Morrissey v. Chequered Flag International

Filed 9/27/06 Morrissey v. Chequered Flag International CA2/1

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

APPEAL from a judgment of the Superior Court of Los Angeles County. Joanne B. O’Donnell, Judge. Affirmed.

________

Peterson & Brynan and Jeffrey Brynan for Defendant and Appellant.

Lamonica & Foley and Denise V. Foley for Plaintiff and Respondent.

_________

Chequered Flag International (CFI) appeals from a judgment following the trial court’s order confirming an arbitration award in favor of Catherine Morrissey (Morrissey). CFI claims that the arbitrator made various legal and factual errors and violated CFI’s due process rights. We reject all of CFI’s contentions and affirm.

FACTS

According to Morrisey’s amended complaint and evidence presented in the arbitration, in late July 2003, Morrissey responded to CFI’s Internet ad offering a convertible 1967 Pontiac Firebird for sale. A CFI sales representative assured her that the car had a “400” engine.^[1] The car also had a “400” emblem on the hood. The CFI representative also assured Morrissey that the car had a manual convertible top. Morrissey signed a contract to purchase the vehicle, subject to an engine inspection by her mechanic. Her mechanic found the engine sound, and she took delivery of the car. The various documents she signed specified that the car was sold “As Is,” without any warranty, and said nothing about features of the car such as the engine size or whether the convertible top was manual or automatic.

Soon after buying the car, Morrissey found that it had various safety problems, including poorly functioning brakes. She also learned later that the car’s engine was a “350” engine taken from a 1977 Pontiac combined with parts from a 1969 Pontiac, not a 400, and that the convertible top was a powered model with the motor missing. Morrissey demanded that CFI repurchase the car or replace the engine with a 400 model. CFI refused, although it paid her $350 toward the cost of brake repairs.

In April 2004, Morrissey sued CFI, asserting four causes of action: fraud, negligent misrepresentation, statutory negligence pursuant to sections of the Vehicle Code, Civil Code, and Business and Professions Code,^[2] and engaging in a pattern and practice of deceiving the general public under the Consumers Legal Remedies Act (CLRA) (Civil Code, §§ 1750 et seq.). She explicitly sought attorney’s fees under the CLRA. CFI answered in October 2004 with 20 affirmative defenses, including that the car was sold “as is” and Morrissey had a chance to inspect it, and that a later modification of the purchase price (CFI’s $350 payment to Morrissey) constituted “a full and complete accord and satisfaction.”

In May 2005, the parties stipulated to a continuance of their pretrial status conference to allow them to select an arbitrator and engage in binding arbitration of the lawsuit. The parties expressly stipulated: “1. That the hearing of this case shall be conducted by way of a final and binding ‘contractual arbitration’ hearing with no claims reserved. Consistent therewith, the parties waive and agree not to pursue any subsequent claims, including but not limited to claims for malicious prosecution/abuse of process or otherwise; 2. That the binding arbitration will be conducted without parameters/limits as to the award that may be made by the hearing officer (e.g. no ‘high or low’, minimum, maximum, etc.)[.]” The parties selected retired Judge Raymond Cardenas as their arbitrator and arranged to share the cost of arbitration equally. The trial court ordered that the matter “proceed by way of contractual binding arbitration pursuant to the terms and conditions set forth by the foregoing stipulation of the parties.”

Judge Cardenas held a hearing on June 28, 2005, at which both parties presented evidence. On July 11, 2005, Judge Cardenas issued an award, which included $45,000 in attorney’s fees for Morrissey. Afterward, CFI challenged Morrissey’s claimed attorney’s fees by submitting a motion to tax costs. Morrissey filed a reply, and Judge Cardenas issued an amended award on August 13, 2005. In the amended award, the arbitrator reduced Morrissey’s fee award from $45,000 to $43,400.

In his five-page decision stating the basis and terms of the amended award, Judge Cardenas noted that Morrissey’s complaint alleged “a violation of the “Consumer [Legal] Remedies Act, general fraud, and misrepresentation” and sought “rescission and general damages including attorney’s fees and court costs” and punitive damages for fraud. Based on a review of admitted evidence, witnesses’ credibility, and relevant law, the arbitrator ordered:

“1. On the basis misrepresentation and Consumer Legal Remedies Act [sic], [Morrissey] shall recover the sum of $22,356.27 from [CFI]. Intentional concealment exists where a party while under no duty to speak, nevertheless does so, but does not speak honestly or makes misleading statements or suppresses facts which materially qualify those stated. The Arbitrator finds that there was a failure of proof on the loss of use issue ($3,000); therefore, [Morrissey’s] claim for actual damages is reduced from $25,706.27 to $22,706.27. The award was further reduced by $350 previously paid to [Morrissey] by [CFI].

