion is shown. [Citations.] (Record v. Reason (1999) 73 Cal.App.4th 472, 486, citing Bedolla v. Logan & Frazer (1975) 52 Cal.App.3d 118, 135-136.) In exercising this discretion, trial courts are bound to apply a policy of great liberality in permitting amendments to the complaint at any stage of the proceedings, up to and including trial. (Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 761; Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 487.) However, this policy should be applied only [w]here no prejudice is shown to the adverse party. (Atkinson v. Elk Corp., supra, 109 Cal.App.4th at p. 761, quoting Magpali v. Farmers Group, Inc., supra, 48 Cal.App.4th at p. 487.) Moreover, even if a good amendment is proposed in proper form, unwarranted delay in presenting it may‑‑of itself‑‑be a valid reason for denial. (Huff v. Wilkins (2006) 138 Cal.App.4th 732, 746; Record v. Reason, supra, 73 Cal.App.4th at p. 486.)

Our review of the record reveals no abuse of discretion in the trial courts denial of Sonis request to amend. Soni proposed his amendment in December 2005, more than six years after he filed his original complaint, and after the conclusion of two arbitrations and three appellate proceedings. Permitting Soni to amend at this late stage would have significantly prejudiced Sheldon & Mak by requiring their participation in yet another arbitration, with all the attendant delay and expense.[5]

Soni urges that he nonetheless should have been permitted to amend because he had every reason to understand that his Second Amended Complaint properly alleged a claim sufficient to support all the elements of wages in issue and he could not have anticipated the Arbitrator would so unreasonably and narrowly construe his wage claims so as to limit them to Labor Code 201 & 203. Stated simply, Sonis contention is that he is entitled to amend because Arbitrator Mainland erred in too-narrowly construing his eleventh and twelfth causes of action. Such an error, however, would not be a valid ground for amendment; to the contrary, the law is clear that with narrow exceptions, an arbitrators decision cannot be reviewed for errors of fact or law. (Moncharsh v. Heily & Blase, supra, 3 Cal.4th 1, 11; Hightower v. Superior Court (2001) 86 Cal.App.4th 1415, 1432.) According to our Supreme Court: [T]he parties to an arbitral agreement knowingly take the risks of error of fact or law committed by the arbitrators and that this is a worthy trade-off in order to obtain speedy decisions by experts in the field whose practical experience and worldly reasoning will be accepted as correct by other experts. [Citation.] In other words, it is within the power of the arbitrator to make a mistake either legally or factually. When parties opt for the forum of arbitration they agree to be bound by the decision of that forum knowing that arbitrators, like judges, are fallible. [Citation.] (Moncharsh, supra, 3 Cal.4th at p. 12.) The trial court did not abuse its discretion in declining to permit an amendment to correct the arbitrators alleged error; indeed, given the history of this litigation, it is doubtful that it had the discretion to do anything else.

DISPOSITION

The order confirming the arbitration award is affirmed. Respondents shall recover their costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

SUZUKAWA, J.

We concur:

WILLHITE, Acting P.J.

MANELLA, J.

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[1] After remand, Sheldon & Mak noticed a judgment debtor examination. On March 19, 2002, the trial court denied Sonis motion to quash the examination, and on April 19, 2002, we issued an alternative writ ordering the trial court to vacate the March 19 order and defer entry of judgment pending adjudication of Sonis wage claims or show cause why it should not do so. On April 25, the trial court vacated the March 19 order.

[2] All further statutory references are to the Code of Civil Procedure unless otherwise indicated.

[3] That section provides: The award shall be in writing and signed by the arbitrators concurring therein. It shall include a determination of all the questions submitted to the arbitrators the decision of which is necessary in order to determine the controversy.

[4] Soni cites two cases for this proposition, but neither compels the result he advocates. Banks v. Milwaukee Ins. Co. (1966) 247 Cal.App.2d 34, 38, holds that failure to find on all issues submitted is a statutory ground for vacating an award, but it does so under a superseded version of the arbitration statute that permitted a court to vacate an arbitration award for conduct of the arbitrators contrary to the provisions of this title. That language is no longer a part of the current arbitration statute. (See Code Civ. Proc.,  1286.2.) Ulene v. Murray Millman of California (1959) 175 Cal.App.2d 655, 661, states that an arbitrator must decide all issues which are submitted, but it does not hold that failure to do so is a ground for vacating an arbitration award.

[5] Soni urges that there was absolutely no showing of any prejudice because Sheldon & Mak had been aware of his wage claims since the beginning of the litigation. Even assuming this to be true, allowing amendment after the conclusion of the first two arbitration proceedings nonetheless would prejudice Sheldon & Mak because it would put them to the expense of a third such proceeding. Further, Soni concedes that if he were permitted to proceed with his wage claims he would need to conduct the discovery necessary for Soni to properly present his case. As Sheldon & Mak correctly notes, denying leave to amend is not an abuse of discretion where addition of the new claims will necessitate a continuance to permit additional discovery. (Magpali v. Farmers Group, Inc., supra, 48 Cal.App.4th 471, 487; Rainer v. Community Memorial Hosp. (1971) 18 Cal.App.3d 240, 257-258.)