“Plaintiff proved her case by the preponderance of the evidence.

“2. [The arbitrator ordered the vehicle sales contract rescinded and the vehicle redelivered to CFI.]

“3. [Morrissey] shall recover attorney’s fees in the sum of $43,400 from [CFI], pursuant to the provisions of Civil Code § 1780[, subdivision] (d). The Civil Code prevails over any private fee agreement between a party and his or her counsel. . . .

“. . . .

“5. [Morrissey] did not establish fraud or violation of the Consumer Legal Remedies Act by clear and convincing evidence; therefore, any claim for punitive damages is denied.”

On September 15, 2005, Morrissey petitioned the trial court to confirm the arbitrator’s award. CFI’s response to Morrissey’s petition argued that the car was sold “as is,” the sale contract included no attorney fees provision, the arbitrator exceeded his powers by awarding attorney’s fees to Morrissey, the payment of $350 constituted full accord and satisfaction, the award was contradictory because one paragraph found a violation of the CLRA while another found no violation, and CFI was denied due process when the arbitrator did not require Morrissey to provide a detailed breakdown of attorney’s fees before CFI filed its motion to tax costs.

At a hearing on October 11, 2005, the trial court issued a minute order confirming the arbitration award and awarding Morrissey post-award attorney’s fees and interest, for a total award of $73,628.78. The court ruled that the arbitration arose under the CLRA, not the vehicle purchase contract, and that the award was rationally related to the arbitrated issues. The court found no contradictions in the award. It also noted that the arbitrator’s refusal to order Morrissey to submit a memorandum of costs was not error because the arbitration agreement included no such requirement and CFI cited no authority for such a requirement. On November 2, 2005, the trial court issued a judgment confirming the arbitrator’s award. On December 12, 2005, CFI filed a timely notice of appeal.

DISCUSSION

In its appellate briefs, CFI reiterates the various arguments it made in opposing Morrissey’s petition to confirm the arbitrator’s award before the trial court. These arguments, which seek a wholesale review of the arbitrator’s factual findings and legal conclusions, are groundless, and we reject them all.

First, we note the limited power of trial and appellate courts to review arbitrators’ findings and awards. Private, contractual arbitrations are intended to be final, by the parties’ own agreement. (Jordan v. California Dept. of Motor Vehicles (2002) 100 Cal.App.4th 431, 443 (hereafter Jordan).) The Legislature has expressed a strong public policy favoring arbitration, and courts “‘”indulge every intendment to give effect to such proceedings.”’” (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 9 (hereafter Moncharsh), quoting Doers v. Golden Gate Bridge etc. Dist. (1979) 23 Cal.3d 180, 189.) The parties’ mutual agreement defines the scope of private arbitrations. (Moncharsh, supra, 3 Cal.4th at p. 8.) The merits of the controversy being arbitrated, the validity of the arbitrator’s reasoning, and the sufficiency of the evidence presented are not subject to judicial review. (Id. at p. 11.) In short, the general rule is that an arbitrator’s decision cannot be reviewed for errors of fact or law. (Id. at p. 11.) Even errors apparent on the face of the arbitration award that cause substantial injustice are not judicially reviewable. (Id. at pp. 25, 28.) Courts must show this same deference in reviewing remedies along with an arbitrator’s other findings and determinations. (Advanced Micro Devices, Inc. v. Intel Corp. (1994) 9 Cal.4th 362, 375-376 (hereafter AMD).)

Given this extreme deference to arbitrators and their awards, CFI’s contentions that it is entitled to de novo review of the award in both the trial court and the appellate court,^[3] and that the decision of an arbitrator may be appealed just the same as that of a trial judge,^[4] are plainly and simply wrong.

CFI’s core argument is that the vehicle purchase contract and its terms set the parameters of the arbitration, that this contract had no provision for attorney’s fees, and that therefore by awarding attorney’s fees, the arbitrator exceeded his powers pursuant to Code of Civil Procedure section 1286.2, subdivision (4). Exceeding of powers is a basis upon which we may review an arbitration award. (Cal. Code Civ. Proc., § 1286.2; Jordan, supra, 100 Cal.App.4th at p. 443.) Yet even this review is highly deferential. “In determining whether an arbitrator exceeded his powers, we review the trial court’s decision de novo, but we must give substantial deference to the arbitrator’s own assessment of his contractual authority.” (Jordan, supra, 100 Cal.App.4th at pp. 443-444.) It is for the arbitrator to determine what issues are necessary to a decision, and “‘any doubts as to the meaning or extent of an arbitration agreement are for the arbitrators and not the court to resolve.’” (AMD, supra, 9 Cal.4th at p. 372, quoting Morris v. Zuckerman (1968) 69 Cal.2d 686, 690.)

The arbitration agreement provided that the arbitration would determine and be binding as to all issues in the case, “with no claims reserved“ and no limits on the size of the award. It did not identify particular issues the arbitrator could not address. So the arbitrator’s powers were broad and sweeping. Morrissey’s claims in her complaint were not limited to the vehicle purchase contract, so the arbitration also was not so limited. (See AMD, supra, 9 Cal.4th at p. 381, fn. 12; Taylor v. Van-Catlin Constr. (2005) 130 Cal.App.4th 1061, 1066.) Morrissey’s complaint specifically demanded attorney’s fees under a statutory provision. This made it necessary for the arbitrator to consider attorney’s fees, and appropriate for him to award fees under that provision as he did. (Caro v. Smith (1997) 59 Cal.App.4th 725, 734-735.)

Among its various subsidiary arguments, CFI insists that the payment of $350 constituted a full accord and satisfaction. But the arbitrator, though clearly aware of the payment, did not think so, and we may not review his factual or legal conclusions on that score. CFI also maintains that the arbitrator’s award of $22,706.27 must be baseless because the car itself only cost $15,500. Yet Morrissey’s complaint sought as damages the cost of purchase plus the cost of repairs, not merely the purchase price.^[5] CFI argues that because the attorney’s fees awarded in this case are three times the purchase price of the car CFI sold to Morrissey, these fees necessarily must be punitive damages, thinly disguised. But CFI cites no authority and offers no further reasoning to support this claim. “A claim of legal error unsupported by authority is waived.” (Lester v. Lennane (2000) 84 Cal.App.4th 536, 594.)

CFI complains that it was denied due process when the arbitrator did not require a detailed cost statement from Morrissey before CFI filed its motion to tax costs. It points to the requirement in California Rules of Court 870(a) that a prevailing party in a lawsuit must file a verified cost memorandum to obtain an award of costs. But arbitrators are not obliged to apply the whole array of standard court procedure unless the arbitration agreement so specifies, and this agreement clearly does not. (See Moncharsh, supra, 3 Cal.4th at pp. 10-11.) As with most other arguments in its briefs, CFI cites no authority indicating otherwise. CFI also alleges that “the arbitrator allowed for no process whatsoever to establish and review the claimed fees or to allow [CFI] to address/tax same[.]” (Italics added.) This claim is not supported by the record, which shows that the arbitrator allowed CFI to file its motion to tax costs, required further evidence on costs from Morrissey, and reduced Morrissey’s attorney’s fees following this review process. Given the parties’ broad arbitration agreement, we do not find this process lacking.

CFI also contends that there is no basis for the arbitrator’s award of damages for misrepresentation because the arbitrator explicitly found no fraud. But this superficial contradiction is readily dispelled simply by reading the arbitration award accurately, in context. In paragraph 1 under the heading, “Award,” the arbitrator explained that Morrissey would recover damages “[o]n the basis [of] misrepresentation and Consumer Legal Remedies Act”; defined intentional concealment, thus implicitly identifying this as the particular misconduct for which CFI was liable; and ruled that Morrissey had proved misrepresentation by a preponderance of the evidence. At paragraph 5 of the same section, the arbitrator stated that Morrissey “did not establish fraud or violation of the Consumer Legal Remedies Act by clear and convincing evidence; therefore, any claim for punitive damages is denied.“ (Italics added.) Thus, the arbitrator found misrepresentation sufficient to support an award of damages, proved by the preponderance of evidence standard, but expressly did not find that Morrissey had proved fraud by the heightened standard of proof required to support punitive damages under Civil Code section 3294. (See Buell-Wilson v. Ford Motor Company (2006) 141 Cal.App.4th 525, 565.) There is no mystery here.

CFI’s misreading of the arbitrator’s award reflects wider patterns of impropriety in its briefs submitted to this court. Throughout its briefs, CFI makes conclusory statements usually supported by no authority, sometimes supported only by irrelevant or inaccurate citations to authority.^[6] It misstates the law, as with the assertion that arbitrators’ awards are reviewable de novo. It misstates the facts, as with its assertions that the arbitrator in this case allowed “no process whatsoever” for review of attorney’s fees. The briefs are rambling and redundant, with no clear organizational structure and the exact same points repeated multiple times in different places for no apparent reason. CFI also included a list more than two pages long of alleged pretrial misconduct by Morrissey’s counsel without ever explaining why this litany had any relevance for an appellate court considering an appeal of an arbitration award. Because of the general lack of proper analysis or argument in support of its assertions, we would be justified in treating most of CFI’s appeal as waived on that basis alone. (See Associated Builders and Contractors, Inc. v. San Francisco Airports Commission (1999) 21 Cal.4th 352, 366, fn. 2.)

In one of the few points it raises that is not simply a demand for impermissible de novo review of the arbitrator’s findings of fact and law, CFI challenges the trial court’s award of “excessive” post-arbitration attorney’s fees to Morrissey for a petition, motion, and reply filed to enforce the arbitration award. In keeping with its usual pattern, CFI cites no authority to support its claim that the trial court erred by awarding these fees to Morrissey. As such, we dismiss its claim as not properly raised. (Lester v. Lennane, supra, 84 Cal.App.4th at p. 594.) But we also note that contrary to CFI’s implication in its appellate briefs that the trial court awarded Morrissey nearly $8,000 in fees without any explanation, CFI received a breakdown of claimed fees and costs in Morrissey’s reply to CFI’s opposition to the petition and motion to confirm the arbitration award. Morrissey claimed $2,925 for the petition and motion and $1,800 for the reply, based on an hourly rate of $225 per hour, plus $558.91 in post-award interest and $2,588.60 in court costs awarded by the arbitrator. Morrissey’s counsel attached her sworn declaration to this statement of costs. Counsel for CFI questioned the $2,925 in fees in a hearing before the trial court, noting that he “wanted to clarify a breakdown of the figures that the court is confirming.” Thus even if this breakdown was not a formal cost memorandum, as CFI asserts, CFI was aware of the breakdown of fees and costs. Nor does the record show any indication that CFI took any further action to challenge the post-arbitration award of fees and costs in the trial court. The vague reference to a figure of $8,000, of which $2,588.60 was in fact awarded by the arbitrator and had nothing whatsoever to do with the trial court’s award of post-arbitration fees and interest, is yet another misleading misstatement of facts in the record.

DISPOSITION

We affirm the judgment. Respondent Morrissey is entitled to her costs on appeal.

NOT TO BE PUBLISHED.

ROTHSCHILD, J.

We concur:

MALLANO, Acting P.J.

VOGEL, J.

Publication courtesy of San Diego pro bono legal advice.

Analysis and review provided by Poway Property line Lawyers.

^[1] The number 400 refers to an engine size of 400 cubic inches of piston displacement.

^[2] Veh. Code, §§ 11705, subd. (a)(14) and 11711, subd. (a); Bus. & Prof. Code, §§ 17200 and 17500; and Civil Code, § 1770, subd. (a)(2), (4), (5), (7), (9), (14), and (16) [from the section of the Consumers Legal Remedies Act that lists proscribed acts of misrepresentation].

^[3] “As presented to the trial Court, in assessing the merits of the matter and the powers held by the arbitrator the ‘merits’ include all issues of law and fact submitted to the arbitrator and such that a full and complete de novo review is necessary herein. [Citing Moncharsh generally.]”

^[4] “Without question, the decision of a private judge, such as the arbitrator herein can be appealed in the same manner as a court-rendered judgment. Under no circumstance did the agreement herein waive the right to appeal.”

^[5] The purchase contract submitted as an exhibit by CFI to the trial court actually shows the total purchase price, with taxes and fees, as $16,951.46.

^[6] Where CFI does cite court opinions, the citations include no precise page numbers for the legal points being asserted. It is not properly the duty of the Court of Appeal to engage in a time-consuming treasure hunt through sometimes lengthy opinions to search for any language that would support a party’s vague assertion.